- Austrian companies are leaders in the research and development of next-generation clean technologies and are well established across the European market.
- Hydrogen is an emerging priority. Through the Hydrogen Industry Valley Austria initiative, the country is advancing 18 proposed projects representing potential investments of €588 million by 2030.
- Carbon capture and storage (CCS) is also gaining momentum. Carbon to Product Austria Plus (C2PAT+), led by Holcim, aims to capture carbon dioxide (CO₂) from cement production. As Austria has no domestic CO₂ storage capacity, the project plans to liquefy the captured CO₂ and transport it by rail and ship to offshore storage sites in the Adriatic Sea. Commercial deployment is not expected before 2035–2040 due to pending European Union funding and the absence of enabling CO₂ storage legislation.
- Heat pumps are a key component of Austria's energy transition. The government provides funding covering up to 30% of eligible costs, to a maximum of €7,500, for replacing existing heating systems with heat pumps.
- Electric vehicle adoption continues to accelerate. In 2025, Austria registered a record 60,651 new battery electric passenger vehicles, a 36% increase over 2024, giving battery electric vehicles a 21.3% share of all new passenger car registrations. The country has also expanded its public charging network to approximately 38,000 charging stations nationwide.
Renewable energy and smart grids market in Austria
Industry highlights
88.2 % of domestic electricity production comes from renewable sources
130,000 new jobs required for the energy transition in Austria by 2030
30 TWh of additional renewable energy production needed to reach climate neutrality for electricity generation by 2030
3rd highest research and development (R&D) quota in the European Union (3.3%)
Austria is a global leader in renewable energy. In 2024, domestic primary production met 43% of the country's gross inland energy consumption, with renewable energy accounting for 88.2% of that domestic production. Over 93% of Austria's electricity is generated from renewable sources, making it one of the European Union's least carbon-intensive electricity systems despite having no nuclear power generation.
However, the electricity sector represents only part of Austria's overall energy system. Electricity accounts for approximately 22% of total energy consumption, while oil remains the largest energy source at 35%, followed by renewable energy (20%) and natural gas (15%). Overall, fossil fuels still supplied about 61% of Austria's energy in 2024, including oil (35%), natural gas (18%) and coal (8%). Renewable energy is led by bioenergy (18%) and hydropower (12%), with wind, solar photovoltaic and ambient heat contributing smaller shares.
To meet its legally binding goal of climate neutrality by 2040—ten years ahead of the European Union target—Austria must accelerate the decarbonization of heating and transport, where oil and natural gas continue to dominate. While the power sector is already largely decarbonized, these sectors remain the country's greatest emissions challenge.
Austria continues to rely heavily on imported fossil fuels. In 2024, 54% of gross inland energy consumption came from imports, while 43% was supplied by domestic production and approximately 3% from stock changes. Oil, natural gas and coal are almost entirely imported. Following the end of Russian gas transit through Ukraine in early 2025, Austria diversified its supply by increasing imports through Germany and Italy, securing liquefied natural gas (LNG) capacity via northwestern European terminals, and drawing on domestic gas storage.
Electrification is central to Austria's energy transition and is increasing demand on the electricity grid. Hydrogen, e-fuels and district heating are expected to complement electrification in sectors that are more difficult to decarbonize. Austria is well positioned to support this transition through advanced decentralized energy systems and smart grid infrastructure. The country has more than 260,000 km of overhead and underground electricity lines, supported by one of Europe's most advanced smart metering networks. By the end of 2024, 6.53 million metering points had been equipped with smart meters, representing 96.9% national coverage.
Key opportunities for Canadian cleantech companies in Austria
Notable challenges for Canadian renewable energy companies in Austria
- Austria's fragmented utility market remains a barrier to large-scale projects. The market is dominated by numerous regional utilities, many of which are municipally or provincially owned and operate as small- and medium-sized enterprises. Their risk-averse approach can make it difficult to form consortia and pursue large procurement opportunities.
- Interoperability has improved, but practical challenges remain. Recent market reforms and pilot programs have strengthened data exchange and market integration. However, technical and commercial interoperability—including SCADA and IT integration, settlement and balancing—often still requires customized solutions at the distribution and aggregator levels.
- Regulatory barriers are gradually easing, but uncertainty remains. New electricity market reforms introduce measures to support citizen energy initiatives and broader market participation. However, rules governing network operator ownership of energy storage and participation in electricity trading are still being developed through secondary legislation and regulatory guidance. Transitional provisions continue to create legal uncertainty for market participants.
Austrian business landscape
- The business landscape is driven by a large number of small and medium-sized enterprises (SMEs), providing a high degree of flexibility.
- The country has committed itself to high environmental standards, supported by both the government and an environmentally conscious population.
- Austria provides a business environment with strong research and development funding. The country offers a 14% research tax credit for large and small companies, and a corporate tax rate of 25%.
Summary
Austria is a leader in renewable energy, with 88.2% of domestic electricity production coming from renewables. Excelling in distributed systems and smart infrastructure, Austria is aiming for climate neutrality by 2040. This goal requires 30 TWh of additional renewable generation by 2030, and significant workforce expansion. The transformation presents clear opportunities for Canadian companies, given Austria’s rapid EV uptake and near‑complete smart‑meter rollout, alongside persistent challenges with intermittency, grid flexibility and system digitalization.
Contact us
For more information on renewable energy in the Austrian market please contact contact Susanne Knobloch (susanne.Knobloch@international.gc.ca), Trade Commissioner.
