Luxembourg will adopt the European Union’s new Emissions Trading System – ETS2 in short – from 2028, Environment Minister Serge Wilmes announced on Wednesday before the parliamentary committee concerned. The current national CO2 tax system is due to expire in 2027.
Several EU member states had previously voiced concerns that the revised calculation method could trigger a price shock for diesel, heating oil, and other fuels. As a result, they secured a one-year delay before the mechanism takes effect.
According to Wilmes, only Ireland is still blocking the measure at EU level. However, he stated that Luxembourg must move in step with neighbouring countries to meet its national climate targets, particularly in the transport sector.
This would likely mean continuing to increase excise duties on petrol in the coming years, he noted. At the same time, Wilmses warned that if fuel prices diverge too sharply from those in neighbouring states, fuel tourism could rise again.
Luxembourg’s current CO2 tax stands at €45 per tonne. It remains to be seen, in consultation with the national statistics office (STATEC), whether the tax will rise by a further €5 in 2027.
The minister also noted that under the European emissions trading system, it is impossible to predict precisely what the carbon price will be in two years’ time. However, estimates from the European Commission also point to a level of around €45.
In response to pressure from several member states, Brussels has pledged to introduce stabilisation mechanisms earlier than planned to prevent excessive price spikes.
