3FOOD

Third Industrial Revolution Consulting Group
represented by Energy taxes. The revenues from taxation of transport (excluding fuel) are low
compared to other EU countries (0.15% of GDP compared to an average of 0.49% GDP).
Following the recommendations from the OECD:
- An environmental fiscal reform is needed to reduce incentives for workers to reside far
away from their workplace.
- Luxembourg should consider creating a Sustainable Mobility Fund that will facilitate the
funding of sustainable transport initiatives. It would follow the internalization of
externalities principle and would act as a three-fold financing tool:
o Finance additional specific incentives targeted at users (managed by the Ministry
of Finance)
o Subsidize innovative municipalities on mobility developments (managed by the
MDDI)
o Contribute to financing start-ups and innovative projects including on-field pilot
tests and experimentations as well as research and development works
(managed by the MEC)
- In the phasing out period, where fuel tourism will still be important, it is recommended
that a substantial part of fuel tax revenue be dedicated, on top of the Climate fund, to
the specific financing of sustainable mobility projects. A percentage of the 2.7 billion
liters sold revenue in Luxembourg could be directed to this Sustainable Mobility Fund.
The sum allocated to this fund has to be considered, keeping in mind the cost of
negative externalities which are estimated to be at least 1 to 3% of the country’s GDP.
Potential synergies will be sought with the Luxembourg Sustainable Development
Finance Platform (cf. Finance). The Luxembourg Sustainable Mobility Fund could be
created in the very short term.
- As stated above, new fiscal instruments taxing polluting vehicles and incentivizing
emission-free vehicles have to be put in place in the short run, following the bonus-malus
approach (fiscally neutral and polluter-pay principle).
- Circulation taxes are more directly linked to emissions. A per-usage tax, providing extra
funding, represents a particularly efficient tool for taking into consideration the actual
vehicle usage.
All these fees and taxes are extremely unpopular and pose economic planning problems. For
example, higher fuel taxation will reduce or eliminate “fuel tourism,” which is a source of traffic
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