Luxembourg energy minister Claude Turmes, pictured, says that Luxembourg has a duty to deliver climate change reductions
Photo: Matic Zorman
Transport in Luxembourg is at a turning point as government policy pushes motorists ever closer to electric mobility. Energy minister Claude Turmes (déi Gréng) explains how he envisages the transition in the coming years.
Jess Bauldry: The government plans to increase excise duty on petrol and diesel before April. How does that solve the issue of trucks that will still drive through Luxembourg and emit CO2, even if they don’t refuel there?
Claude Turmes: We had a conference in October where we had Tesla and Renault. One of the things discussed were electric trucks. All major truck constructors are really researching and coming forward with 40-tonne electric trucks. They will be on the road in 2024-25-26. The difference between [the] truck business and individual mobility is [the] truck business has no emotion, it’s just about economics. The day when electric trucks will be a few euros cheaper than diesel trucks, the shift will happen and so the shift in truck business could happen even more quickly than in the car business.
JB: Haulage companies required big investment to make this transition. What incentives will be offered to push them this way?
CT: We are already supporting the fleets of Luxembourg haulage to be more efficient through the lean and green programme. We’re in talks with the economy ministry to design a special programme for the fiscal or financial incentives for the decarbonisation of the professional fleet, which is vans. Then afterwards trucks.
JB: If the first trucks come out in 2024, could we see a full fleet transition by 2030?
CT: I think it would be arrogant for me to put an exact month or day or year on when this tipping point will be.
Raising the price of fuel will push truckers to refuel elsewhere but they'll still pollute as they drive through Luxembourg. Photo: Shutterstock
JB: And, yet the government has put a year on having half the nation’s pool of private cars electrified, 2030?
CT: Yes, but I think we have a duty to deliver climate change reductions. And in order to get to the 55%, even if we go for a very ambitious investment into public transport, we have a bit more than 400,000 [426,000/Statec 2019] cars today in Luxembourg. So, we expect that there will be a lot of cars on the roads in 2030. We need to have them climate compatible. There’s no such thing as climate compatible diesel or gasoline. So, it can only be an emission-free technology.
JB: Last year zero or low emission vehicles made up 2.5% of the pool of cars. How will the government accelerate take up?
CT: There’s a European dimension: the EU legislation on CO2 in cars, which obliges each and every car manufacturer to be 95 [g CO2/km] in 2020 and to be 65 in 2025. The only way to get there is massive sales of electric. The biggest bottleneck to electric mobility until now was the lack of attractive models. That will change quite substantially and rapidly. I expect the next autofestival will be one where most of the cars in showrooms will be electric.
JB: In 2021?
CT: You’ll see there are a lot of new models coming out. The second thing is infrastructure. If I stay with the cars, we try to accelerate the tipping point where an electric car will be cheaper than diesel or gas, by giving a support scheme for new buys. We will have to see if the €5,000 we give today is good enough or if there is modulation to be done.
We have now created a stability. We didn’t want to change it this year because we wanted stability for at least two years. But, we will review it for the next year.
JB: Some people argue the public charging infrastructure in Luxembourg isn’t good enough, even for the current small number of electric vehicles. What do you say to that?
CT: Luxembourg has already in square metres or in population the densest charging infrastructure in Europe. Now what we need is to move over to fast charging stations. And on fast charging we’re working to get a detailed roll out, country wide soon.
Claude Turmes said: "I expect the next autofestival will be one where most of the cars in the showrooms will be electric" Photo: Shutterstock
JB: This will be in addition to the 1600 sockets with Chargy?
CT: For medium rapid and then we have medium fast and then fast fast.
JB: What budget impact do you expect from the increase in excise duty on fuels?
CT: We expect a 3-5 cent increase in diesel will be budget neutral. So, we will get more income on one hand and will lose some million litres and that will be budget neutral.
JB: What will that revenue be used for?
CT: We have a general principle in the CO2 pricing which is 50% of the revenue goes to creating alternatives and the other 50% goes to compensating the low-income [households] in Luxembourg. It will be a monetary benefit. This measure will be part of the tax reform for 1 January 2021 and CO2 pricing will be part of that tax reform.
JB: And the alternatives?
CT: The alternatives are a multitude of actions: what we call a climate bonus so we will have a climate bonus for forest owners to replace tree species which aren’t adapted to climate change with species which are. We will have a programme to replace heating oil devices, for renovation of buildings, we have a programme to switch to electric mobility. We will also have climate bonuses and maybe new [bonuses] also for small and medium enterprises and for industry. So, the whole idea is climate change is a collective societal effort. We see our role as a government in helping to pave the way so that for each and every individual and company it gets as easy as possible to take so that everybody takes his overall responsibility.
JB: What solutions do you suggest for people driving long distances?
CT: The new electric cars have a mileage of 350 and 500 [kilometres]. You will charge at home, you will charge at work, you will have medium fast and fast chargers, so the infrastructure for electric mobility is there.
The European institutions are planning some hydrogen fleets and so we are also working to get a hydrogen fuelling station in Luxembourg so that for these extreme cases of very fast daily basically long journeys that we also have an option for that. It could be that that could be done by hydrogen cars. With our neighbouring countries we try to have fast charging stations on the highways, every 40-50km, so that this problem is not a problem.
Claude Turmes says fuelling habits will change with electric mobility, instead of filling up, people will top up in various places. Photo: Mike Zenari/archives
JB: The cost of fast-charging is rising, for instance the Ionity network increased its rates to 79 cents/kWh on 31 January 2020. How can you ensure a fair price in Luxembourg for these kinds of services?
CT: One of the things which we want to prevent is modern racketeering. We will try to design a system in Luxembourg where the prices are such that the actors are not able to racket out in a certain sense more money from someone refuelling than he should.
JB: Enovos increased its rates for charging from 20 cents per kwh to 26 cents. Is that fixed with the government?
CT: Electricity prices depend on the market prices. Green electricity is done on the three-year contract. And since 2016, when the last contract was done, the price on the whole thing electricity market, today it is 50% higher. So, this is largely due to a change in the market price of wholesale electricity in western Europe.
JB: How can Luxembourg ensure it has capacity to meet the expected demand for charging EVs? And how will it cope with the peaks in demand?
CT: The demand is not a problem. The day we have 250,000 cars on the road, this is not even 10% of our electricity demand. Why is it not a volume problem? Because electric cars are dammed efficient. The only issue we have to deal with is if everybody recharged their car at the same time. That won’t happen because you have so many different options to refuel and we will add intelligence to the system so that cannot happen.
JB: Back to infrastructure, what if your local charging station is blocked? You’re stranded if your car battery is running on empty.
CT: The system management is a challenge but fuelling habits will change. An electric car you will fuel it maybe every night a bit, maybe every day a bit at work. You go to the supermarket and charge it there.
JB: Not everyone can charge at home or at work. Not everyone has a parking space.
CT: But you will have fast-charging stations. Is anyone worried because he doesn’t have an oil drill in his garden and he’s still able to fuel? The fast charging [stations] will be open 24/7.
This interview was conducted on 10 February 2020. Check out a longer article on electric mobility and fuel taxes in the next edition of Delano Magazine, out in March 2020.