Hungary will look to promote EU funding for gas infrastructure during its upcoming presidency of the EU, however, Budapest’s priorities for the energy sector will largely focus on pushing support for geothermal and nuclear.
Hungary vowed to “make Europe great again” on Wednesday as it unveiled its program and priorities ahead of the start of its six-month rotating presidency of the council of the EU, starting Jul. 1.
Hungary’s priorities for the energy sector were brief, with the focus on support for geothermal and nuclear energy — two key energy sources in the country’s mix.
Natural gas is also a priority area, and Hungary said it will look to “support the promotion of access to targeted EU funding for natural gas infrastructure projects that enhance source and route diversification.”
However, it is unclear how much EU funding will be made available for natural gas infrastructure, given the bloc’s move in recent years to cut funding for fossil gas projects.
Only two gas projects maintained their status on the latest list of projects of common interest that are eligible for EU funding under the Connecting Europe Facility: the proposed East Mediterranean pipeline, and an interconnector between Malta and Italy.
EU Funding Criteria
Access to EU funds will hinge on project developers demonstrating their ability for infrastructure to utilize hydrogen or biomethane in the future.
“We are not aware of the details of the Hungarian Presidency’s priorities; we have seen them and are interested to see what this will concretely result in. We know that to access EU funds or to be considered sustainable, projects would need to promote hydrogen or biomethane,” a spokesperson for industry body Eurogas told Energy Intelligence.
Transmission system operators in Greece, Bulgaria, Romania, Hungary and Slovakia, as well as non-EU Ukraine and Moldova, are actively looking to increase pipeline capacity to flow more LNG and Caspian gas through the region.
The planned increase is part of a move to diversify away from Russian gas imports, in line with the EU’s target to phase out Russian gas by 2027.
However, in theory the route could be used to transport Russian gas, which could flow from Turkey.
“If Hungary intends to utilize EU funding to develop its natural gas infrastructure, and thereby strengthen its gas trade with Russia, it is unlikely that any EU country will support these plans,” Sylwia Andralojc-Bodych, senior advisor at Germanwatch, told Energy Intelligence.
“Hungary would have to provide first a clear and detailed explanation of their intentions for the new gas infrastructure. Hungarian officials maintain that securing Hungary’s energy supply is infeasible without Russian energy resources,” Andralojc-Bodych added.
Nuclear, Geothermal Support
Budapest aims to adopt council conclusions on promoting geothermal energy and reducing related financial risks, stating that geothermal energy can aid energy security and climate goals.
Hungary also said it will support nuclear initiatives, which likely means pushing for nuclear energy to receive equal support to renewables in clean energy policies. Hungary is already part of an EU nuclear alliance, led by France, that successfully pushed for nuclear to be recognized as a net-zero technology in recent EU legislation.
Further support for nuclear could come in the form of additional funding or financing mechanisms.
The nuclear alliance in March discussed the creation of a working group to consider using financing instruments for nuclear newbuilds, such as the Innovation Fund, European Investment Bank (EIB) support, state aid guidelines or “important project of common European interest” designation.
The EIB is not actually prohibited from investing in nuclear, but it does not view large nuclear newbuilds as bankable, being more receptive to financing small modular reactors.
