Status and Current Mix

Hungary remains a net electricity importer (historically ~30% of consumption), with domestic generation dominated by nuclear and growing solar. In 2023, nuclear was the largest single source of generation (about mid-40% share).

Renewables Share (Recent Trend)

Renewables in gross final energy consumption (GFC) reached a record 17.4% in 2023 (up from 15.2% in 2022 and ~14.1% in 2021). Within Hungary’s renewable production, biomass remains predominant, while solar provided the bulk of renewable electricity.

Deployment on the Ground

Solar photovoltaic (PV) power generation is the main growth engine. Installed capacity surpassed 6.7 GW by July 2024 (MAVIR data cited by press) and was approaching ~8 GW by mid-2025 (industry reporting), far ahead of earlier trajectories.

After a decade-long de facto freeze on wind power development, the rules were liberalised from 1 January 2024 (setback distance cut from 12 km to 700 m; mandatory capacity tender repealed), paving the way for new projects, although grid and siting constraints remain.

Targets and Objectives

Hungary’s updated National Energy and Climate Plan (NECP, 2024 final) sets at least 30% renewables in GFC by 2030, with an indicative trajectory rising from ~17% (2023) to 30% (2030).

The government/IEA also reference a system goal of ~90% low-carbon (nuclear + renewables) electricity by 2030.

Phase-Outs/Shifts

Hungary has signalled a coal exit this decade. At Mátra (the last lignite plant), lignite units are to be phased out and replaced/converted (new CCGT). Government communications in November 2023 tied decommissioning to replacement gas units expected 2027–2029; lignite unit licences run to 2029, implying a practical coal phase-out by 2029/2030 in the absence of further delays.

Policy emphasis is on accelerating solar, cautiously reopening wind, expanding flexibility/storage and relying on nuclear to keep the electricity mix low-carbon while reducing import exposure.

Bottom Line

Hungary’s transition is advancing – driven above all by solar – lifting renewables’ GFC share to 17.4% (2023) and targeting ≥30% by 2030, alongside a coal exit aligned with the Mátra conversion and a 2030 objective of a ~90% low-carbon power mix. Deliverability now hinges on timely grid upgrades, storage/flexibility and execution of Mátra’s replacement schedule.

The most important renewable energy technologies in Hungary are:

• Solar PV: Solar PV generation is the dominant renewable technology in Hungary. Installed capacity exceeded 6.7 GW by mid-2024 and is expected to approach 8 GW in 2025, making Hungary one of the regional leaders in per capita solar deployment. Utility-scale projects as well as rooftop installations (supported by household subsidy programmes and net metering) drive growth. Solar is by far the main contributor to renewable electricity generation.
• Biomass and biogas: Biomass remains the largest component of Hungary’s renewable energy production in gross final energy consumption, mainly for heat generation in residential heating, district heating systems and some co-firing in power plants. Biogas is less significant but present in agricultural and waste management projects.
• Wind power: Hungary has very limited installed wind capacity (unchanged around 330 MW since 2011) due to restrictive siting rules. However, a regulatory liberalisation in 2024 (reducing the exclusion distance from 12km to 700m and removing mandatory tenders) has reopened the sector, and new project pipelines are beginning to form.
• Hydropower: The country has only modest small-scale hydro potential. No large new projects are foreseen due to geographical and environmental constraints. Hydro contributes only marginally to the mix.
• Geothermal: Hungary has significant geothermal resources. The sector is developing mainly in district heating, particularly in municipalities in the Great Plain region. Several projects are under way, but electricity generation from geothermal remains negligible.
• Emerging technologies (hydrogen, green gas, bio-LNG): These are still in their early pilot stages. Hungary’s updated NECP identifies hydrogen and green gas as strategic for the 2030s, but no commercial-scale projects are yet operational.

Market Versus 12 Months Ago

• Bigger and more solar-heavy: Hungary’s installed solar PV fleet moved from just over 7 GW (end 2024) to >8 GW by July 2025, after adding ~1.41 GW in 2024. Growth continues, albeit at a slightly slower rate than 2023’s record year.
• Wind reopening: After a decade-long freeze, wind is back on the agenda thanks to legal changes on 1 January 2024 (exclusion distance cut from 12 km to 700 m and removal of mandatory capacity tenders), unlocking new pipelines.
• Flexibility catching up: A national battery energy storage system (BESS) support scheme launched in early 2024 (RRF-6.5.1-23; MEKH Decree 17/2023) is now translating into projects and demos (eg, MET 40 MW/80 MWh; MVM pilots).
• System effects felt: High midday PV has increased price volatility (frequent negative imbalance/price periods in 2024–2025), followed by sharp rebounds (eg, average HUPX DAM price rose 22% in July 2025 versus June).

Top Trends and Notable Deals (Last 12 Months)

• Corporate PPAs scale up: Landmark 15-year PPA: ID Energy → Holcim (28.5 MWp) at Királyegyháza (Hungary’s largest private renewable PPA to date with grid access). Axpo signed its first Hungary PPA (60 MW) for three 2024-commissioned solar plants.
• Storage build-out: First wave of utility-scale batteries progressing (eg, MET Százhalombatta 40 MW/80 MWh; MVM Green Generation 20 MWh in Western Hungary; NAS battery demo with MVM).
• Geothermal momentum: Government flagged new tenders for district heating/geothermal in August 2025; Budapest (Zugló) launched a geothermal district heating project in May 2025.

• Grid/connection focus: Authorities and TSO highlight PV-driven operational uncertainty and reserve needs for winter 2024–25; grid development planning in the CEE region (ENTSO-E TYNDP/RIP 2024) remains a priority.
• Courts: No widely reported, sector-shaping domestic court rulings in the last year; market direction has been driven primarily by regulatory changes (notably wind liberalisation).

International/Cross-Border Developments

• Black Sea “Green Energy Corridor”: Azerbaijan, Georgia, Romania and Hungary set up a joint venture (September 2024) to develop a ~1,000 MW, ~1,100 km subsea cable to bring Azeri renewable energy sources (RES) to the EU. The feasibility study has advanced during 2025.

Bottom Line

Compared with a year ago, Hungary’s renewables market is larger, more corporate-PPA friendly and finally diversified beyond solar via storage build-out and a regulatory reopening for wind, while grid flexibility and cross-border integration are the key enablers to watch in 2025–26.

Principal Laws and Regulatory Framework

Act LXXXVI of 2007 on Electricity (the “Electricity Act”)

This is the core legislation governing Hungary’s electricity market, designed to:

• create an efficient electricity market and integrate with EU systems;
• promote new generation and network infrastructure; and
• facilitate the generation of electricity from renewable energy sources.

Act XLIV of 2020 on Climate Protection

This is a standalone climate law requiring:

• climate neutrality by 2050; and
• originally, a 40% GHG reduction by 2030 (versus 1990 levels), now updated to 50% via the revised NECP.

Act LVII of 2015 on Energy Efficiency

This introduces a system of energy-saving obligations for energy suppliers to deliver savings targets annually, revised as of 12 June 2025, increasing obligations and extending them until 2035.

METÁR/KÁT Renewable Support Schemes

METÁR (renewable auctions) and legacy KÁT (feed-in tariff) are the central support mechanisms for RES.

Government Decree No. 26/2025 (II.27.), effective 1 March 2025, revises METÁR/KÁT rules, including excluding TSO-instructed deviation energy from KÁT settlement, improving the economic viability of solar power for industrial users.

Specific Renewable-Energy Provisions

There is no entirely separate law regarding renewable energy; instead, renewable energy law is embedded within:

• the Electricity Act (explicit promotion of RES);
• support schemes (METÁR, KÁT); and
• climate law obligations that indirectly drive uptake.

Sector-specific frameworks include:

• Biogas and biomethane: A “Biogas and Biomethane Action Plan” and funding via brown premium subsidies and a HUF40 billion (~EUR100 million) CAPEX grant under the Jedlik Ányos Energy Programme (expected Q3 2025) plus a Guarantee ofOrigin system.
• Co-located BESS/solar/generators: Early 2025 amendments to the Electricity Act authorise shared grid connection points for BESS and power generators (min. 0.5 MW capacity) owned by different entities, with mandatory five-year sharing agreements and notification to the regulator (HEPURA), supported by MAVIR’s updated Operational Code.

The primary regulators of renewable energy activities in Hungary are the following.

Hungarian Energy and Public Utility Regulatory Authority (MEKH)

Role: Independent national energy regulator, established by Act XXII of 2013.

Competence:

• Licences for generation, distribution, trading and renewable energy support schemes (KÁT, METÁR).
• Supervision of electricity, natural gas, district heating and renewables.
• Approval of grid codes, tariffs and market rules.

Enforcement powers:

• Right to information and access to data from market participants.
• Inspections and audits of compliance with licensing and support scheme conditions.
• Binding instructions to ensure safe and lawful operation.
• Sanctions: warnings, fines, withdrawal of licences, suspension from support schemes.

MAVIR ZRt.

Role: The Hungarian electricity transmission system operator (TSO), which operates the national high-voltage grid and is responsible for balancing, system adequacy and RES integration.

Competence:

• Approves grid connection requests for new RES plants.
• Publishes and updates the Operational Code.
• Co-ordinates with ENTSO-E on cross-border infrastructure.

Enforcement powers:

• Can refuse or condition grid connections based on system security.
• Issues binding technical instructions to generators, including RES plants, to maintain stability.

Ministry of Energy

Role: Strategic energy policy and legislative authority.

Competence:

• Drafts primary and secondary legislation.
• NECP implementation.
• Oversees renewable subsidies and energy transition strategies.

Enforcement powers: Primarily policymaking and administrative supervision; no direct fines, but can initiate decrees and binding regulations.

Core Regulated Activities

Under the Electricity Act and implementing decrees, the following activities require licensing or authorisation from MEKH.

Electricity generation

• Licensing required above 0.5 MW installed capacity.
• Small-scale PV plants (≤0.5 MW) are exempt but must be notified and comply with grid connection rules.
• Specific regimes for KÁT (legacy feed-in tariff) and METÁR (auction/green premium) supported generators.

Electricity trading and supply

• Wholesale trading and retail supply both require MEKH licences.
• Power purchase agreements (PPAs) are permitted but must respect grid code and balancing rules.

Grid operation

• Transmission (MAVIR) and distribution system operators (DSOs) are natural monopolies; activities are licensed and tariff-regulated.

Balancing and ancillary services

• RES plants >0.5 MW must participate in balancing markets, provide data and comply with dispatch orders from MAVIR.

Renewable Energy – Specific Rules

Solar PV

• The fastest-growing RES technology.
• Licensing exemptions for small-scale rooftop PV (<0.5 MW), but subject to building and land-use restrictions (eg, prohibition on agricultural land or balconies under recent zoning decrees).
• Large PV plants must undergo full environmental, land-use and construction permitting.

Wind power

• Historically frozen due to restrictive siting rules (12 km from settlements).
• Since January 2024, siting restrictions reduced to 700 m, and mandatory tender requirements abolished. Projects must still undergo environmental permitting and MEKH licensing.

Biomass/biogas/biomethane

• Regulated as generation units; licensing requirements are capacity-based.
• New biomethane support scheme (brown premium + CAPEX grants; 2025 onwards) encourages injection into the natural gas grid, subject to quality and sustainability certification and a Guarantee ofOrigin system.

Hydropower

• Only small-scale permitted (environmental restrictions prevent large river projects).
• Licensing involves both MEKH and water management authorities.

Geothermal

• Governed by mining law and water management rules in addition to energy law.
• District heating projects require a production licence, environmental clearance, and a concession in certain cases.

Storage/BESS

• New 2025 legal framework allows co-location of batteries with generation plants at shared grid connection points.
• BESS facilities >0.5 MW require a licence and must comply with MAVIR’s Operational Code.

Hydrogen/green gas (emerging)

• No dedicated law yet; regulated under general energy and environmental rules.
• Pilot projects must apply for exemptions or case-by-case permits.

Cross-Cutting Restrictions

• Land use and zoning: Agricultural land protection and municipal zoning rules heavily influence siting of PV/wind.
• Environmental law: Mandatory EIA/Natura 2000 assessments for large-scale RES projects.
• Grid connection: Subject to capacity availability; new connection requests restricted until grid upgrades post-2024.
• Support scheme participation: Strict eligibility rules for KÁT/METÁR; breach may trigger exclusion or repayment.

Summary

Hungary regulates generation, trading, supply and grid activities across all energy sources, with renewables integrated into the Electricity Act regime but subject to sector-specific rules. The main differences include the following:

• Solar enjoys simplified rules below 0.5 MW but strict land-use limits.
• Wind only recently reopened with liberalised siting rules.
• Biomass/biogas/biomethane and geothermal have special permitting and quality regimes.
• Storage now has its own clear legal framework (2025), while hydrogen and green gas are in pilot regulatory phases.

General Rule

Hungary allows private ownership of renewable energy assets.

There are no sector-specific restrictions on foreign or domestic ownership of renewable power plants, grid-connected installations or energy companies, beyond the general framework of company law, competition law and merger control.

Licensing and Regulatory Approvals

MEKH authorisation is required for:

• transfer of licences (eg, generation licences >0.5 MW, trading licences); and
• changes in control/ownership of licensed entities (share deals and asset transfers alike).

MEKH may withhold consent if the acquirer does not meet the financial, technical or legal criteria.

Competition/Merger Control

Transactions that qualify as concentrations under the Hungarian Competition Act or the EU Merger Regulation require clearance from the Hungarian Competition Authority (GVH) or the European Commission.

This includes acquisitions of renewable portfolios if turnover thresholds are exceeded.

Foreign Direct Investment Control

Hungary has a foreign direct investment (FDI) screening regime (Act LVII of 2018 and Government Decree 228/2020).

The regime applies to acquisitions by non-EU/EEA/Swiss investors of a decisive influence (10%, 15%, 20%, 25% or 50% shareholding thresholds) in strategic companies, including those in the energy sector.

The Minister of National Economy must approve such acquisitions before closing; transactions without clearance are void.

Land Ownership Restrictions

Renewable projects often require large tracts of land.

Foreign investors cannot directly acquire Hungarian agricultural land.

Workarounds include long-term leases, use rights or development on industrial/commercial plots.

The Land Protection Act also restricts siting solar PV on high-quality agricultural land unless formally reclassified.

Transfer of Support Scheme Rights (KÁT/METÁR)

KÁT/METÁR entitlements are linked to the licensed generator.

A transfer of the project company (share deal) is possible, but MEKH approval is required to ensure the continuity of support.

Direct assignment of entitlements without MEKH consent is not allowed.

Summary

There is no outright prohibition on ownership or transfer of renewable energy assets.

Key restrictions arise from:

• MEKH licence transfer approvals;
• FDI screening for non-EU/EEA/Swiss investors;
• land ownership limits on foreigners; and
• transferability rules for support scheme entitlements.

Overall, Hungary’s regime is open to both domestic and international investors, but all changes of control in licensed RES assets require regulatory clearance.

Hungary is open to private and foreign investment in generation, trading/supply and storage, subject to MEKH licensing, FDI screening, merger control, grid connection availability and land-ownership limits (notably for agricultural land).

Market Access (Sector Rules)

• Licensing (MEKH): Generation above 0.5 MW requires a licence; 0.5–50 MW uses a simplified one-stop regime; ≥50 MW needs separate establishment/operation licences. Trading and retail supply are also licensed activities.
• Grid connection: Access is conditional on TSO/DSO capacity and system security. Hungary applied a temporary restriction on new connection requests until 31 December 2024 while redesigning the regime. Connection constraints remain a key gating factor for new RES projects.
• Unbundling/ownership limits (networks): Transmission and distribution are unbundled per EU law. Network operators are subject to ownership and functional separation rules (affecting vertical integration strategies).

Foreign Investment Controls

Two parallel FDI regimes exist:

• national security screening (Act LVII of 2018 and Decree 246/2018), led by the Cabinet Office; and
• “strategic sectors” screening (Act LVIII of 2020 as replaced/implemented by Decree 561/2022), led by the Minister of National Economy.

Both can apply cumulatively to energy deals. Approvals are suspensory.

The regimes capture share/asset deals conferring decisive influence or specified equity thresholds in strategic/sensitive energy companies and infrastructure. Since 13 January 2024, the second regime explicitly covers certain solar projects and introduces a state pre-emption right in defined cases.

Merger Control

Concentrations meeting Hungarian/EU thresholds require clearance from GVH or the European Commission, in addition to any FDI and sector approvals.

Real Estate/Land Access

With rare exceptions, legal entities and non-EU persons cannot acquire arable land; even EU/EEA individuals face strict farmer-status conditions. Project SPVs typically secure long-term leases or develop on non-agricultural plots.

Support Schemes/Market Rules

Access to KÁT/METÁR support is rule-bound. 2025 changes allow more flexible exits/migrations between schemes and the market (subject to conditions), which can affect bankability and transaction structuring.

Practical Takeaways for Investors

Although there is no blanket foreign-ownership ban for RES assets, investors should plan for MEKH licensing/consents, dual FDI filings, merger control, grid connection risk and site control workarounds where agricultural land is involved.

Market Structure

Hungary has a liberalised power market aligned with EU law, with generation and supply open to private investment.

The production of electricity from renewable sources is dominated by private independent power producers (IPPs), although MVM Group (state-owned utility) also develops and operates renewable assets (especially large solar parks).

The sector is highly solar-centric. Utility-scale PV parks and rooftop solar together account for the overwhelming majority of renewable generation capacity.

Wind capacity remains limited (~330 MW, unchanged for a decade), though new projects are restarting after the 2024 liberalisation of siting rules. Biomass, biogas and small hydro contribute mainly to baseload and district heating integration, while geothermal projects are emerging, primarily for district heating rather than electricity.

Key Parties and Assets

• Private developers/IPPs: Local and international investors own the majority of new solar PV parks (examples include MET Group, SolServices, Photon Energy and Green Genius).
• MVM Group: The largest domestic energy company, which operates several RES assets and invests in solar, storage and pilot wind/geothermal projects.
• MAVIR ZRt. (TSO): Manages transmission, balancing and connection capacity.
• DSOs: E.ON, MVM Démász and other regional distribution operators responsible for integrating small-scale RES into the grid.
• Financial investors: Institutional investors and infrastructure funds (often foreign backed) are increasingly active through project acquisitions and PPAs.

Applicable Rules and Regulations

• Electricity Act: Core statute governing generation, licensing and market integration.
• Licensing regime (administered by MEKH):
1. ≤0.5 MW: Notification regime (simplified licensing).
2. >0.5 MW: Generation licence required.
• Support schemes:
1. KÁT (legacy feed-in tariff): Closed to new entrants but still significant in portfolio value.
2. METÁR (green premium + auction): Main support mechanism; determines feed-in tariffs through competitive tenders.
• Grid connection: Subject to MAVIR’s Operational Code; new connection requests restricted until grid reinforcements are completed (moratorium until 2024).
• Environmental and land-use rules:
1. PV siting restricted on high-quality agricultural land and residential balconies.
2. Wind farms require environmental impact assessments and compliance with updated (2024) zoning rules (minimum 700m setback from settlements).
• Emerging frameworks:
1. Co-located BESS and solar: – Legal basis introduced in 2025 allowing shared grid connections.
2. Biomethane Action Plan (2025): Introducing CAPEX support, Guarantee ofOrigin certificates and premium tariffs.

Hungary’s renewable electricity generation sector is privatised, solar-dominated and investment-driven, supported by state auctions (METÁR) and increasingly by corporate PPAs. MEKH licenses and supervises producers, while MAVIR manages grid integration. Key challenges are grid capacity constraints and land-use restrictions, while upcoming opportunities include wind re-entry, biogas/biomethane incentives and storage co-location.

Market Structure

Hungary’s natural gas market is fully liberalised under EU rules, but domestic production is limited and conventional natural gas is still dominant.

Renewable gas production is at an early stage and focuses mainly on biogas and biomethane from agricultural, municipal and food industry waste.

The state sees biomethane as a strategic growth area to diversify supply, reduce import dependence and support EU decarbonisation goals.

Key Parties and Assets

Agricultural co-operatives and waste-management companies operate most existing biogas plants, typically combined heat and power (CHP) units feeding both power and heat into local grids.

MVM Group and local municipalities are developing new biomethane projects for district heating and grid injection.

New biomethane upgrading units are planned to allow injection into the national gas transmission network (FGSZ, the Hungarian gas TSO).

International players are beginning to show interest, anticipating state support and EU Green Deal incentives.

Applicable Rules and Regulations

• Act XL of 2008 on Natural Gas Supply (the “Gas Supply Act”): General framework for gas production, transmission and supply, covering both fossil and renewable gases.
• Electricity Act: Relevant where biogas plants generate electricity/heat.
• Licensing (MEKH): Biogas and biomethane producers require a production licence. Grid injection of biomethane is subject to MEKH authorisation and technical compliance with FGSZ (TSO) standards.
• Biogas/biomethane support scheme (2025 onwards):
1. Brown premium tariffs for biomethane injection.
2. CAPEX grant programme under the Jedlik Ányos Energy Programme (~HUF40 billion, ~EUR100 million) launching in 2025.
3. Guarantee ofOrigin (GO) system for biomethane certificates to support trade and PPAs.
• Environmental and land-use rules:
1. Feedstock sustainability criteria (in line with the Renewable Energy Directive (RED II/III)).
2. Environmental permitting and waste-management rules apply to agricultural and municipal feedstocks.

Summary

Hungary’s renewable gas sector is in its nascent stage but expanding, centred on biogas and biomethane. Existing projects are small-scale CHP plants, but new support measures in 2025 (premium tariffs, CAPEX grants, GO certificates) are expected to trigger a wave of biomethane-to-grid projects. MEKH licenses and supervises producers, while FGSZ sets grid compliance standards. There are no foreign ownership restrictions, though projects must navigate Hungary’s FDI screening regime and land-use laws.

Market Structure

Hungary has a large district heating (DH) (távhő) sector, serving around 650,000 households and numerous public buildings, historically reliant on natural gas and biomass.

Renewable heat is generated mainly from:

• Biomass (wood chips, pellets, agricultural residues): Still the dominant RES in DH.
• Geothermal energy: Hungary has significant potential, especially in the Great Plain. Geothermal is increasingly used for municipal DH networks.
• Biogas/CHP units: Smaller role, often linked to agricultural or waste projects.

Municipalities and state-owned DH companies (often backed by MVM) are key operators, alongside private investors in geothermal projects.

Key Parties and Assets

• MVM Group: Operates several DH systems, increasingly co-firing with biomass.
• Municipal utilities: Major DH operators (Budapest, Szeged, Miskolc, Győr).
• Geothermal developers: Private and foreign-backed companies (eg, Turkish and Icelandic investors in Szeged geothermal DH).
• Agricultural companies: Operate smaller-scale biogas/CHP for local heating needs.

Applicable Rules and Regulations

• Act XVIII of 2005 on District Heating Services (the “District Heating Act”): Governs production, supply and tariff regulation of DH services. Requires licensing by MEKH for DH producers and suppliers.
• Electricity Act and Gas Supply Act: Relevant for CHP plants (biogas, biomass).
• Licensing (MEKH): DH production >0.5 MW requires a licence. Tariffs for DH are regulated (heat prices set by decree, subject to government approval).
• Environmental/water law: Geothermal extraction requires a water permit (under water management law) and sometimes a concession if deep resources are used. Biomass/biogas plants require EIAs, and waste and emission permits.

Recent/Upcoming Developments

• Geothermal expansion: Szeged’s DH system has become one of the largest geothermal networks in Europe, replacing significant volumes of natural gas. Similar projects are being developed in Budapest (Zugló) and other regional cities (2024–2025).
• Government tenders (2025): The Ministry of Energy announced new tenders for geothermal DH projects, signalling further growth.
• EU funding support: DH decarbonisation is a key target under the Hungarian Recovery and Resilience Plan.

Summary

Hungary’s renewable heat market is municipality-driven and biomass-dominated, with geothermal rapidly scaling up as a strategic replacement for natural gas in DH. Production and supply are regulated by the District Heating Act and licensed by MEKH, while geothermal is also subject to water and concession law. The sector is highly regulated, tariff-based and reliant on public–private partnerships, with significant EU-backed investment expected in geothermal networks until 2030.

Hydrogen

Market structure

Hungary’s hydrogen sector is in its nascent stage. There is no large-scale commercial hydrogen production yet; activities are at the pilot or planning stage, focused on “green hydrogen” (electrolysis powered by renewables) and “blue hydrogen” feasibility (linked to natural gas with CCS in longer-term plans).

Hydrogen is recognised as strategic in Hungary’s NECP (2024 update) and National Hydrogen Strategy (2021), targeting 20,000 tonnes/year of low-carbon hydrogen production capacity by 2030.

Key parties and assets

• MVM Group: Launched pilot electrolyser projects (in partnership with MAVIR and EU programmes).
• MOL Group: Exploring hydrogen use in refining, mobility and storage; member of European hydrogen alliances.
• Budapest University of Technology & Economics (BME) and research consortia: Leading R&D.
• Projects are often EU-funded (Innovation Fund, Recovery and Resilience Facility (RRF)).

Applicable rules and regulations

There is no dedicated Hydrogen Act yet.

Hydrogen projects fall under:

• the Electricity Act (for RES-based electrolysers);
• the Gas Supply Act (for blending/injection into natural gas grids); and
• environmental/water law (for electrolysis siting and permitting).

The government announced work on a regulatory framework for hydrogen transport and grid blending aligned with the EU Hydrogen and Decarbonised Gas Market Package (implementation pending 2025–2026).

Biofuels (Liquid Fuels)

Market structure

Hungary has a well-developed biofuels sector, driven by EU blending mandates under RED II/III.

Bioethanol (from maize) and biodiesel (from rapeseed and waste oils) dominate.

Hungary is one of the largest bioethanol producers in the EU, exporting to other member states.

Key parties and assets

• Hungrana Kft.: Located in Szabadegyháza, Europe’s largest corn-processing plant, a joint venture between AGRANA and Tate & Lyle); leading bioethanol producer.
• MOL Group: Operates biodiesel blending facilities, invests in advanced (second generation) biofuels.
• Agricultural co-operatives: Supply raw materials (maize, rapeseed).

Applicable rules and regulations

• Act CXVII of 2003 on Fuel Quality (the “Fuel Quality Act”) and implementing decrees: Requires minimum blending ratios for biofuels in transport fuels.
• Sustainability certification: Biofuels must meet RED sustainability criteria (GHG reduction thresholds, traceability of feedstock).
• Excise duty law: Tax incentives for certified biofuels.

Other Renewables (Beyond Solar/Wind/Biomass/Geothermal)

• Waste-to-energy: Budapest operates a municipal waste incinerator feeding heat/electricity into the grid (regulated under waste and energy law).
• Tidal/wave energy: Not relevant due to geography.
• Advanced biofuels and bio-LNG: In pilot phase; MOL and research consortia studying algae-based and waste-based fuels.

Summary

• Hydrogen: Early stage, with MVM and MOL pilots, no standalone legal regime yet, EU directives to be transposed.
• Biofuels: Mature, with Hungary a regional bioethanol leader; regulated under EU RED and national fuel laws.
• Other renewables: Mainly waste-to-energy and experimental biofuels.

Overall, hydrogen and advanced biofuels are framed as strategic future sectors, while conventional biofuels already play a significant role in Hungary’s renewable energy mix.

Regulatory Framework

Electricity Act

This act provides the legal basis for small-scale generation.

Systems ≤0.5 MW are exempt from licensing, but must be registered/notified with the DSO.

Household Power Plant Regime (HMKE – háztartási méretű kiserőmű)

• Covers rooftop solar PV installations for domestic/self-consumption.
• Applies mainly to private persons, condominiums and small businesses.
• Rules:
1. Must connect to the DSO grid under a standardised connection agreement.
2. Requires technical compliance (inverters, protection, metering).
3. No MEKH generation licence required below 50 kVA.

Support and Incentives

• Net metering (legacy): For systems commissioned before 31 October 2023, prosumers benefit from net metering until 31 December 2035.
• Gross metering (new systems): For systems after November 2023, Hungary introduced a gross settlement scheme: households sell surplus to the grid at a regulated feed-in price, while paying full retail price for consumption.
• Subsidies and EU funds: The “Solar Plus” programme and earlier RRF-backed tenders provide grants for household PV + battery systems. Specific support exists for low-income households and combined PV–heat pump solutions.

Restrictions and Recent Changes

• Grid connection moratorium (2022): Temporary suspension of new HMKE connections due to grid stability concerns.
• Lifting of ban (from 2024 onwards): New household PV can connect, but export to the grid remains restricted in certain DSO regions. Priority is given to self-consumption systems or systems paired with storage.
• Data reporting obligations (2025): New regulation to introduce centralised monitoring of household PV production/consumption via inverters; privacy concerns have been flagged.

Other Local/Community Models

• Energy communities: Hungary has transposed EU rules on citizen energy communities, allowing collective generation/consumption at local level (still at the pilot stage).
• Co-operatives/municipal projects: Local authorities may develop small-scale RES for community use, subject to the same 0.5 MW threshold and MEKH rules.

Summary

Small-scale/local renewable generation in Hungary (mainly rooftop PV for households) operates under a simplified, notification-based regime, without MEKH licensing if ≤0.5 MW.

Legacy net metering remains until 2035 for earlier adopters; gross metering applies to new systems.

Export to the grid is restricted in some regions pending grid upgrades, pushing households towards self-consumption + batteries.

Regulatory focus is shifting towards digital monitoring and community energy models.

Electricity Act (Act LXXXVI of 2007)

This Act provides the legal basis for the operation of Hungary’s electricity transmission system.

Threshold: Transmission-level activities are reserved to MAVIR Zrt. as the designated transmission system operator (TSO), licensed and supervised by MEKH. Private ownership is permitted for generation assets but not for the core transmission grid.

Transmission System Overview

Hungary’s transmission grid covers the national high-voltage network (132 kV and above), with interconnections to Austria, Slovakia, Romania, Croatia, Serbia and Ukraine.

The system is operated in full compliance with EU internal market and ENTSO-E requirements, including market coupling and cross-border balancing.

Transmission tariffs are regulated by MEKH to ensure cost-reflective, non-discriminatory access.

MAVIR’s Role and Grid Management

MAVIR is responsible for:

• real-time system operation, balancing and dispatch;
• approval of new grid connection requests at transmission level;
• preparation of the National Network Development Plan (NDP) and co-ordination with DSOs; and
• publication of the Operational Code and market rules.

The TSO also ensures compliance with EU network codes and manages cross-border capacity allocations.

Grid Connection Rules and Challenges

All new generators >0.5 MW must apply for a grid connection agreement with MAVIR (TSO-level) or the relevant DSO.

Connection is conditional on available network capacity; developers may be required to finance reinforcements.

Between 2022 and 2024, no new capacity was announced for intermittent RES at transmission level, leading to a de facto moratorium.

Government decrees (526/2022, 54/2024) introduced extraordinary measures: developers must declare connection timelines, provide securities, and accept possible deferrals until 2027–2030.

Curtailment and Flexibility Measures

MAVIR may instruct RES plants >0.5 MW to curtail output if grid stability requires.

New 2025 METÁR rules exclude TSO-mandated curtailment from penalty settlement, improving bankability.

Flexibility tools:

• balancing markets for ancillary services;
• mandatory remote-control capability (aFRR) for larger solar/wind plants; and
• large-scale batteries (eg, 20 MW/60 MWh Szolnok, 40 MW/80 MWh Százhalombatta) integrated into the grid.

Ongoing Developments

The Network Development Plan 2023–2037 prioritises reinforcement of domestic lines and new interconnectors with Slovakia, Romania and Serbia.

Fast-start gas units (eg, Tiszaújváros project) are planned to provide backup capacity.

Co-location rules (2025 amendment) allow shared grid connection of storage and generation, enhancing system flexibility.

Summary

Hungary’s electricity transmission infrastructure is centrally operated by MAVIR under MEKH supervision.

Grid access is constrained, with intermittent RES facing moratoria until reinforcements are completed.

Curtailment remains an emergency tool, but storage, demand response and interconnections are being deployed to mitigate risks.

The medium-term outlook depends on successful grid expansion, enabling Hungary to accommodate further solar and wind growth.

Grid Congestion Challenges

Hungary has experienced rapid PV growth (8 GW installed by mid-2025), creating daytime oversupply and local congestion, especially in rural areas.

MAVIR (TSO) and DSOs have flagged frequent voltage management issues and balancing difficulties, with negative price events on the Hungarian Power Exchange (HUPX).

Curtailment Regime

• Forced curtailment: MAVIR and DSOs can instruct RES plants >0.5 MW to curtail generation in case of grid congestion or system security risks. These instructions are binding, and failure to comply may trigger fines or licence sanctions.
• Voluntary curtailment/flexibility: Market participants can offer balancing/ancillary services (including voluntary downregulation) via MAVIR’s balancing market. New METÁR rules (effective 1 March 2025) exclude TSO-instructed curtailment from penalty settlement, improving bankability for solar producers.

Flexibility and Demand-Side Management

• Balancing market: Operated by MAVIR, with intra-day and balancing products available. Large consumers and aggregators can offer demand reduction or flexible generation as ancillary services.
• Standard contracts/incentives: MAVIR publishes standard terms for flexibility providers. Pilot capacity remuneration mechanisms are being explored for storage/flexibility assets.
• Storage support: From 2024, Hungary introduced a support scheme for batteries (BESS) (40 MW/80 MWh MET project; MVM 20 MWh pilot), encouraging co-located storage.
• Consumers/prosumers: New “Solar Plus” and RRF schemes fund household PV with storage, incentivising self-consumption and local flexibility.

Off-Grid and Alternative Solutions

• Off-grid solar + storage systems:Increasingly deployed in remote farms and small businesses where grid connection is delayed or restricted.
• Microgrids/energy communities: Legal basis exists under Hungary’s transposition of the EU Electricity Directive, allowing local communities to share RES generation behind the meter (still at the pilot stage).
• Hydrogen pilots: Considered as future off-grid storage/transport vector, but still at the R&D stage.

Summary

Hungary addresses intermittency and congestion mainly through TSO/DSO curtailment powers, supported by MAVIR’s balancing market and new incentives for storage and demand-side management. The 2025 METÁR reform reduced curtailment risk for investors, while battery subsidies and prosumer storage schemes aim to add flexibility. Off-grid solutions (solar + batteries, microgrids) exist but remain niche; grid reinforcement and flexibility markets are the central tools to manage intermittency.

Market Structure, Key Parties, Assets

• TSO: FGSZ Zrt. operates Hungary’s high-pressure gas transmission network and publishes technical/network rules, gas-quality specs and biomethane-injection guidance (including a new 2025 map showing feasible injection periods by station).
• DSOs: Major DSOs include MVM Égáz-Dégáz Földgázhálózati Zrt., MVM Főgáz Földgázhálózati Kft. and OPUS TIGÁZ (plus several small local DSOs).
• Storage system operators (SSOs): Commercial storage is provided by Hungarian Gas Storage Ltd. and strategic/commercial storage by HEXUM. Both operate under MEKH-approved business codes.

Applicable Rules and Regulations (Biogas/Biomethane)

• Gas Supply Act and codes: The Gas Supply Act and its implementing decrees; FGSZ Operation & Business Code (quality/measurement/interconnection); SSO business codes (off-spec gas procedures, measurement).
• Gas quality for injection: FGSZ specifies limits (eg, Wobbe index, GCV) and requires compliance. Responsibility for gas quality at the physical point lies with the injecting network user. European practice references EN 16723-1 for biomethane injection (used alongside EN 16726).
• Connection and capacity: Injection depends on local/system capacity and pressure management. FGSZ’s 2025 biomethane-injection map supports siting/timing decisions.

Incentives/Market Signals (Renewable Gas)

• Government push for biogas/biomethane scale-up (Jedlik Ányos Energy Programme): HUF40 billion (~EUR100 million) CAPEX grants announced in 2025; sector targets include tripling biogas output and ~184 mcm biomethane by 2030; work is under way on renewable-gas Guarantees of Origin (GOs).

Injection Into the Public Gas Grid

• Technical gatekeeping: Producers must meet FGSZ/DSO gas-quality specs, install agreed measurement/odorisation and pressure control, and bear connection-related costs under the interconnection/connection agreements.
• Operational control: TSO/DSO may refuse or curtail injections that threaten system integrity or are off-spec. SSO and TSO business codes set out notification and shutdown procedures for off-spec gas.
• Certification/tracking: A GO system for renewable gas was introduced/rolled out in 2025 to certify origin. Suppliers can market “green gas” via GOs and mass-balance.

Admixture Obligations

No general, legally binding biomethane admixture obligation exists in Hungary’s public gas grid at present. Policy relies on project support, GO-based products and targets (NECP/ministerial communications), not mandatory blending percentages in network gas. (Note: transport-fuel mandates exist for liquid biofuels/transport RES, but these are separate from grid-gas admixture.)

Bottom Line

Transportation and storage of renewable gas in Hungary follow the standard gas-sector regime (Gas Supply Act + network/storage codes), with biomethane admitted as natural-gas equivalent if it meets FGSZ/DSO quality specifications. Growth is driven by CAPEX support and GOs, while grid capacity/pressure and local quality compliance remain the practical gating factors for new injection projects.

Market Structure

Heat supply in Hungary is dominated by district heating systems, serving around 650,000 households and public institutions.

District heating (DH) is considered a public utility service and is therefore price-regulated and subject to licensing.

The market is a mix of municipally owned utilities (eg, Budapest, Szeged, Miskolc, Győr) and the state-owned MVM Group, which has expanded into DH operations.

Renewable sources integrated into DH include:

• biomass (wood chips, pellets, agricultural residues);
• geothermal heat (notably in Szeged and Miskolc, and new projects in Budapest’s Zugló district); and
• biogas/CHP units on a smaller scale.

Transportation and Storage of Heat

Heat transportation takes place via DH grids, which are closed local networks regulated under the District Heating Act.

Heat storage is limited. Some DH companies operate buffer tanks/thermal storage to smooth daily demand, but large-scale seasonal storage is not yet developed.

Consumers are connected via substations, and metering is increasingly being modernised to enable consumption-based billing.

Organisation and Regulation of Heat Grids

District Heating Act

This Act sets out the rules for licensing, operation and consumer protection.

DH providers must obtain a production and supply licence from MEKH.

Tariff regulation

Heat prices are centrally regulated by government decree; operators cannot freely set consumer tariffs.

Grid ownership/operation

Heat networks are typically municipally owned, and operated by municipal utilities or by MVM subsidiaries.

Operators are responsible for maintaining infrastructure, ensuring security of supply and meeting efficiency standards.

Renewable integration

Biomass-fired boilers and geothermal wells are linked into DH systems.

Geothermal projects require water permits (under water law) and, in some cases, concessions if deep reservoirs are exploited.

Key Parties

• MVM Group: major state-owned player, investing in biomass and geothermal-based DH.
• Municipal utilities: Budapest (FŐTÁV), Szeged (Geothermal DH), Miskolc, Győr, Debrecen, etc.
• Private developers: Especially in geothermal (domestic and foreign-backed investors).
• Regulator: MEKH licenses producers and suppliers, monitors tariffs and enforces consumer protection.

Summary

Hungary’s renewable heat sector is structured around regulated DH systems, where transportation is via municipally or state-owned grids under the District Heating Act.

MEKH licenses and supervises operators.

Tariffs are regulated by government decree, not market-based.

Renewable sources (biomass, geothermal, biogas/CHP) are increasingly integrated, with geothermal expansion (Szeged, Budapest) representing the most dynamic growth.

Heat storage is limited to small-scale buffer solutions; large-scale thermal storage is not yet deployed.

Hydrogen

Market structure

Hungary’s hydrogen sector is in its nascent stage; there is no dedicated hydrogen transport grid yet.

Transportation currently relies on local pipelines (industrial sites) and road tankers for compressed hydrogen.

A National Hydrogen Strategy (2021) sets a target of 20,000 tonnes/year low-carbon hydrogen production by 2030, with pilot transport/storage projects funded under EU programmes.

Key parties and assets

• MVM Group: Pilot electrolyser and storage projects.
• MOL Group: Hydrogen use in refining and mobility; developing pilot transport/logistics solutions.
• Research consortia: Universities (eg, BME, Szeged) testing hydrogen mobility/storage.

Applicable rules and regulations

There is no standalone Hydrogen Act yet.

Hydrogen infrastructure is regulated under general gas, chemical safety and environmental laws.

Hungary will transpose the EU Hydrogen and Decarbonised Gas Market Package (2025–2026), which will introduce rules for hydrogen grids, third-party access and unbundling.

Biofuels (Liquid Fuels)

Market structure

Hungary is a regional leader in bioethanol production (mainly maize-based) and also produces biodiesel.

Transportation/storage is through the conventional liquid fuel infrastructure: rail, road tankers and MOL’s pipeline/terminal network.

Biofuels are blended into transport fuels at MOL refineries and depots.

Key parties

• Hungrana Kft. (AGRANA/Tate & Lyle JV): Europe’s largest corn-processing plant and bioethanol producer.
• MOL Group: Operates biodiesel blending and invests in advanced biofuels.

Applicable rules

• Fuel Quality Act and RED II/III blending mandates.
• Excise law governs tax treatment.
• Sustainability certification required for all biofuels.

Other Renewables (Beyond Electricity/Heat/Gas)

• Bio-LNG/advanced biofuels: Still at the pilot stage, with MOL and R&D consortia testing production and logistics.
• Waste-to-energy: Thermal plants feed electricity/heat into grids, regulated under waste and energy law.
• Geothermal transport/storage: Integrated into district heating networks (already covered in 4.4 Heat).

Operation of Grids and Infrastructure

• Hydrogen grids: None yet in Hungary; forthcoming EU package will set a framework.
• Biofuels transport: Integrated into existing oil product pipeline and depot system, operated by MOL and logistics firms, subject to fuel and environmental regulation.
• Renewable certificates: Guarantees of Origin (GOs) for biomethane are being extended to cover renewable gases. Similar EU-wide GO systems are expected for renewable hydrogen and advanced biofuels.

Summary

• Hydrogen transport/storage: Pilot stage; no dedicated grid yet, pending EU law transposition.
• Biofuels: Mature sector, with established logistics through MOL’s conventional fuel infrastructure and strict sustainability rules.
• Other renewables (bio-LNG, advanced biofuels, waste-to-energy): Early stage, integrated into existing infrastructure.

Regulation is mainly through existing energy/fuel acts, with hydrogen-specific rules still under development.

Market Structure

Hungary’s electricity market is liberalised and integrated into the EU internal market.

Wholesale trading occurs primarily via HUPX, operated under MEKH licence and linked to regional markets (EPEX/European coupling).

Retail supply is split between:

• a regulated universal service (for households and small consumers) provided by state-owned MVM Next; and
• a competitive retail market for industrial/commercial consumers, served by licensed private suppliers.

Renewable electricity is not a separate retail product by default, but is supplied through PPAs, green tariffs or Guarantees of Origin (GOs).

Key Parties

• MVM Group: Dominant in wholesale trading, universal service supply and renewable portfolio sales.
• Independent traders: For example, Axpo, Statkraft, E.ON Global Commodities. Involved in RES PPAs and balancing services.
• Corporate offtakers: Multinationals (eg, Holcim, Audi Hungaria, Mercedes) are entering long-term PPAs with solar developers.
• Renewable generators: IPPs and solar developers (MET Group, Photon Energy, SolServices, Green Genius).

Standard Contracts and Instruments

PPAs

• Growing in importance, especially for industrial consumers.
• Structures: physical delivery or financial settlement (CfD-style).
• Terms often adapted from EFET (European Federation of Energy Traders) model contracts.

Feed-in support contracts

KÁT (legacy feed-in tariff) and METÁR (auction/green premium) contracts between RES producers and MEKH-designated entities.

GOs

Issued for renewable generation; tradable on domestic and cross-border markets; enable “green electricity” labelling.

Applicable Rules and Regulations

• Electricity Act: Primary legislation for generation, trading and supply.
• Market rules and grid codes: Set by MAVIR and approved by MEKH.
• Renewables support framework: KÁT/METÁR decrees regulate RES purchase obligations, settlement and pricing.
• Consumer protection and tariffs: Universal service supply regulated by government decree; competitive supply governed by contractual freedom subject to MEKH oversight.
• EU regulations: Hungary participates in EU market coupling and follows REMIT (wholesale market integrity and transparency).

Summary

Hungary’s renewable electricity trade and supply market is liberalised and EU-integrated, with HUPX as the wholesale platform and MVM Next as the regulated retail supplier. Renewable electricity reaches end users through corporate PPAs, GO-backed supply products and regulated feed-in schemes (KÁT/METÁR). MEKH licenses and supervises all traders and suppliers, ensuring compliance with the Electricity Act and EU market rules.

Market Structure

Hungary’s natural gas market is liberalised, with wholesale and retail activities subject to MEKH licensing.

Renewable gas (biogas/biomethane) is still a nascent market, but is strategically promoted in the 2024 NECP update and the Biogas and Biomethane Action Plan (2025).

Biogas is typically consumed on-site for CHP.

Biomethane (upgraded biogas) can be injected into the natural gas transmission/distribution system and traded like conventional gas, provided it meets FGSZ/DSO quality standards.

Key Parties

• FGSZ Zrt.: National gas TSO, responsible for grid access and technical rules for biomethane injection.
• DSOs: Regional distribution companies (eg, MVM Égáz-Dégáz, MVM Főgáz, OPUS Tigáz) handle local connections.
• Biogas/biomethane producers: Mainly agricultural and waste management companies, with new projects backed by EU and government support.
• Suppliers/traders: Licensed gas suppliers (MVM CEEnergy, MET, independent traders) may offer green gas products backed by Guarantees of Origin (GOs).
• End users: Primarily industrial consumers and municipalities seeking to decarbonise supply portfolios.

Standard Contracts

• Gas supply agreements: Based on standard commercial terms; no distinct contract form for biomethane, but must comply with grid code and supplier licensing rules.
• Grid connection and injection agreements: Concluded with FGSZ or the relevant DSO; include gas quality, metering and balancing obligations.
• GOs: Introduced in 2025 for biomethane, enabling suppliers to certify renewable content to end users.

Applicable Rules and Regulations

• Gas Supply Act: Core statute governing gas transmission, distribution, trading and supply, equally applicable to renewable gases.
• FGSZ Business & Network Code: Technical requirements for biomethane injection (quality standards, odorisation, pressure, measurement).
• District Heating Act: Relevant where biogas is used in CHP supplying district heat.
• Biogas/biomethane incentives:
1. Jedlik Ányos Energy Programme (2025): CAPEX grants (~HUF40 billion).
2. Brown premium tariffs: Support mechanism for biomethane injected into the grid.

No admixture/blending obligation currently exists in Hungary. Renewable gas uptake is voluntary, market-driven and incentive-based.

Summary

The Hungarian renewable gas supply market is emerging:

• Biogas is mostly used on-site in CHP.
• Biomethane is technically tradable through the public gas grid if upgraded to meet TSO/DSO standards.
• MEKH licenses all supply/trading activities, while FGSZ and DSOs control technical access.
• New GOs, CAPEX support and premium tariffs (2025) are designed to stimulate growth, but there is no mandatory blending requirement.

Heat – Trade and Supply (Renewables)

• Market structure: Heat is supplied mainly through district heating (DH) systems, which serve ~650,000 households and numerous institutions. The sector is not liberalised – DH is a regulated public utility.
• Renewable sources: The share of renewables in DH is rising, led by biomass-fired boilers and rapidly expanding geothermal projects (notably Szeged, Miskolc, Budapest-Zugló). Smaller contributions come from biogas-CHP units.
• Key parties: State-owned MVM Group (largest operator); major municipal DH companies (Budapest FŐTÁV, Debrecen, Győr, Pécs, etc); private geothermal developers.
• Contracts: Supply to end users is under standardised statutory contracts; terms (billing, consumer rights) are defined by law. Prices are centrally regulated by government decree, not market-driven.
• Regulation: Governed by the District Heating Act; licensing of producers and suppliers by MEKH. Geothermal heat additionally requires water law permits and sometimes concessions.

Summary

Trade and supply of renewable heat in Hungary is regulated, utility-based and tariff-controlled. Renewable integration is growing, especially through geothermal and biomass in DH, but there is no competitive wholesale/retail market for heat.

Market Structure

Hydrogen

Hungary does not yet have a commercial hydrogen supply market. Production and trade are pilot-stage only, focused on industrial use and R&D. There is no dedicated hydrogen grid; transportation is via on-site pipelines or road tankers. A regulatory framework will follow the EU Hydrogen and Decarbonised Gas Market Package (2025–2026).

Biofuels (liquid fuels)

A mature and regulated sector, driven by RED II/III blending mandates. Bioethanol (from maize) and biodiesel (from rapeseed and waste oils) are blended into transport fuels at MOL’s refineries and depots. Hungary is among the largest bioethanol producers in the EU.

Other renewables

Includes biogas/biomethane (covered under gas), bio-LNG and advanced biofuels (pilot stage), and waste-to-energy feeding into electricity/heat supply.

Key Parties

• Hydrogen: MVM Group (electrolysis pilot), MOL Group (refining, mobility pilots), universities and R&D consortia (eg, BME).
• Biofuels:
1. Hungrana Kft. – major bioethanol producer (corn-based).
2. MOL Group – biodiesel blending, investments in advanced fuels.
• Other renewables: Municipal waste-to-energy operators; emerging private developers in bio-LNG/advanced fuels.

Standard Contracts

• Hydrogen: No market-standard agreements yet. Supply is via pilot contracts between producers and industrial users.
• Biofuels: Supply agreements follow standard oil product sale/purchase contracts, aligned with refinery and logistics infrastructure.
• Guarantees of Origin (GOs): Introduced for biomethane and expected to extend to hydrogen and advanced biofuels, supporting traceability and certification.

Applicable Rules and Regulations

• Hydrogen: Currently regulated under general energy, chemical safety and environmental law. Forthcoming EU rules will define grid access, certification and market rules.
• Biofuels:
1. Fuel Quality Act and implementing decrees.
2. RED II/III blending mandates.
3. Excise tax rules with incentives for certified biofuels.
4. Sustainability certification is mandatory.
• Other renewables: Governed by general energy law and sector-specific regulations (eg, waste law for waste-to-energy).

Summary

• Hydrogen trade and supply: Still pilot-based, with no commercial market or dedicated infrastructure yet.
• Biofuels: Established and regulated, with Hungary a regional leader in bioethanol production and supply, blending mandated by EU law.
• Other renewables (biomethane, advanced biofuels, waste-to-energy): Integrated through existing energy and fuel infrastructure, with new GO systems emerging.

Renewable Energy Certificates/Guarantees of Origin

Market structure

Hungary has implemented the EU Guarantee of Origin (GO) system in line with the Renewable Energy Directive.

MEKH is the issuing body for GOs, covering all forms of renewable electricity.

GOs certify that a given MWh of electricity was produced from renewable sources and can be traded separately from the physical power.

Hungary participates in the Association of Issuing Bodies (AIB) system, which allows cross-border GO trading within the EU.

Key parties

• Renewable generators (mainly solar IPPs, biomass, some wind).
• Suppliers/traders (MVM, Axpo, Statkraft, E.ON Global Commodities).
• End users (corporates seeking green electricity for ESG compliance).

Standard contracts and rules

GOs are traded bilaterally or via exchanges, often under EFET standard agreements with GO annexes.

Applicable rules:

• Electricity Act.
• Government decrees transposing RED II/III.
• MEKH regulations on issuance, transfer and cancellation of GOs.

Corporate PPAs

Market practice

Long-term corporate PPAs are increasingly common, though still a relatively young market in Hungary.

The first wave of deals (2023–2025) were landmark transactions between solar developers and large industrial consumers.

PPAs are seen as key to bankability for unsubsidised solar PV projects and as an ESG tool for corporates.

Main features

• Parties: Renewable generator (typically solar) and industrial/offtaker (cement, automotive, food industry, logistics).
• Structure:
1. Physical delivery PPAs (generator delivers electricity to the offtaker or via a trader).
2. Virtual/financial PPAs (CfD settlement against HUPX or another reference price).
• Tenor: Typically 10–15 years.
• Volume and pricing: Fixed or floor/ceiling price structures; volume flexibility linked to solar intermittency.
• Standard contracts: Adapted EFET PPA templates, with Hungarian law adjustments on balancing, grid curtailment and support scheme interaction.
• Bankability: Increasingly used to secure project financing; lenders require step-in rights and clear curtailment/risk allocation.

Recent trends

• Holcim Hungary (cement plant) – ID Energy (28.5 MWp solar park) PPA (2024): Hungary’s largest corporate renewable PPA to date.
• Axpo Hungary – three solar parks (60 MW, 2024 commissioning): first international trader-backed PPA deal.
• Rising interest from automotive (Audi, Mercedes) and logistics corporates in Hungary.

Summary

• GOs: Hungary has a functioning GO market under MEKH, integrated into the EU AIB system, traded via EFET contracts.
• Corporate PPAs: Not yet the norm but rapidly expanding, especially for solar projects; 10–15-year tenors, physical or virtual structures, EFET-based documentation. These instruments are increasingly central to financing merchant renewable energy projects and meeting corporate sustainability targets.

Market Overview

Hungary’s onshore renewable market is dominated by solar PV, with projects ranging from small-scale (0.5–5 MWp) to large utility parks (>50 MWp). As of mid-2025, installed PV capacity exceeded 8 GW.

Wind power development was effectively frozen for a decade due to restrictive zoning but reopened in 2024 (new siting distance: 700m from settlements). New wind pipelines are now forming, but no large parks have been built since 2011.

Biomass/biogas projects are generally smaller CHP plants (1–20 MW), often integrated into local heat networks or industrial facilities.

Key Parties

• Developers/IPPs: Domestic (MVM, MET Group, SolServices) and international (Axpo, Photon Energy, Green Genius).
• Construction contractors (EPC): Mix of Hungarian and international EPCs specialising in solar and grid works.
• Operations and maintenance (O&M): Often bundled with EPC contracts; larger IPPs retain specialist O&M providers.
• Financiers: Domestic banks (OTP, MKB/MBH) and international lenders, often requiring long-term PPAs or METÁR support.
• Authorities:
1. MEKH (licensing).
2. MAVIR (grid access approval).
3. Municipal authorities (land use/zoning).
4. Environmental and water authorities (EIA, permits).

Legal and Regulatory Considerations

• Core legislation: Electricity Act, Environmental Protection Act, District Heating Act (for CHP), Land Protection Act.
• Permits required (depending on size/technology):

1. Generation licence (MEKH) for projects >0.5 MW.
2. Environmental Impact Assessment (EIA) and Natura 2000 screening for large-scale projects.
3. Construction and land-use permits from local municipalities.
4. Grid connection agreement with MAVIR/DSO (subject to available capacity).
• Land acquisition: Developers typically use long-term lease agreements. Foreign entities face restrictions on agricultural land ownership, requiring reclassification or leasing.

Project Delivery and Contracting Standards

• EPC contracts: Common for utility-scale solar; often adapted from FIDIC or bespoke international forms.
• O&M contracts: Usually long-term (10–15 years), including performance guarantees and availability KPIs.
• Balance-of-plant and grid connection works: Often subcontracted to local specialists.
• Bankability considerations: Lenders require step-in rights, clear curtailment risk allocation and PPA/support scheme certainty.

Government Involvement and Community Participation

Government role

• Sets support frameworks (KÁT, METÁR).
• Administers auctions for new capacity under METÁR (though solar deployment now largely merchant/market-driven).
• Controls tariff regulation (universal service supply) and issues policy via Ministry of Energy.

Community involvement

Public consultation is required for EIAs and local zoning.

Local municipalities influence land reclassification decisions.

Pilot energy communities under EU law allow local citizen participation, though uptake is limited.

Summary

Onshore renewable project development in Hungary is mature in solar PV, re-emerging in wind, and niche in biomass/biogas. The legal regime is centred on the Electricity Act and MEKH licensing, supplemented by environmental, land-use and grid access regulations. EPC and O&M standards follow international practice (often FIDIC-based). The government shapes the market through support schemes and regulatory approvals, while local municipalities and communities play a role in permitting and land allocation.

Market Overview

No offshore renewable energy market currently exists in Hungary due to its landlocked geography (no access to sea or tidal resources).

Lakes and rivers (eg, Lake Balaton, the Danube, the Tisza) are protected bodies of water and not used for large-scale offshore wind or floating solar.

As a result, offshore wind, tidal and wave energy projects are not relevant in the Hungarian context.

Upcoming Projects

There are no planned offshore renewable projects in Hungary.

Instead, focus is placed on onshore solar PV, re-emerging onshore wind, geothermal heat and biomethane.

“Floating solar” on industrial water reservoirs (eg, cooling ponds) has been discussed at pilot level, but no regulatory framework exists yet.

Key Parties

• Not applicable in Hungary’s context. No offshore developers, contractors or consortia are active domestically.
• Hungarian energy companies (eg, MVM, MOL, MET Group) may participate in foreign offshore projects through joint ventures in the EU, but not domestically.

Legal Considerations and Regulation

No offshore licensing regime exists in Hungarian law.

The Electricity Act and general permitting rules apply only to onshore generation.

Environmental law and water law impose strict protections on lakes and rivers, preventing energy development in those zones.

Standards for Offshore Contracting

EPC, balance-of-plant), wind turbine supply agreements and O&M standards are not applicable domestically, but Hungarian contractors active abroad follow FIDIC-based contracts and EU offshore market practices.

Government Involvement and Community Participation

Government energy strategy does not foresee offshore projects; instead, resources are directed towards:

• solar PV (utility and rooftop);
• onshore wind (new pipeline after 2024 liberalisation); and
• geothermal and biomethane (2025 incentives).

Community participation is linked to onshore renewable projects and energy communities, not offshore.

Summary

Hungary has no offshore renewable energy sector, and there are no current or planned offshore projects due to its landlocked status and the environmental protections on inland waters. Development efforts are instead concentrated on solar, onshore wind, biomass/biogas and geothermal, where established permitting regimes and market activity exist.

Market Practice

Renewable energy projects in Hungary (especially solar PV, increasingly biomethane and geothermal) are typically financed through project finance structures using a special purpose vehicle (SPV).

Historically, support schemes (KÁT, METÁR) provided the revenue certainty necessary for bankability.

In recent years, corporate PPAs and merchant exposure (HUPX-based) have become more important, though lenders still prefer long-term contracted revenues.

Main Legal Considerations

Licensing and permits

Financing is conditional on the SPV obtaining a generation licence (MEKH) and all relevant permits (environmental, construction, grid connection).

Lenders require confirmation that licences and permits are valid, transferable (if needed) and not subject to challenge.

Land rights

Security of land tenure is critical.

Foreign investors face restrictions on acquiring agricultural land; typically, long-term lease agreements or use rights are used.

Land classification (eg, reclassification from agricultural to industrial) must be confirmed.

Revenue framework

• Support scheme participation (KÁT/METÁR): Lenders require MEKH confirmation of eligibility and contract terms.
• PPAs: Step-in rights, curtailment risk allocation and balancing obligations must be clearly allocated.
• Merchant risk: Lenders are more cautious where revenues rely purely on market prices (HUPX).

Security package

Typical securities include:

• Pledge over shares in the project SPV.
• Pledge/mortgage over land-use rights and assets.
• Assignment of receivables (PPA, feed-in contracts).
• Security over bank accounts.

Hungarian law requires registration of pledges/mortgages in the public register (Collateral Register, Land Register).

Step-in and direct agreements

Lenders usually require direct agreements with EPC/O&M contractors and PPA counterparties.

Step-in rights are key to ensure continuity in case of default.

Regulatory risks

• Curtailment risk: TSO/DSO instructions may force RES to reduce output; 2025 METÁR reform mitigated this risk by excluding TSO-ordered curtailments from penalty settlement.
• Grid connection moratoria: Restrictions on new connections (2022–2024) showed that sudden regulatory changes can delay projects.
• Support scheme amendments: Past retroactive changes (eg, KÁT caps) have created investor concern; stability is a continuing risk factor.

Comparison With Other Project-Financed Assets

The basic project finance model (SPV, non-recourse lending, security package, step-in rights) is the same as in infrastructure/real estate.

Some differences are:

• greater reliance on support schemes or PPAs for revenue certainty;
• stronger regulatory dependency (licensing, grid access);
• higher policy/regulatory risk due to frequent adjustments in Hungary’s renewable incentives; and
• Market prices (HUPX) are volatile, adding merchant risk uncommon in traditional infrastructure finance.

Summary

Project financing of renewables in Hungary follows classic SPV-based structures, but with specific legal sensitivities around:

• licensing and regulatory stability;
• land ownership restrictions;
• revenue certainty (support schemes, PPAs or merchant risk); and
• curtailment and grid access risk.

Compared to other project-financed assets, renewable projects in Hungary carry higher regulatory and policy risk, making bankable offtake arrangements and robust security packages critical.

Core Support Schemes

KÁT – feed-in tariff (legacy)

The Kötelező Átvételi Tarifa (KÁT) was the original guaranteed feed-in tariff scheme.

It is closed to new entrants since 2016 but still applies to many existing biomass, biogas and early solar projects.

It provides long-term, fixed-price revenue streams – highly bankable but gradually being phased out.

METÁR – main support scheme

The Megújuló Támogatási Rendszer (METÁR) is Hungary’s main renewable support mechanism since 2017.

It includes:

• Green premium: RES producers sell electricity on the market but receive a premium over market price.
• Feed-in tariff (small plants <0.5 MW): Simplified support for micro/small generators.
• Auction system: Competitive tenders allocate support to new RES projects.

Recent reform (2025): Government Decree 26/2025 revised METÁR/KÁT rules to improve bankability, eg, excluding TSO-ordered curtailments from penalty settlement.

Sector-Specific Incentives

Solar PV

• Major beneficiary of METÁR auctions.
• EU-funded programmes (eg, Solar Plus under the RRF) provide CAPEX subsidies for household and SME rooftop PV + storage systems.

Biogas and biomethane

• Jedlik Ányos Energy Programme (2025):
1. ~HUF40 billion (EUR100 million) CAPEX grants for biomethane plants.
2. Introduction of brown premium tariffs and a Guarantee of Origin system for biomethane injected into the grid.

Geothermal

• Government tenders (2025) support geothermal integration into district heating.
• Investment grants available under EU Cohesion and Recovery funds.

Energy communities/storage

• Pilot support for community RES projects and BESS under RRF-financed calls.

Tax Incentives

• Depreciation allowances for renewable energy equipment under the Corporate Income Tax regime.
• Excise duty exemptions/reductions for certified biofuels under the Fuel Quality Act.
• Local business tax (IPA) relief may apply where municipalities grant favourable treatment for green investments.
• EU ETS free allowances benefit certain industrial RES-linked CHP projects.

Regional Schemes

Hungary does not operate regional-level incentive programmes (support is centralised).

However, EU regional development funds (via Hungarian Operational Programmes and RRF) provide co-financing for municipal geothermal and district heating decarbonisation projects.

Summary

Hungary’s RES incentives are centred on the METÁR system (premium, feed-in tariff, auctions), supplemented by CAPEX subsidies (Solar Plus, biomethane, geothermal) and fiscal incentives (tax depreciation, excise exemptions for biofuels). The legacy KÁT feed-in tariff still supports older assets, while the new biomethane support framework (2025) and geothermal tenders mark the next wave of subsidies.

General Principles

Hungary does not have a single dedicated “Renewables Decommissioning Act”, but decommissioning obligations are embedded in environmental law, construction law, land-use rules and licensing conditions.

Developers are responsible for ensuring that, at the end of an installation’s lifetime, the site is restored and equipment is dismantled or recycled in line with environmental standards.

Electricity Act

Generation licences issued by MEKH typically include obligations to:

• notify the authority of cessation of operation;
• terminate grid connection agreements with MAVIR/DSOs; and
• decommission assets in compliance with environmental and land-use permits.

MEKH has the power to revoke licences and require proof of safe dismantling.

Environmental and Waste Law

Act CLXXXV of 2012 on Waste and EU Waste Electrical and Electronic Equipment rules apply to renewable installations (esp. solar panels, inverters, batteries).

PV modules fall under extended producer responsibility (EPR) – importers/producers must ensure recycling and waste management.

Decommissioning plans must provide for collection and treatment through certified waste operators.

For wind turbines and biomass plants, dismantling requires an environmental permit amendment and certified disposal of hazardous waste (oils, chemicals).

Land-Use and Construction Law

Land leases or use-right agreements typically oblige the developer to return the site to its original condition.

If the land was agricultural, the Land Protection Act requires reinstatement unless reclassified.

Construction permits (issued by local building authorities) may contain explicit dismantling obligations at the end of lifetime.

Financial Security

For larger projects, MEKH may require financial guarantees (decommissioning bonds or bank guarantees) as part of the licensing process to cover dismantling costs.

Lenders also typically impose contractual obligations on SPVs to set aside reserves or maintain insurance for decommissioning.

District Heating/Geothermal

Geothermal wells must be closed and sealed in line with water and mining law.

District heating boilers/plants must be dismantled with environmental supervision.

Summary

Cessation and decommissioning of renewables in Hungary are governed by a combination of sectoral licences, environmental and waste legislation, and land-use rules.

• PV panels: EPR recycling obligations.
• Wind/biomass: Dismantling and hazardous waste disposal.
• Geothermal: Well closure under water/mining law.

Land must be reinstated, usually under lease or zoning conditions.

MEKH and environmental authorities oversee compliance, and financial guarantees may be required to ensure proper decommissioning.

Policy Direction

Hungary’s energy policy continues to emphasise a low-carbon electricity mix (~90% nuclear + renewables by 2030), as reflected in the updated NECP.

The government remains committed to grid security and import reduction, while scaling renewables primarily through solar PV, reopened wind and biomass/biogas.

Decarbonisation of district heating (via geothermal and biomass) is emerging as a parallel policy focus, supported by EU and national tenders.

Expected Developments

• Solar PV: Growth will continue, though moderated by grid bottlenecks. Policy is shifting towards self-consumption, storage integration and community energy models rather than pure grid export.
• Wind power: The 2024 liberalisation of siting rules (700m setback) is expected to bring the first new wind parks by 2026–27, re-establishing wind as a viable technology.
• Biomethane: The 2025 biomethane support framework (CAPEX grants, brown premium, Guarantee of Origin system) should trigger the first wave of injection projects into the gas grid by 2026.
• Geothermal: After the success of Szeged and the launch of Budapest-Zugló, further geothermal district heating tenders are expected, positioning geothermal as a strategic gas-replacement technology.
• Storage and flexibility: Large BESS projects under RRF tenders are under development. New rules on co-location (2025) enable joint solar-storage projects, which will be essential for balancing solar volatility.
• Hydrogen: Hungary remains at the pilot stage, but with EU Hydrogen Package transposition (expected 2025–2026), MOL and MVM are likely to develop the first commercial hydrogen transport/mobility projects.

Regulatory/Policy Themes

• Grid capacity: Upgrades and digitalisation are the single biggest policy bottleneck. Further regulation on connection queues, curtailment compensation and flexibility markets is anticipated.
• Support schemes: METÁR reforms (2025) have improved bankability. Future auctions may return once grid limits ease.
• Community participation: Early energy community pilots are expected to be scaled up as Hungary transposes RED III.
• EU alignment: Hungary will implement RED III, the Gas Decarbonisation Package and the Hydrogen Package, shaping renewable gas and hydrogen rules.

Summary

The next policy wave (2025–2030) in Hungary will be shaped by:

• grid reinforcement and flexibility;
• wind re-entry;
• biomethane and geothermal scale-up; and
• integration of hydrogen pilots into the energy mix.

The government’s strong reliance on nuclear and renewables remains the backbone of national energy strategy, with EU law transposition and subsidy frameworks providing the practical policy levers.