EU Approves Hungarian ‘Green Deal’ State Aid

The European Commission says it has approved a EUR 2.36 billion (approximately HUF 880 billion) Hungarian scheme for accelerated investments in strategic sectors to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan.

The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on March 9, 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on March 23, 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on July 20, 2022 and on October 28, 2022.

According to the Commission's statement, Hungary notified to the Commission, under the Temporary Crisis and Transition Framework, a EUR 2.36 billion (approximately HUF 880 billion) Hungarian scheme for accelerated investments in strategic sectors to foster the transition to a net-zero economy.   

Under this measure, the aid will take the form of direct grants and/or tax advantages.

The measure will be open to companies producing relevant equipment, namely batteries, solar panels, wind turbines, heat-pumps, electrolyzers, equipment for carbon capture usage and storage, as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production.

The Commission found that the Hungarian scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid will incentivize the production of relevant equipment for the transition towards a net-zero economy; and will be granted no later than December 31, 2025.

The Commission concluded that the Hungarian scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.

On this basis, the Commission approved the aid measure under EU State aid rules.