Austria

Expenditure on environmental protection remains a priority on the political agenda

Climate and environmental protection is becoming increasingly important for the Austrian economy and public budgets. This is reflected in the growing expenditure on environmental protection, which rose to 3.6% of gross domestic product (GDP) in 2021, 1.6 times higher than the EU-27 average for the same year. Research conducted by the Technical University of Vienna and Environmental Agency Austria highlights the crucial role of public capital stock in driving Austria’s progress towards decarbonisation. They estimate that the additional investments required to decarbonise the existing public capital stock will amount to EUR 36 billion cumulatively by 2030, equivalent to 1.2% of GDP annually. Investments and decisions focused on climate protection boost GDP and employment, while advancing climate neutrality.

The environmental goods and services sector plays a key role in Austria’s economy

The environmental goods and services sector holds greater significance in Austria than across the EU-27. Both its GDP contribution and the share of environmental employment are approximately twice as high as the EU-27 averages. This sector encompasses activities such as energy resource management, soil and water protection and remediation and waste management. Additionally, Austria’s bioeconomy aims to create additional jobs in rural areas by 2030 through the production and processing of renewable raw materials into high-quality products.

A standout example is the Umweltstiftung (Environmental Foundation) initiative, which showcases effective collaboration between public institutions and companies to promote green jobs. It provides specialised training and qualification programmes in areas like renewable energy, e-mobility and environmental technology. The initiative focuses on supporting unemployed individuals, particularly women, older workers and long-term unemployed people.

Environmental taxes are paired with reimbursements for households

Environmental taxes as a share of total tax revenues are slightly lower in Austria than the EU-27 average. The proportion of environmental taxes decreased from 5.6% in 2010 to 4.3% in 2022. A significant proportion of Austria’s environmental tax revenues comes from a carbon dioxide tax introduced in 2022. To offset the financial burden of the carbon dioxide tax on households, it was accompanied by the Klimabonus, a climate bonus that provides direct monetary transfers to households. The bonus is scaled based on regional access to public transportation.

The food system

An important lever for food system change on the production side lies in the distribution of the total agricultural budget: for the Austrian agri-environmental programme (ÖPUL), in the 2023–2027 funding period, a total annual average budget of EUR 614 million was allocated, including EUR 100 million for eco-schemes. The funding for ÖPUL measures is generally split in terms of sources, with approximately 50% coming from the European Agricultural Fund for Rural Development, while the remaining contributions come from federal and regional governments. Eco-schemes, however, are fully financed by the European Agricultural Guarantee Fund.

The programme supports biodiversity, soil conservation, water protection, air quality, animal welfare and climate-friendly farming by providing financial incentives for farmers who implement specific ecological measures. In Austria, 80% of farms, covering over 80% of agricultural land, participate in ÖPUL measures. Further growth of the sustainable agriculture sector, in particular organic farming, is an important area for the transition.

Extensive livestock production systems, based on permanent grassland, provide many ecosystem services. They require the use of low amounts of arable land per unit of product and thus result in high food conversion efficiency. Grassland-based feeding management is one of the promising factors for the food system transition.

To tackle the transformation towards sustainable food systems in a systemic way, interministerial cooperation between three federal ministries (those responsible for climate and environment, agriculture and health and consumers) is supported by the National Coordination Centre for Sustainable Food Systems, established in 2023 at the Austrian Agency for Health and Food Safety. Another key element is the Austrian action plan for sustainable public procurement, which contains procurement criteria for food and catering services. In 2023, the Austrian Promotional Bank (AWS) of the Austrian federal government started an initiative to support business and civil-society initiatives working on the transformation to a sustainable food system.

From 2005 to 2022, amounts of meat and milk for human consumption fell by around 10%, reaching 58.6 kg/capita and 70.4 kg/capita, respectively, in 2022. New Austrian food‐based dietary guidelines, including climate and health parameters, have been in place since July 2024. At the local level, food policy councils in Vienna and Innsbruck were established, where citizens engage in creating a more coherent urban food policy, also backed by the Milan Urban Food Policy Pact. A food system framework was also developed for Vienna.

In 2021, Austria generated 1 201 165 t of food waste, corresponding to 134 kg/capita/year. The 2023 Austrian waste prevention programme states that initiatives like cooperative partnerships with retailers, the United against Waste platform and the distribution of food to social services and welfare organisations are important starting points to significantly reduce food waste. The tax exemption for food donations to charitable institutions entered into force in 2024 and is another important step in reducing food waste.

The energy system

In 2023, Austria had net energy imports in the range of 800 PJ, and almost all imports were fossil fuels (oil and gas).

In the upcoming years, major changes will affect the Austrian energy system. To meet the national and EU targets for energy efficiency, shares of renewable energy and the reduction of greenhouse gas emissions, several aspects of the energy system will have to undergo significant changes. More efforts have to be made to reduce energy demand.

In the Renewable Energy Expansion Act, Austria set the target of installing 27 TWh of renewable power capacity by 2030; according to the National Energy and Climate Plan, this number will be increased to 35 TWh by 2030. For the generation of power, renewable energy sources have to be integrated into the electricity grid. At the same time, the net power level has to be kept stable, so the infrastructure has to be significantly updated. Austria has set out its way forward in its national infrastructure plan.

One consequence of this reorganisation of the energy system is that the infrastructure for energy production, storage and transmission must be adapted accordingly. This expansion requires a whole range of measures, such as the designation of suitability zones for renewable electricity production plants, accelerated approval processes and the expansion of transmission networks and energy storage.

As for renewable gases, Austria’s hydrogen strategy has set a target of capacity of 1 GW for electrolysis by 2030. A draft renewable gas act proposes a total domestic annual production of 15 TWh of renewable gases by 2035 (approximately two thirds biomethane and approximately one third hydrogen). In order to meet the increasing demand for hydrogen in Austrian industry, imports of hydrogen from other countries have to be secured.

For the distribution of hydrogen, the current fossil gas pipelines could be repurposed to act as the first sections of a hydrogen network in Austria. The Austrian network has to be a part of the larger European hydrogen backbone. The parts of the fossil gas network that are no longer needed will have to be decommissioned within the next two decades.

Networks for district heating have to address the challenges of decreasing demand per kilometre due to the refurbishments of buildings and providing district heating through non-fossil-fuel-based sources and at lower temperatures.

A carbon management strategy has recently been developed in Austria; it states that carbon capture and storage will be used for hard-to-abate emissions. Of course, carbon capture and storage will create additional energy demand.

Concerning final energy demand, energy efficiency measures have to be implemented (see country indicator on 'energy consumption'). The reduction of fossil fuel use reduces emissions of not only greenhouse gases but also air pollutants.

The mobility system

The COVID-19-pandemic-related developments in 2020, together with technological developments, led to a – 13.5% reduction in transport-related greenhouse gas emissions in Austria within one year. This change was not an exception, but the beginning of a sustainable reversal of the emission trend. With the exception of a slight increase in 2021, emissions have decreased steadily since then and in 2023 reached their lowest level in 22 years.

The change in technology played a major role in this: almost one in five new passenger cars registered in Austria in 2023 were battery electric vehicles. This means that, on 31 December 2023, 155 500 vehicles, or approximately 3% of all passenger cars registered in Austria, were battery electric ones. These figures show that locally emission-free electric mobility has already established itself in the passenger car category. Moreover, there were 21 462 publicly accessible charging points at the end of 2023, or 1.38 charging points per 10 vehicles, and this figure has grown from year to year. Pure biofuels are also becoming increasingly important, particularly in the heavy commercial vehicle category. In 2023, for example, 220 times more pure hydrotreated vegetable oils were sold than in the previous year.

These technological developments are supported by government subsidies: since 2016, both the purchase and operation of electric vehicles have been subsidised. The expansion of charging infrastructure is also being subsidised. This is complemented by regulatory and fiscal measures that support the technological shift towards electromobility. These include the abolition of the standard consumption tax, which is payable in Austria when purchasing a new car, or the exemption from non-cash benefits for fully electric company cars. The national implementation of the EU Renewable Energy Directive has also created a legal basis that provides a significant incentive to increase the proportion of renewable energy in the Austrian transport sector.

The change in technology and the use of climate-neutral fuels are only parts of the mobility transition. Austria’s 2030 mobility master plan was published in summer 2021. In addition to the non-binding goal of a phase-out of new registrations of passenger cars with internal combustion engines by 2030 at the latest, it sets out, among other things, the need to reduce traffic volume to a significant extent or to shift to particularly energy-efficient and therefore climate-friendly modes and means of transport. Based on this strategy, measures to avoid and shift traffic have been implemented and are ongoing. These include, for example, an increase in the budget for the construction of infrastructure for active mobility (cycling and walking) and the provision of more than EUR 21 billion for the expansion and development of infrastructure for rail transport by 2029.