Energy and climate policy environment

The reporting period was characterised by a wide range of decisions on energy and climate policy at both EU and national level that are relevant to the sector. On 13 October 2021, the European Commission issued a communiqué (“Toolbox”) on how to deal with rising energy prices, including recommendations for households and industries which are particularly affected. In March 2022, the European Commission followed up on this toolbox with further recommendations for action.

The aim of the Commission's “Hydrogen and Gas Market Package”, as presented on 15 December 2021, is to integrate renewable and decarbonised gases and hydrogen into the European legal framework, strengthening the ramp-up of climate-neutral gases for the internal gas market in the style of the “Fit for 55” package in the process. The introduction of a standardised certification system for renewable and low-carbon gases is planned with a view to this. Beyond this, the package includes requirements for regulating and unbundling hydrogen networks and strengthening consumer rights.

In the scope of the “Fit for 55” package, the Commission presented a proposal in mid-December 2021 to revise the building efficiency directive. Among other things, the innovations are aimed at doubling the refurbishment rate for buildings in the EU with a view to achieving a significant reduction in energy consumption and greenhouse gas emissions in the building sector.

On 27 January 2022, the European Commission adopted the new EU Guidelines on State Aid for Climate, Environmental Protection and Energy (CEEAG) with immediate effect.

On 2 February 2022, the Commission released the final wording of the complementary delegated act of the Taxonomy Regulation on technical assessment criteria for electricity and/or heat production with gas-fired power plants and from nuclear energy. The act classifies held-to-maturity investments in hydrogen-capable gas-fired power plants which continue to be operated with natural gas for a transitional period, and for which very strict emission limits apply, as a sustainable transitional activity. The conversion of power plant operations to 100% renewable or low-carbon gases must be completed by 1 January 2036.

On 23 February 2022, the European Commission issued a directive proposal for an EU supply chain law. The central objective of the proposal is to impose sustainability requirements along the entire value chain on companies with 500 or more employees and annual global sales of at least EUR 150.0 million, with a view to ensuring compliance with human rights and preventing pollution.

In Austria, the federal government and the electricity and gas utilities undertook a number of activities during the reporting period to alleviate the social hardship caused by the current energy price situation. In the scope of the Electricity Industry and Organisation Act (ElWOG), the National Council recently standardised a legal entitlement for households and small businesses to instalment payments, in the face of additional payments for the annual electricity bill. Electricity and gas suppliers have also introduced further voluntary measures to curb spiraling energy prices. On top of this, funding for emergency aid will be increased in 2022 in cooperation with social institutions and aid organisations.

In January 2022, the Austrian National Council ratified the eco-social tax reform, thereby introducing national CO2 pricing for petrol, diesel, heating oil, coal and natural gas. The associated National Emissions Allowance Trading Act provides for graded national CO2 pricing of sectors outside the EU emissions trading scheme as of 1 July 2022, with this taxation to be offset by a climate bonus and other relief measures.

The introduction of the Renewable Energy Expansion Act package in the summer of 2021 meant that a first milestone had been reached in the implementation of the EU's “Clean Energy Package”. Due to the European Commission's concerns regarding state aid, the Renewable Energy Expansion Act was amended in January 2022.

Shortly before the end of the reporting period, an amendment to the Gas Industry Act was passed in March. This will ensure rapid provisioning of domestic gas volumes in the event of sudden disruption to Austria's gas supply on the one hand while work on establishing a strategic gas reserve and ensure storage levels is in progress on the other. The strategic gas reserve will be available for the first time in November 2022 and will be based on the volume of gas supplied to grid users in January of each year.

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