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Environmental information systems
The Luxembourg country profile provides a concise overview of key trends across three dimensions: environment and climate; socio-economic change; and system change (energy, mobility and food) in the country. It highlights the main developments and challenges in these areas, including measures to support progress towards sustainability in Luxembourg. An assessment for each of the three dimensions was prepared by national experts from the European Environment Information and Observation Network (Eionet) in Luxembourg, based on 20 established indicators from the EEA or Eurostat.
Luxembourg is a small (2 586 km2) but wealthy and densely populated country with a dynamic service-based economy that is highly integrated with its neighbouring countries. It is characterised by strong international and regional interdependence, relying heavily on external markets for energy and raw materials; cross-border workers make up a significant proportion of its workforce. Luxembourg has experienced sustained economic growth and spectacular demographic growth in recent decades, while pursuing ambitious environmental policies that have reduced energy consumption, lowered greenhouse gas (GHG) emissions, introduced carbon taxation, increased the use of renewable energy and improved air quality. Luxembourg has also developed several proactive policies regarding waste and the use of secondary raw materials, started to catch up on wastewater treatment and promoted public and soft mobility, notably with major investments in public transport infrastructure.
However, despite the progress made, Luxembourg’s economic model has its limits, with a still high carbon intensity and a persistent dependence on fossil fuels, especially for road transport. Nature conservation is hampered by the degradation of habitats and fragmentation of landscapes, an alarming deterioration in the state of forests – due in particular to climate change – and water management that, although considered good, has not yet achieved expected results in terms of water quality. Although significant progress has been made in the treatment of waste, its production remains stagnant and therefore problematic.
Nevertheless, Luxembourg can boast several innovative and/or successful policies, such as the ‘pacts’ with municipalities and businesses, and its system of ecological compensation through the introduction of ‘ecopoints’, which give a monetary value to the ecological value of biotopes.
Major challenges remain if Luxembourg is to move towards zero net emissions by 2050, better biodiversity conservation and forest revitalisation, improved water quality and a truly circular economy, while maintaining the country’s prosperity and quality of life. These challenges are exacerbated by Luxembourg’s economic model, which relies on a growing workforce moving into the country or commuting daily from border regions, increasing pressure on the environment and sparking debate about the country’s future growth model.
Key trends and assessments
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Summary assessment
Luxembourg has made progress in decoupling environmental pressures from economic growth, but challenges remain, such as urban sprawl, landscape fragmentation and cross-border transport, which generate social costs and environmental pressures.
Luxembourg has set ambitious environmental targets in its National Energy and Climate Plan (NECP) (see country indicator on 'Greenhouse gas emissions and removals in land and forests'). Despite positive and significant progress in recent years, further efforts are needed. For example, a population that has grown by 53 % since the turn of the century and an increasing number of cross-border workers – many of whom still commute by car – have led to congested transport infrastructure. To reduce this major source of carbon dioxide emissions, the government is investing heavily in public transport, particularly rail infrastructure, as well as promoting electric mobility.
Biodiversity is declining due to land artificialisation, agricultural intensification, infrastructure development and urban sprawl. A healthy and resilient economy needs healthy ecosystems, in particular to increase resilience and reduce vulnerability to climate change. Therefore, Luxembourg is developing a cross-sectoral climate adaptation strategy, involving all policy sectors, and needs to systematically integrate biodiversity considerations into its development policies. The latter is already happening through investments to restore ecosystems and their essential services, such as drinking water provision, flood protection, forest resilience and biodiversity conservation, which are crucial for a country with a growing population and increasing demand for resources, especially water.
The management of drinking water and wastewater resources is good. Regarding surface waters, although many measures have been taken in recent years, their impact is not immediately reflected in the assessment of the overall ecological status of Luxembourg’s watercourses. None of the bodies of water achieve a good ecological or chemical status due to the presence of nutrients (total phosphorus, orthophosphate, ammonium, nitrates and nitrites) and polycyclic aromatic hydrocarbons. To further improve water quality, it is essential to continue intensifying joint efforts with all stakeholders, in particular the agricultural sector, by implementing the measures set out in the third river basin management plan. To speed up the implementation of these measures and in view of the preparation of the fourth river basin management plan, consultation with and participation of the main stakeholders have been intensified.
Finally, Luxembourg promotes waste recovery and the use of secondary raw materials, but progress is needed to meet recycling targets and implement Luxembourg’s zero waste strategy.
Despite several major shocks and the recent economic slowdown, Luxembourg’s economy has grown strongly in recent decades. Its living standards are among the highest in the world. A stable institutional framework, responsive regulation and a relatively favourable tax regime have attracted foreign investment and labour, particularly in the financial sector and related business services.
Until the COVID-19 health crisis, economic growth was sustained, driven by the financial sector. Services generate 87 % of value added, and, as a result, Luxembourg has a relatively high GDP, partly artificially inflated by the performance of the financial sector. Consequently, environmental protection expenditure and fossil fuel subsidies as a percentage of GDP are lower than the EU-27 average. However, in recent years Luxembourg has achieved higher performance than the EU-27 average in the environmental goods and services sector, illustrating the government’s willingness to diversify the economy in a more sustainable way. These positive developments are also reflected in Luxembourg’s high score on the eco-innovation index. In fact, since 2010, Luxembourg has been a European leader in eco-innovation, with an eco-innovation index 47 % higher than the EU average. It has also promoted sustainability through increased public funding for research and development; numerous subsidies for environment-related investments; and flagship initiatives, such as the Klimabonus for sustainable housing, the use of renewable energy in buildings, sustainable mobility or biodiversity protection, and programmes such as Clever akafen (‘buy clever’) and the climate pact with municipalities.
However, the growth model based on the rapid expansion of the labour force has reached its limits. With more inhabitants and cross-border commuters, traffic congestion has increased, urban sprawl has spread and Luxembourg’s landscapes – agricultural land and forests cover more than half and more than a third of the country, respectively – are highly fragmented. In addition, despite low levels of energy poverty, housing has become less affordable for many residents, whether they buy or rent.
The consumption footprint is very high, even after removing the effect of cross-border commuters (around 30 % of the resident population).
Policies supporting the transition to a more sustainable growth model based on skills, innovation and behavioural change need to be prioritised and the high level of public expenditure on tertiary education better targeted towards this goal, while ensuring the sustainability of effective social protection, tackling climate change and the high consumption footprint.
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The food system
In recent years, the food system in Luxembourg has come under pressure due to a decline in the number of farms, difficult socioeconomic conditions, climate change and geopolitical instability. Luxembourg has a very open food market, with products coming from national producers, other Member States and non-EU countries. Primary agricultural production is concentrated in the livestock sector (i.e. milk and meat), much of which is exported. On the other hand, Luxembourg has a large deficit in eggs, poultry, pork, fruit and vegetables.
Society’s awareness of health and sustainability is growing. One trend is an increasing demand for local products; according to recent studies, 98 % of respondents buy local products, compared with 88 % in 2021. Another is a decreasing demand for meat, indicating a growing interest . Luxembourgish authorities are therefore supporting local producers to sell their products at the farm level.
Consumer choice is crucial to the survival of Luxembourg’s agricultural sector. In this context, the Luxembourg government signed up to the nutri-score system for ready-to-eat foods in 2021. In 2024, the system was extended to non-prepacked foods, meaning nutri-score information is available for foods served in all types of catering establishments. The antigaspi information campaign, which addresses food waste, has been running since 2016. This initiative aims to reduce food waste by 50 % by 2030 and is mainly targeted . In addition, producers of food contact materials in Luxembourg use recycled materials to reduce the amount of waste in the food chain.
On the producer side, concerns about environmental regulations and price volatility in agricultural markets can have a negative impact on production prices. The government is therefore committed to a sustainable, smart, resilient and safe food system that encompasses the entire food chain and promotes food sovereignty. One example is state-subsidised canteen meals. After a pilot project in the 2023/2024 school year, Supply4Future by Restopolis has been extended to . This online platform gives Luxembourg’s producers easier access to school catering and encourages them to expand and diversify their product range.
Food safety is a major concern for the Luxembourg government. All controls in the food chain have been regrouped and are based on risk assessments and legal obligations. In this context, the first study of Luxembourg’s food consumption data using the European Food Safety Authority’s methodologies has been planned. To support others in the institutional catering sector in their sustainability efforts, the Ministry of Agriculture, Food and Viticulture offers free training courses on local and organic food and on reducing food waste. Public funds are also being used to improve the market for sustainable products, such as the .
The energy system
Overall, Luxembourg’s energy policy is characterised by import dependency, ambitious renewable energy targets and a strong emphasis on energy efficiency and regional cooperation. The country’s updated National Energy and Climate Plan (NECP, dated July 2024) aims for 37 % of energy consumption to be from renewables and a 42 % reduction in final energy demand by 2030.
Energy dependence is a structural feature of Luxembourg’s landlocked situation. Luxembourg imports around 90 % of its energy. The country is highly dependent on fossil fuels, which have accounted for around three quarters of the energy mix in recent years, mostly in the form of road fuels. If Luxembourg succeeds in maintaining a reliable supply of electricity and natural gas, supported by its strategic partnerships and interconnections with neighbouring countries, pursuing decarbonisation, especially in the transport sector, will strengthen energy security by reducing dependence on imported oil products.
The share of renewable energy in gross final energy consumption is increasing but remains one of the lowest in the EU. Luxembourg continues to develop its renewable energy production capacity, which, given the limited land area, is mostly limited to hydropower, biogas, wind and, more recently, wood waste, whose share in electricity production is increasing. Planned measures include legislation to speed up permit-granting procedures for decarbonisation projects and the conclusion of cross-border agreements with other countries to receive a percentage of the country’s renewable energy production as a statistical transfer, notably under the EU renewable energy financing mechanism.
While significant progress towards the EU’s 2030 energy efficiency targets has been made so far, particularly in the services sector, the residential sector still has some catching up to do, as the uptake of government subsidies and initiatives has been limited so far. One reason for this may be that homeowners are required to provide the funding up front, as the government’s financial support takes the form of tax relief in subsequent years. This could discourage low- and middle-income homeowners, especially at a time of higher interest rates.
Therefore, reducing energy consumption and dependence on fossil fuels, improving the electricity transmission grid, enabling efficient and increasing integration of renewable energy generation into the electricity grid in cooperation with neighbouring countries and ensuring that import capacity expands in line with growing electricity demand are key to ensuring reliable clean energy supplies.
The mobility system
In 2024, Luxembourg’s mobility system remained heavily dependent on fossil fuel-powered vehicles for both passenger and freight transport. The country has one of the highest car ownership rates in Europe, largely due to favourable fiscal policies, limited rural mobility options and many cross-border commuters. This reliance on cars creates challenges, such as persistent traffic congestion. In response, the government is actively pursuing a shift towards sustainable mobility, as detailed in the [1]. Key strategies include promoting electric vehicles through financial incentives such as subsidies, which were updated in 2024 and now include a subsidy for [2], and gradually shifting towards alternative modes of transport. Public transport is developing positively, largely due to the pioneering move to offer free public transport nationwide. This initiative, together with the modernisation of the public transport fleet, including the introduction of electric buses and the extension of tram lines, has made public transport more attractive and sustainable. The government’s investment in cleaner, more efficient transport options is reducing car dependency, especially for commuting and daily travel. One of the national mobility plan’s stated goals is to have a 100 % electric bus fleet for the national network by 2030. Shared mobility services, such as bike-sharing and car-sharing platforms, complement public transport and reduce the need for private car ownership.
Despite the gradual increase in the number of electric and hybrid vehicles, they still make up a small proportion of Luxembourg’s fleet. The government is expanding charging infrastructure to encourage the uptake of electric vehicles, and significant investments have been made to develop a robust charging network. The various municipalities are also investing heavily in the development of local public charging infrastructure. The current public charging infrastructure easily meets European requirements, [3]. The national energy and climate agency, Klima-Agence, plays a key role in supporting the government by providing essential information, advice and financial incentives to encourage electric vehicle uptake. It manages programmes offering subsidies to purchase electric vehicles, including both private and commercial vehicles, and supports the expansion of charging infrastructure across the country by actively advising municipalities [4]. The agency also runs awareness campaigns to educate the public about the environmental and economic benefits of switching to electric vehicles.
In summary, while Luxembourg still relies on fossil-fuelled vehicles, significant efforts are being made to promote sustainable mobility. Government policies, local initiatives and the growth of shared, public and multimodal transport options are gradually transforming the country’s mobility ecosystem. Continued investment in infrastructure and technological advances will be key to achieving a more sustainable future for Luxembourg’s transport system.
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