Background information

Between 2022 and 2026, Luxembourg experienced an energy and economic crisis marked by a persistent rise in electricity prices, primarily due to international upheavals. Inflation reached historic levels, exceeding 10%, mainly as a result of soaring energy prices (electricity, gas, and fuel).

Since 2024–2026, although electricity prices have stabilized (between €0.30 and €0.40/kWh for residential customers, compared to €0.15 to €0.20/kWh before 2022), they remain twice as high as they were before the crisis. As a result, the most vulnerable sectors (manufacturing, small and medium-sized enterprises, and agriculture) continue to face financial difficulties.

The measure implemented as part of the Resilienzpakt targets households and businesses, with the aim of reducing the financial impact of price increases on household purchasing power, as well as on rising production costs for businesses, particularly in energy-intensive sectors (manufacturing, agriculture, and services).

Content of measure

In response to rising energy prices, specifically electricity prices, the Luxembourg government has adopted a specific measure as part of a comprehensive plan.

The measure consists of support for sectors exposed to rising electricity prices and is a key step in limiting the economic impact of the energy crisis. In practical terms, it takes the form of targeted financial assistance aimed at partially offsetting the rise in electricity costs for businesses and vulnerable households. This measure forms part of the Resilienspakt and complements other schemes, such as the reduction in excise duties on fuels. It takes the form of aid covering up to 50 per cent of the cost increase, capped at €500,000 per year.

Use of measure

The measure adopted consists of a subsidy on the all-inclusive electricity price of 4 euro cents per kWh (including VAT) from 1 August 2026 to 31 December 2026 for all residential customers with an annual consumption of less than 25,000 kWh and a taxable income of less than €50,000 per year.

For businesses, support varies, with energy-intensive sectors being treated separately. Thus, energy-intensive businesses – including industry (steel and chemicals), agriculture (greenhouses, livestock farming) and services (data centres, hospitals) – will benefit from a direct subsidy covering up to 50 per cent of the increase in costs. Other business sectors benefit from a 2 per cent reduction in the general electricity tax.

These measures are in addition to existing ones, namely the subsidy for network costs and the State’s funding of the compensation mechanism for the years 2026, 2027 and 2028.

Contents

• Other topics

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government Trade unions Employers' organisations	National funds

Social partners

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

	Trade unions	Employers' organisations
Role	Consulted	Consulted
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: Unknown

Involvement

Trade unions and employers’ representatives have been involved in the tripartite framework to discuss and develop measures based on consensus. The trade unions are committed to protecting workers’ purchasing power, particularly that of households. Similarly, employers’ representatives prioritise economic competitiveness, particularly for energy-intensive sectors such as the steel industry, data centres, etc.

This dialogue is overseen by the government as part of the tripartite meetings held in June 2026. The complexity of the situation stems from the interplay of two opposing dynamics: ensuring the energy transition whilst mitigating economic shocks.

Views and reactions

Trade unions strongly support this initiative, viewing it as vital for safeguarding jobs in the sectors most affected (manufacturing, agriculture) and preventing job losses caused by soaring energy costs. They are also putting forward additional demands: i) to extend the scheme to all small and medium-sized enterprises, including those with energy consumption of less than 1 GWh per year; ii) to increase financial support for the most vulnerable sectors; and iii) to maintain the scheme beyond 2026 if the price situation does not improve.

For their part, employers’ representatives acknowledge the relevance of this measure, but highlight budgetary constraints on public finances – estimated at around 80 million Euros for 2026 – as well as concerns regarding the prolonged continuation of the support, which could discourage businesses from investing in energy-efficiency solutions. They therefore propose focusing the support on the most vulnerable sectors (heavy industry, agriculture) and linking the subsidies to concrete commitments regarding the energy transition, such as carrying out energy audits or investing in renewable energy.

Sources

• 08 June 2026: Resilienzpakt (gouvernement.lu)
• 08 June 2026: Ce que contient le Resilienzpakt Ce que contient le Resilienzpakt (www.virgule.lu)