The EU's smallest member country, with a population of under half a million, Luxembourg nevertheless has by far the bloc's highest per capita emissions, partly because of its large steel industry but also because its tax regime stimulates huge sales of petrol and diesel. Uniquely in the EU, transport accounts for nearly half of Luxembourg's greenhouse gas emissions, 60-70% of which cannot be attributed to the national car fleet.
Under the EU's burden sharing arrangement for complying with the Kyoto protocol, Luxembourg is committed to a 28% cut in its greenhouse gas emissions from 1990 levels by 2008-2012. The strategy notes that they actually fell by 32.6% to 1998, largely due to a restructuring of its important steel industry. But it warns that emissions are projected to rise once more to 23% below 1990 levels by 2010, so putting the target at risk.
A key measure proposed to counter this trend is an already planned 350MW gas-fired power station, which the ministry says would meet 40% of Luxembourg's electricity demand with lower greenhouse gas emissions. The ministry proposes meeting a further 10% of electricity demand from renewable sources, compared with just 2% in 1997. Greenpeace's Luxembourg office yesterday attacked the power station plan saying a smaller unit plus several local cogeneration plants would release nearly 300,000 tonnes less carbon dioxide.
Several new tax initiatives aimed at encouraging lower emissions are also proposed by the ministry, including a new electricity tax on the "Danish model" foreseen under a law to liberalise Luxembourg's electricity market. The strategy also proposes introducing greater fuel tax differentiation to encourage biofuels and natural gas, plus differentiation of vehicle taxes depending fuel consumption and motor size.
Other measures in the strategy include promotion of cogeneration in industrial and residential settings, extension of Luxembourg's natural gas supply network, improvements in building energy efficiency, and encouragement to consumers to turn off electrical appliances rather than leaving them on stand-by.
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