Austria’s economic growth is still above the EU average and the weekly economic indicator is also higher than in the same week last year, Kocher said at a press conference on Tuesday. However, the current price increases for energy are “threatening” for households as well as for companies, according to the minister.
That is why work is now being done on an energy cost subsidy for companies. This will come due to EU rules for “energy-intensive companies” whose energy costs account for more than three percent of sales. The amount of the subsidy will be linked to the rise in energy costs. Kocher assumes that “tens of thousands” of companies will benefit from this – from manufacturing to transport companies to, for example, a hotel with a sauna, a wide range of recipients is conceivable.
payment later this year
Already on Monday Kocher had promised a payout later this year. The associated process of application and payment should be “as unbureaucratic as possible”, emphasized Kocher at a press event in Tyrol.
Energy cost subsidy for companies
ÖVP Economics Minister Martin Kocher has announced that companies that produce very energy-intensively should receive an energy cost subsidy. Retailers now fear being at a disadvantage compared to industry.
We are aware of the current situation and the guidelines of the grant decided in July as part of a relief package “are ready soon”, he promised. “After finalization, the guidelines go to the European Commission,” said the minister. “In October there should finally be an application option for companies that have to spend at least three percent of their sales on energy costs,” says Kocher. They want to spend around a billion for this.
“Kurier”: Greens make demands
According to “Kurier”, there are still controversial points in the negotiations within the coalition. The newspaper quoted the green budget spokesman Jakob Schwarz as saying that the energy cost subsidy should primarily support “small and medium-sized companies” that have gotten into difficulties.
The “probably most important point” of the negotiations, according to “Kurier”, therefore concerns “marksmanship”. It is about the company size from which the lower limit is drawn. In addition, the green companies that apply for the subsidy want to commit to saving energy. This should apply primarily to larger companies, while consultations are planned for smaller ones. According to “Kurier”, another point concerns bonuses for management: these should no longer be paid out.
Economy wants quick help
The Chamber of Commerce (WKO) had sharply criticized at the weekend that the energy cost subsidy is still not on track. Calls for relief for companies also grew louder from business. The President of the Federation of Austrian Industries (IV), Georg Knill, sees the threat of “production cutbacks and unemployment in Austria unless countermeasures are taken quickly and consistently. The government is called upon to act as quickly as possible and to get the announced aid off the ground.”
Specifically, the IV called for the subsidy to be increased to at least EUR 2.5 billion and extended until next year. According to the IV, a reform of the electricity market is also needed in the medium term, in which the merit order system, in which the most expensive power plant determines the gas price, will be further developed.
“It’s the EU Commission’s turn to quickly present a corresponding model,” says Knill. The Economic Provincial Councils from Lower Austria, Upper Austria and Styria also spoke out in a joint broadcast in favor of rapid economic aid for all domestic companies.
Stove for decoupling electricity and gas prices
From Kocher’s point of view, the decoupling of electricity and gas prices would be even more important than short-term national support. But this must be done at EU level. Kocher would like to see a fixed price for gas used to generate electricity. If the market price for gas is higher, the gas for the power generators would have to be subsidized accordingly.
This would automatically cap the price of electricity and give companies planning security. “In my view, that would be the optimal solution,” says Kocher, because the price peaks in electricity production will be eliminated and the market mechanism will remain in place. A similar model was recently presented by Oesterreichs Energie, the advocacy group for the electricity industry.
WKO also sees trade badly affected
The sharp rise in energy prices is also having a negative impact on trade. “In the past, energy costs were the third or fourth largest cost factor. It is now the largest or second largest item,” said Juan Manuel Morales, President of the European trade association EuroCommerce. With a return on sales of three or four percent, there is nothing left after the recent price increases for electricity and gas.
Energy costs endanger local suppliers
The exploding energy costs are a major burden for local suppliers. They only have a small trading margin and can only pass the high costs on to customers to a limited extent. If the crisis worsens, many small shops will have to close – so the fear.
“Originally it was said that trade would not be affected as much. And trade was ignored,” added Jürgen Roth, chairman of the association for energy trading and vice president of EuroCommerce. “And now the costs are exceeding the profitability,” says Roth. A common European strategy is therefore required.