Climate change mitigation - Outlook 2020 (Luxembourg)

Greenhouse gas emissions: projections

Estimating GHG emissions for the coming year is a difficult exercise for Luxembourg. On the one hand, the size of the country implies that emissions will be affected by the opening, closing or a change in production processes at a single plant. On the other hand, the significance of ‘road fuel sales to non residents’ in the total emissions places a great deal of uncertainty on the estimates. This element depends on many factors such as price differentials, toll charges for motorways, economic cycles, the development of alternatives to road freight, and so on. Nevertheless, Luxembourg will have to take more action to comply with the EU 'Climate and Energy Package' objective assigned to it by the Commission for 2020 − i.e. a 20 % reduction in the non-ETS sectors compared to 2005.

The challenge of bridging the gap

It will require significant effort on Luxembourg’s part to comply with both its Kyoto commitment and the 'Climate and Energy Package' objective. Yet Luxembourg faces a critical challenge since it only has limited emission reduction potential at national level. In fact, having moved from blast to electric arc furnaces in the steel sector during the 1990s, Luxembourg has already exhausted the main technical potential for GHG emissions reduction. Other industrial activities offer limited mitigation potential and those installations emitting the most are already part of the current EU ETS scheme and will probably be included in the post-Kyoto EU ETS scheme.

The picture is similar for energy production which has no mitigation potential. Up to the end of the last century, Luxembourg did not have any significant fossil-fuel plants and most of its electricity needs were met by imports [Note 6]. Consequently, any investment in power plants does not replace electricity production from existing inefficient fossil-fuel plants. In other words, investing in its own electricity production capacities does not offer any mitigation potential for Luxembourg.

Thus, any energy-efficient, fossil-fuel-based electricity generating plant that Luxembourg might decide to construct would automatically lead to an increase in its GHG emissions. This is illustrated by the increase in emissions in the public electricity and heat production sector in recent years, since the start-up of highly-efficient combined heat-power (CHP) installations and the ultra-modern gas and steam power station mentioned in the ‘State and Impacts’ chapter. The result is approximately 1.2 million tonnes of CO₂e added to Luxembourg’s GHG balance − i.e. around 9-10 % of the total emissions. Consequently, the new Government, which took office during the summer of 2009, will primarily promote production units based on renewable energy sources, with a special focus on biomass, wood and solar energy. This will be achieved by adopting new instruments and reinforcing existing ones, such as special tariffs for electricity produced from renewable sources. However, it is doubtful whether these measures will result in further GHG reductions since electricity generation from renewable energy sources will not substitute electricity generation from recently-constructed and highly-efficient national plants.