The New Climate Act

How Austria Plans to Become Climate-Neutral by 2040

There is still much work to be done to ensure that Austria becomes climate-neutral in 14 years.(Bild: Krone-Collage/Klemens Groh, Jana Kuehle, APA/HELMUT FOHRINGER)

The government is hailing its climate deal as a major triumph. The powerful ÖVP business community, however, sees things differently—and is already gearing up for resistance, as we reported. But what does the new Climate Protection Act entail? The “Krone” has the first details.

The major climate deal was supposed to end the ongoing dispute within the three-party coalition—instead, it immediately sparked the next uprising within its own ranks. The business community is up in arms over the government’s climate plans.

And yet, after a long struggle, the law has already been significantly watered down.  For example, the energy and industrial sectors do not have to be climate-neutral by 2040, but only by 2050, as mandated by the EU. It’s possible that the transportation sector will be added to this list as well. The EU requires a 90 percent reduction in emissions by 2040. If Austria fails to meet the European targets, it faces fines running into the billions. Although the government has set a more ambitious goal of achieving climate neutrality by 2040, no sanctions are tied to this target.

Rather, it is a so-called self-binding law: it primarily places an obligation on the government itself. The government must implement measures to ensure that the climate target remains achievable. The plan includes, for example, binding “annual caps on Austria’s total emissions”—though only in accordance with the EU requirements that are already in place.

On Friday, the government proudly presented the agreement on drought aid—and the long-awaited Climate Protection Act.(Bild: APA/TOBIAS STEINMAURER)

Emergency program after three months
A dedicated climate roadmap will establish reduction pathways and greenhouse gas budgets for each sector in the future. It must also list the planned measures by the federal government and the states. Progress will be tracked through more frequent monitoring. In addition, an interministerial steering group and a scientific advisory board will be established. States, municipalities, social partners, and civil society are also to be involved. 

If Austria is at risk of exceeding its annual emissions limits—or has already done so—a mandatory correction mechanism will be triggered. The steering group must then develop an emergency program with additional measures within three months. However, budget-related proposals may not exceed the applicable federal budget limits. 

Before Austria purchases expensive emission allowances abroad to meet its obligations, domestic measures should be implemented. The rationale: this ensures that value creation and investments remain within the country.

An “Emergency Exit” for the Economy
A separate provision is also intended to prevent the law from creating new legal grounds for climate lawsuits, such as those that repeatedly cause a stir in Germany—this, too, is said to have been negotiated into the law by the business lobby. At the urging of the business community, a “location clause” was also included. It allows for deviations from the planned climate pathway in the event of extraordinary circumstances—such as a pandemic or a global crisis.

The Climate Protection Act has been fully negotiated and will undergo review in the coming days, making a National Council resolution possible in November.

NEOS-Klimasprecher Michael Bernhard

Business representatives are apparently not satisfied with this. Behind closed doors, sources told the “Krone” that trading drought aid for the Climate Protection Act is “disproportionate.” At the same time, however, they do not want to be seen as the ones to blame should farmers—who have been severely affected by the drought—ultimately be left without support. But as soon as the competitiveness of the country is at stake, they say they are “ready to fight.” For the government, at any rate, the matter is settled. “The Climate Protection Act has been fully negotiated and will undergo review in the coming days, so that a National Council resolution can be passed in November,” explains NEOS climate spokesperson Michael Bernhard.