Luxembourg 2020

Energy Policy Review of Luxembourg 2020

Executive Summary

• Overview: The International Energy Agency (IEA) reviewed Luxembourg's energy policies, focusing on its energy supply and demand, sector targets, support schemes, and key recommendations.
• Energy Supply and Demand: Luxembourg's energy demand and greenhouse gas (GHG) emissions have shown signs of decoupling from economic and population growth. The country has doubled the share of renewables in its energy supply over the past decade.
• Energy Sector Targets and Policy: The government aims for a 50-55% reduction in GHG emissions by 2030, compared to 2005 levels. However, the energy supply remains heavily dependent on fossil fuels.
• Support Schemes: Luxembourg offers generous support schemes for energy efficiency and renewable energy, but low energy taxes pose a barrier to additional investments.
• Key Recommendations: Gradually introducing carbon pricing and enhancing energy prices could stimulate behavioral changes and investments needed for the transition to a low-carbon energy system.

Energy Supply and Demand

• Energy Supply: Dominated by fossil fuels, with significant reliance on imported energy.
• Energy Demand and Carbon Dioxide Emissions: Fell significantly between 2008 and 2015 but started increasing again in 2016, driven by higher fuel consumption in the transport sector.
• Government Response: Recognized the need to reduce fuel demand, modestly increasing excise duties on diesel and gasoline in May 2019, with another increase planned for April 2020.

Support Schemes

• Energy Efficiency and Renewables: Generous support schemes exist, but low energy taxes hinder additional investments.
• Carbon Pricing: A gradual introduction of carbon pricing could stimulate necessary behavioral changes and investments.

E-Mobility

• Electric Vehicles (EVs): No specific focus on e-mobility mentioned in the summary.

Electricity Infrastructure and Smart Meters

• Infrastructure: No detailed information provided.
• Smart Meters: No specific mention of smart meters.

Energy Prices and Taxation

• Energy Prices: No specific details provided.
• Taxation: Low energy taxes represent a barrier to additional investments in energy efficiency and renewables.

Key Recommendations

• Gradual Introduction of Carbon Pricing: To stimulate behavioral changes and investments in a low-carbon energy system.
• Enhance Energy Prices: To encourage more efficient use of energy resources.
• Policy and Regulatory Reforms: To ensure a cost-efficient, equitable, and sustainable pathway to meeting ambitious energy transition goals.

Detailed Sections

General Energy Policy

• Country Overview: Luxembourg's energy landscape and key energy policies.
• Supply and Demand: Analysis of current energy supply and demand trends.
• Energy Sector Institutions: Overview of relevant institutions and organizations.
• Energy Sector Targets and Policy: Government targets and policy measures to address climate and energy goals.
• Energy Prices and Taxation: Current energy pricing and tax structures.

Energy System Transformation

• Climate: Overview of climate-related energy policies and CO2 emissions.
• Energy Efficiency (Focus Area): Detailed analysis of energy consumption by sector, institutions, and policy measures.
• Energy Research, Development, and Demonstration: Funding, policy, and international collaboration in energy RD&D projects.

Renewable Energy

• Overview: General overview of renewable energy initiatives and projects.
• Projects: Specific details on ongoing and planned renewable energy projects.

This review highlights the challenges and opportunities for Luxembourg to achieve its ambitious energy transition goals through targeted policy and regulatory reforms.