Energy Policies of IEA Countries: Luxembourg 2008

Luxembourg's Energy Policies and Challenges

Executive Summary and Key Recommendations

Executive Summary: Luxembourg has made significant reforms in its energy policies across various sectors since the last IEA in-depth review in 2004. The country has fully liberalized its electricity and natural gas markets and is actively participating in the development of the Central West European regional electricity system. Luxembourg has also developed a broad action plan on energy efficiency, improved support systems for renewable energy sources, and revised taxes to mitigate climate change.

Key Recommendations:

• Swift implementation of a plan to improve the security of oil supply.
• Address the challenges posed by foreign truckers and motorists contributing to around half of energy-related CO2 emissions.
• Enhance the potential for producing more renewable energy.
• Strengthen measures to reduce greenhouse gas emissions and increase renewable energy and energy efficiency.

General Energy Policy

• Country Overview: Luxembourg has reformed its energy policies across all sectors since the last IEA in-depth review in 2004.
• Supply and Demand: The country has fully liberalized its electricity and natural gas markets.
• Institutions: Luxembourg actively participates in the development of the evolving Central West European regional electricity system.
• Key Policies:
  • Security of Supply: The country is heavily dependent on oil, with over 85% of oil stocks held in neighboring countries under short-term leasing contracts.
  • Climate Change Mitigation: Luxembourg aims to meet EU 2020 targets for reducing greenhouse gas emissions, increasing renewable energy, and improving energy efficiency.
  • Market Reform: The country has implemented market reforms to improve the energy sector.
  • Taxation: Taxes have been revised to mitigate climate change.

Sustainable Energy Policies

• Climate Change:
  • Overview: Luxembourg is working towards reducing greenhouse gas emissions and increasing the share of renewable energy.
  • CO2 Emissions: Around half of energy-related CO2 emissions come from foreign truckers and motorists.
  • Policy and Measures: Policies include supporting renewable energy sources and improving energy efficiency.
  • Critique and Recommendations: There is a need for stronger measures to address the high dependence on foreign oil and to enhance the production of renewable energy.

Sector Analysis

• Fossil Fuels:

  • Oil: Over 85% of oil stocks are held in neighboring countries under short-term leases.
  • Natural Gas: The supply and demand dynamics, market reform, industry structure, infrastructure, prices, and taxes.
  • Coal: No specific details provided.

• Renewable Energy:

  • Supply and Demand: Focus on electricity, heat, and transport fuels.
  • Policies and Measures: Support for renewable energy sources and measures to improve energy efficiency.

• Electricity:

  • Supply and Demand: Market reform, industry and infrastructure, distribution, and regional electricity market.
  • Prices and Taxes: Impact on security of supply.

Annexes

• Organization of the Review: Details on the review team, organizations visited, and review criteria.
• Energy Balances and Key Statistical Data: Comprehensive data on energy balances and key statistical information.

Overall, Luxembourg faces significant challenges in meeting its sustainability targets due to its heavy reliance on oil and the contributions of foreign truckers and motorists to energy-related CO2 emissions. The country needs to implement robust measures to improve the security of oil supply and enhance the production of renewable energy.