As part of an eco-social tax reform, the parliament of Austria has approved a climate levy on fossil fuels. The proposed levy will start at €30/tCO2 of emitted carbon from 1 July 2022 and will increase to €35/tCO2 in 2023, €45/tCO2 in 2024 and €55/tCO2 in 2025, corresponding to a rise in fuel prices by €13c/l to €15c/l. The CO2 tax is expected to generate nearly €1.4bn in additional state revenues. The country intends to compensate taxpayers for increased prices of petrol, gas, diesel, and heating oil via a regional climate bonus ranging between €100/year and €200/year per person. The climate bonus will be higher for people living in rural areas who are often forced to rely on their cars. CO2-intensive companies will benefit from a tax relief to avoid "carbon leakage" (relocation of activities) and a "hardship regulation" is planned for particularly energy-intensive companies; in addition, the electricity tax on auto-production will be removed. Finally, €500m will be invested in clean heating, to replace boilers, shift from oil and gas and promote thermal renovation.
Austria aims to reduce its CO2 emission in 2030 by 36% compared to 2005 level. After a 2.7%/year decrease over 2011-2014, CO2-energy related emissions have increased since then by 1.3%/year on average to 66 MtCO2 in 2019.
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