New Law Planned

How the Climate Target Could Drive Up Gas Prices

A new law could lead to further price increases.(Bild: APA/HARALD SCHNEIDER)

Behind the cumbersome name “EEG-V” lies another bill proposed by the federal government that could have a direct impact on prices at local gas stations. It mandates that oil companies ensure a certain percentage of the fuel they sell comes from renewable sources. These sources are expensive—which, according to calculations by the Chamber of Commerce, will be reflected in the price.

One euro more per liter: That’s how much more it could cost to fill up by 2035 if Austria, as it has repeatedly stated recently, sticks to its goal of achieving climate neutrality by 2040. This is shown by initial calculations from the Austrian Federal Economic Chamber (WKÖ). At the current diesel price of around 2.24 euros, the price per liter would thus climb to over 3.20 euros.

“Fuel price caps or tax cuts on food in the range of a few cents will do little to help if climate neutrality starting in 2040 drives up the price of fuel by up to one euro,” says WKÖ Secretary General Jochen Danninger.

A new law could lead to further price increases.(Bild: APA/HARALD SCHNEIDER)

Austria Wants to Move Faster
Background: The climate law proposed by the coalition government of the ÖVP, SPÖ, and NEOS is currently under review. It aims to commit Austria to climate neutrality by 2040—ten years earlier than required by the EU. The Chamber is not focusing on the Climate Act itself, but rather on the lesser-known Renewable Energy Act for Transportation (EEG-V).

It mandates that oil companies ensure a certain percentage of the fuel they sell comes from renewable sources. The target path: 18 percent in 2027, 35 percent in 2030, and 65 percent in 2035. Specifically, this means that by 2035 at the latest, roughly two-thirds of the energy in a vehicle’s fuel tank must be “green.”

Options include biodiesel, ethanol, or HVO—a diesel made from vegetable oils and used cooking oil—and charging electricity for electric cars can also be counted toward the target. These energy sources are and will continue to be in short supply—and more expensive than petroleum. The resulting expected additional costs would thus be passed on at the gas pump. Starting next year, when the law is set to take effect, the Chamber estimates that an additional 20 cents per liter could be added to the price of gas each year through 2030.

Danninger: “Will Fuel Inflation”
“An extra euro per liter affects all drivers and makes transportation, goods, and services more expensive. This will further fuel inflation,” warns Danninger. The WKÖ is committed to the EU’s climate goals, but Austria must not “incur additional costs and competitive disadvantages.”