With the economy in a slump, the Austrian government that wins the general election on Sunday will come under increasing pressure to diversify its energy sources and wean itself on Russian gas.
It is anticipated that no party will gain enough seats to secure an absolute majority. The far-right and Russia-friendly Freedom Party (FPO) is leading in opinion polls, and this could have an impact on how quickly the energy transition moves forward.
Following Moscow’s invasion of Ukraine in 2022, the European Union has taken swift action to swiftly substitute Russian gas shipments. The cost of alternative energy sources is typically higher, which drives up costs already exacerbated by the war and pandemic’s inflationary effects.
Austria is one of the members of the bloc most dependent on Russian gas, and over the last two years, its inflation has exceeded the EU average, despite the country’s economy contracting due to a downturn in its main trading partner, Germany, which is struggling with the energy transition and competition from China.The senior economist at the Austrian Institute of Economic Research, Stefan Schiman-Vukan, stated that “other nations arent happy Austria is still consuming such huge volumes of Russian gas.”
“There is a lot of political pressure to leave it.”
Russian gas will be phased out by the EU by 2027, but Austria’s energy ministry, which is led by the Greens, wants to move up this timeline. However, 83% of Austria’s imported gas was still coming from Russia as of July. In contrast, the share of EU gas imports from Russia had decreased to 15% in 2023.
The government’s junior partners, the Greens, have spearheaded initiatives to access alternate sources of energy. The conservative Austrian People’s Party (OVP), Chancellor Karl Nehammer’s partner, has similarly promised to wean the nation off Russian gas.
The energy ministry said it had taken steps to make Austria independent of Russian gas in the long run, pointing to supplies from Norway and other sources. It also noted that Austria had enough capacity to import non-Russian gas via Germany and Italy and that its sizable gas storage facilities were more than 90% full.
Austria faces significant economic and security risks due to its substantial reliance on Russian gas supply, the ministry stated in a statement. “Therefore, cutting back on gas use and ceasing to purchase Russian gas is crucial for the security of our nation.”
Though its lead is closing, the FPO maintains that Russian gas must continue to be a part of Austria’s energy balance.
According to opinion surveys, the FPO is supported by between 27 and 29% of voters, with its lead over the OVP eroding to as little as one point. Three other parties are predicted to win by at least 10% of the vote.
Since the other parties have refused to work with FPO leader Herbert Kickl, alliances that are more determined to distance themselves from Russia may be able to form. At present, it looks highly likely a post-election coalition will feature the OVP.
Whoever governs will have to grapple with an economy that the central bank has forecast will shrink by 0.7% this year, contracting for
