Each EU member state was requested to draw up a national climate and energy plan until the end of 2019. Luxembourg's government had high aspirations and hoped to do more than the minimum stipulated by Brussels. In May, officials had announced that they were considering the possibility of getting Luxembourg's finance sector on board to devise the best possible strategy.
Luxembourg's climate plan revolves around different sectors. Claude Turmes stressed that new buildings should be zero-energy houses. He also advocated electric cars and financial support to encourage a gradual phase-out of fossil fuel vehicles. There will also be a new CO2 tax of €20 per tonne entering into effect in 2021. This amount will be increased to €30 by 2023. The CO2 tax is part of the broader tax reform.
The ministers estimate that the tax will bring in €150 million per year, half of which will flow into compensation measures. Those who are most affected by the CO2 tax will be disburdened by tax credit. The other half of the revenue will be used to fight climate change.
The government approved the climate plan on Friday morning.
