environmental law & climate change

The government programme of the three-party coalition for the years 2025-2029 has been established. In the field of energy law, long-awaited legislation such as the Electricity Industry Act (ElWG), the Renewable Gas Act (EGG) and the Renewable Expansion Acceleration Act (EABG) are set to be enacted.

Let's start with the fundamentals: Hungary will need significant additional power plant and battery capacities, and it will need them soon. This necessity persists despite the gross amount of solar power capacity reaching 7.5 GW by the end of 2024, a target initially set for the 2030s. The drive for electrification, the goal to reduce energy imports, the high average age of the existing generator portfolio and the previous focus on solar energy necessitate at least 10 GW of new generation capacities, with a preference for baseload generation and/or storage solutions. The state-owned incumbent MVM is already developing 3x500 MW new combined cycle gas turbine (CCGT) installations and 2x1000 MW new nuclear blocks, but significant private investment is still required.

Hungary's national settlement planning and construction requirements are currently governed by Government Decree 253/1997. (XII. 20.) (OTÉK), which outlines the regulations on which construction is planned and licensed. On 1 October 2025, Act C of 2023 on Hungarian Architecture entered into force, and together with an upcoming government decree on urban planning and building requirements (effective from 1 January 2025), it is expected to reshape the future of properties in Hungary. Until 30 June 2027, OTÉK and the Decree must be applied in parallel. The regulations will promote environmental awareness and sustainability, incorporating a new set of principles and restrictions on zoning for new construction, of which we have highlighted a few for your attention.

The EU Carbon Border Adjustment Mechanism (CBAM) is a landmark regulatory instrument that imposes a special price on the greenhouse gas emissions of goods imported into the EU. Introduced in 2023, the CBAM primarily aims at addressing carbon leakage, which occurs when companies relocate production to countries with less stringent climate policies than those in the EU. It seeks to prevent unfair competition between EU and non-EU producers resulting from carbon leakage by ensuring that the same carbon costs are applied to imported products as to those produced within the EU.

In Austria, photovoltaic plants (PVPs) are increasingly being installed near existing wind farms (WFs) to share grid connections. These hybrid parks offer an innovative solution for the use of renewable energy but raise legal questions concerning grid connection and environmental law.