Drought relief, climate law – these measures are coming now
Austria’s government has reached a long-awaited agreement on emergency drought assistance for farmers and a new climate protection law. Farmers will receive €240 million in immediate support as the coalition also settles a major dispute over climate policy.
The drought has caused agricultural losses of more than €1 billion, according to Agriculture Minister Norbert Totschnig (ÖVP). Around €400 million is already being paid to affected farmers through the Hagelversicherung (hail insurance), while the new government package adds another €240 million in emergency assistance.
A major part of the package focuses on insurance. The government plans to reduce Hagelversicherung premiums by 10 percent, with the goal of encouraging more farmers to take out coverage and ensuring better protection against future weather-related losses.
Farmers will also receive financial relief through the cancellation of two social insurance contributions. The measure is expected to cost around €140 million and is intended to give agricultural businesses more room to purchase essential supplies such as animal feed and fertilizer. The federal government plans to recover the money over the next five years.
The package also includes support for farm loans, payment deferrals and interest subsidies. This part of the program is expected to cost about €25 million and will be financed through reallocations within the Agriculture Ministry. The government says the measures are designed to protect Austria’s domestic food production during the difficult months ahead.
At the same time, the coalition has reached a compromise on the long-disputed Klimaschutzgesetz (Climate Protection Act). The controversial target of achieving climate neutrality by 2040 will remain in place. The legislation is expected to enter the review process soon, while a national climate roadmap is scheduled to be presented by the end of 2027.
The agreement could also pave the way for a Carbon-Capture-Gesetz (Carbon Capture Act), creating a legal framework for storing CO₂ from industrial processes where emissions are difficult to eliminate completely. The government also plans to speed up Umweltverträglichkeitsprüfungen (environmental impact assessments), marking a significant compromise between agricultural support and Austria’s climate ambitions.