Energy Policies of IEA Countries: Luxembourg 2014
This review analyses the energy policy challenges facing Luxembourg and provides recommendations
for each sector. It is intended to help guide the country towards a more secure and
sustainable energy future and the development of its 2030 energy strategy.
It finds that since 2008, Luxembourg’s energy policy has focused on mitigating CO2
emissions in transport and industry and on supporting renewable energies and energy
efficiency towards 2020. Luxembourg’s greenhouse gas emissions have stabilised as
energy-intensive industries have scaled back their activities and the government put
strong energy efficiency policies in place, notably for buildings.
Since 2009, the country’s research and development (R&D) policies have promoted eco-innovation
and clean energy technologies. In 2012, government spending on energy R&D as a ratio
of gross domestic product was the highest among IEA members. Luxembourg is creating
a national platform for smart meters and electric vehicles, the first of its kind
country-wide roll out.
Nonetheless, Luxembourg faces several energy challenges. Oil consumption in transport
is rising because of growing road fuel sales, largely the result of tax differences
to neighbouring countries. This increases Luxembourg’s emissions and its oil stockholding
needs. Because the country imports all of its energy needs, energy security is a priority.
Luxembourg has sought to address this through greater regional integration such as
merging its gas market with Belgium and increasing its electricity interconnection
with France and Belgium. Yet the benefits of regional integration of wholesale energy
markets have not yet translated to retail markets. Moreover, as regional electricity
trade grows and neighbouring countries introduce ambitious decarbonisation policies
and capacity markets, Luxembourg will need to define its priorities for an energy
strategy through 2030.
Published on July 16, 2014
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