Energy and climate policy environment

In the period under review, the EU's energy policy was again largely characterised by the implementation of immediate measures to cushion high energy prices in the form of “emergency regulations”, as well as by activities to reduce dependency on energy imports from Russia and measures to improve supply security.

On 8 October 2022, a regulation on emergency measures as a response to high energy prices was published in the EU's Official Journal. The regulation introduces temporary measures to reduce electricity consumption by between 5% and 10%, along with a levy on excess profits for electricity, and a solidarity contribution for fossil energy companies, up to the end of 2023. In a similar vein, the EU Acceleration Regulation was published by the European Council on 29 December 2022. The primary intent here is to accelerate energy transition projects by simplifying approval procedures.

To improve the resilience of gas supplies to the EU, a regulation was published on 29 December 2022, boosting solidarity among member states in the event of a crisis, while regulations relating to a cross-border gas exchange improved coordination in the form of pooled gas purchasing and reliable price benchmarks at the Title Transfer Facility (TTF) gas trading exchange. A further emergency regulation from the Council, which entered into force on 1 February 2023, provides for the introduction of a market correction mechanism to hedge excessive gas prices in the EU. This mechanism has been in effect since 15 February 2023 and is automatically activated if gas prices that do not reflect world market prices occur in the EU.

The Parliament and the Council reached a political agreement on the reform of the EU Emissions Trading Scheme (EU ETS) on 18 December 2022. The key element is a significant increase in the greenhouse gas (GHG) reduction target by 2030 compared to the reference year 2005 from a previous value of -43% to -62%. As part of the “Fit for 55” package, political agreement was also reached on the revision of the effort sharing regulation. It defines binding reduction targets for all member states in sectors not covered by the EU ETS. For Austria, this means a 48% reduction in GHG emissions by 2030.

The amendments to the Energy Efficiency Directive envisaged in the “Fit for 55” package and in the “REPowerEU package”, designed to rapidly reduce dependence on Russian gas imports, were formulated in a political agreement in March 2023. This means that the Member States must collaborate to ensure that final energy consumption falls by at least 11.7% in 2030, compared with the 2030 consumption forecasts from 2020.

The large number of emergency regulations and the upheavals on the energy markets also led to numerous legislative measures in Austria:

National CO2 pricing for fossil energy came into force on 1 October 2022 as a central instrument of the eco-social tax reforms. This means that CO2 emissions in Austria have, for the first time, been assigned a price beyond the bounds of the emissions trading system.

Two minor amendments to the Renewable Energy Expansion Act in October and December 2022 mainly regulated an extension of the commissioning deadlines or improvements in the application system and a suspension of the renewable support flat rate for 2023. The accompanying regulation on the allocation of market premiums to support larger generation plants for 2022 and 2023 was published on 4 October 2022. The 2023 regulation on investment grants for small-scale renewable power generation facilities was published on 15 March 2023. In December 2022, a minor amendment to the Electricity Industry and Organisation Act (ElWOG) provided for budget funds of EUR 260 million in the first half of 2023 to cushion the sharp rise in grid loss charges for withdrawing parties. At the end of the year, the Electricity Consumption Reduction Act was also passed; it sets a target of 5% electricity consumption reduction at peak times.

On the basis of the EU Emergency Regulation relating to levies on excess profits, the Federal Act on the Energy Crisis Contribution – Electricity was announced on 29 December 2022. This caps the revenue from inframarginal electricity generation plants at 140 EUR/MWh. The maximum revenue increases to 176 EUR/MWh if preferential investments in renewable energies can be claimed in 2022 and 2023. The levy amounts to 90% of excess revenues and is applicable from 1 December 2022.

The Electricity Cost Subsidy Act (SKZG) was passed to relieve the burden from increased energy prices for households. This means that, as a rule, private households in Austria receive an electricity cost subsidy for electricity consumption of 2,900 kWh per year. In addition to this, a grid cost subsidy was introduced for low-income households. The Corporate Energy Cost Subsidies Act (UEZG) for energy-intensive companies provided for energy cost subsidies of up to EUR 7 billion.

The Renewable Gas Act was submitted for public review from 15 February 2023 to 29 March 2023. Central regulations call for an increase in domestic production of renewable gases of at least 7.5 TWh by 2030. An annual obligatory quota for suppliers will ensure the required investment security for Austrian producers. A corresponding Investment Subsidies Ordinance, which provides monetary support for newly constructed or converted biogas plants, was submitted for review at the same time.

An amendment to the Environmental Impact Assessment Act (UVP-G) was passed by the National Council in March 2023. One aim of the amendment is to fast-track essential projects in the scope of the energy transition. The amendment ensures improved structuring of the procedures by introducing procedural rules and ruling out objections if they were not raised in time.

The amendment to the Gas Industry Act (GWG), announced on 22 March 2023, provides for an extension of the protected customer group to district heating plants that supply heat to households, social services or small and medium-sized enterprises and stipulates the grid level 1 connection of the Haidach storage facility.

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