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The government programme of the three-party coalition for the years 2025-2029 has been established. In the field of energy law, long-awaited legislation such as the Electricity Industry Act (ElWG), the Renewable Gas Act (EGG) and the Renewable Expansion Acceleration Act (EABG) are set to be enacted.
One of the major challenges for the new government will be the ramp-up of a hydrogen economy in accordance with the new EU Gas Market Directive. However, the government programme contains only a few concrete details on this matter.
On a positive note, the continuation of subsidies for the transformation of the industry is assured, aligning with the newly published EU Clean Industrial Package, released by the European Commission on 26 February 2025 (Read our Legal Insight on the Package here).
In this Legal Insight, we present selected points from the energy sector, incorporating some comments from a practical perspective
Governmental proposal and plans:
Unlocking energy community potential for large enterprises: The government seeks to offer large enterprises access to competitive prices through energy community participation, while also evaluating existing privileges for these communities.
Comments from legal and regulatory perspectives:
While energy communities are primarily nonprofit and typically exclude established energy companies, larger businesses can still benefit in practice. However, choosing the right community model, participation form and legal structure is essential and challenging at the same time. It remains to be seen whether, and to what extent, existing community entry barriers for large enterprises (e.g. the participation ban with regard to renewable energy communities and the "no-control" requirement for citizen energy communities) will be lifted. In this context the law makers will need to take account of "red lines" set by the RED III and Electricity Market Directive. Against this background, the government might think of new types of energy communities, such as peer-to-peer/energy sharing concepts or direct Power Purchase Agreement (PPA) structures.
Governmental proposal and plans:
Revamping the Renewable Energy Expansion Act (EAG): Market premiums will undergo review, paving the way for the introduction of Contracts for Difference.
In addition, the government plans to introduce eco-social criteria for eligibility to receive subsidies under the EAG.
Comments from legal and regulatory perspectives:
Notably, the existing EAG regime already provides (two-sided) CfD components in relation to large wind farms and photovoltaics. It is therefore unclear what the new government is planning to adjust in terms of EAG market premiums. For example, the CfD mechanism could be extended to smaller plants and technologies not yet addressed by the CfD mechanism. In any case, the interest of entering into PPAs will likely remain unchanged or, ideally, become increasingly vital. (To find out more about our energy capabilities, including with regard to PPAs, click here.)
Governmental proposal and plans:
Measures for more affordable energy: energy companies should place greater emphasis on public interest in affordable energy.
An expert group will be formed to drive price reductions, particularly through reforms to levies and grid tariffs.
Additionally, the Electricity Energy Crisis Contribution measure and the Fossil Energy Crisis Contribution measure will be extended.
Comments from legal and regulatory perspectives:
The government aims to set corporate governance rules according to which the management of energy companies can take account of the public interest in affordable energy when doing business and setting business strategies. This governmental plan appears to be triggered by recent discussions on price setting and trading strategies of utility companies (who were accused of pursuing strategies that resulted in high energy prices for customers in times of energy crisis). However, it should be clear that the management needs to continue to focus on the welfare of the company, ensuring its long-term profitability.
Governmental proposal and plans:
Boosting the geothermal sector: The government plans to set clear expansion targets and offer subsidies to reduce the risk of "failed" drilling. Long-awaited revisions to the Mineral Resources Act and the Water Rights Act are also on the way.
Comments from legal and regulatory perspectives:
The right to dispose of and use foreign properties at great depths without affecting the near-surface area currently presents legal hurdles for the expansion of geothermal energy.
Governmental proposal and plans:
Decarbonising the heating sector: The new government aims to phase out fossil fuels in heating and emphasises the crucial role of local heating plans, particularly in relation to the decommissioning of gas grids and the expansion of district heating.
Comments from legal and regulatory perspectives:
Large municipalities will soon be required to implement local heating and cooling plans according to the Energy Efficiency Directive. These plans will be pivotal for investments in heating grids, the development of contracting models and the integration of excess heat into existing systems.
Additionally, the new government will likely aim to establish third-party access to large district heating systems, as mandated by the Renewable Energy Directive.
Governmental proposal and plans:
Adoption of the Renewable Gas Act (EGG): The promotion of green gas will be supported through market premiums (rather than by setting a green gas quota for suppliers, as initially planned under the EGG which finally failed under the former government). This would mean a support mechanism for green gases like the EAG premiums for renewable electricity.
The government has set an ambitious target to expand green gases by 6.5 TWh each year until 2030.
Comments from legal and regulatory perspectives:
The future of green gas promotion offers a valuable investment opportunity. From a legal perspective, project designs and CfD concepts must comply with state aid regulations. Moreover, green gas production would need to comply with the RED sustainability and greenhouse gas reduction criteria.
It remains uncertain whether a 6.5 TWh annual expansion is feasible. Any obligations related to this target could be challenged from a constitutional law perspective.
Governmental proposal and plans:
Reaching net-zero with carbon management: The new government plans to lift the ban on geological CO2 storage in Austria and create a framework for Bioenergy Carbon Capture and Storage (BECCS). In this context, the establishment of a CO2 pipeline infrastructure is being considered. Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU) will play a key role in reducing emissions in hard-to-abate sectors.
Adoption of a Climate Act: One of the aims of the Climate Act is to create an "interministerial steering group", which is to draw up a "climate roadmap" in addition to other tasks. This will act as a planning instrument and will include measures by the federal government and the federal states to achieve the goal of climate neutrality by 2040.
Comments from legal and regulatory perspectives:
The introduction of CCS and CCU offers companies in hard-to-abate sectors a way to reduce emissions.
Clear guidelines and standards are needed to ensure effective and safe deployment, along with incentives for adoption. The development of this framework will be key to the success and widespread use of CCS and CCU in reducing industrial emissions.
The interministerial steering group appears to be an interesting idea. However, allocating competencies and decision rights to such a steering group could be in conflict with constitutional law.
Governmental proposal and plans:
Technological-openness and innovations in fuels: the government programme emphasises openness to all technologies that could enhance ecological drivinge solutions, with hydrogen and e-fuels as components for the future of transport and mobility.
Comments from legal and regulatory perspectives:
Demand for renewable hydrogen, particularly hydrogen-based fuels, is expected to increase. Producers of renewable fuels of non-biological origin (RFNBO) must adhere to strict conditions and methodologies outlined in the Renewable Energy Directive and its Delegated Acts.
The Austrian government's new programme for 2025-2029 sets a transformative agenda for the energy sector, with significant legal implications. The enactment of the Electricity Industry Act and the Renewable Gas Act, along with measures to promote affordable energy, geothermal expansion and the transition to a hydrogen economy, mark critical steps forward. However, the success of these initiatives will depend on the effective implementation of regulatory frameworks, compliance with state aid and sustainability criteria and the ability to navigate constitutional challenges.
authors: Bernd Rajal, Patrick Barabas
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