Energy Policies of IEA Countries: Luxembourg 2000

International Energy Agency

The International Energy Agency's 2000 review of Luxembourg's energy policies and programmes. It finds that Luxembourg is the smallest IEA country, but its population is the richest of all IEA members. Energy consumption per inhabitant is high. The country’s iron and steel industry, heavy sales of transport fuel and the country’s overall wealth contribute to the high demand.

Luxembourg’s domestic energy resources are limited to renewable energies. Therefore Luxembourg is the most dependent on imported energy of all IEA countries. Energy taxes are low, particularly on automotive fuels. The report discusses the effects of this policy as well as Luxembourg’s plan to introduce an energy tax. The study makes recommendations on how best to internalise the full costs of using energy.

The national government and municipalities still own a significant, if decreasing, share of energy companies. This report recommends arm’s-length relationships between these enterprises and public bodies. Luxembourg’s electricity and natural gas sectors are being liberalised. The government regards market liberalisation in the whole of Europe as a boon to Luxembourg’s consumers who will benefit from reduced energy prices.

Carbon dioxide emissions have decreased substantially since the mid-1970s due to the restructuring of the iron and steel industry. Now that this restructuring process has come to an end, CO2 emissions are expected to increase. Effective measures need to be taken to reach Luxembourg’s Kyoto target of a 28% reduction in greenhouse gas emissions.

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