First meeting of the Mouvement Ecologique with Serge Wilmes, Minister for the Environment, Climate and Biodiversity

A delegation from the Mouvement Ecologique had its first meeting with the new Minister for the Environment, Climate and Biodiversity, Serge Wilmes. At the beginning of the exchange, the Mouvement Ecologique briefly explained to the Minister how it sees its work and assured the Minister of its constructive cooperation.

Ensuring cooperation between ministries and a strong voice for the Ministry of the Environment

The Mouvement Ecologique first emphasised the importance of coordinated cooperation between ministries, particularly from a sustainability perspective. The environment minister must be a strong voice and also become more involved in issues such as agricultural, economic and consumer protection policy. After all, important decisions that are directly relevant to climate and biodiversity protection are determined by these “sectoral” policies.

The Minister stated that cooperation was a high priority in the new government and that officials would regularly exchange information, and that there were also interministerial working groups.

Negotiations at civil servant level are important, but direct policymaking at political level is crucial, according to the Mouvement Ecologique. Accordingly, the “political leadership” of the interministerial bodies would be of paramount importance.

Abolish environmentally harmful subsidies – implement sustainable tax reform

The discussion centred on important instruments that the Mouvement Ecologique believes the ministry should initiate in order for the socio-ecological transition to succeed. This includes carrying out an analysis (as already provided for in previous coalition agreements) to analyse which current state subsidies are counterproductive from a sustainability perspective. Specifically, where the state is even spending money to destroy the climate and biodiversity. Such an analysis is still not available and should be a priority for the ministry, according to the Mouvement Ecologique.

The implementation of a sustainable tax reform is also necessary. Both instruments – the abolition of environmentally harmful subsidies and sustainable tax reform – are also repeatedly cited in numerous EU documents and scientific analyses as the basis for the socio-ecological transition. They would also be all the more necessary in times of limited financial resources.

The Minister stated that both dossiers were very close to his heart; a direct exchange and cooperation with government colleagues was necessary.

Adapt CO2 tax to developments abroad

Another point of discussion was the (amount of) CO2 tax. The government plans to increase this to €45 per tonne by 2026. At the same time, the EU is planning to introduce a separate emissions trading system for the building and road transport sectors (ETS2) from 2027. According to estimates, the European CO2 price could be between €200 and €300 per tonne. Exceptions will be made for member states that have already introduced a national CO2 tax with a minimum level of €45 per tonne. Luxembourg does not want to join the ETS2 in the first phase and will not have to do so until 2030. From then on, the European price for one tonne of CO2 will apply throughout Europe.

In the eyes of the Mouvement Ecologique, this is a risky game. This would mean that – if the national CO2 tax were not increased significantly by 2030 – there could be a price shock. The difference currently expected in the event that the Luxembourg CO2 tax is not gradually increased would mean that the tax would have to rise from €45 per tonne to €200 or €300 per tonne in a very short space of time. The Mouvement Ecologique has drawn the Minister’s attention to this risk and noted that such a significant price increase in a short space of time would certainly not be accepted by broad sections of the population. It would therefore be important to gradually increase the CO2 tax now in order to support the energy transition and cushion the changeover to the European price.

Another argument in favour of increasing the currently planned CO2 tax are the developments in the border region. According to STATEC, the reductions in CO2 emissions envisaged in the national climate and energy plan can only be achieved if the difference in fuel prices between Luxembourg and neighbouring countries remains low. However, now that Germany has increased the CO2 tax to €45 per tonne at the beginning of the year, fuel in Luxembourg is becoming considerably cheaper again, which would fuel tourism once more. This significantly weakens the effect of the Luxembourg CO2 tax. There is therefore a real risk that the national climate and energy plan cannot be met without an additional increase in the CO2 tax.

Minister Serge Wilmes took note of these comments and is aware of the basic problem. He referred to Luxembourg’s good data situation on climate policy. If new developments were to occur, the consequences could easily be calculated by STATEC. When asked by the Mouvement Ecologique whether these calculations would be public, officials reacted rather negatively.

You can find the full report here in the downloads.

Translated by deepl.com – free version

19.03.2024