Luxembourg- Photo Credit - Waldomigeux & Free Images - Pixabay
Welcome to the forty-fifth edition of my weekly blog where I take a closer look at the policies adopted by individual countries in their efforts to meet the requirements of the Paris Agreement. Particular attention is paid to the role that Carbon Capture, Utilisation, and Storage (CCUS) research and technologies are playing in the drive to meet these requirements.
Having examined the role of enhanced geothermal systems in reducing CO2 emissions last week, I’m returning to my country-by-country analysis and this week I’m focusing on Luxembourg.
Luxembourg ranks twentieth highest on Yale University’s Environmental Performance Index (EPI). This follows top 5 placings in 2014 and 2012 in the biennial index. Looking at the sub-categories of the index, Luxembourg’s Agriculture rating is weak based on overuse of fertiliser and its ‘carbon intensity’ score is also low.
Paris Agreement Targets
As part of Luxembourg’s Paris Agreement targets, the country has agreed to reduce its Greenhouse Gas (GhG) emissions by at least 33% of 1990 levels, by 2030. This was agreed as part of the EU’s overall target to reduce emissions by 40% of 1990 levels by 2030.
The EU Climate Leaderboard produced by Carbon Market Watch and Transport & Environment ranks Luxembourg 6th out of the EU countries for the efforts it has taking towards reducing its CO2 emissions and the position it has taken towards negotiating the EU’s Effort Sharing Regulation (ESR). Unlike Ireland who we featured two weeks ago, Luxembourg supports the EU commission’s proposal for its reduction starting point to be an average of 2016 – 2018 levels as opposed to using 2020/ 2021 levels (higher starting point).
According to 'Le Portail Des Statistiques Grand-Duché Luxembourg' the mix of the electricity provided to end users by source has changed substantially between 2009 and 2016. In 2009 53% of electricity used in Luxembourg was sourced from fossil fuels with just over 20% coming from renewable energy. In the space of just seven years, the trend has changed considerably. Renewable energy now represents 55% of the electricity mix with 34% of the remainder being sourced from fossil fuels.
An increase in the generation of electricity at hydro-powered plants has been the main catalyst for the switch to renewables. The hydroelectricity share of the overall mix stands at 45% in 2016 compared with 12% in 2009.
Financial Services and Asset Management are an important part of the Luxembourg economy. LuxSE, Luxembourg’s stock exchange was the first exchange in the world to list a green bond in 2017. The “Climate Awareness Bond” was issued by the European Investment Bank in 2007.
A further 130 green bonds have been listed on the LuxSE since then, including bonds raised by sovereign funds, development banks, corporates, financial institutions etc. LuxSE defines a green bond as one that is dedicated to funding positive environmental/ climate change projects and these bonds are backed by their issuer’s entire balance sheet.
Just like its EU counterparts, Luxembourg is committed to meeting its share of the union’s CO2 emissions reduction target. The country has made great progress towards changing its electricity usage mix from fossil fuel energy to renewable energy in recent years. As a financial services hub, the small nation is a global leader in the area of green financing. Like other small countries featured in previous weeks of this blog, Luxembourg has shown that you do not have to be a large nation to make a big impact.
Next week’s blog will profile Greece and their efforts to meet their CO2 emissions reduction targets.
If you liked this article you might enjoy reading some recent articles in the series:
Week 44 Geothermal: Supercritical CO2 brings us heat from beneath our feet
Week 43 Ireland: Dear Leo, by the time you read this letter we’ll all be gone
Week 42 Austria: New Government, same renewable energy goal