Austria has established some of the most ambitious energy and climate objectives globally, targeting 100% renewable electricity by 2030 and climate neutrality by 2040. A recent International Energy Agency (IEA) review highlights Austria’s strong foundation in low-emissions power generation and diversified supply, while noting the need for faster policy implementation and investment to achieve its goals.
The IEA report finds that Austria already leads the European Union in renewable electricity share, thanks to its extensive hydropower fleet, which generates around 60% of the country’s electricity, and significant pumped hydro storage capacity. The nation has also developed an integrated framework for electricity, gas, hydrogen and storage infrastructure, bolstering both energy security and emissions reductions.
Since 2022, Austria has rapidly reduced its dependence on a single gas supplier, diversified import routes, expanded its strategic gas reserve and enhanced infrastructure resilience. Ongoing market reforms aim to accelerate electrification, optimise grid infrastructure and improve system flexibility to withstand external shocks.
Despite these strengths, the IEA notes a widening gap between ambition and delivery. While greenhouse gas emissions have declined overall, more rapid progress is required. The agency recommends swifter enactment of key legislation, clearer governance structures and sustained financial support. According to IEA Executive Director Fatih Birol, “The priority now is to turn its ambitions into concrete actions.”
Austria’s State Secretary for Energy, Elisabeth Zehetner, emphasized that the country’s strong renewable base and resilient system must be matched by accelerated implementation, affordability and measures that reinforce economic competitiveness and job creation.
Industry competitiveness remains critical, as the industrial sector represents 22% of GDP and employs 26% of the workforce. Recent reforms, including the Electricity Market Act, have improved system flexibility and consumer outcomes, but further efforts are needed to enhance market competition and modernise district heating regulation.
The report also underscores the importance of expanding wind power to complement rapid solar PV growth, streamlining permitting processes and improving intergovernmental coordination. Public R&D spending exceeded 3.3% of GDP in 2024, with over €400 million dedicated to energy research. Building on this innovation base will be essential for advancing hydrogen, carbon capture, energy efficiency and electrification solutions.
To guide Austria’s next steps, the IEA sets out ten key policy recommendations focusing on system flexibility and industrial decarbonisation.
Source: IEA (https://www.iea.org/news/austria-can-build-on-its-strong-energy-ambitions-through-targeted-reforms-and-faster-delivery)
