In Austria is to ban the installation of gas heating systems in new buildings from January 2024, but the long-debated obligation to replace gas systems in existing buildings is now off the table. The black-green government is launching an extensive funding package for their voluntary conversion.
The coalition partners have agreed on this and an economic stimulus program for the construction industry that economic researchers had recommended by presenting a record budget for next year. The aid program worth 6 billion euros is intended to help cushion the current slight recession. Coal and oil heating in new buildings has been banned for three years.
Chancellor Karl Nehammer (ÖVP) promised to give the economy “a noticeable boost, especially in the affected sectors”. Vice Chancellor Werner Kogler (Greens) said they wanted to “solve two problems with a package of measures: push ahead with the ecologically necessary energy transition even more quickly and effectively combat the dip in the construction industry.” After district heating, gas covers a quarter of heat consumption in Austria; in Vienna alone, 400,000 thermal baths heat 600,000 apartments.
Up to 75 percent funding for replacing old systems
Specifically, the “Renewable Heat Package” provides additional funding for the replacement of gas boilers amounting to 1 billion euros. The limit of eligible costs will be raised from the previous 50 percent to 75 percent, and the applicable “renovation bonus” for one- and two-family houses will be increased by 200 million euros. By suspending sales tax on photovoltaic systems up to 35 kilowatts, the desired path to “climate neutrality” in 2040 is also intended to be accelerated. The resulting lost tax revenue is estimated at 650 million euros.
The state-guaranteed market premiums for the conversion of wind, water and biomass into electricity should also be increased in order to make the further expansion of green energies more attractive. The electrification of society requires a lot of electricity, which should come from renewable sources. Because of the large hydropower supply, they now account for almost 80 percent of electricity generation in Austria. The struggling construction industry should benefit from the state or state-owned companies such as the Austrian Railways bringing forward public construction projects worth 640 million euros in 2024.
Since the law requires approval from two-thirds of the MPs in the National Council, the government needs approval from the opposition. The SPÖ has made it clear that the proposals are not enough for it, the right-wing FPÖ made its rejection clear by using the word “eco-communism”. Part of the law is further relief for energy-intensive producing companies (energy cost subsidy II).
The new spending package is part of the draft budget submitted by Finance Minister Magnus Brunner (ÖVP) on Wednesday. It envisages revenues of 102.6 billion euros and expenses of 123.5 billion euros. Despite a deficit of 20.9 billion euros or 2.7 percent of gross domestic product, the three percent limit applicable in the EU would be met. At 77 percent, the national debt ratio would be further above the current mark of 60 percent.
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