COMMISSION STAFF WORKING DOCUMENT Country Factsheet Luxembourg Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union
Date: 2015-11-18
Institutions: European Commission, Secretariat-General
Subjects: Luxembourg, competitiveness, economic and social cohesion, electrical energy, energy policy, gas, innovation, reduction of gas emissions, regional cooperation, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2015  SWD(2015) 232 final   COMMISSION STAFF WORKING DOCUMENT Country Factsheet Luxembourg Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK  State of the Energy Union  {COM(2015) 572} {SWD(2015) 208 à 209} {SWD(2015) 217 à 231} {SWD(2015) 233 à 243}  
 
 
Towards an Energy Union  
           Luxembourg 

Macroeconomic relevance of energy 

IMPORTANCE OF THE ENERGY SECTOR 

The macro-economic importance of the energy sector is very low in Luxembourg compared to the EU 
as  a  whole,  as  reflected  by  the  sector's  low  shares  in  total  value  added  and  employment. 
Interestingly, the shares in value added and employment have decreased sharply between 2005 and 
2012, whereas for the EU as a whole they have increased or remained constant during this period.  

Source: EUROSTAT – National Accounts 
According  to  EurObserv'ER,  in  2013,  the  share  of 
direct  and 
indirect  renewable  energy  related 
employment in total employment of the economy in 
Luxembourg  was  at  about  0.29%,  below  the  EU 
average  of  0.53%.  However,  in  absolute  terms, 
employment  in  the  energy  sector  has  increased  by 
29% from 2005 to 2013.1 

Source:  European  Commission,  based  on  EurObserv'ER  and 
EUROSTAT 

TRADE BALANCE OF ENERGY PRODUCTS 

The energy trade balance deficit of Luxembourg represents 3.3% of GDP in 2014, which is higher than 
the  EU  average,  and  is  virtually  fully  driven  by  oil,  which  can  be  linked  to  the  importance  of  the 
transport fuel market (i.e. cross-country fuel purchase) for Luxembourg's economy.  

1  

Source: LU authorities 

0.01.02.03.020052012LUEU27Value added of energy sector% of grossvalue added (total economy)0.00.20.40.620052012LUEU27Employment in energy sector% of total employment 
 
 
 
 
 
 
 
 
 
 
                                                                 
 
Towards an Energy Union - Luxembourg 

Source: EUROSTAT 
Note: Current account balance for EU28 from European Commission (AMECO) 

1. Energy Security, solidarity and trust 

ENERGY MIX 

The energy mix of Luxembourg differs broadly from the one of the EU-28, with the notable difference 
of a much higher share of petroleum and products. Compared to 1995, the share of petroleum and 
products sharply increased (from 55% to 71% of gross inland energy consumption), while the share 
of solid fuels decreased sharply as well (by 14 percentage points). The share of gases increased from 
18 to 23% of the energy mix. 

Gross inland energy consumption in 2013  

Source: European Commission, based on EUROSTAT  

IMPORT DEPENDENCY 

Luxembourg  has  a  very  high  import  dependency  on  fossil  fuels,  particularly  on  gas  and  petroleum 
and products. Luxembourg imports gas from Norway, Russia and other countries2, which translates 
into  a  relatively  balanced  range  of  import  sources.  Luxembourg  experiences  a  significant  energy 
trade deficit, expressed in percentage of GDP.  

2  

Top non-EU gas suppliers table is based on EUROSTAT data. The share of imports from non-EU countries is calculated 
as the ratio between volumes of imports from that specific non-EU supplier and total imports  (from EU and non-EU 
countries). 

2 

-8-404812LUEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2006 -8-404812LUEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2014  
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Luxembourg 

Source: European Commission, based on EUROSTAT  

2. A fully-integrated internal energy market 

INTERCONNECTIONS 

Due  to  its  location,  the  interconnection  capacity 
of  Luxembourg  is  the  highest  among  the  EU 
Member  States.  However,  further  developments 
are  needed 
that 
Luxembourg is dependent on imports for almost 
all its energy needs.  

in  certain  areas  given 

For  electricity,  Projects  of  Common  Interest 
(PCIs)  have  been  identified  in  order  to  increase 
the capacity at the Belgian/Luxembourg border.  

Source: European Commission based on ENTSO-E scenario 
outlook and adequacy forecast 2014 
Note:  Reference  to  2030  target  is  based  on  October  2014 
European Council conclusions stating that "the Commission 
will  also  report  regularly  to  the  European  Council  with  the 
objective of arriving at a 15% target by 2030" 

ELECTRICITY AND GAS MARKETS 

Market concentration index for power generation (left) 
and gas supply (right) (2013) (Herfindahl index – 10000 means 
monopoly) 

The  concentration  of  the  power  generation 
market is above EU average while it is below 
for  gas.  Regarding  electricity  markets,  the 
relevant  wholesale  price  zone  encompasses 
Luxembourg,  Germany  and  Austria.  The 
absence  of  congestion  on  interconnectors 
means  wholesale  operators  can  participate 
on other power exchanges.  

Sources: European Commission based on ESTAT, CEER and Platts 
Power Vision 

3 

gas  markets, 

Regarding 
relevant 
wholesale  prices  applied  in  Luxembourg  are 
those of the Zeebrugge Trading Point (ZTP) in 

the 

Top non-EU gas suppliers in 2013 (% in total imports)LuxembourgEuropean Union country[%]country[%]Norway63.9Russia39.0Russia25.2Norway29.5Not specified10.8Algeria9.7Qatar6.797%97%99%100%100%100%52%53%82%87%57%65%200520132005201320052013All fuelsPetroleum andproductsNatural gasLUEU28Import dependency 2013 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Luxembourg 

Sources:ESTAT and European Commission Calculations 

gas 

transmission 

initiative  was 
Belgium.  Furthermore,  an 
launched  in  May  2014  by  the  Belgian  and 
Luxembourg 
system 
operators (TSO) to integrate the Belgian and 
the Luxembourg gas markets. The gas market 
integration,  starting  in  October  2015,  will 
offer 
to  market 
opportunities 
new 
participants.  

9.7%  by 

consumption 

At retail level, electricity and gas markets are 
highly  concentrated.  The  supplier  switching 
rate in 2012 was 0.22% by customer number 
volumes, 
and 
demonstrating  that 
industrial  users  were 
more  active 
in  switching  suppliers.  The 
opening of the gas sector remained very low 
with  supplier  switching  rates  less  than  0.1% 
(customer numbers). Consumers report high 
level  of  satisfaction  for  both  the  electricity 
and gas retail markets3. Household electricity 
and gas prices are below EU average.4 

CONTRIBUTION OF ENERGY TO CONSUMER PRICE EVOLUTION 

The  inflation  of  consumer  prices  has  decreased  more  or  less  in  line  with  the  Euro  Area  average 
since 2011. In Luxembourg the contribution of the energy on the inflation rate has been negative 
since 2013, whereas for the Euro area the contribution was still positive in 2013. 

Source: DG ECFIN based on Eurostat 

10th Consumer Markets Scoreboard (June 2014),   

3  
http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm 
 http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm  
4  

Source: Eurostat (http://ec.europa.eu/eurostat/statistics-explained/index.php/Energy_price_statistics). 

4 

-2024620052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsLuxembourg : Price evolution & the contribution of energy prices-2024620052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsEA : Price evolution & the contribution of energy prices 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Luxembourg 

VULNERABLE CONSUMERS 

living 

offices 

Based  on  a  EUROSTAT  survey  on  income 
three  proxy 
conditions, 
and 
indicators  are  used  to  assess  fuel  poverty. 
They 
indicate  that  while  relevant,  the 
problem  is  rather  limited  in  Luxembourg. 
Social 
the 
municipalities  apply  criteria  established  to 
define 
in 
Luxembourg.  Both,  the  laws  concerning 
the electricity market and the gas  market, 
as  well  as  the 
law  concerning  social 
welfare, have set a procedure to define the 
way how to treat vulnerable consumers. 

consumers 

vulnerable 

organised 

by 

 Source: European Commission, based on on EUROSTAT SILC survey 

3. Energy Efficiency and moderation of energy demand 

ENERGY EFFICIENCY TARGET 2020  
(4.5 Mtoe primary energy and 4.2 Mtoe final energy) 

 Source:  European  Commission,  based  on  EUROSTAT  and  on  national 

energy efficiency targets as declared by the MS under the EED 

Luxembourg’s 2020 energy efficiency target 
is  4.5  Mtoe  expressed  in  primary  energy 
consumption  (4.2  Mtoe  expressed  in  final 
energy consumption). When comparing the 
trend  of  primary  energy  consumption  with 
the  GDP  development  over 
the  past 
decades,  there  is  evidence  of  a  decoupling 
of  both  since  2005.  Even  if  Luxembourg’s 
current  primary  energy  consumption  (4.3 
Mtoe  in  2013)  is  below  its  2020  target, 
Luxembourg  should  continue  its  current 
the  primary  energy 
efforts 
consumption at this level or increase it only 
slightly  so  that  it  will  reach  its  2020  target 
even  if  the  economy  continues  to  grow  in 
the next five years. 

to  keep 

ENERGY INTENSITY 

Primary energy intensity in Luxembourg has decreased since 2005, and remains below EU average, 
even  though  the  country  has  substantial  ‘heavy  industry’  and  a  sizeable  amount  of  transport  fuel 
sales,  also  due  to  a  high  level  of  fuel  exports.  Regarding  industry,  energy  intensity  is  above  EU 
average, but decreasing at a faster pace. The energy consumption of the industry decreased by 36% 
between 2010 and 2013. 

5 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Luxembourg 

Primary energy intensity of the economy    

Final energy intensity in industry 

Source: European Commission based on  EUROSTAT 

Source: European Commission based on  EUROSTAT and 
European Commission/AMECO 

Specific  energy  consumption  by  households  is  slightly  below  EU  average.  Luxembourg  has  an 
ambitious  policy  regarding  energy  efficiency  of  new  buildings.  The  specific  energy  intensity  of 
passengers  cars  is  extremely  high,  which  could  be  biased  by  the  cross-country  fuel  purchase.  The 
specific  energy  intensity  for  freight  transport  is  also  very  high,  which  could  be  explained  by  the 
nature of Luxembourg as a transit country.  

Final energy consumption per m2 in residential 
sector, climate corrected 

Specific energy intensity for passenger cars and freight transport5  

Source: European Commission based on  Odyssee 

database 
EU legislation sets mandatory CO2 emission reduction targets for new cars and vans. By 2021, the fleet 
average to be achieved by all new cars is 95 grams of CO2 per kilometre. For new vans, the fleet average 
is set at 147 g/km by 2020. 

Source: PRIMES model background data and estimations based on EU Commission 
and EU MS inputs   

Source: European Environmental Agency. 2014 values are provisional. 2013 EU average refers to EU-27. 

Regarding transport performance, in EU-28 the inland freight modal shares are 71% by road, 17% by rail, 
7% by inland waterways and 5% by pipelines. The respective inland passenger modal shares are 82% by 
private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro. 

5  

Statistics  on  energy  demand  for  passengers  and  freight  transport  are  not  available  and  model  estimates  have  been 
used instead. These issues should be borne in mind when comparing energy intensity in freight or passenger transport 
between Member States, which should be regarded as merely indicative. 

6 

 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Luxembourg 

Modal shares Luxembourg 

Source: Eurostat and EU transport in figures 2015. Data refers to 2013. Modal shares based on tonne-kilometres for freight sector and passenger-
kilometres for passenger sector, freight data based on activity within country territory. Estimates are made when data is missing. 

4. Decarbonisation of the economy 

NON-ETS GHG EMISSION REDUCTION TARGET 2020  
(-20% by 2020 as compared to 2005 in the non-ETS sector) 

to 

According 
recent  data 
the  most 
(preliminary  figures  for  2014),  ESD  emissions 
in  Luxembourg  have  decreased  by  10% 
between  2014  and  2005.  According  to  the 
latest  projections,  Luxembourg  is  going  to 
exceed  by  a  wide  margin  its  greenhouse  gas 
emission  reduction  target  for  2020,  with 
approximately  a  21%  gap  as  compared  to 
2005. However, these projections do not take 
into consideration new measures, such as the 
increase  of  the  standard  VAT  rate  which  will 
narrow 
fuel  with 
neighbouring  countries  and  the  construction 
of a tramway in Luxembourg City. The impact 
of  these  measures  on  projected  emissions 
remains to be quantified. 

the  price  gap  of 

Source: European Commission  based on EEA. Based on preliminary inventory 
data. 

ESD  (Effort  Sharing  Decision)  emissions  are  the  emissions  from  sectors  not 

covered by the EU ETS. 

Emissions 

Non-ETS 
(vs. 2005) 
Projections with 
existing measures 
2020 
Proxy 2014 

Projections/proxy 

target 

1% 

-10% 

-20% 

-8% 

RENEWABLE ENERGY SHARE TARGET 2020 (11%) 

7 

 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Luxembourg 

Source: European Commission based on  EUROSTAT 

The  estimated  renewable  energy  share  in  2013 
was 3.6%, which is below the indicative trajectory 
of 3.9% for 2013-2014; interim figures for 2014 are 
increase  to  4.54%.  The  target 
indicating  an 
trajectory  will  become  steeper  in  the  coming 
years.  

Given  the  limited  national  capabilities  and  the 
geographical  constraints,  the  achievement  of  the 
2020  target  solely  by  domestic  measures  seems 
challenging.  Negotiations  to  make  use  of  the 
cooperation  mechanisms  available  under  the 
Renewables  Directive 
its  2020 
to  achieve 
renewable energy target are ongoing.  

GREENHOUSE GAS EMISSION INDICATORS 

  Overall  GHG  emissions  decreased  by  5%  in  2013  compared  to  2012  in  Luxembourg  and  are 

currently at their lowest level since 2002. 

  Although  this  downward  trend  can  be  observed  across  all  sectors,  the  transport  sector  still 
accounts for more than half of the total greenhouse gas emissions, due to the intense transit and 
commuting traffic performed within the country.  

  Emissions  per  capita  are  the  highest  in  Europe  due  to  the  very  high share  of  road  fuel  sales  to 

non-residents.  

Largest Sectors of GHG 
Emissions in 2012 (*) 

Energy/power industry  

Transport 

Industry  

Agriculture (incl. forestry & 
fishery) 

Residential & Commercial 

Waste & others 

Luxembourg 

EU 
Average 

9% 

55% 

16% 

6% 

13% 

1% 

33% 

20% 

19% 

12% 

13% 

3% 

(*)Sectoral breakdown for 2013 data not available 

GHG Emissions 

Luxembourg 

EU 

EU ETS auctioning 
revenues in 2014(EUR 
millions) 

Share of ETS emissions 
in 2013 

GHG emissions/capita in 
2013 (tCO2equivalent) 
Carbon intensity of 
economy in 2013 
(tCO2equivalent/EUR 
millions) 

5.155 

3205 

16% 

42% 

21.2 

8.9 

277 

346 

Source: European Commission  based on EEA 

ENERGY & TRANSPORT TAXATION 

Energy and transport related taxes as a share of GDP amount to 2.4%, which is slightly higher than the 
EU-average.  More  than  90%  of  these  tax revenues  in  Luxembourg still  come from  transport fuel  taxes, 
despite  a  decrease  in  the  period  2005-2012,  which  reflects  the  remaining  importance  of  the  transport 
fuel market for the economy. By contrast, the revenues from taxes on transport vehicles and heat and 
electricity are very low compared to the EU average. 

In the framework of the on-going tax reform, Luxembourg is currently analysing the impact of increasing 
tax rates on road fuels. Another considered option is to increase taxes on company cars which  account 
for almost half of the cars registered in Luxembourg.  

8 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Luxembourg 

Source: Eurostat 

9 

0.01.02.03.0LUEU-28Energy & Transport related taxes % of GDP, 2005TransportvehiclesTransport fuelHeat &Electricity0.01.02.03.0LUEU-28Energy & Transport related taxes % of GDP, 2012TransportvehiclesTransport fuelHeat &Electricity 
 
 
 
 
 
Towards an Energy Union - Luxembourg 

5. Research, innovation and competitiveness 

RESEARCH AND INNOVATION 

Luxembourg is below the EU average, above the US and below Japan and South Korea in terms of public 
support share allocated to research and innovation in the field of energy and environment. Luxembourg 
has set priorities for research towards sustainable buildings and bioenergy with the emphasis on nearly 
zero-energy buildings. In terms of intensity of low-carbon technologies patents, Luxembourg lags behind 
the EU average and main worldwide partners. 

Source: European Commission based on  EUROSTAT   

COMPETITIVENESS 

Real unit energy costs (% of value added) 

The  real  unit  energy  costs 6  in  Luxembourg 
increased  since  2000,  but  remains  slightly  below 
the  EU  average,  while  above  the  US.  This  can  be 
explained  by  the  level  of  energy  intensity7 in  the 
manufacturing  sector,  as  well  as  lower  real  energy 
prices in Luxembourg.  
Regarding  electricity  prices  paid  by 
industrial 
customers, these stand below EU average. They are 
also  lower  than  OECD  average  prices.  Gas  prices 
stand slightly above EU and OECD averages..  

Source: European Commission 

6  
7  

This indicator measures the amount of money spent on energy sources needed to obtain one unit of value added. 
The  energy  intensity  presented  here  is  derived  from  Use  Tables  of  WIOD,  see  "Energy  Economic  Developments  in 
Europe SWD(2014)19". 

10 

10.09.58.212.013.28.812.013.78.00246810121416LUEU27US200020092011 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Luxembourg 

Source: European Commission based on EUROSTAT and IEA 

6. Post-2020 Energy and Climate policy Strategy  

COMPREHENSIVE MEDIUM TO LONG-TERM STRATEGY (post-2020) 
FOR CLIMATE AND ENERGY 

 

Luxembourg has not yet established a medium to long-term climate and energy strategy for 
the  period  post-2020.  The  current  climate  targets,  covering  the  period  until  2020,  are 
outlined in the 2013 "Action Plan for reducing CO2 emissions". 

  A white book process has been launched in 2009 to prepare a new national post-2020 energy 
strategy,  covering  higher  energy  efficiency,  the  replacement  of  imported  fossil  fuels  with 
alternative  sources  and  increase  of  renewables  in  the  transport  sector.  Luxembourg 
announced it would actually start working on its "low carbon development strategy" in 2016. 

NATIONAL TARGETS, especially for 2030 

Objective, 2030-2050 

GHG reduction  
Renewable energy  
Energy efficiency / savings 

Targets 
No 
No 
No 

7. Regional cooperation  

Comments 

Luxembourg  is  a  member  of  the  Pentalateral  Energy  Forum.  It  was  created  in  2005  by  Energy 
Ministers  from  Benelux,  Germany  and  France  in  order  to  promote  collaboration  on  cross-border 
exchange of electricity. It is an inter-governmental initiative, assisted by an independent secretariat, 
whose mission consists of improving control of the cross-border network and harmonising allocation 
methods  using  information  exchange  between  regulators  and  network  operators  in  participating 
countries. Luxembourg also participates in the German-led round-table on electricity market design. 

8. Cohesion policy contribution 

The EU Cohesion policy provides for investment possibilities to implement energy policy objectives in 
Luxembourg  which  will  be  complemented  by  national  public  and  private  co-financing,  aiming  at 
optimal leverage. It also ensures integrated territorial solutions to challenges by supporting capacity 
building, technical assistance and territorial cooperation. 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Luxembourg 

Energy  efficiency:  Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  4  million  in  energy 
efficiency improvements in public and residential buildings. A further estimated EUR 4 million will be 
invested in supporting the move towards an energy-efficient, decarbonised transport sector. These 
investments are expected to contribute to around 60 households with improved energy consumption 
classification  and  a  decrease  of  around  150  000  kWh  per  year  of  decreased  primary  energy 
consumption of public buildings. 

Decarbonisation:  Overall,  the  EU  Cohesion  Policy  investments  in  Luxembourg  over  2014-2020  are 
expected to contribute to an estimated annual decrease of GHG of around 15 000 tonnes of CO2eq. 
Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  2  million  in  renewable  energy  in 
Luxembourg.  These  investments  are  expected  to  contribute  to  5  MW  of  additional  capacity  of 
renewable energy production. 

innovation  and  competitiveness:  Over  2014-2020,  EU  Cohesion  Policy  will 

Research, 
invest 
significantly  in  R&I  and  in  SME  competitiveness  in  Luxembourg.  This  will  be  based  on  the  national 
strategy for smart specialisation. For Luxembourg, the strategy includes a focus on ecotechnologies 
and  key  enabling  technologies.  At  this  stage,  at  least  EUR  360  000  are  foreseen  for  investments  in 
R&I and adoption of low-carbon technologies in Luxembourg, but this might increase further in line 
with the evolving content of the smart specialisation strategy. 

12