Luxembourg is to become the first country in the world to make all public transportation free. All fares for trains, trams and buses will be scrapped by summer 2019 as part of a new environmental initiative, Xavier Bettel, the prime minister, has announced.
Luxembourg City, the capital, suffers from some of the worst traffic congestion in the world, with one study showing that drivers spent an average of 33 hours in traffic jams in 2016.
Despite its tiny population of 110,000 people, some 400,000 - including those from the bordering countries of France, Belgium and Germany - commute to the capital city for work.
Mr Bettel was sworn in for a second term on Wednesday, having promised during his election campaign to prioritise environmental issues.
Mr Bettel will also consider introducing two new public holidays and legalising cannabis for recreational purposes.
The Grand Duchy is the European Union's wealthiest but second smallest member state, with a population of approximately 600,000.
Annually, the national public transport system costs around €1 billion (£890 million) to run. The new coalition government has promised to invest more in public services.
The plan will ease road network constraint as well as save money on fare collection and ticket inspection, but there still remain some issues to resolve before people can start travelling for free.
A decision still needs to be make about what do to with first- and second-class train compartments.