Luxembourg

Public consultation quality

Luxembourg organized a structured consultation process to develop its Social Climate Plan, involving various stakeholders from the early stages. An initial informal phase was launched at the end of March 2025 in the form of an online questionnaire. This consultation aimed to gather diverse opinions on existing and upcoming measures, as well as innovative proposals to strengthen climate action.

 It targeted representatives from the social sector, associations, trade unions, researchers, and stakeholders in the energy and housing fields. Twenty-seven organizations contributed, but it could have been more inclusive.

The second, more technical phase took place in June 2025 through bilateral discussions with key stakeholders, allowing for a deeper exploration of the proposed measures. These meetings enabled the collection of targeted feedback and concrete proposals while identifying obstacles faced by priority groups.

Following the approval of the draft Plan by the Council of Government, a formal two-month public consultation was organized to incorporate input from the general public. The public is invited to comment on the draft pdf which is quite poor as an interface. A public event was also organized.

The official opinions of the Platform for Climate Action and the Climate Policy Observatory will further complement this participatory process.

Overall, the quality of the consultations has room for improvement. A more integrated consultation, like the one conducted for the national Adaptation Plan, would have been better, with sectoral dedicated workshops and regional public workshops.

Cross-ministerial coordination & participation of social ministries

The draft Plan is the result of close collaboration between the Ministry of the Environment, Climate and Biodiversity (MECB), the Ministry of the Economy (MECO), and the Ministry of Family Affairs, Solidarity, Living Together and Reception of Refugees (MFSVA), in partnership with Klima- Agence and the Ministry of Finance (MFIN).

Stakeholder consultation scope

Although 27 organizations participated, the informal consultation could have engaged a broader or more diverse set of stakeholders. Furthermore, the format could have been more developed to encourage richer exchanges and discussions leading to new or improved measures.

During the formal consultation there was the possibility to propose specific measures.

Consultation timing

Only one month was allocated between the publication of the draft Plan and the deadline for submitting comments. This is short, especially for platforms that coordinate multiple organizations.

Stakeholder representation

Social and environmental groups, and social partners were consulted at the first and second stages of the draft preparation. 

However, no special effort was made to make the consultation accessible and reach underrepresented groups.

Stakeholder feedback integration

Remarks from the first informal consultation were quoted in the draft Plan. 

It's not yet clear how/to what extent comments from the formal consultation will impact the final Plan, but it is likely that stakeholders' views will be heard. 

Arrangement to set up a standing consultation/monitoring body for the Plan

An Interministerial Committee for Climate Action will oversee the implementation of the Social Plan for Climate. A network of experts will regularly assess the effectiveness of the measures, monitor energy poverty, support their rollout, and help develop new and existing initiatives. An institutional and partnership network focused on energy poverty and measure evaluation could also aid in transposing Article 24(4) of the EU Energy Efficiency Directive (EED), promoting cross-sectoral coordination and a user-centered approach.

Is still not yet clear which stakeholders will be involved. 

Involvement of Local Authorities

Local Authorities were invited to complete an online form and also invited to participate in face-to-face exchanges.

Energy poverty definition

The Plan is aligned with the Energy Efficiency Directive, as it follows the definition already set in the Regulation on criteria for defining and assessing energy poor households. 

Effective targeting of vulnerable households

Theoretically, the Plan targets all vulnerable households in the country. A main avenue will be the social services that municipalities already offer. 

Moreover:

• Measure 4 "Pre-financing under the Klimabonus Wunnen subsidy program" will enable beneficiaries to advance only the portion of costs not covered by subsidies for eligible investments. Simultaneously, participating companies will promptly receive the public aid amounts. 
   
• Measure 6: Pre-financing of the ‘Topup Social’ energy efficiency improvement subsidy. This subsidy complements the support already granted under the Klimabonus Wunnen programme. The amount awarded through the top-up can reach up to 100% of the Klimabonus aid previously received.
   
• Measure 21 Assistance for energy-poor households: The Assistance for fuel-poor households programme is designed to provide targeted support to vulnerable households experiencing fuel poverty—defined as households lacking sufficient financial means to adequately heat their homes and/or having been unable to pay electricity, gas, water, or heating bills within the past 12 months. Eligible households are identified, contacted, and informed about this specific assistance offer by social services. Support includes personalised energy advice provided by Klima- Agence, along with a subsidy for the replacement of one or more energy-intensive household appliances and/or the purchase of new energy-efficient appliances (e.g. refrigerator, freezer, dishwasher, washing machine, and tumble dryer). This service aims not only to inform and raise awareness, but also to improve the living conditions and overall quality of life of the households concerned.
   
• Measure 22 Specialised energy advisory service for replacing fossil fuel heating systems with renewable solutions: As part of the Assistance for fuel-poor households programme (see Measure No. 21), the government plans to strengthen Klima- Agence’s specialised energy advisory service, with a focus on supporting the replacement of fossil fuel heating systems with renewable alternatives. Individualised support will be provided by energy advisers, working in close collaboration with social actors such as social services.

What's missing from the draft Plan is the mention of other social actors on the ground, so as to ensure greater reach. 

Despite the existence of various measures to alleviate energy poverty that are already in place, a key challenge is how to reach vulnerable households. 

Measures addressed to households that are not immediatedly impacted by ETS2

The draft Plan goes beyond the scope of the European Commission requirements and aggregates all current (and new) measures against energy poverty - including those that support households not directly affected by ETS2. 

Pass-on benefit guarantee (100% of benefits reaching vulnerable households)

There is not enough information to assess this at this stage. 

Housing sector reforms & investments

The draft Plan includes several measures and investments in the housing sector:

• Measure 3 Klimabonus Wunnen subsidy program: This -existing- measure provides financial assistance for the renovation of households and the installation of renewables. The Klimabonus Wunnen 2026 subsidy programm, effective from the 1st of January 2026, builds upon the current framework while introducing adjustments aimed at improving fairness and simplicity. Under the new scheme, flat-rate subsidies will be granted regardless of the power output of renewable energy installations. This revised calculation method enables owners of smaller homes with lower-capacity systems to receive proportionally higher support than before.
   
• Measure 7 Individual housing assistance for energy efficiency improvements. The maximum amount of the bonus corresponds to 100% of the assistance granted under the Klimabonus Wunnen scheme. Moreover, an investment line for energy efficiency improvements via climate loans is also in place for renovations: a State guarantee and an interest subsidy are provided in addition to the financial assistance available under the Klimabonus Wunnen scheme. These measures support energy renovation efforts in residential dwellings.
   
• Measure 8: a reform of the current climate loan scheme to enhance the investment capacity of low- income homeowners. This reform may include, where appropriate, adjusting interest rates based on the income level of the applicant household, as well as reassessing the ceiling on capital aid to better reflect the scale of investment required for meaningful energy renovation.
   
• Measure 9: Establishment of a national entity supporting energy renovation, decarbonization, and photovoltaic installation in residential buildings. This entity will offer end-to-end assistance—from identifying potential improvements to overseeing implementation—while integrating existing support mechanisms. It will target residential property owners, whether occupants or landlords, who voluntarily commit to energy renovation projects.
   
• Measure 11 Energy renovation of vacant dwellings: The government would cover part of the energy renovation work for a vacant dwelling, on the condition that the owner makes the property available to a social housing provider for a specified period (for example, 10 or 20 years, as deemed appropriate).
   
• Measure 13 Facilitation of energy-related work in co-owned buildings: The Act of 30 June 2022, which amends the revised Act of 16 May 1975 on the status of co-ownership of buildings, introduces several measures to facilitate energy renovation in jointly owned properties. One of the key changes is the simplification of decision- making procedures for certain types of work. Previously requiring a three-quarters majority, the following works can now be approved by an absolute majority of all co-owners: Energy renovation, insulation, installation of energy production and storage systems using renewable energy sources in common areas. If no decision is reached under this condition, a simple majority of co-owners present or represented at a subsequent general meeting will suffice. The law also establishes a mandatory works fund for co- ownerships. This fund is intended to help co-owners gradually build financial reserves, enabling them to better anticipate and cover the costs of future works. Its existence facilitates—or even makes possible—the execution of maintenance, repair, improvement, conversion, and energy renovation projects, as well as the installation of renewable energy systems.
   
• Measure 14 Study on the rental challenges of the energy transition: a study will be launched to identify and analyse concrete measures to better protect tenants—particularly the most vulnerable—from the combined effects of rising energy prices and the lack of energy renovation in the rental housing stock. The study will focus specifically on situations in which insufficient investment in energy renovation results in higher living costs for tenants, without any corresponding improvement in comfort or energy performance. This phenomenon disproportionately affects vulnerable households, especially in a context of volatile and rising fossil fuel prices.
   
• Measure 15 Financial contributions to the construction of affordable rental and sale housing (Aides à la pierr). 
   
• Measure 16 Support for the installation of photovoltaic systems in affordable housing: 

However, the draft Plan does not indicate exact investment figures for each of these measures. 

Heating & cooling sector reforms & investments

Measure 18 Social leasing – heat pumps and photovoltaic panels: the government will assess the feasibility of introducing a social leasing model for photovoltaic installations, potentially including domestic batteries and heat pumps. Inspired by the mechanism currently under development for social car leasing, this scheme would offer affordable and flexible monthly payment plans that cover maintenance and repair costs, and, where appropriate, include an option to purchase at the end of the contract.

Measures and investments for energy communities

The draft Luxembourgish Plan does not include any support to citizen-led energy communities. 

Measure 19 establishes a ‘State Energy Community’ for sharing renewable electricity with vulnerable households and micro-enterprises. The Plan outlines the measure as:

"The State possesses suitable areas for the installation of renewable energy infrastructure—including land along motorways and State-owned buildings and properties— particularly for photovoltaic energy and, where appropriate, wind energy. Depending on the location, the State may not be able to consume all, or part of the electricity produced on site. In such cases, it could either redirect this electricity to other State-owned consumption sites or make it available to vulnerable households and/or micro-enterprises under affordable conditions through electricity sharing. When implemented locally, such sharing could also yield positive effects on electricity networks, where applicable." 

Public transport & active mobility

Public transport is free in Luxembourg, and thus the transport component is not a significant part of the draft Plan - but it is still referenced. A national mobility plan covers this sector. 

The Plan includes measures on expanding public charging for electric vehicles, subsidies for (second-hand) electric cars and bikes, social leasing, and car and bike sharing. 

Finally, it includes:

•  Measure 33 Transport on demand: The demand-responsive transport service (such as ‘Ruffbus’ or ‘Bummelbus’), available upon reservation, offers households an additional local mobility solution, particularly in rural areas. It helps maintain autonomy by facilitating trips for shopping, appointments or social activities, without relying on a private car
   
• No. 34 Awareness-raising, information, and advisory services on mobility (for corporate users)
   
• 35 Awareness-raising, information, and advisory services for citizens promoting behavioural change and a favourable environment for citizen engagement

Vulnerable micro-enterprise support

The draft Plan includes the following measures concerning vulnerable micro-enterprises:

• Measure 11: State aid for the energy renovation of functional buildings. The subsidy programm supports energy renovation through a range of eligible measures, including improving the thermal insulation of the building envelope, installing controlled mechanical ventilation with heat recovery, and installing a heat pump. It also covers the cost of conducting a feasibility study or energy consultation to identify appropriate renovation strategies and develop a tailored energy renovation concept. This concept must aim to meet, at minimum, the required energy performance level based on the building’s initial classification.
   
• Measure 24 Climate pact (pacte climat) for Businesses (Klimapakt fir Betriber) – Basic advisory services for vulnerable micro- enterprises: as a strategic guidance platform that facilitates consultation, coordinated implementation of projects and activities among various stakeholders, and the management of new programmes supporting the shared goal of climate protection and energy transition in the business sector. It is based on voluntary commitments by participating businesses, enabling long-term monitoring of their decarbonization and energy transition efforts.
   
• Measure 26 Subsidy program for businesses – Environmental and climate protection: a revision of the Law of 15 December 2017 on the subsidy programm for environmental protection, aligned with the General Block Exemption Regulation (GBER). This revision is informed by an in-depth assessment of new opportunities in areas such as the decarbonization of industrial processes, transport and charging infrastructure, hydrogen production, carbon capture and utilisation (CCU), energy performance contracts, and circular economy initiatives.
   
• Measure 29: Administrative simplification for micro-enterprises. Designed in the form of a decision tree or a similar tool, this instrument will help facilitate applicant support, clarify the various administrative steps, and make the available aid options more transparent depending on each situation.
   
• Measure 30: Zero-interest “Competitiveness and Sustainability Loan”. The loan is primarily aimed at SMEs for any type of project that contributes to their competitiveness/sustainability. It provides stable and affordable financing, interest-free under the European “de minimis” regime, and complements financing granted by intermediary banks.

However, the budget for micro-entreprises might be inadequate. There is a need to clarify eligibility criteria and outline the number of companies concerned.

Problematic investments

Overall the Plan does not include any measures or investments that could be considered problematic. 

Cost-supportive measure design

The social redistribution linked to the existing CO2 tax on fossil fuels will be adapted if necessary. 

• In 2022, Luxembourg introduced an energy bonus alongside the cost-of-living allowance to assist vulnerable households amid rising energy prices. In 2025, the energy premium was tripled to combat energy poverty, with eligibility extended to households earning up to 25% above the cost-of-living allowance threshold. 
   
• Additionally, a reduced energy premium—half the standard amount—was created for households with incomes between 25% and 30% above the threshold, further expanding support."
   
• Lastly, to support the long-term stabilisation of electricity prices, through Measure 28 (State contribution to electricity network usage costs), the government will allocate a contribution of €150 million in 2026 toward costs associated with the use of electricity networks.

Strategic alignment & linkages with other major national strategies & plans

The draft Plan brings together all the national measures related to climate (with social implications). It makes specific references to coherence with the: 

• Action Plan on the European Pillar of Social Rights
• National Energy and Climate Plan
• National Adaptation Plan
• Long Term Building Renovation Strategy
• National Mobility Plan 2035
• Recovery and Resilience Plan
• National Action Plan for the Prevention and Combating of Poverty
• Cohesion Policies - European Social Fund Plus (ESF+)
• Just Transition Fund (JTF)

Mobilisation of broader ETS2 revenues

There is a CO2 tax on fossil fuels that covers social finance, including energy and climate. The plan explains that it remains to be decided whether the CO2 tax on fossil fuels will be abolished after the implementation of ETS2. The Plan ensures that social measures will always be implemented with this CO2 tax or ETS2.

It's not yet clear if ETS2 revenues beyond the 25% mandatory co-financing will be mobilised.