The recent tripartite agreement reached between the government and social partners has sparked criticism from environmental organisations, with Blanche Weber, president of Mouvement écologique, describing the current discourse on the energy transition as deeply disappointing and even counterproductive. In a Friday interview on RTL’s Face-à-Face, Weber argued that the decisions taken – specifically, across-the-board state subsidies to reduce energy prices – send the wrong message at a critical moment. She stressed that making fossil fuels cheaper for everyone, rather than providing targeted financial support to those most in need, represents “a completely wrong signal”. Weber warned that every delay in shifting to renewable energy ultimately increases the financial burden on both the country and its people.
The government’s approach was defended by Minister of the Economy and Energy Lex Delles of the Democratic Party (DP), who acknowledged the environmentalists’ concerns but emphasised the need for a balanced support package. According to Delles, the primary objective of the tripartite agreement was to combat inflation and safeguard purchasing power. The minister added that the only way out of the fossil fuel trap remains the energy transition which would be carried out independently of the tripartite.
Risk of increased fuel tourism?
Weber recalled that at the outset of the war in Middle East, the government had announced targeted social assistance for those on lower incomes, a measure which was also supported by the Mouvement Écologique. However, she explained that “subsidising everyone indiscriminately for purchasing fossil fuels sends the wrong message”, warning that prices would attract more fuel tourism, as the price caps on diesel and petrol in Luxembourg will come into effect when Germany’s fuel rebate expires.
Lex Delles himself had questioned – during a Chamber of Deputies session on 17 March – whether Luxembourg should use taxpayer money to subsidise fuel for the entire Greater Region, warning that a price cap would only trigger a “rush to the pumps”. At the time, the government favoured targeted support to mitigate the impact of the war, not broad fuel subsidies.
Fighting inflation is the top priority
Minister Delles countered that tackling inflation was the overriding priority behind the tripartite package. He explained that solely relying on socially staggered measures would have had only a marginal effect. The CSV-DP coalition wanted to reach a swift agreement with social partners, given the tensions surrounding the negotiations, and any discussions on indexation could have jeopardised that.
By reducing prices on heating oil, diesel, petrol, gas, and electricity, the government aimed to prevent the triggering of a second wage indexation round within 12 months – a scenario projected by the National Institute of Statistics and Economic Studies (STATEC).
Environmental measures fall short for Mouvement Écologique
For Mouvement Écologique, however, the tripartite agreement fails to provide adequate support for the energy transition. Weber described the outcome as “extremely frustrating”, highlighting the need for a pre-financing system for heat pumps similar to that already in place for photovoltaic installations since the start of the year. She also noted that some municipalities continue to oppose heat pump installation, expressing disappointment that the tripartite agreement did not address these issues.
In response, Minister Delles assured that the Minister for Home Affairs is currently revising the relevant regulations, with the process nearing completion.
The minister also explained that the government had deliberately focused on keeping electricity prices low to encourage people to switch away from fossil fuels. He noted that, factoring in state subsidies for network costs, electricity bills have dropped.
The delay in implementing the electricity price reduction compared to the drop in excise duties on petrol and diesel is, according to Delles, due to technical reasons.
