Climate and energy plan: ineffective measures, and at taxpayers' expense!

Published on 28.02.2020


Dear Sir or Madam,
During these past few weeks the government has announced a number of piecemeal measures that will entail additional costs for motorists: an increase in excise tax (between February and April 2020), the use of the WLTP (Worldwide Harmonised Light Vehicle Test Procedure) for calculating vehicle tax and subsidies for low-emission vehicles (postponed in recent days by members of Parliament), the CO2 tax (from 2021) and a reform of the tax on road vehicles (also from 2021).

The objective: to address the climate emergency with a view to reducing CO2 emissions in Luxembourg by between 50 and 55 percent by 2030. The climate plan presented over the last days is simply utopian.

It has to be said, once again, that these insufficiently specific government measures will not enable the objective of rapid decarbonisation to be attained. Let’s not fool ourselves: these taxes will not induce users to change their behaviour and will only lead to an increase in the cost of your mobility!


ACL estimates 

Cost to the user State revenues Real impact on decarbonisation Expected redistribution 
New WLTP standard

Up to €200 p.a.

Est. + €7.5 million (2020)



Excise tax on fuel

Up to €150 p.a.

Depending on the real impact on the volume of diesel sales to hauliers:
Between -€300 and + €100 million (2020)

Nil for HGVs since the accounting will be done in neighbouring countries
For private individuals the impact will be marginal 


CO2 tax (2021) on fossil-bassed energy

Up to €200 p.a. per household 

Between + €100 and + €150 million (2021)

The initial price of €20 per metric ton of CO2, increasing to €30 in two years’ time, is considered too low by numerous experts. The OECD asserts that €30 per metric ton of CO2 is not enough to attain the Paris climate goals. 

Half of the tax collected will go to the most vulnerable households (in the name of social equity) and the other half will be used to support ecological transition

Reform of vehicle tax (2021)



Unknown but the tax currently in force and already based on CO2 has not attained the emission reduction targets



With 14.88 metric tons of CO2 produced per inhabitant in 2017 (the OECD average is 8.9 metric tons), reducing emissions is an enormous challenge given that Luxembourg’s stock of cars and therefore traffic*, as well as its population, are set to continue increasing appreciably. But we have no choice: we must find effective measures that are fair to the taxpayer!  
* The Dutch GPS manufacturer TomTom has published its traffic data for Luxembourg. On average, 40 minutes a day stuck in traffic jams. Reducing traffic jams would also reduce consumption and therefore CO2 emissions, while at the same time contributing to companies’ productivity and workers’ wellbeing. 

Free public transport scheduled to start in March will not meet the needs of the great majority of users. With employment still very highly concentrated in the city of Luxembourg and its immediate surroundings, the great majority of workers (230,000 resident, plus 200,000 cross-border commuters) currently have no alternative to using their cars to get to work. This also concerns people working shifts in industry or the service sector or at their employers’ customers’ premises. And of course not all municipalities have adequate public transport.

If the increase in excise tax has the desired effect of reducing purchases of fuel in Luxembourg, where will the financing come from for all the measures and all the infrastructure projects under way and in the pipeline to create sustainable and effective mobility alternatives (free public transport, development of the rail network, roads, etc.)? And until such time as we have an effective supply of public transport, what options are there other than just paying more? And in this particular case, what exactly will be the positive effect on the environment of users’ having to pay more to remain mobile? (Average additional annual expense per user is estimated at between €300 and €500.)  These are all open questions to which the government so far has no answer.

Mobility concerns all of our daily lives: we spend a significant portion of our budget and of our time on it. It is an essential element of our quality of life and we must be demanding in this regard.

So we cannot sit with our arms folded! We must act to accelerate the transition to sustainable mobility!  

The ACL (Automobile Club du Luxembourg) is committed to sustainable reduction of CO2 emissions in Luxembourg and is in favour of the “polluter pays” principle to encourage electro-mobility and the other mobility alternatives.

In order to get there, as a neutral and independent association, the ACL proposes the following measures:

>Provide better information to consumers, information that is targeted, objective and neutral, so that they can make properly informed choices. Consumers are currently confused by the clutter of contradictory information and don’t know where to turn. Yes, it must be admitted that the zero emission vehicle does not exist (yet); that the production of batteries for electric vehicles (EVs) uses a lot of energy (and therefore emits a lot of CO2) and requires the use of scarce resources. Yes, you have to cover between 40,000 and 150,000 kilometres with your EV to start emitting less CO2 than an ICE-powered car.     

>Give consumers the means to contribute at their individual level to reducing their CO2 emissions. We’re not all equal as regards mobility and the lack of solution then becomes a brake. The government had announced 800 public charging points for EVs and plug-in hybrid vehicles in Luxembourg by the end of 2020. This objective will be difficult to achieve given that only 388 units had been installed at the end of 2019. In any case, this roll-out will not be enough to charge all the EVs if their numbers increase as projected. In fact only overnight EV charging at home is really effective. More ambitious solutions must be found for people living in apartments who are unable to install private charging points at home. Fast HPC (high power charging) stations for charging vehicles during the daytime or at motorway service stations must also be encouraged with the contribution of the government. 
>Educate: home-work commuting being the leading cause of traffic in Luxembourg (source: Luxmobil 2017), the creation of the corporate Mobility Manager function to better coordinate employees’ commuting should be promoted by means of subsidies. It is also essential by means of temporary attachments or training courses to raise motorists’ and young people’s awareness of energy-efficient driving in driving schools and to talk about sustainable mobility in schools.


>Introduce more ambitious subsidies and incentives in order to bring about lasting change in users’ behaviour:
  • Introduce the mobility budget as soon as possible to promote multi-modality (47% of new registrations in Luxembourg are company cars, and company cars account for 23% of the stock of vehicles according to the HOA [House of Automobile, an association of federations representing the automotive sector].
  • Improve the quality, reliability and flexibility of public transport in order to encourage multi-modality effectively and sustainably. Otherwise, since public transport in Luxembourg is not very expensive, the effect of making it free is unlikely to have a significant influence.
  • Promote telecommuting for residents and accelerate discussions with neighbouring countries (at present French cross-border workers hired in Luxembourg are entitled to 29 days of telecommuting, whereas Belgians are entitled to just 24 and Germans to only 19 days). This is not enough.
  • Subsidise short-distance car-sharing (home - work) in order to attain a critical mass of participants. Platforms such as “CoPilote” are not enough by themselves; effective incentives must be put in place.
  • Re-assess the double subsidy for acquisition of company cars, which currently benefits only companies and their employees. 
  • Revise the scale of subsidies for EVs to make it more equitable: more for entry-level vehicles and less for high-end vehicles like Tesla. This concerns a more equitable redistribution of the bounty as well as being more consistent if we really want to incentivise the transition to electro-mobility. As a reminder, Luxembourg is lagging far behind with its target of 40,000 EVs planned for 2020, only 12% of this objective having been attained. Strong incentive measures must be found. We also recommend a review of the amount of the premiums, with more ambition, including classic hybrid vehicles too for example.
  • Guarantee the subsidy for buying an EV for at least 5 years in order to encourage private individuals to opt for electro-mobility and active mobility and so make mobility sustainably cleaner. This measure will bring stability and confidence.   
  • Stabilise KW/h prices for charging EVs in Luxembourg in order to reassure consumers and avoid price inflation that would discourage the acquisition of this type of vehicle. As a reminder, in January 2020 the rate went from €0.20 to €0.26 per kW/h incl. tax, an increase of 30%.
  • Introduction of a conditional scrappage premium encouraging the destruction of a polluting vehicle (thus avoiding export resale) accompanied by a premium for the purchase of a new low-emission vehicle (< 95g CO2). Low-income households will then be able to benefit from it.


 >Allow more time for the search for alternative solutions: the all-electric scenario currently being pushed to excess by governments brings to a jarring halt all alternative research, be it improved diesel engines, fuel cell (hydrogen) or biogas engines. Environmental standards are becoming very strict, and while automakers are now absolutely compelled to find alternatives in order to avoid heavy fines, these alternatives nor the ecosystem needed to bring them about are not yet ready. This will entail Europe’s technology lagging significantly behind other countries which continue to work on alternatives.


The ACL urges the government to involve the various organisations in reflecting together on solutions and appropriate and sustainable measures enabling CO2 emissions in Luxembourg to be effectively reduced!


Plan climat et énergie - des mesures inefficaces encore aux frais du contribuable.pdf


About the ACL

The environmental stakes are a major concern of the ACL. A working group has been put in place within the association to reduce its carbon footprint and encourage its employees to practise multi-modality. The ACL membership card being individual, the association offers its members numerous services dedicated to sustainable mobility, such as “Bike Assistance”.

In September last the ACL, Luxembourg’s leading mobility club, inaugurated its “Mobility Loft” with a view to providing neutral and objective information and advice on the various types of vehicle power: electric, plug-in hybrid, hybrid, petrol (gasoline) or diesel. All these power possibilities are considered in accordance with the use to which the vehicle is put. Electric bicycles and scooters have also been given the place they deserve.

This free service dedicated to its 187,000 members is accompanied by free vehicle test drives. The ACL has agreements with the great majority of automotive brands in order to keep its members informed of the latest developments regarding EVs.

Lastly, the ACL also has its own fleet of EVs (hybrid, plug-in hybrid and electric) which ACL members can rent for periods ranging from half a day to several days in order to familiarise themselves with this type of technology for the pre-purchase decision.




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