Energy and climate policy environment
At EU level, the start of the new College of Commissioners was marked by work on the ‘Clean Industrial Deal’, the ‘Action Plan for Affordable Energy’ and the two legislative ‘Omnibus Directives’ to reduce red tape in sustainability reporting and to simplify investment.
The Clean Industrial Deal - as a non-legislative communication - is designed to underpin the EU's belief in its decarbonisation targets, provide clear incentives to decarbonise businesses, and address climate change mitigation and competitiveness in an overarching growth strategy. The aim is to promote increasingly sustainable and resilient production in Europe, especially for energy-intensive industries and the cleantech sector. Key actions of the Clean Industrial Deal include reducing energy prices, promoting renewable energies and the necessary grid expansion, regulatory and financial assistance for hydrogen uptake, and supporting the decarbonisation industry.
The Action Plan for Affordable Energy, in turn, aims to reduce energy bills, deepen the Energy Union, promote investment and be better prepared for possible energy crises. The Communication is non-legislative, but it will be followed up in part by legislative measures or will be accompanied by reviews of existing regulations.
The first Omnibus Directive contains far-reaching proposals to reduce reporting requirements under the Corporate Sustainability Reporting Directive (CSRD), the EU Taxonomy, the EU's Sustainability Corporate Due Diligence Directive (CSDDD) and the Carbon Border Adjustment Mechanism (CBAM). On 3 April 2025, the deadline for implementing the CSRD and the CSDDD was decided in the European Parliament. The second Omnibus Directive aims to simplify and optimise the use of several European investment programs.
In early March 2025, the action plan for the European automotive industry was presented. The European Commission is looking to boost the sector's competitiveness and promote the transformation towards clean mobility and digitalisation. The intended flexibilisation of the CO2 fleet limits for passenger cars and light commercial vehicles is expected to temporarily weaken the electromobility ramp up. The action plan also contains important positive accelerating impulses for electric vehicle charging infrastructure, energy networks and regulatory arrangements for bi-directional charging.
The report dated 28 April 2025 on the verification of bidding zones by the European Network of Transmission System Operators for Electricity did not produce a clear result for Central Europe. It leaves open the possibility of splitting the German electricity price zone, which could have a potential impact on Austria. In the 21st legislative period, the German Federal Government committed to maintaining the existing electricity supply zone.
On 6 May 2025, the European Commission published a roadmap for the complete phasing out of Russian energy imports by the end of 2027. This intent is to implement this through concrete actions and regular EU legislative procedure. On 17 June 2025, a legislative proposal to phase out Russian gas imports and improve energy dependency monitoring followed. The draft provides for an end - directly or indirectly - to the import of pipeline gas and liquefied natural gas (LNG) of Russian origin by 2027 at the latest.
The implementation of the ‘Net Zero Industry Act’ (NZIA) is an important step in the implementation of the ‘Green Deal Industrial Plan’. The objectives of the new energy and climate legislation are to provide predictability for investment, so that cleantech companies can grow in Europe and remain globally competitive.
On 26 June 2025, the European Commission adopted the ‘Clean Industrial Deal’ State Aid Framework. The new framework in particular includes speeding up the development of renewable energies, including hydrogen, promoting non-fossil flexibility options, and temporary reductions in electricity prices for energy-intensive consumers. The State Aid Framework will remain in effect until 31 December 2030.
The European Commission presented the proposal for the EU 2040 climate target on 2 July 2025. It is part of the implementation of EU Climate Law and sets out the path towards climate neutrality in 2050. The intent is to reduce greenhouse gas emissions by 90.0% compared to 1990 levels. As of 2036, up to three percentage points of the target can be covered by international climate change projects in third countries. Flexibility between the EU Emissions Trading Scheme (ETS) and non-ETS sectors, as well as Member States, is also envisaged and there are incentives for permanent domestic CO2 abstraction. On 18 September 2025, the EU Council adopted a non-binding memorandum of understanding, which sets a target range of 66.25% to 72.5% reduction by 2035.
The European regulation on the reduction of methane emissions in the energy sector came into force on 4 August 2024. This was the first time that immediately binding regulations regarding the prevention and reduction of methane emissions had been introduced in the EU for gas infrastructure operators, oil production and coal mining.
Following the publication of the EU Gas Storage Regulation in the Official Journal of the EU, the retention of 90.0% of storage capacity utilisation was extended to the end of 2027 as of 11 September 2025. Options for achieving the 90.0% target for member states have been made more flexible; this can now be achieved between 1 October and 1 December of each calendar year, instead of 1 November previously. In addition, additional flexibility is possible in difficult market or technical situations. The interim targets are also indicative with a view to avoiding market distortions.
At the national level, the Austrian Federal Government is committed to climate neutrality by 2040 in the government programme 2025-2029. The intent is to establish a socially balanced climate policy in line with the UN Sustainable Development Goals and the EU Green Deal, as well as effective implementation of the pertinent legal instruments of the ‘Fit for 55’ package. The focus will also be on measures for competitive and stable energy prices for households and businesses.
In the area of legislation, the amendment of the Renewable Energy Expansion Act to increase the efficiency of support and to speed up approval procedures is envisaged in the form of key actions under the Renewable Expansion Acceleration Act. The Electricity Industry Act, the Renewable Gases Act and the Climate Act are also very high priorities in the Austrian Government's programme. The implementation of the Directive of the European Parliament on common rules for the internal markets for renewable gas, natural gas and hydrogen to establish a hydrogen start-up and core network also takes a key role in the form of a Gas Industry Act (GWG) amendment.
A draft of the Electricity Industry Act (ElWG) was submitted for evaluation on 8 July 2025. This legislative package includes the legal measures required to fully implement Directive (EU) 2019/44, as amended by Directive (EU) 2024/1711, and to adapt national electricity legislation to developments in Union law. Since the ElWG regulates many aspects of the electricity market, numerous comments on it were received.
On 1 October 2025 a small amendment to the Renewable Energy Expansion Act (EAG) was adopted by the Economic Affairs Committee; it provides for an extension of support for existing biogas plants for 18 months. The National Council is expected to take a decision later this year.
On 9 September 2025, an evaluation procedure on the Renewable Energy Expansion Acceleration Act (EABG) was launched. The focus will be on pooling procedural and decision-making powers among the country's heads of state. In future, instead of a wide variety of material procedures, the ‘one-stop shop’ principle will mean that there will be only one procedure; this will drive simplification, reduction and increased efficiency of administrative procedures. The EABG is the response to a long-standing demand from the industry for procedural acceleration below the environmental impact assessment (EIA) threshold.
Since July 2025, the government has been discussing a climate law (KliG) drafted by the Federal Ministry of Agriculture and Forestry, Climate and Environmental Protection, Regions and Water Management (BMLUK). The new draft focuses on climate change mitigation, adaptation measures and the circular economy, creating a governance framework without binding targets for climate action. A proposal to Parliament was announced for autumn 2025.
The ‘Made in Europe’ bonus is a support measure in Austria which has been in force since 23 June 2025 under the EAEC investment grant for photovoltaic (PV) installations. The aim is to strengthen European production of PV components and reduce dependency on Asian imports by obtaining higher subsidies when using European products.
The Renewable Gases Act (EGG) aims to promote the production and supply of domestic renewable gases by means of a market premium. The draft was submitted to Parliament by the previous government in February 2024.
The amendment to the Upper Austrian Spatial Planning Act saw the introduction of an extension to the dedication exemptions for certain projects, such as freestanding PV systems, substations, etc., on 1 July 2025.