Luxembourg's integrated national energy and climate plan for the period 2021-2030 (PNEC) (2024)

I. What is the PNEC?

Luxembourg's integrated national energy and climate plan (PNEC) is an important element of the Grand Duchy's climate and energy policy. It sets out the national climate and energy objectives for 2030, as well as the policies and measures needed to achieve them.

The measures apply to six sectors, namely:

Residential and tertiary buildings,
Transport,
Energy and manufacturing industries, construction,
Agriculture and forestry,
Waste and wastewater treatment,
"LULUCF" (Land use, land-use change and forestry)

The "Energie- a Klimaplang fir Lëtzebuerg" is also a strategic document enabling Luxembourg to make an active commitment to climate action and the energy transition, as well as to the development of a sustainable economy. It is a direct response to both the climate crisis and the energy crisis.

The PNEC is the result of an intrinsically collaborative approach between the ministries and administrations concerned, coordinated by the Ministry of the Environment, Climate and Sustainable Development and the Ministry of Energy and Spatial Planning.

The ambitions and enhanced measures set out in the PNEC are also based on the results of various public consultation and institutional cooperation processes carried out in recent years.

Citizens and scientists alike have come out in favour of even more ambitious targets and measures for Luxembourg in the future:

the "Luxembourg in Transition" (LIT) international consultation on spatial planning held in 2021,
the "Klima-Biergerrot" in 2022 (KBR, Citizens' Council on Climate),
the Climate Policy Observatory (OPC),
the Platform for Climate Action and Energy Transition.

A public enquiry, open from 17 April to 16 May 2023, was also an integral part of the procedure, inviting citizens to submit their comments and proposals on the project.

II. The objectives of the PNEC

The PNEC defines the national climate objectives for the coming years, which are compatible with the objectives of the European Union.

III. The measures defined by the PNEC

The "Energie- a Klimaplang fir Lëtzebuerg" presents both reinforced and new measures. The plan includes a total of 197 different measures, and particular attention was paid during the review process to the "just transition".

These measures correspond to different types of instruments, are at different stages of development, have different deadlines for implementation and identify different players responsible. And some measures are proving to be the most important and/or innovative compared with the previous version of the plan:

1. CO2 tax

Since 2021, fossil fuels, whether road or heating fuels, have been subject to a CO2 tax in order to curb and reduce their consumption. Initially set at €20/t CO2, the tax was increased by €5/t CO2 in 2022 and 2023. The "Energie- a Klimaplang fir Lëtzebuerg" is proposing the continuation of this annual increase of €5/t CO2.

The revenue generated by this tax will be used fairly:

to finance climate measures and solutions,
to finance social compensation measures for low-income households (tax credit for low-income households, cost-of-living allowance),
to invest in the energy transition.

2. The continuous development of "Klimapakt 2.0"

Since local authorities are important partners in implementing climate objectives at local level, "Klimapakt 2.0" encourages and supports them:

strengthen their exemplary role in climate action and energy transition,
contribute to efforts to adapt to climate change,
to promote efficient resource management,
stimulate sustainable local and regional investment.

3. The "phase-out" of fossil fuel heating

The "phase-out" aims to completely decarbonise heating systems in buildings. Initially, this will be done on a voluntary basis, with the support of financial aid and collective solutions such as the systematic neighbourhood renovations and the development of decarbonised heating networks.

4. The national entity to support energy renovation for all low-energy-performance residential buildings

To extend support for energy renovation to all low-energy-performance residential buildings, a national entity to support energy renovation projects, decarbonisation and the installation of photovoltaic systems for residential buildings will be set up.

The aim is to provide comprehensive and structured assistance to owners of residential buildings with low energy performance, in terms of identifying potential for improvement, planning and financing.

5. The "Klimabonus"

The "Klimabonus" aid scheme provides increased financial support for the construction and sustainable energy renovation of homes, the installation of technical systems that make the most effective use of renewable energy sources in homes, and energy advice.

The changes include:

a simplified procedure for accessing grants, in particular by simplifying and digitising application forms,
greater promotion of environmentally-friendly insulation materials,
greater encouragement to replace old boilers fuelled by fossil fuels,
the eligibility of air-to-water and air-to-water hybrid heat pumps in existing buildings,
promotion of self-consumption for photovoltaic installations, with a higher subsidy and the inclusion of a battery in the eligible costs,
the appropriateness of pre-financing mechanisms.

6. Promoting the electrification of the car fleet

With regard to the electrification of the car fleet, the PNEC provides for:

the promotion of the private charging point network and public charging infrastructure,
the introduction of financial subsidies for zero-emission vehicles,
a strategy for decarbonising the sector,
options for a zero-carbon strategy through the deployment of biofuels, electric motorisation, renewable hydrogen and IT and AI optimisations (Information Technology andArticial Intelligence).

The ''social leasing''

Introduction of a social leasing system for electric cars with long-term leasing contracts to support low-income households in electrifying their individual mobility.

8. The "Klimapakt fir Betriber" (KPB)

The "Klimapakt fir Betriber" (KPB) is a new instrument designed to accompany and support companies in the energy transition and climate action. This is a strategic orientation platform that allows for the coordinated consultation and implementation of projects and activities by different actors, as well as the management of several new programmes.

Aimed at small and medium-sized enterprises (SMEs), the KPB is a voluntary commitment by companies that will enable long-term monitoring of their decarbonisation and energy transition efforts.

9. The national hydrogen strategy

The strategy includes seven key measures to promote the production, import and use of renewable hydrogen:

defining the legal, regulatory and supervisory framework at EU level,
cooperation with EU Member States and third countries,
identifying opportunities in Luxembourg in the field of research and innovation,
identifying flagship projects for study and implementation,
prioritising the actions to be taken towards targeted decarbonisation using renewable hydrogen,
the development of instruments for a renewable hydrogen market,
implementation and continuous improvement.

A "Taskforce H2 Luxembourg" steering committee has been set up to monitor the strategy.

10. Accelerated roll-out of the agriculture council and promotion of "agrivoltaics".

In the agricultural sector, as well as continuing to develop and accelerate the deployment of agriculture council, the aim is to promote "agrivoltaics", i.e. the combination of agricultural production and the production of photovoltaic energy.

11. Reinforcement of targets for net greenhouse gas removals and introduction of a "Klimabonus Bësch" aid scheme

Since forests have a significant natural carbon storage potential, the targets for net greenhouse gas removals in the LULUCF sector will be strengthened.

In addition, an aid scheme for the sustainable management of private forests, the "Klimabonus Bësch", will be established.