Energy and spatial planning minister Claude Turmes said on Wednesday that he expected a change in the way green funds are taxed in Luxembourg Matic Zorman/archives

Energy and spatial planning minister Claude Turmes said on Wednesday that he expected a change in the way green funds are taxed in Luxembourg Matic Zorman/archives

Energy and spatial planning minister Claude Turmes (Déi Gréng) was speaking at a breakfast conference organised by finance labelling agency Luxflag at 19 avenue de la Liberté on Wednesday.

He said that the finance minister, Pierre Gramegna (DP), was warming to the idea of reducing tax on green funds. “That’s something I asked a year ago. I think he is now ready to do it,” Turmes said in his keynote speech.

Climate finance strategy

Luxembourg’s climate finance strategy has so far seen it establish a sustainable finance roadmap, build a climate finance platform with the EIB, create an international climate finance accelerator and launch the Amundi Planet Emerging Green One Fund.

These efforts ranked Luxembourg among the top green financial centres in the 2018 Global Finance Index, in second place for green finance penetration and sixth for green finance quality. But, there remain barriers, among them taxation. Luxembourg currently charges a 0.5% in annual subscription tax on the net assets of undertakings for collective investments. But it charges a super-reduced rate of 0.01% on specialised investment funds and alternative investment funds.

Turmes said that he’d also like to see a chair created at the University of Luxembourg which is specialised in the science behind rating funds to better assess the risks associated with funds which are not environmentally responsible. “The future of banking is green,” he said, adding that effective labelling of 100% sustainable funds was essential to move forward.

Turmes spoke about the efforts Luxembourg and the European Union have made in reducing carbon emissions and combating the effects of climate change.

Among them are moves to encourage the creation of energy cooperatives in Luxembourg which are paid for the energy they generate from photovoltaics. “In three weeks’ time, I will launch a big programme for cooperatives,” Turmes said, adding: “We raised the prices. Yesterday, we had a meeting to get an easy system of standard contracts for local authorities to rent it out.”

The minister further explained he hoped to see supermarket chains like Cactus and Auchan form similar cooperatives with their clients. And he called on the 100 or so people gathered at the conference to put pressure on their employers to do the same.