3FOOD

Third Industrial Revolution Consulting Group
documenting the externalities and making recommendations on fiscal reforms that would
motivate actions for greater energy and resource efficiency.
In the case of Luxembourg, greenhouse gas (GHG) emissions are a substantial externality in
need of deep reductions. While significant reductions have been achieved by the industrial
sector (e.g., the steel sector switching to energy and resource efficient electric arc furnaces that
use recycled steel as feedstock, reducing coal emissions by 96%), emissions from the transport
and power sector have soared. Transportation emissions have climbed 152% while the power
sector experienced a rise in emissions of 3000%, due to constructing new and combined cycle
natural gas plants and combined heat and power systems, as shown in Figure 25-2.
Source: Eunomia (2016), citing Source: International Energy Agency (2014) Energy Policies of IEA Countries -
Luxembourg: 2014 Review, 2014, p.32.
Among EU Member States, Luxembourg has the highest level of GHG emissions per capita, and
even among the highest worldwide, surpassing 24 tonnes of CO 2 -eq per capita in 2012.
Luxembourg is currently projected to exceed its 2020 emissions reduction target by 23 percent.
A major recommendation by the OECD is for Luxembourg to reduce non-resident fuel
consumption by means of raising the level of fuel taxation in alignment with EU averages.
Cross-border commuters increased 350% between 1990 and 2012.
Luxembourg’s tax rates for both fossil fuel products and electricity are significantly below EU
averages, barely at the minimum level set in the Energy Tax Directive (ETD).
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