Austria’s Constitutional Court has upheld the legality of a revenue cap on electricity producers introduced during the energy crisis to limit earnings from specific sources.

The cap, in place from December 2022 to June 2023, was challenged by the Burgenland regional government and several electricity producers. However, the court dismissed their complaints as unfounded.

The measure, enacted under the Federal Act on the Energy Crisis Contribution for Electricity (EKBSG), implemented an EU emergency regulation requiring limits on profits from electricity generated by sources such as renewable energy.

Critics argued that the cap violated the principle of equality, targeting electricity producers but excluding others, such as traders and district heating providers, who also profited from rising energy prices.

The court ruled the cap was within the government’s discretion as a temporary response to disruptions in the energy market. The exclusion of electricity traders was justified, it said, as their business model differs significantly from that of producers.

The law, applied retrospectively from December 2022, was also deemed constitutional. The court found that the backdated introduction did not breach legal certainty, as it was necessary to meet EU emergency regulation requirements.