Electricity Cost Compensation Act 2025
Support for Compensating Rising Electricity Prices in Austria
Federal law on the temporary provision of subsidies to compensate for the increase in electricity prices due to the inclusion of greenhouse gas emission costs from European emissions trading for the years 2025 and 2026 was published.
Legal Objective and Background
Main Objective
Reduction of the burden on companies that are particularly affected in the calendar years 2025 and 2026 by significantly increased electricity prices due to the inclusion of greenhouse gas emission costs from the European Emissions Trading Scheme (indirect CO2 costs).
Affected Companies
The law targets companies that are exposed to a real risk of CO2 emission leakage and operate in the defined sectors.
Timeframe
The subsidy applies exclusively to the calendar years 2025 and 2026.
EU Emissions Trading Scheme
The costs arise from the passing on of greenhouse gas emission costs via electricity prices.
Key Definitions
1
Installation
A stationary technical unit in which products are manufactured that fall under one of the sectors or sub-sectors listed in Annex 1.
2
Indirect CO2 Costs
The costs actually incurred through the passing on of greenhouse gas emission costs via electricity prices.
3
EUA Futures Price
The simple average of the daily one-year forward prices for emission allowances, determined at the European Energy Exchange (Leipzig Power Exchange EEX).
4
CO2 Emission Factor
The maximum CO2 emission factor set for the Austria, Germany, and Luxembourg zone, amounting to 0.72 t CO2/MWh.
Further Important Definitions
Electricity Consumption Efficiency Benchmark
The product-specific electricity consumption per tonne of output, using the most electricity-efficient production methods (in MWh/tonne).
Fallback Benchmark
A share of 80% of actual electricity consumption for products without a specific benchmark. This will be reduced annually by 1.09% starting in 2022.
Actual Production Output
The actual production output of the installation in year t, determined retrospectively in year t+1 (in tonnes per year).
Subject and Amount of Funding
01
Subject of Funding
Compensation for indirect CO2 costs of applicant companies to achieve the legal objective.
02
Type of Funding
Provision of direct grants for the calendar years 2025 and 2026.
03
Funding Amount
The funding amounts to 75 percent of the actual indirect CO2 costs incurred.
04
Calculation
The amount is calculated for each calendar year based on the formulas in Annex 2.
Important: Funding or other support from other public funding bodies is permissible up to the maximum aid limits under state aid law.
Companies Eligible for Funding
Eligibility
Applications for funding can be submitted by companies that, in the respective calendar year, manufacture products in one or more facilities within the sectors or sub-sectors listed in Annex 1.
Minimum Consumption
Applications can be submitted for the portion of a facility's annual electricity consumption that exceeds 1 GWh.
1 GWh
Minimum Electricity Consumption
Threshold for eligibility per facility
Processing and Deadlines
1
Processing Authority
Austria Wirtschaftsservice GmbH (aws) is responsible for processing the funding applications.
2
Deadline 2025
Applications for 2025 within six months of state aid approval by the EU Commission.
3
Deadline 2026
Applications for 2026 between January 1st and June 30th of the following calendar year.
Compliance with deadlines is essential for the granting of funding. Late applications cannot be considered.
Funding Requirements: Energy Audit
Obligation
Submission of a valid energy audit by November 30, 2026, in accordance with the Energy Efficiency Act (EEffG).
Format
Independent energy audit or as part of a certified energy/environmental management system.
Implementation
Identified measures must be implemented within 60 months from the grant of funding.
Measures Obligations
Energy Efficiency Measures
Companies applying for funding commit to implementing identified and technically feasible energy efficiency measures, as well as other technically and economically feasible decarbonization measures.
Payback Period
The investment costs of the measures must not exceed a payback period of five years. In justified exceptional cases, a reasonable extension of the implementation period may be granted.
80%
Minimum Investment
of the grant amount must be invested
50%
Energy Efficiency
At least for energy efficiency measures
Decarbonization measures include: measures for generating renewable electricity and measures for decarbonizing the production process.
Exclusion Reasons and Proof Requirements
Undertakings in difficulty
No funding for undertakings in difficulty within the meaning of the EU guidelines.
Recovery orders
No funding in case of non-compliance with previous EU recovery orders.
Burden of proof
The necessary evidence for the fulfillment of all requirements rests with the applicant undertaking.
Flexibility in Measures
Commitments are reduced proportionally if insufficient potential for measures is available.
The documents required for verification must be submitted by the applicant undertaking. Implemented energy efficiency measures will be reported by the implementing body to E-Control.
Funding Procedure
Review by aws
The processing agency reviews funding applications in accordance with the law and funding guidelines.
Supplementary Statement
In the event of a deviating funding proposal, supplementary feedback from the company must be obtained.
Decision
The Federal Minister for Economic Affairs, Energy and Tourism decides on the funding application.
Funding Agreement
Upon a positive decision, written assurance is provided by aws. The funding agreement comes into effect upon unconditional acceptance.
In case of rejection, the company will be notified of the pertinent reasons, provided this was requested in writing in the application.
Recovery and Interest
Reasons for Recovery
The reasons and regulations for the cessation and recovery of funding are laid down in the funding guidelines. A recovery must in any case be provided if required by organs of the European Union.
Interest Accrual
In case of recovery, the amounts shall be subject to interest at four percent per annum from the date of payment, using the compound interest method. If this interest rate is below the EU interest rate, the EU interest rate shall apply.
4%
Base Interest Rate
Per year for recovery with compound interest
9.2%
Default Interest
Above base interest rate for delayed repayment
The base interest rate applicable on the first calendar day of a half-year is decisive for that respective half-year.
Funding and Budget
Available Funds
Up to 25% of the previous year's auction proceeds, but no more than €75 million per year for 2025 and 2026.
Proportional Reduction
If the requested subsidies exceed the available funds, a proportional reduction will be applied to all companies applying for funding.
Financing
The subsidies are financed from federal funds and managed by aws on behalf of and for the account of the federal government.
Transparency and Reporting
Publication Requirement
The aws must publish information on all individual grants exceeding 500,000 Euros within six months of their award on a publicly accessible website. This information must remain publicly accessible for at least ten years.
EU Reporting
The Federal Minister submits a report to the EU Commission in accordance with EU guidelines. The aws maintains detailed records for all individual grants, which must be kept for ten years.
National Report
If the total grant amount exceeds 25% of the previous year's auction revenues, an evaluation report must be submitted to the National Council, justifying the excess and providing relevant information on electricity prices.
Eligible Sectors (Selection)
The law defines 13 sectors and sub-sectors for which there is a real risk of carbon leakage:
Metal Production
Production of pig iron, steel, ferroalloys, aluminum, lead, zinc, tin, copper, and other non-ferrous metals, as well as iron foundries
Chemical Industry
Manufacture of other inorganic basic chemicals and chemicals, specific plastic products (polyethylene glycol), industrial gases (hydrogen, oxygen compounds)
Paper Industry
Manufacture of wood pulp and cellulose, as well as paper, cardboard, and paperboard
Further Sectors
Manufacture of leather clothing, glass fiber products (mats and non-wovens made of glass fibers)
Possibility of Expansion: The Federal Minister may extend the list of beneficiary sectors based on state aid regulations if companies are particularly affected by increased electricity costs. Changes will be published at www.aws.at.
Implementation and Next Steps
The Electricity Cost Compensation Act 2025 (Strompreiskompensationsgesetz 2025) provides crucial support to eligible companies. Effective implementation requires a clear understanding of the application process and strategic preparation to fully leverage the available compensation.
Application Process
Adherence to the specific guidelines and criteria of the Electricity Cost Compensation Act is essential for successful claims and timely payouts.
Energy Audit Preparation
Prepare thoroughly for mandatory energy audits, identifying potential for energy efficiency improvements and ensuring compliance with audit requirements.
Documentation Requirements
Maintain precise and comprehensive records of energy consumption, costs, and efficiency measures to support compensation applications and future audits.
For optimal compensation, carefully consider the timing of your application and proactive implementation of energy efficiency measures. Investing in energy-saving technologies now can reduce future electricity costs and maximize compensation benefits under the act. It is crucial to stay informed about any updates to the act and plan accordingly.
Looking for additional funding opportunities? The seminar "Förderungen - finden, ansuchen, abwickeln" (23.10.2025 - 24.10.2025) offers comprehensive insights.