Austria can build on its strong energy ambitions through targeted reforms and faster delivery

Austria has set some of the most ambitious energy and climate goals in the world, including 100% renewable electricity by 2030 and climate neutrality by 2040. But achieving these goals will require stronger alignment between targets, delivery mechanisms and resources, according to a new report by the International Energy Agency.

The IEA’s Energy Policy Review finds that Austria is entering the next phase of its energy transition with some notable strengths. It already has a higher share of renewables in its electricity mix than any other country in the European Union – supported by a large hydropower fleet that accounts for around 60% of electricity generation and significant pumped hydro storage capacity. Austria is also a leader in developing an integrated plan for electricity, gas, hydrogen and storage infrastructure.

The IEA report finds that Austria’s efforts to bolster energy security and reduce emissions reinforce one another. The review also highlights the major shift in Austria’s energy security position since 2022. Before then, Austria imported 80% of its natural gas from Russia. Since then, the country has diversified supply, increased its strategic gas reserve, strengthened infrastructure resilience and reduced market vulnerability to external shocks. Ongoing market reforms aim to further enhance Austria's energy security by speeding up electrification and optimising grid infrastructure to improve flexibility and support long-term resilience.

At the same time, the report says the gap between ambition and implementation is widening. While Austria’s greenhouse gas emissions have fallen overall, faster progress is needed to meet its long-term goals. Swifter implementation of key legislation, clearer governance, and sustained investment are needed to keep Austria’s energy transition on track to meet its objectives.

“I congratulate Austria on the progress it has made on improving its energy security and building a resilient electricity system,” said IEA Executive Director Fatih Birol. “The priority now is to turn its ambitions for the years ahead into concrete actions. This will require swift implementation of key reforms alongside measures to keep energy costs under control, strengthen system flexibility and support a competitive economy.”

“The IEA report confirms that Austria has built a strong foundation: a high share of renewable electricity, a resilient energy system and a clear path towards diversification. The next phase is about delivery: accelerating implementation, keeping energy affordable and ensuring that the energy transition strengthens Austria’s economy. Energy policy must secure competitiveness, value creation and jobs while advancing supply security and climate protection,” said Austria’s State Secretary for Energy Elisabeth Zehetner.

A central message of the review is that affordability and industrial competitiveness must remain at the heart of Austria’s energy strategy. Austria’s industrial sector accounted for 22% of its GDP and employed 26% of the workforce in 2024, but they face pressure from high energy prices, global competition and the cost of decarbonisation. The report says recent reforms, including the Electricity Market Act adopted in December 2025, are important steps towards a more flexible, consumer-friendly and lower-cost electricity system. Despite this, further action is needed to strengthen competition in the electricity market and improve regulation of district heating.

The IEA review finds that Austria’s rapid expansion of solar PV has helped diversify electricity supply but that faster deployment of wind power is now essential to support system reliability, meet seasonal demand and enable Austria to reach its 2030 renewable electricity target. The report recommends streamlining of permitting, improving co-ordination across levels of government, and strengthening the planning for system-friendly deployment of renewables.

The report also underlines Austria’s strong position in innovation. Public spending on research and development exceeded 3.3% of GDP in 2024, a record high, and public spending on energy research and development exceeded 400 million euros. Austria can build on this innovation base, according to the IEA review, to strengthen its industrial competitiveness and develop solutions for sectors where emissions are hardest to reduce – such as hydrogen; carbon capture, utilisation and storage; energy efficiency; and electrification.

To support progress, the review sets out 10 key energy policy recommendations for Austria. The IEA regularly conducts energy policy reviews, drawing on international experience to identify best practices and policy options. Austria’s latest review includes a special focus on energy system flexibility and on strengthening industrial decarbonisation and competitiveness.