Key points of the energy costs subsidy for businesses

In July 2022, the Business Energy Costs Subsidy Act (UEZG, BGBl. I No. 117/2022) was passed by the Austrian Parliament and published in the Federal Law Gazette (see Newsletter of 14 July 2022). The Act provides for relief for energy-intensive companies. Specifically, this non-repayable subsidy is intended to cover roughly a third of the additional costs incurred due to the significant increase in energy prices. The subsidy volume, which was originally planned to be EUR 450m, will be increased to EUR 1.3bn due to the massive rise in energy prices. Details on how the UEZG will be implemented are to be given in funding guidelines. Further information has now been released.

Eligible to apply are energy-intensive companies that are either incorporated in Austria or have a permanent establishment (PE) in Austria. To be deemed energy-intensive, a company must have energy and electricity procurement costs amounting to at least 3% of the production value, or pay domestic energy tax amounting to at least 0.5% of value added. The amount of support will be determined based on the most recent financial statements for 2021 or the subsidy period 1 February 2022 to 30 September 2022, if confirmed by a tax advisor. Companies with annual revenues of max. EUR 700,000 are exempt from the requirement of providing evidence of intensive energy use. It is possible that the period will be extended if approval is granted by the European Commission.

The guidelines set out four levels:

• • Level 1 is an energy costs subsidy for electricity, natural gas, and fuel up to max. EUR 400,000. This can be used as compensation for 30% of actually incurred additional costs compared to the previous year. The minimum threshold is EUR 2,000.
  • Level 2 is a subsidy for electricity and natural gas in the amount of max. EUR 2m. If prices have at least doubled since the previous year, up to 70% of the amounts consumed in the previous year may be subsidised at max. 30%. No subsidy is available for fuels.
  • Level 3 provides for a maximum subsidy amount for electricity and/or natural gas of EUR 25m. In addition to the prerequisites set out in level 2, from level 3 funding will be provided for companies that have incurred a loss due to high energy costs.
  • Level 4 is a subsidy for electricity and natural gas in the amount of up to max. EUR 50m. However, support is only available for certain industries, such as the steel industry.

For micro-businesses and small businesses, which do not fulfil the above requirements, a flat-rate model will apply. 30% of half of the energy costs for 2022 will be subsidised (optional: doubling of energy costs for 2021). In this context, the subsidy will be paid out as a lump sum by level.

Austria Wirtschaftsservice Gesellschaft m.b.H (aws) will manage the subsidies. The guidelines envisage a two-stage application process, although according to current information a ‘first-come, first-serve’ principle will apply. In a first step, it is necessary to register in ‘aws Fördermanager’. This should be possible from the end of October 2022. Subsequently, the company will receive confirmation of registration and information about the individual period for formal submission of the application. It is expected that formal applications will be possible from mid-November 2022.

Authors: Cornelia Kalina, Christiane Zöhrer