Hydrogen law, regulations & strategy in Austria

Explore reliable legal information about hydrogen energy in Austria

1. Current State of Hydrogen Projects in Austria

Austria has ambitious goals when it comes to renewable energy sources: by 2030, the country wants to obtain its electricity supply completely from renewable energy sources and as a next step become climate-neutral by 2040. This means that by 2030, the annual electricity generation from renewable energy sources needs to be increased by 27 terawatt hours (TWh), 11 TWh coming from photovoltaics, 10 TWh from wind power, 5 TWh from hydropower and 1 TWh from biomass. According to the government programme, by 2030 Austria aims to produce 5,000 GWh of green gas (including hydrogen).

It is clear that hydrogen will take an increasingly important role in achieving the ambitious climate goals. How important that role will be is currently the subject of political discussions. In 2018, the Austrian government kicked off the development of an “Austrian Hydrogen Strategy”, which was supposed to be spearheaded by the Austrian Federal Ministry for Climate Action, Environment, Energy, Mobility, Innovation and Technology. Political turmoil led to a new government being elected with participation of the conservative Austrian People’s Party and the Green Party. This led to an even stronger focus on renewable energy production. However, despite more ambitious climate goals, hydrogen has fallen somewhat behind on the political agenda. 

The business community, however, is not deterred by the political hesitation. Like everywhere else in the world, there are more and more hydrogen projects surfacing. Currently approximately 180 companies in Austria deal with hydrogen technologies and interest is continuously increasing. 1 Energieinstitut der Wirtschaft, Wasserstoff – Zentraler Baustein der Energiewende, p. 3. A few exemplary projects in the following fields are set out on the next page:

Power to Gas The “Renewable Gasfield” situated in Styria is one of the most advanced research projects in this context. This project pursues a holistic power-to-gas approach that generates green hydrogen from renewable electricity through electrolysis and combines two-stage catalytic methanation on a large scale for sustainable energy supply in the fields of energy, mobility and industry. 2 RENEWABLE GASFIELD - WIVA P&G.
Energy Storage

The project “Underground Sun Storage 2030” explores the safe, seasonal and large-volume storage of renewable energy in the form of hydrogen from solar and wind energy in underground gas reservoirs. Under the leadership of RAG Austria AG together with project partners such as Voestalpine and the WIVA P&G association underground storage possibilities will be researched under real conditions. 3 Underground Sun Storage 2030: Sonnenenergie saisonal und großvolumig in Form von Wasserstoff speichern, vorhandene Infrastruktur nutzen | RAG Austria AG, 08.06.2021 (ots.at).

ADX, an Australian energy company that recently acquired former oil and gas fields in Lower Austria, currently also works on the use of depleted gas reservoirs suitable for hydrogen storage. 4 PowerPoint Presentation (adx-energy.com)

The project “HyWest”, which is funded by the Climate and Energy Fund with 9.2 million euros, serves the exemplary development of a largely autonomous regional green hydrogen economy. The processes of cross-sectoral production, storage and application of green hydrogen are being researched. The aim of the project is to produce, methanise and feed green hydrogen and to use green hydrogen in industrial processes. 5 WIVA P&G HyWest: Regional Green Hydrogen Economy - WIVA P&G.

Production 

UpHy II: In 2021, OMV and Kommunalkredit announced that they would invest €25 million in hydrogen production facilities. They are cooperatively building Austria's largest electrolysis plant at the OMV Schwechat refinery. The 10 MW electrolyser will produce up to 1,500 metric tons of green hydrogen, thereby reducing CO2 emissions by up to 15,000 metric tons. The goal of UpHy II is, on the one hand, to upscale green hydrogen for mobility and industry by investing in the green H2 value chain from production to electrolysis, trailer charging and bus filling station and, on the other hand, the development of novel measurement methods for gas quality and mass to meet regulatory requirements.

Wien Energie, the regional Viennese energy provider, announced the foundation of the subsidiary “Wiener Wasserstoff GmbH” solely focusing on the development of hydrogen technologies including a 2.5 MW electrolyseur. The medium-term goal is to become the hydrogen hub of the region. 6 Stadtwerke investieren 4,25 Mrd. in Klimaschutz - wien.ORF.at

Mobility

The biggest Austrian energy company OMV AG and Post AG signed a letter of intent for the application of green hydrogen in heavy-duty transportation. The common goal is to advance commercial electromobility for heavy-duty transport in the field of hydrogen fuel cells in Austria and make it available. 2,000 fuel cell trucks that will be powered by green hydrogen shall be put into operation by 2030.

HyTrain: The “HyTrain” project aims to use Austrian know-how to develop the world's first hydrogen-powered narrow-gauge train to the point where it can be used in the mobility sector. This includes the generation, storage and refueling of the train with green hydrogen. The hydrogen powertrain will be tested at the Hydrogen Center Austria (HyCentA) test stand and then used in real operation with an electric railcar of the Zillertal Railway. The hydrogen train-system will be designed for high-performance train applications such as high-speed trains with high acceleration. 7 HyTrain: Forschungsprojekt zu Wasserstoffzug– Testbetrieb auf der Zillertalbahn | Klima- und Energiefonds, 04.08.2020 (ots.at).

HyTruck: The project focuses on the development and testing of a zero-emission fuel cell powertrain for commercial vehicles. The goal is the development and simulation of a hydrogen tank system for commercial vehicles, as well as comprehensive technical, economic and ecological analyses. 8 HyTruck - Hydrogen Truck Austria - WIVA P&G.

2. Market Prospects for Hydrogen

 The publication of the Austrian Hydrogen Strategy is still pending. A further rise in interest and investment activity can be expected once the strategy comes into force. In July 2021, the Austrian Parliament enacted the Renewable Energy Expansion Act (“REEA”, “Erneuerbaren-Ausbau-Gesetz”). One major part of the REEA are investment grants in the amount of 80 million euros per year for the development of technologies for renewable gases including hydrogen. These investment grants are expected to have positive effects on development and investment actitivites.

The Austrian Climate and Energy Fund which is set up by the Austrian government to provide financial support to companies engaging in sustainable energy technologies and climate research, has supported (and continues to do so) numerous hydrogen related projects in Austria. 9 https://www.klimafonds.gv.at/ueber-uns/.

There are several associations that deal with the market prospects of hydrogen, such as the WIVA P&G association. WIVA P&G is an association for the promotion of research and development in the fields of application, network and storage technologies of hydrogen and renewable gases as well as measures for the dissemination of these activities. The association supervises the “Hydrogen Initiative Showcase Region Austria Power & Gas” (in short “WIVA P&G”), which is also funded by the Climate and Energy Fund.

Even though hydrogen is not yet a priority on the political agenda, companies are strongly interested in the development of hydrogen technology and applications. Most Austrian energy providers have initiated the first hydrogen projects in recent years. Further, the Austrian economic chamber is pushing for an open approach to subsidising hydrogen technologies (not only limited to 100 per cent green hydrogen). 10 WKÖ-Kopf: Wasserstoff-Nutzung fördern, nicht behindern | SN.at

3. Challenges Facing Hydrogen Projects in Austria

Lack of Hydrogen Strategy

As already mentioned, the Austrian federal government has initiated a national hydrogen strategy in 2018. However, a final strategy has (despite several announcements) not been published yet. Austrian companies expect this strategy to provide guidelines at the national level for funding R&D and also large-scale demonstration projects in Austria. 11 energy innovation austria, Issue 1/2020 (energieforschung.at) In August 2021, the Austrian State Secretary for climate protection expressed strong support for investments in Austria for producing 100 per cent clean hydrogen. 12 ÖVP-Staatssekretär Brunner zum Klimaschutz: "Drüberfahren ist nicht der richtige Weg" - Umwelt, Landwirtschaft & Klima - derStandard.at › Wirtschaft. The lack of a strategy leads to the danger of Austria falling behind in several areas: Large amounts of hydrogen will be needed in industry, mobility, heat supply and stabilisation of the electricity grid and it will not be possible to cover the need with domestic sources only. Other countries have begun working on partnerships to secure supply sources, which Austria has not done yet. 13 Grüner Wasserstoff - der Stoff, aus dem Träume sind | DiePresse.com  

Legal framework

Currently, there is no legal framework that exclusively deals with hydrogen. The laws governing the Austrian energy industry, the Electricity Industry and Organisation Act and the Gas Industry Act, also make hardly any reference to hydrogen-related technologies. For example, it has not yet been clarified whether the production of hydrogen falls under the industrial plant law (Betriebsanlagenrecht) of the Industrial Code or under the electricity laws of the Austrian states.

As described above, in July 2021, the Renewable Energy Expansion Act (“REEA”) was passed by the Austrian parliament. The REEA is the most important piece of legislation in the field of energy in Austria in decades. It was expected that hydrogen will play a major role in the REEA. However, only first steps have been taken in the form of the introduction of subsidies for the development of technologies for renewable gases, including the transformation of electricity into hydrogen. A total of €40 million euros in subsidies will be available for this purpose per year, with the aid being granted in the form of investment grants. Up to 45 per cent of the costs for construction of each plant will be available. The subsidies can be higher, should the hydrogen be used for supporting the grid stability. Other Western European Countries have announced much bigger support schemes for the development of hydrogen technology and infrastructure. 

4. Regulation of Hydrogen

Legislation

Even though Austrian legislation is slowly advancing, there is no comprehensive set of regulations. Therefore, general provisions of public law and energy law must be used for the implementation of hydrogen projects.

The scope of the Gas Industry Act continues to be limited to natural gas or biogenic gases processed to natural gas quality. Other types of gas, such as hydrogen and synthetic natural gas, are therefore not explicitly covered by the current provisions of the Gas Industry Act. However, this could be remedied by Art. 1(2) of the Gas Directive 2009, the scope of which extends to other types of gas on a non-discriminatory basis. Since the Gas Industry Act falls short of EU law requirements in this respect and does not fully implement them, it can be argued that EU law is directly applicable. 14 De Bruyn, Power to Gas - Eine rechtliche Analyse, Jahrbuch Energiewirtschaft 2017, 169. In this sense, the Gas Industry Act can also be considered applicable to hydrogen.

Subsidies

As described above, one of the major new developments in hydrogen legislation is the subsidisation of electrolysis plants for the production of green hydrogen. The construction of an electrolysis plant for the conversion of electricity into hydrogen or synthetic gas with a minimum capacity of 1 megawatt (MW) can be subsidised by an investment grant if the plant is used exclusively for the production of renewable gases and is powered exclusively by renewable electricity. Funding is excluded for plants that are built and operated by grid operators or that add hydrogen to natural gas in the public gas grid. The investments are subsidised with up to 45 per cent of the investment volume directly required for the construction of the plant (excluding land).

Generation

The Austrian legal system does not have any specific regulations on the construction and operation of a hydrogen production plant, nor does it provide for any specific licensing obligations for this type of plant. Therefore, the existing general licensing obligations in Austrian law must be examined for each hydrogen production plant on a case-by-case basis. As a commercial operating facility, a hydrogen production plant may regularly be subject to the Austrian Industry Act (“IA”, “Gewerbeordnung). Depending on the production capacity, the plant may be subject to the normal licensing procedure under the IA. Hydrogen production plants with a high production capacity may also be IPPC plants. Therefore, the competent authority has to assess the situation on a case-by-case basis, particularly for large hydrogen production plants that can potentially have a significant impact on the environment. In such cases, the comprehensive permit requirement under the Environmental Impact Assessment Act (or Umweltverträglichkeitsprüfungsgesetz, UVP-G) must be considered. According to the UVP-G, such plants are subject to an environmental impact assessment in which hydrogen is produced by chemical conversion in the order of 150,000/year. 15 Christoph Cudlik, Ist das österreichische Anlagenrecht reif für Power-to-X-Anlagen? RdU-UT 2020/14, S 63ff.

Storage 

Regulations such as the Regulation dealing with the Prevention of Accidents in the Industry Sector (or “Industrieunfallverordnung”), the Explosion Protection Regulation 2015 (or “Explosionsschutzverordnung 2015”) and the Regulation on Flammable Liquids (or “Verordnung über brennbare Flüssigkeiten”) must be consulted when storing hydrogen. Necessary considerations will depend on the size of the facility being used.

Transport and Distribution

The European Agreement concerning the International Carriage of Dangerous Goods by Road (“ADR”) regulates the transport of hydrogen, which is classified as a dangerous good under Annex A (Class 2) of the ADR. Drivers transporting hydrogen must be appropriately trained and vehicles must meet certain specifications required for hazardous cargoes. The Law on the Transportation of Dangerous Goods (“Gefahrgutbeförderungsgesetz”), the Law on Pressure Equipment (“Druckgerätegesetz”) and the Regulation on Explosion Protection (“Explosionsschutzverordnung”) also apply to the transport, design and manufacture of tanks being used to transport hydrogen.

Gas Grid

The Austrian gas market is regulated by the public authority E-Control, whose task is to monitor and support the implementation of the liberalisation of the Austrian electricity and gas markets and, where necessary, to take regulatory action. E-control must be notified in advance of the commencement of a natural gas trader’s activity. The regulatory authority shall publish a current list of such natural gas traders.

It must be considered that - unlike synthetic natural gas - hydrogen cannot be fed into the grid in its pure form. As a result, it must first be mixed with natural gas to form a natural gas-hydrogen mixture to achieve the required composition, so that damage to pipelines and customer plants can be prevented. It is therefore imperative that the gas being fed in complies with the relevant guidelines of the Austrian Association for the Gas and Water Industry and thus, is compatible with the grid. Until recently, the direct injection of hydrogen into the natural gas network was limited to a maximum of 4 percent by volume. With the new gas quality guideline G B210, which came into force on 1 June 2021, up to 10 per cent hydrogen can be fed into the gas network.

Further, recent amendments to the Austrian Gas Industry Act specify that the Federal Minister for Climate Protection, the Environment, Energy, Mobility, Innovation and Technology, in alignment with the Federal Minister for Digitization and Economic Location, can set a maximum value for the technically permissible proportion of hydrogen in natural gas pipeline networks by ordinance. 16 Sec 133a GWG.

The Electricity Industry and Organisation Act, which was amended in the course of the new REEA package, now allows grid operators to operate power to gas plants to stabilise the electricity grid. 

5. Regulatory Bodies

Regulatory Body

Role

Municipality

The respective municipality makes the decisions on land use plans.

State (Bundesland)

The "Bundesland" is a one-stop-shop for the Environmental Impact Assessment

Gas Connect Austria as Transmission System Operator (“TSO”)

Gas Connect Austria is responsible for the safe operation of a high-pressure natural gas pipeline network. It is up to the transmission system operator to decide whether hydrogen can be injected into the gas grid.

AGGM Austrian Gas Grid Management AG

AGGM is the independent System operator of the Austrian gas network.

E-Control GmbH

E-Control monitors and supports the implementation of the liberalisation of the Austrian electricity and gas markets.

6. UPCOMING DEVELOPMENTS 

As described above, the most important development the Austrian hydrogen community and its stakeholders are waiting for is the publication of the Austrian Hydrogen Strategy. 

The following cornerstones are supposed to be part of the strategy:

  1. Developing hydrogen technology specifically for the economic and transport sectors to make Austria the leading hydrogen nation;
  2. Implementing a Climate Protection and Hydrogen Centre as a cluster for research, innovation and technology to position Austria as a pioneer in the field of renewable energy and support the Austrian export economy; and
  3. Making Austria:
    1. the pioneer in electricity generation from renewable energies focusing on an anti-nuclear and anti-coal power agenda; and
    2. an innovation leader in hydrogen technology.
Portrait ofMarco Selenic
Marco Selenic
Lawyer
Vienna