On Wednesday 16 September 2026, Mouvement Ecologique issued its response to Luxembourg’s Government’s ongoing plan to develop an EU regulation relating to tax advantages for certain plug-in hybrid vehicles.
Mouvement Ecologique said that following the answers from Luxembourg’s Minister of Finance Gilles Roth to parliamentary questions on the subject, nothing fundamental has changed its analysis and it maintains the stance it originally put forward in July 2026.
According to the environmental organisation, Minister Roth put forward a plan for further development of an EU regulation which would ensure that only more “efficient” plug-in hybrids would be given greater tax advantages, and in response asked why the government is choosing to proceed, despite uncertainty from other EU countries such as Germany, on whether this development will take place.
Mouvement Ecologique said: “To now adopt a Grand Ducal regulation in Luxembourg that would make plug-in hybrids more attractive again, without having the guarantee that this further development will actually come at EU level, is, in our eyes, reckless. A coupling would be the absolute minimum. But even then, it would be a wrong decision.”
Mouvement Ecologique argues that over half of Luxembourg’s car fleet consists of company cars that benefit from tax relief. Until now, this relief has been structured in such a way as to provide a strong incentive for purely electric cars, thereby helping to achieve climate targets through this ‘lever’. They state that this is “absolutely essential”, as the switch to electric vehicles is a central pillar of the government’s National Climate and Energy Plan (PNEC). They added that logically, plug-in hybrids were correctly given minimal tax benefits as company cars, as purchasing them was “unattractive”.
The environmental organisation argues that the government’s stance is untenable in various ways and stated that plug-in hybrid vehicles have long been an outdated technology, electric cars have become even more attractive, meaning there is even less need for a transitional solution, electric cars are now cheaper, the variety on offer is wider and the vehicle’s range is much greater.
Mouvement Ecologique said: “Anyone who now tries to argue that plug-in hybrid vehicles are still needed as a bridging technology between internal combustion engines and electric cars is simply looking for a spurious argument to give in to pressure from certain car manufacturers who want to cling to outdated solutions.”
Additionally, Mouvement Ecologique noted the discrepancies between EU measurements of the average amount of CO₂ produced per kilometre by plug-in hybrid vehicles in comparison to the manufacturers’ figures (145 g vs 24 g) and argues that “they are a world away from the benefits of an electric car and do not even offer any real added value compared to internal combustion engines”.
Moreover, Mouvement Ecologique questions the certainty of any changes to the legislation taking place at an EU-level as Germany and Italy, in particular, are pushing for a relaxation of the usage factor (50%–50%) due to come into force in 2025, or even its complete abolition, therefore rejecting the adjustment suggested by Luxembourg.
“Today, without there being any real need for action, to increase subsidies for plug-in hybrids – which are climate killers – using taxpayers’ money, without there being any certainty whatsoever that the EU regulations will actually be tightened – and indeed with the concern that they may even be watered down – would be utterly unacceptable and downright negligent,” emphasised Mouvement Ecologique.
“If the government does intend to provide greater subsidies for plug-in hybrids, then this must be strictly conditional on the subsidies only coming into effect if the usage factor it is aiming for is actually implemented from 2027 onwards. Only in this way would it be consistent with its own positions: if Luxembourg opposes, at European level, any watering down of Regulation 2023/443 – and thus opposes PHEVs with excessively high emissions – why should it then grant these vehicles a tax advantage should that regulation be weakened?”
