Government Cuts Funding: Where Savings Are Now Being Made

Climate Minister Norbert Totschnig and Energy State Secretary Elisabeth Zehetner (both ÖVP) identify significant savings potential in climate and energy subsidies based on an examination of the subsidy landscape. These were reviewed for efficiency by the Swiss institute Prognos on their behalf. Although "fundamentally desired effects are achieved," the planned adjustment of subsidies will now take savings potential into account, it was stated on Tuesday.

Analysis Shows Optimization Potential in Climate and Energy Subsidies

Among other things, the renovation offensive, energy efficiency subsidies, subsidies under the Renewable Expansion Act, the Electricity Cost Compensation Act, or the Climate and Energy Fund were analyzed. The measures were analyzed in terms of their funding mechanisms, goals, and target groups, the government politicians announced in Alpbach, Tyrol. The study shows that the direction is correct, but there is a need for optimization. This applies especially to effectiveness and efficiency.

"Specifically, clearer goal definitions and the delineation of areas of responsibility to avoid duplication, as well as greater efficiency in the use of subsidy funds, are recommended," it was stated in the release. "This should be brought back into focus in the future, especially in the design of the respective instruments of the Climate and Energy Fund, through energy efficiency subsidies, the EAG, up to environmental subsidies domestically, as well as the new orientation of subsidies such as boiler replacement."

Government Focuses on Efficiency in Subsidy Funds

Totschnig stated that subsidies in the past were sometimes too high and inefficient. "In the environmental and climate sector, we will therefore tighten up in several areas and use taxpayers' money much more efficiently than before. While we have already abolished the climate bonus, which had no positive impact on the climate, without replacement, we will increase efficiency in subsidies such as thermal renovation and boiler replacement." The results showed that with less taxpayer money, the same effect can often be achieved with smarter use. "We are currently reviewing the old subsidies and will focus on higher efficiency in the new edition."

Zehetner: "We are bringing our subsidies back to what they are intended for." And these are "targeted incentives that trigger investments, keep value creation in the country, and advance the energy transition." Subsidies should not fizzle out or finance windfall effects, but must work where the market alone is not enough. "That's why we are streamlining the subsidy priorities, aligning them with European guidelines." Every subsidy euro should save more CO2 and bring more dynamism to the energy transition.

Lukas Hammer, environmental spokesperson for the Greens, saw the report as evidence that the climate subsidies of recent years are working. "They make an important contribution to achieving our climate goals." The forecast does point to optimization potential, but overall, the ambitious climate policy of the Greens in recent years has worked. Emissions have decreased, jobs and local value creation have been generated. "Totschnig, on the other hand, apparently only read part of the study," Hammer criticized. "The experts recommend a further development of the existing measures and not a radical turnaround." Now it's about making the subsidies even more effective with targeted adjustments and simplifications.

Subsidies Will Be Discontinued or Made More Efficient

A key recommendation of the study, according to Totschnig and Zehetner, is to review existing funding areas for their current relevance. This has already been partially addressed. For example, subsidies for certain cooling and freezing devices are being discontinued, and many measures are already mandatory due to legal regulations. It has also been decided to discontinue funding streams with low demand, such as those for in-house energy centers. Funding offers for switching to LED systems will also be discontinued, as these technologies are now standard and no longer require funding incentives.

Renovation Initiative is Being Reorganized

The analysis also shows that in some areas, the subsidies have been too high. Funding budgets should be reduced there while still achieving the high emission targets. The greatest efficiency potential is seen in the renovation initiative, which consists of the two areas of thermal renovation (facade insulation and window replacement) and boiler replacement. With the current design, this funding performs the worst in comparison.

After the already implemented reduction of the funding budget, Totschnig's Climate Ministry is now in contact with federal states and stakeholders to discuss the new funding criteria. Recommendations from the study to reduce funding intensity are also being considered. "The new subsidies will be reduced in any case, thereby improving the efficiency of the subsidies, as high demand is still expected."

In the area of efficiency subsidies based on the new Energy Efficiency Act (EEffG), there will be a stronger focus in the future, and a new energy efficiency program will be launched. The focus will be on thermal renovation in cooperative housing and the worst quarter of non-residential buildings such as schools, kindergartens, or municipal facilities, as well as on larger operational efficiency measures that are awarded competitively.

EAG Amendment Planned by End of 2025

The Renewable Expansion Act remains the centerpiece of Austria's green electricity expansion but will be designed more streamlined and precise in the future. With the 10th amendment by the end of 2025, operational subsidies are to be further developed, and competition for funding efficiency is to be strengthened. Temporary suspension of subsidies is planned in the event of negative prices.

The PV storage subsidy will be specifically pursued to achieve more grid integration. Additional PV subsidies in the Climate and Energy Fund will be eliminated, but PV systems will remain eligible for funding based on the EAG.

In the focus on green energy, biomass, heat pumps, geothermal energy, and efficiency through heat recovery are at the top. The market introduction of climate-friendly technologies should be specifically supported.

(APA/Red)

This article has been automatically translated, read the original article here.