Subsidy Policy in Luxembourg in the Environmental Sector
The draft law on the “Klimabonus Wunnen”, which provides financial support for heat pumps, building renovations and other measures promoting the energy transition, was recently adopted by the Chamber of Deputies.
The Mouvement Ecologique welcomes the adoption of this law and its underlying provisions in principle.
At the same time, it should be acknowledged that the way Luxembourg generally designs its subsidy programmes could – and should – be significantly improved. Greater attention should be paid to key questions such as:
- What concrete objectives should the different subsidy schemes achieve?
- Do these subsidies also reach people with limited financial resources?
- How long should the subsidies remain in place, and should they gradually decrease over time?
- What level of financial support is appropriate, and on which calculations are these subsidy rates based?
- What impact do the subsidies have on the affected economic sectors?
- How can administrative burdens and bureaucracy be reduced?
All of these aspects deserve much greater consideration.
Current subsidy schemes are often too broad and insufficiently targeted. In particular, they do not adequately address the needs of households with limited financial resources. Yet these households are the ones most in need of support in making the energy transition, especially in light of rising energy prices.
For this reason, the Mouvement Ecologique commissioned the Öko-Institut, with financial support from the Ministry of the Environment, Climate and Biodiversity, to carry out an analysis assessing the current subsidy policy and identifying concrete opportunities for improvement.
You can find the study carried out by the Öko-Institut, together with a brief summary by the Mouvement Ecologique, in the Downloads section.
Video: Heatwaves and Climate-Related Support Measures (English subtitles)