It is now assumed that a large part of the global warming on Earth is attributable to human activities and that this warming will undoubtedly be one of the most serious threats to mankind during the course of this century. Climate change is already having strong implications for the environment, the economy and society, and will continue to do so in the future.

Climate change in Luxembourg

Annual mean temperatures for the city of Luxembourg are now above the 30-year averages for the last century. In fact, the 1951-1980, 1961-1990 and 1971-2000 mean annual temperatures – around 9°C – are now regularly exceeded: since entering the 21^st century, annual mean temperatures have been between 9.3°C (2001) and 11.3°C (2007). Other meteorological stations across the country show similar results. Further analysis of the data suggests that the average air temperature in Luxembourg has also increased during the winter and this, along with longer frost-free periods, has had a significant impact on the phenology of plants and the life cycles of animals, birds and insects. Preliminary results from an ongoing study suggest that mean annual temperatures are expected to reach up to 11.6°C for the period 2071-2100 [Figure 1].

The seasonal distribution of precipitation has varied considerably over the last 130 years. This is mostly due to changes in atmospheric circulation patterns, with an increase in westerly atmospheric fluxes during winter months, which have reportedly been responsible for significant redistribution of winter rainfall totals over the past 30 years. Combined with higher air temperatures, this has led to increased flood frequency in most national river basins.

Figure 1 - Anomalies in annual air temperature for the reference period 1961-1990: Luxembourg-City

Source: Centre de Recherche Public-Gabriel Lippmann, unpublished.
Note: anomalies from the reference period 1961 till 1990: long-term mean: 8.6°C.

Greenhouse gas emissions: state, key drivers and pressures

Luxembourg is a Party to the Kyoto Protocol. The related European Union burden-sharing agreement limits Luxembourg’s greenhouse gas (GHG) emissions for the Kyoto period 2008-2012 to an average of 28 % below their 1990 level.

In 2009 [Note 1], carbon dioxide (CO₂) was the main source of GHG in Luxembourg. This represented 91.5 % of the total GHG emissions calculated in CO₂e (excluding LULUCF) [Note 2]. Nitrous oxide (N₂O) and methane (CH₄) counted for 3.8 % of the total emissions each, while fluorinated gases only accounted for 0.9 %.

The very high share of carbon dioxide is the result of a GHG emissions structure dominated by energy-related releases: in 2009, 88 % of the total GHG emissions were generated by energy production, combustion or distribution. Of that total, emissions related to agriculture only represented 5.6 % and industrial processes only 5.5 %. Other sources of GHG emissions were negligible.

One explanation of the predominance of CO₂ and energy sources in the total is the very high share of road transportation-related emissions. In 2009, this source was responsible for 52 % of the total emissions from Luxembourg. Located at the heart of the main traffic axes for Western Europe, Luxembourg is a focal point for international road traffic and therefore has a high volume of road transit traffic. The latter is further increased by the large number of commuter journeys made on working days: in 2009, 147 000 people (around 30 % of the residential population) were commuting by car – see the country introduction text for an overview of the main driving forces and pressures on Luxembourg’s environment. Compared to international traffic, domestic traffic plays a relatively small role since it accounts for only one quarter of all road fuel sold in Luxembourg. Consequently, in 2009, ‘road fuel sales to non-residents’ (transit traffic, commuters and ‘fuel tourism’) represented 38 % of the total GHG emissions [Note 3] [Figure 2].

Industry (energy combustion and industrial processes) was the second main source of GHG emissions, accounting for 17.5 % of total emissions in 2009. In third place was public electricity and heat production, representing 11.7 %, as against only 1.5 % in 2001 and the fourth main source of emissions was energy combustion in buildings, representing 11.5 %. In fact, the development of combined heat-power installations, and the opening of a gas and steam power station with an electrical output of 350 MWel in 2002, has increased the weight of this source category almost tenfold within a few years. This is a perfect example of how, due to the small size of Luxembourg and of its economy, an individual project can have considerable impact on certain key environmental parameters [Figure 3a, Figure 3b].

Figure 2 - Road fuel sales: 1990-2009 in tonnes

Source: Ministry of Sustainable Development and Infrastructure - Department of the Environment & Environment Agency.
Note: 2009 data are provisional.

Figures 3a&b - GHG emissions (excl. LULUCF) - sector based breakdown: 1990-2009 in Gg (1000 tonnes)
Main emitting source categories

Other source categories

Source: Ministry of Sustainable Development and Infrastructure - Department of the Environment & Environment Agency. For background data, click here.
Note: 2009 data are provisional.

Greenhouse gas emissions: past trends

Estimated total GHG emissions amounted to 12.010 million tonnes of CO₂e in 2009, which is 8.8 % below the Kyoto commitment period base year value of 13.167 million tonnes of CO₂e. However, 2009 emissions are still well above the annual allocated emissions under the Kyoto Protocol (9.48 million tonnes of CO₂e during the period 2008-2012, i.e. 72% of 13.167 million tonnes of CO₂e): they should be further reduced by 21 % to reach the Kyoto reduction target of 28 % [Figure 4a, Figure 4b]. If a distinction is made between EU Emissions Trading System (ETS) and non-ETS sectors [Note 4], the effort is more substantial: minus 29 % in the non-ETS sectors [Figure 5].

Several phases can be identified during the period 1990 to 2009:

• from base year to 1993, Luxembourg’s emissions remained stable;
• between 1994 and 1998, they began to decrease significantly, reaching their lowest value in 1998 when they were down by more than 30 %;
• from 1999 up to 2004, emissions increased continuously;
• between 2004 and 2006, the figure stabilised at around 13.2-13.3 million tonnes of CO₂e;
• from 2006 to 2008, there was a significant decrease in emissions by more than 5 %; decrease amplified in 2009 – minus 4 % compared to 2008 – notably because of the aftermaths of the financial and economic crisis [Note 5].

The evolution during this period can be explained by changes in production techniques and in the final ‘energy-mix’ consumption: less solid fuels, more natural gas and an ever-increasing amount of liquid fuel in line with the growth in transport. It goes without saying that increases or decreases in activity for certain source categories have also played a crucial role in Luxembourg’s GHG emissions trends. For example, the move from blast furnaces to electric arc furnaces in the steel industry between 1994 and 1998 explains the significant decrease in GHG emissions during that period [Figure 4a, Figure 4b, Figure 6a, Figure 6b].

Figures 4a&b - GHG emissions and removals: 1990-2009 in Gg (1000 tonnes)
Overview CO2 vs. non-CO2

GHG emissions (excl. LULUCF) and Kyoto target

Source: Ministry of Sustainable Development and Infrastructure - Department of the Environment & Environment Agency. For background data, click here.
Notes:
a) 2009 data are provisional;
b) BOF = blast-oven furnace / EAF = electric arc furnace.

Figure 5 - GHG emissions (excl. LULUCF) - ETS and non-ETS sectors: 2005-2009 in Gg (1000 tonnes)

Source: Ministry of Sustainable Development and Infrastructure - Department of the Environment & Environment Agency. For background data, click here (GHG emissions) and here (ETS).
Note: 2009 data are provisional.

Figures 6a&b - Energy supply and consumption: 1990-2009
Primary energy supply

Final energy consumption (after conversion)

Source: STATEC, Statistical Yearbook, Table A.4200 and Table A.4300.
Note: 2009 data are provisional.

Presented together with the 'State and Impacts'.

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.

Given the challenges described in the ‘Outlook 2020’ chapter, the main areas for which there is potential for deploying mitigation policies are road transportation and buildings. These two sectors are identified as focus areas in the National CO₂ reduction Action Plan (‘Plan d'Action en vue de la réduction des émissions de CO₂’) and a variety of appropriate policies and measures have been implemented.

Road transportation

• vehicle tax reform: since 1 January 2007, the annual tax is based on CO₂ emissions [Note 7];
• promotion of CO₂-efficient vehicles: subsidies for the purchase of low-emission vehicles registered between 1 June 2007 and, to date, 31 December 2010. This subsidy has been complemented by what is known as a ‘prime à la casse’ for new vehicles registered in 2009, and up to 31 July 2010, to replace vehicles over 10 years old. All these financial subsidies are regularly evaluated and will be adapted or amended in due course;
• ‘Kyoto-cent’: climate cents have been levied on all petrol and diesel sold since 1 January 2007 (EUR 0.02/litre for petrol, EUR 0.0225/litre for diesel);
• promoting the use of second-generation biofuels in accordance with EU legal texts;
• promoting public transport: Luxembourg has an ambitious modal-split target for 2020: 25 % of commuter journeys by public transport against 75 % using private vehicles. Two Action Plans have been introduced as instruments in support of this goal: one dealing with transport as a whole and another focusing on non-motorized mobility (‘mobilité douce’ in French): more details here and here.

Buildings (residential, commercial, institutional)

Numerous policies, measures and incentives have been introduced to increase energy-efficiency in buildings and promote the use of renewable energy sources. These measures relate to old buildings (renovation) and new constructions that have to comply with increasingly stringent energy requirements.

To conclude, due to limited mitigation potential, the size and location of Luxembourg and anticipated economic and demographic growth that might offset some of the energy-efficiency gains, there is a risk that national policies and measures might be insufficient to bridge the gap between allocated emissions under the Kyoto Protocol and estimated emissions for the Kyoto period. In fact, recent calculations indicate that, even after taking into account the anticipated effects of implemented and additional policies and measures, GHG emissions will reach an annual average of 13.1 million tonnes of CO₂e over the Kyoto commitment period (2008-2012). This amounts to some 3.7 million tonnes of CO₂e per year above the annual amount of 9.48 million tonnes of CO₂e Luxembourg is supposed to emit to respect its minus 28 % Kyoto reduction target. As a consequence, and since no reductions from carbon sinks are expected, Luxembourg now anticipates using project-based mechanisms and assigned amount units (AAUs) under international emissions trading for between 18 and 20 million tonnes of CO₂e during the commitment period. The Kyoto Protocol’s Clean Development Mechanism (CDM) is expected to cover about half of the emission reductions and Joint Implementation (JI) and International Emissions Trading (IET) the remaining half.

To meet the EU 'Climate and Energy Package' objective for 2020 assigned by the Commission – i.e. (i) to reduce GHG emissions by 20 % to below their 2005 level for sectors outside EU ETS; (ii) to achieve an 11 % share of renewable energy from total energy consumption by 2020; and (iii) to achieve a 10 % share of biofuels from total energy consumption for the transport sector by 2020 – Luxembourg will have to reinforce and define new policies and measures. Discussions are ongoing with a view to revising the national Action Plan for CO₂ reduction as part of the wider ‘Environment-Climate Partnership’ put into place by the current Government and presented in one of our national and regional stories. In addition, a Renewable Energy Action Plan was adopted in July 2010 which foresees Luxembourg reaching its renewable energy objectives for energy consumption in the transport sector through a mix of biofuels, the promotion of electric vehicles and production from renewable energy sources.

Financing use of the Kyoto Mechanisms: the ‘Kyoto Fund’

In order to finance the purchase of tonnes of CO₂ within the framework of project-based mechanisms and international emissions trading, Luxembourg set up the ‘Kyoto Fund’ in 2004. Sources of revenue are annual budgetary grants, 40 % of the CO₂-based vehicle tax and 100 % of the ‘Kyoto-cent’. Budgetary grants represents just over 10 % of the proceeds in the Fund, vehicle tax just under 30 % and the ‘Kyoto-cent’ some 60 %.

Notes

[1]

According to Decision 280/2004/EC and the UNFCCC requirements the latest official GHG inventory covers the period 1990-2008: see submission 2010v2.1. Nevertheless, Luxembourg has produced for the European Commission and the EEA provisional 2009 estimates during the summer of 2010. These estimates are used as reference in the text.

[2]

CO₂e stands for CO₂ equivalents, i.e. other GHG gases are converted into CO₂ according to their 100-year global warming potential (GWP).

LULUCF stands for ‘Land Use, Land Use Change & Forestry’. This covers carbon sinks (or sources) due to land use and changes made to it, whether through human activities (deforestation, reforestation, renaturation, conversion to agricultural land or settlements) or due to natural causes (fires, storms). In the rest of the text, unless indicated, GHG total emissions are quoted excluding emissions from LULUCF activities.

[3]

According to IPCC rules the related emissions were counted in GHG balances for exporting countries, not in Luxembourg’s own balance.

[4]

Directive 2003/87/EC determines which installations are part of the EU Emission Trading System (ETS) during the period 2008-2012. In Luxembourg, 14 installations participates to the ETS, for an allocated annual amount of 2.49 million tonnes of CO2e. Since emissions of these installations are ‘regulated’ by the ETS, national policies and measures to mitigate GHG emissions should ideally target emissions which are not covered by the ETS. The non-ETS sectors are essentially small industries, agriculture, waste management and, especially in Luxembourg, buildings and road transportation.

[5]

First estimates for 2009 show that emissions decreased by 22.4 % for the steel industry and by 8.5 % for the other manufacturing industries. Road transportation related emissions lost 6% between 2008 and 2009.

[6]

According to IPCC rules the related emissions were counted in GHG balances for exporting countries, not in Luxembourg’s own balance.

[7]

Other emissions are also considered: for instance, diesel vehicles – which emit less CO₂ than petrol vehicles – must have a particle filter to qualify for a lower tax rate.