Background information

In light of the tripartite agreement of 31 March 2022 aimed at strengthening Luxembourg's commitment to combating climate change, a new aid scheme has just been introduced for companies wishing to convert their road haulage fleet to ‘zero emission’ CO₂ rolling vehicles. This aid is being introduced on the basis of the amended law of 15 December 2017 on the environmental protection aid scheme.

Content of measure

The new subsidy is based on an analysis of the propulsion technologies best suited to stimulating the decarbonisation of the logistics sector in Luxembourg, as well as on the price difference between these new technologies and an equivalent vehicle with an internal combustion engine. The aim is to further encourage companies to invest in zero-emission technologies in order to reduce the environmental impact of their road haulage activities. New medium- and heavy-duty trucks (categories N2 and N3) equipped with zero-emission powertrains, such as pure electric vehicles and hydrogen fuel cell vehicles, are therefore eligible for this aid. In addition, heavy commercial vehicles equipped with an internal combustion engine with CO₂ emissions of less than 1 g/kWh are also eligible, such as a commercial vehicle with a hydrogen combustion engine. Added to this is the conversion (‘retrofitting’) of combustion engine vehicles, registered in Luxembourg, into zero-emission heavy commercial vehicles. Also varying according to the size of the company, the amount of aid is calculated on the basis of the additional cost, i.e. the difference between the cost of acquiring a zero-emission vehicle and acquiring an equivalent vehicle with an internal combustion engine, or on the basis of the costs of conversion to a zero-emission vehicle for retrofitting. The aid is capped at €300,000 per group. This aid is temporary and will be reviewed when the new European provisions on State aid are transposed into national law.

Use of measure

No information available.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	Does not apply to citizens

Actors and funding

Actors	Funding
National government Social partners jointly	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Agreed (outcome) incl. social partner initiative	Agreed (outcome) incl. social partner initiative
Form	Consultation through tripartite or bipartite social dialogue bodies	Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Sectoral or branch level

Involvement

On 31 March 2022, following meetings of the Tripartite Coordination Committee, the government signed an agreement with representatives of the Union des entreprises luxembourgeoises (UEL), the Lëtzebuerger Chrëschtleche Gewerkschaftsbond (LCGB) and the Confédération Générale de la Fonction Publique (CGFP). This agreement covered the effects of inflationary pressure, as well as aid to businesses, including some specific to the energy transition.

Views and reactions

The social partners are satisfied. On the one hand, the unions have been able to make progress in preserving jobs, livelihoods and people's purchasing power". On the other hand, the employers consider that they have been able to guarantee predictability for the country's businesses.

Sectors and occupations

This case is not occupation-specific.

Sources

• 15 December 2017: Law 15 Dec 2017 - Environnemental protection (www.stradalex.lu)
• 18 April 2023: Support for heavy commercial vehicle (guichet.public.lu)