Luxembourg

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GH2 Country Portal – Luxembourg

Green Hydrogen Vision

Luxembourg’s vision for green hydrogen revolves around its commitment to sustainability, innovation, and the transition to a carbon-neutral economy. As a small but ambitious nation, Luxembourg seeks to leverage green hydrogen as a key pillar in reducing greenhouse gas emissions and achieving energy independence. The country views hydrogen as an enabler for decarbonizing sectors that are challenging to electrify, such as heavy industry, long-haul transport, and energy storage. By integrating green hydrogen into its energy ecosystem, Luxembourg aims to complement its renewable energy initiatives, using excess solar and wind power for hydrogen production through electrolysis.  

This aligns with the nation's broader strategy of promoting clean technologies, circular economy principles, and cross-border cooperation within the European Union. Luxembourg envisions becoming a hub for hydrogen innovation by fostering public-private partnerships, advancing R&D, and creating a supportive regulatory framework. The country is dedicated to establishing infrastructure for hydrogen production, storage, and distribution, ensuring its accessibility for both domestic and regional needs. Additionally, Luxembourg seeks to collaborate with neighbouring countries to develop integrated hydrogen corridors and expand its role in the European hydrogen economy. Luxembourg aspires to lead by example through these efforts, demonstrating how green hydrogen can catalyse sustainable development, economic resilience, and global environmental stewardship. 

National Strategy

Luxembourg’s 2021 hydrogen strategy positions renewable hydrogen as a crucial energy carrier for achieving climate neutrality by 2050. Recognizing the limitations of direct electrification in hard-to-decarbonize sectors, such as heavy industry and transportation, the strategy emphasizes using green hydrogen to bridge these gaps. By substituting fossil hydrogen in current industrial processes and gradually integrating renewable hydrogen across sectors, Luxembourg aims to reduce greenhouse gas emissions significantly. Hydrogen will play a pivotal role in decarbonizing three priority areas: industrial processes, transportation (with a focus on aviation and heavy road vehicles), and the development of an integrated energy system to support energy storage and grid flexibility. 

The strategy outlines a multi-faceted approach with seven key measures. These include contributing to a robust legal and regulatory framework at the EU level, fostering international collaboration for hydrogen production and infrastructure, and investing in research and innovation to explore domestic opportunities. Luxembourg intends to develop flagship projects such as pilot hydrogen production, the methanation of biogas, hydrogen refuelling stations, and integration into a transnational hydrogen network. Priority will be given to sectors where hydrogen provides the most significant impact, ensuring efficient use of resources and steering its adoption in high-demand, hard-to-electrify industries. 

To facilitate this transition, Luxembourg will create market instruments aligned with EU standards to stimulate supply and demand for renewable hydrogen. The Taskforce H2 Luxembourg governance structure will oversee the strategy’s implementation, continuously refining objectives and ensuring progress through expert groups and a steering committee led by the energy ministry. By focusing on sustainability, collaboration, and innovation, Luxembourg aims to establish itself as a leader in the renewable hydrogen economy, contributing to regional decarbonization efforts and fostering long-term energy resilience. 

Capacity Targets

  • Luxembourg's hydrogen strategy aims to integrate renewable hydrogen to achieve climate neutrality by 2050.
  • Initially, the focus is on substituting the country's current annual consumption of 450 tonnes of fossil hydrogen with renewable hydrogen, reducing 5,000 tonnes of CO2 emissions annually.
  • Over time, hydrogen demand could grow to 125,000 and 300,000 tonnes per year, supporting decarbonising priority sectors such as heavy industry, transport, and energy systems.
  • The strategy includes plans to establish infrastructure like hydrogen refuelling stations and develop flagship projects, including domestic hydrogen production and participation in international hydrogen networks. 

Impact Targets

  • Renewable hydrogen could reduce Luxembourg’s greenhouse gas (GHG) emissions by 1 to 2 million tonnes of CO2 equivalent per year, representing up to 20% of the country's current emissions.
  • Key sectors identified for hydrogen use are industrial processes that are challenging to decarbonize, aviation and other forms of transportation that are difficult to electrify, and integrated energy systems that utilize hydrogen for storage and balancing renewable energy.
  • These efforts align with Luxembourg's goal to transition to a sustainable energy system while supporting regional and international decarbonization. 

Policy and Project Spotlight

  1. Thanks to the collaborative LuxHyVal project, green hydrogen production in Luxembourg could begin by 2026. Apart from support by the EU, the University of Luxembourg will act as the project's primary coordinator. Central to the Luxembourg Hydrogen Valley (LuxHyVal) is a planned six-megawatt electrolyser facility set to be constructed in the industrial park at Bascharage. Enovos and LuxEnergie, subsidiaries of Encevo Group, aim to produce up to 1,750 kg of green hydrogen daily for industrial and mobility applications by 2026, with engineering firm Paul Wurth also participating. Industrial partner Ceratizit plans to transition from natural gas-derived hydrogen to green hydrogen produced through water electrolysis using renewable electricity. Additionally, bus operators Sales-Lentz and TICE are looking to incorporate hydrogen fuel cell buses into their fleets in the future. 
  2. On October 31, 2024, the Ministry of the Economy initiated a project call to promote renewable hydrogen production nationwide. This project reflects the government's commitment to assist the transition of energy and decrease reliance on fossil fuels by encouraging sustainable and innovative solutions. A portion of this budget will be allocated to: 

  • Investment aid that covers up to 45% of eligible expenses. 

  • Operational aid payments are limited to €7/kg (H₂), with an additional "bonus" of €3/kg (H₂) for new renewable energy production capacity created through this initiative.

  • The objective is to facilitate the installation of approximately 12 MW of electrolysis capacity for renewable hydrogen production. 

Financing

Luxembourg's strategy relies on fostering regional, European, and international partnerships to finance hydrogen-related projects. The strategy highlights collaborations within the Greater Region, the Benelux Union, and through the EU’s renewable energy financing mechanisms. Participation in flagship projects under the Important Projects of Common European Interest (IPCEI) framework is also key.  

Establishing a governance structure such as Taskforce H2 Luxembourg will oversee strategy implementation, budget requirements, and continuous improvement of hydrogen policies and initiatives. 

The LuxHyVal project has drawn funding to the tune of €39 million.  

The Ministry of the Economy has committed to €110 million in aiding the development of green hydrogen projects.  

Government Green Hydrogen Lead

The Ministry of the Economy