Austrian government seeks big boost for company subsidies due to energy crisis

GENEVA (AA) – On Sept. 28, the Austrian government presented the so-called energy cost subsidy 1. It was intended to cushion the increased prices for electricity, natural gas and fuels for energy-intensive companies and commercial associations. Now the government is massively extending its aid.

The original subsidy period for energy cost subsidy 1 was for February to September 2022. The new energy cost subsidy 2 is for the whole of 2023, with between €3,000 ($3,180) and €150 million available to be paid out per company.

"In view of the permanently increased energy prices and the German decision on an electricity and gas price brake, further relief is also needed for Austrian companies in 2023," Economics and Labor Minister Martin Kocher announced in a press release on Thursday.

Until now, the energy cost subsidy 1 provides that businesses are taken 30% of the additional costs for energy. Next year, the aid will be expanded to 60%. The additional cost could range from €5 billion to €9 billion, the daily Der Standard reported.

In addition, the companies no longer have to prove that their production methods are energy-intensive, a concession for the Austrian commerce, which also wanted to be more involved.

The Austrian federal budget for 2023 includes €6 billion ($6.38 billion) for further aid in the form of an authorization to the government. According to Kocher, an expansion of this framework could still be provided for.

The new energy aids still need to be fixed in law, and the rules and regulations for them do not yet exist. Moreover, the EU Commission must additionally approve the aid measures. According to Kocher, however, it is envisaged that, as in Germany, companies that take advantage of very large subsidies will have to provide a job guarantee.

These companies must retain 90% of their workforce until the end of 2024, according to the German regulation, which Austria wants to follow.