COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Hungary Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) (ST 15447/22 INIT; ST 15447/22 ADD 1) of 15 December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary
Date: 2023-11-23
Institutions: European Commission, Secretariat-General
Subjects: EU aid, EU loan, Hungary, digital transformation, economic recovery, economic reform, energy policy, green economy, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.11.2023  SWD(2023) 384 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Hungary Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) (ST 15447/22 INIT; ST 15447/22 ADD 1) of 15 December 2022 on the approval of the assessment of the recovery and resilience plan for Hungary {COM(2023) 748 final}  
 
 
Table of contents 

1.  Executive summary ............................................................................................................................... 2 

2.  Objectives of the modification of the plan ............................................................................................ 3 

2.1 Main newly emerged challenges for Hungary and how they are addressed ....................................... 3 

2.2 New and modified components and their associated estimated costs ................................................. 4 

2.3 Other elements not covered by assessment criteria ............................................................................. 6 

3.  Summary of the assessment of the plan ................................................................................................ 8 

3.1.  Comprehensive and adequately balanced response to the economic and social situation ............ 8 

3.2. 

Link with country-specific recommendations and the European Semester ................................ 10 

3.3.  Growth potential, job creation, economic, institutional and social resilience, European Pillar of 
Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence ...... 12 

3.4. 

The principle of ‘do no significant harm’ ................................................................................... 13 

3.5.  Green transition ........................................................................................................................... 14 

3.6.  Digital transition ......................................................................................................................... 17 

3.7. 

Lasting impact of the plan ........................................................................................................... 18 

3.8.  Milestones, targets, monitoring and implementation .................................................................. 18 

3.9.  Costing ........................................................................................................................................ 20 

3.10.  Controls and audit ....................................................................................................................... 21 

3.11.  Coherence ................................................................................................................................... 23 

3.12.  REPowerEU ................................................................................................................................ 24 

3.13.  Cross-border or multi-country dimension or effect .................................................................... 26 

ANNEX I: Climate tracking and digital tagging..................................................................................... 28 

1 

 
 
 
 
 
 
 
 
 
1.  EXECUTIVE SUMMARY  

Hungary  was  significantly  impacted  by  the  effects  of  Russia’s  war  of  aggression  against 
Ukraine, mainly due to Hungary’s large reliance on fossil energy imports. The rising energy 
import bill worsened the current account deficit to 8.3% of GDP in 2022 from 4.2% in 2021. Real 
GDP grew by 4.6% last year, bolstered by fiscal stimulus, while the employment rate of the 15-64 
age group rose to a historic high of 74.4% in 2022. However, higher energy prices pushed annual 
average inflation up to 15.3%. Declining real incomes and higher interest rates have pushed the 
economy into recession from the second half of 2022. 

Hungary  submitted  a  modified  recovery  and  resilience  plan  including  an  additional  loan 
element which is almost entirely used for REPowerEU objectives. For the modification of its 
Recovery and Resilience Plan (RRP), Hungary has relied on three legal bases of the Regulation 
(EU) 2021/241. First, the modification relies on a request for additional loans in accordance with 
Article  14(2)  of  Regulation  (EU)  2021/241  amounting  to  EUR  3.9  billion.  Second,  Hungary 
provided  a  reasoned  request  to  the  Commission  to  make  a  proposal  to  amend  the  Council 
Implementing Decision on the basis of Article 21(1) of Regulation (EU) 2021/241 rely on limited 
elements of the modification are built upon the legal basis of  Article 21(1) of Regulation (EU) 
2021/241,  due  to  objective  circumstances  affecting  a  limited  number  of  measures.  Hungary 
provided  a  reasoned  request  to  the  Commission  to  make  a  proposal  to  amend  the  Council 
Implementing  Decision.  Finally,  in  accordance  with  Article  21c  of  Regulation  (EU)  2021/241 
Hungary included a REPowerEU chapter in  its recovery and resilience plan in order to  benefit 
from the additional available resources from ETS revenues.   

The REPowerEU chapter contains measures to help address  important energy challenges 
that Hungary is currently facing and to increase its energy savings and renewable potential. 
The  proposed  measures  comprise  13  reforms  and  16  investments.  A  large  part  of  the  reforms 
focuses on improving the electricity system. These include the setting up of dynamic pricing in the 
retail electricity market, strengthening the role of energy communities and aggregators, improving 
regulatory reserve markets, incentivising the uptake of electricity storage, enhancing the range of 
consumers that are to use smart meters and harmonising the way the connection application rules 
are applied by the DSOs. The plan includes an ambitious target for grid connection authorisation 
for power plants based on renewable energy sources. Other reforms include measures aiming at 
levelling the playing field between households wishing to apply to EU-funded energy efficiency 
support  schemes  by  providing  technical  assistance  for  their  applications,  supporting  legislative 
environment for hydrogen production and use, improving the geothermal regulatory framework, 
developing a strategy for biogas and biomethane with biomethane action plan, as well as a national 
strategy  on  skills  for  the  green  transition  and  an  action  plan.  Investments  range  from  the 
strengthening  of  the  electricity  grid  to  enable  the  integration  of  energy  from  renewables, 
deployment  of  renewables,  fossil-free  hydrogen  production  and  use,  upskilling  and  reskilling 
workforce  for  the  green  transition  skills  to  sustainable  transport.  The  chapter  also  contains 
investments  in  decarbonising  the  industry  and  in  the  production  capacity  of  products  that  are 
targeted  at  the  transition  towards  the  net-zero  industry.  Hungary  also  aims  to  set  up  financial 
instruments to stimulate private investment in the energy efficiency sector, to improve geothermal 
energy exploitation as well as to boost the rollout of recharging stations for electric vehicles and 
the uptake of electric vehicles by the private sector.  

2 

 
 
 
 
 
Based on the assessment of the submitted modification and the REPowerEU  chapter,  the 
Hungarian modified plan receives an A-rating on all criteria, except for costing, where the 
plan receives a B-rating (unchanged from the assessment of the original plan). Regarding the 
new assessment criteria that are relevant exclusively for the REPowerEU chapter, a rating A is 
warranted.  Most  REPowerEU  measures  contribute  to  the  climate  target.  The  REPowerEU 
measures  are  expected  to  effectively  contribute  to  energy  security,  the  diversification  of  the 
Union’s energy supply, an increase in the uptake of renewables and in energy efficiency, and the 
necessary reduction of dependency on fossil fuels before 2030. All REPowerEU measures address 
at  least  one  REPowerEU  objective  listed  in  article  21(c)  of  the  RRF  Regulation.  Finally,  most 
REPowerEU measures  can be considered as having a cross-border dimension,  which would be 
above the 30% threshold. 

(1) 
Balanced 
Response 

(2) 
CSRs 

(3) 
Growth, 
jobs… 

(4) 
DNSH 

(5) 
Green 
target 

(6) 
Digital 
target 

(7) 
Lasting 
impact 

(8) 
M & T 

(9) 
Costing 

(10) 
Control 
Systems 

(11) 
Coherence 

(12) 
REPowerEU 

(13) 
Cross-
border  

A 

A 

A 

A 

A 

A 

A 

A 

B 

A 

A 

A 

A 

2.  OBJECTIVES OF THE MODIFICATION OF THE PLAN  

2.1 Main newly emerged challenges for Hungary and how they are addressed  

The high energy import dependency, low share of renewables and low energy efficiency of 
buildings create a challenge for the Hungarian economy. Hungary relies heavily on Russia for 
fossil fuels as well as nuclear and its efforts to shift away from Russian dependence are slow. Three 
quarters of domestic gas consumption is covered by imports from Russia. Decreasing dependency 
on Russian fossil fuels will require significant additional action. Electrification and the envisaged 
investment in energy-intensive industries will increase the need for electricity production. Despite 
the significant  increase in  solar energy  capacity in  recent  years, the share of renewable energy 
capacity  is  still  one  of  the  lowest  in  the  EU.  Geothermal  energy  has  been  underutilised.  The 
frequently  changing  regulatory  environment  poses  several  challenges  to  the  development  of 
renewable energy. In addition, the limitations of the electricity grid’s capacity create a significant 
bottleneck  for  connecting  renewables  to  the  grid,  while  the  lack  of  flexibility  solutions  on  the 
demand and supply sides, and limited consumer empowerment, create a major constraint on the 
development  of  clean,  renewable  electricity  production.  Suboptimal  integration  into  the  EU 
balancing  market  is  also  a  missed  opportunity  to  optimise  the  grid  for  additional  renewables 
capacity. 

Hungary’s  modified  RRP  adds  a  new  REPowerEU  chapter  with  13  reforms  and  16 
investments. In this chapter, measures are related to the strengthening of electricity grid to enable 
the integration of energy from renewables, increasing the deployment of renewables, improving 
households’, companies’ and the public sector’s energy efficiency, decarbonising the industry and 
sustainable  transport.  The  reforms  aim  at  strengthening  the  electricity  sector.  The  reforms  and 
investments  in  this  chapter  address  most  of  the  challenges  in  the  field  of  green  transition  and 

3 

 
 
 
 
 
 
energy, therefore, the implementation of these measures will help Hungary in the decarbonisation 
challenge.   

In the modified RRP Hungary requested to change a limited number of existing measures in 
the plan based on objective circumstances. These amendments concern investments in water 
management, sustainable transport, energy and circular economy.   

2.2 New and modified components and their associated estimated costs  

Component 1: Demography and public education 

Based on Article 14(2) of the RRF Regulation, as part of its loan request, Hungary proposes scaling 
up one already existing measure, by increasing the estimated costs of the measure by EUR 20,9 
million. In particular, the modified RRP increase the number of places in creches by 519 on top of 
the additional places envisaged in the measure C1.I4 Creation of new crèche places. Hungary plans 
to use in the form of loan from the RRF to create the additional places in creches. The modification 
will address further the challenges related to integrating the most vulnerable groups into the labour 
market. 

Component 4: Water management 

Based  on  Article  21  of  the  RRF  Regulation  the  plan  proposes  removing  Investment  1  – 
Construction  of  main  water  replacement  systems,  development  of  new  networks  and  systems 
(C4.I1).  The  request  is  justified  under  Article  21  by  the  fact  that  the  cost  of  the  investment  is 
significantly higher than expected. Hungary intends to reallocate the freed-up fund to scale up the 
electricity grid development (C6.I1) and to compensate for cost increase of the water monitoring 
system investment (C4.I2).  

Component 5: Sustainable transport 

Hungary  proposes  to  modify  all  five  measures  of  this  component  (four  investments  and  one 
reform) under Article 21 and to add one new investment. The ambition of the suburban rail network 
in  Budapest  (C5.I1)  is  decreased  by  reducing  the  number  of  km  of  railways  renovated  and  by 
removing  a  number  of  elements  of  this  investment  (parking  places,  converters,  etc).  The  cost 
estimate  for  this  investment  is  modified  and  overall  reduced.  The  railways  central  traffic 
management  system  (C5.I4)  would  be  implemented  in  three  instead  of  four  railway  sections. 
Despite this change, the cost estimate of this investment is increased. Hungary proposes to add a 
new measure to support sustainable mobility in Budapest, including the purchase of 51 new trams 
and the development of infrastructure of trams and trolley buses. The timeline of all the measures 
is postponed due to implementation difficulties.  

Component 6: Energy 

Based on Article 21 of the RRF Regulation, the modified plan removes the investment related to 
storage facilities to be installed by the Hungarian transmission system operator and the distribution 
system operators (C6.I3) by EUR 147 million, due to objective circumstances, namely the lack of 
applicants  to  the  related  call.  The  measure  is  replaced  by  a  scaled-up  measure  to  improve  the 
electricity  grid  to  be  able  to  integrate  additional  energy  from  renewables  (C6.I1).  The  latter 

4 

 
 
 
 
 
investment will benefit from funds that become available due to the cancellation of investments in 
the water management and the circular economy component of the plan. In total, the allocation of 
funds  to  this  investment  by  Hungary  will  increase  by  about  EUR  255  million.  The  plan  also 
modifies  the  scheme  supporting  the  installation  of  grid  energy  storage  facilities  for  market 
participants (C6.I4) by changing the aid structure to such projects. The intensity of the investment 
aid to be granted under the RRF measure is lowered, which results in higher investment volumes. 
Thus, the ambition of the investment is increased, and the initial target is modified from 311 MWh 
to 885 MWh. The costs for the measure C6.I2. “Support for the use of residential solar panels and 
heating  modernisation’  have  significantly  changed  due  to  high  inflation.  In  addition,  Hungary 
reduces the ambition of this measure. The reduced ambition means that instead of 34 920 only 
30 674 households will receive funding for their solar panel systems. Of these only 7 385 - instead 
of 11 600 - households will receive support for electric heating systems, window replacement and 
storage unit in addition to the solar panel system. Hungary will use the funds made available from 
the above reduction to support energy efficiency improvements of public buildings.  
The reform regarding the introduction of separate accounting for the electricity fed into the grid 
and  electricity  consumed  from  the  grid  will  also  be  amended.  In  particular,  the  amendment 
introduced  provides  that  it  will  not  be  required  for  new  prosumers  receiving  public  financial 
support for the installation of their solar panel systems to use this separate accounting system as 
from 1 January 2023. Instead, the amendment provides that all existing prosumers will gradually 
move to the separate accounting system after a 10-years transition period staring at the time of 
installation of the solar panels. In addition, any new consumers having submitted their connection 
application after 7 September 2023 will apply the separate accounting system. 

Component 7: Circular economy 

On the basis of Article 21 of the RRF Regulation, Hungary requested to remove measure C7.I1 
Strengthening a smart, innovative and sustainable waste management industry and secondary raw 
materials market, involving the construction of a plastic chemical recycling plant, because in view 
of supply chain disruptions, the measure requires a longer implementation period which exceeds 
the timeframe of the RRF. Hungary has also requested to use the freed-up resources to introduce 
a  new  measure  aiming  to  improve  the  separate  collection  of  municipal  waste  by  investing  in 
separate  waste  collection  infrastructure.  The  rest  of  the  freed-up  funds  will  be  used  for  further 
electricity grid development. Beyond the freed-up resources, a new reform on awareness raising 
is also added, which entails the development of a national framework communication strategy for 
local awareness raising measures. 

Component 10: REPowerEU 

The  REPowerEU  chapter  is  a  new  component  of  the  plan.  It  includes  13  reforms  and  16 
investments.  

Table of new and modified components and associated costs. 

Component 
1: Demography and public education 

Status 
Modified 

Costs (EUR million) 

661 

5 

 
 
 
 
 
 
Component 
2: Highly qualified, competitive workforce 

3: Catching-up settlements 
4: Water management 
5: Sustainable green transport 
6: Energy – green transition 
7: Circular economy 
8: Health 
9: Governance and public administration  
10: REPowerEU 
Total:  

Status 
Unchanged 

Unchanged 
Modified 
Modified 
Modified 
Modified 
Unchanged 
Modified 
New 

Costs (EUR million) 

692 

225 
38 
1 444 
1 334 
60 
1 306 
66 
4 603 
10 430 

2.3 Other elements not covered by assessment criteria  

The  description  of  the  plan  of  the  consultation  process,  security  self-assessment  for  digital 
investments and the planned communication strategy as  detailed in the previous Staff Working 
Document SWD (2022) 686 remains relevant. 

Consistency with other initiatives 

The  modified  RRP  of  Hungary  provides  detailed  justification  for  its  consistency  with  the 
objectives and priorities of other initiatives, such as the National Energy and Climate Plan, the 
Partnership  Agreement  with  Hungary,  the  Operational  Programmes  of  Hungary,  the  Just 
Transition  Fund,  the  National  Reform  Programme  of  Hungary,  and  the  Youth  Guarantee 
Programme. The modified RRP of Hungary explains how these funds and the RRP would cover 
different objectives and how they are delineated from each other. 

The measures in the REPowerEU chapter complement, are consistent with and will contribute to 
achieving the updated 2030 targets as set out in the forthcoming update of the Hungarian National 
Energy and Climate Plan.  

National arrangements for the implementation of the plan 

The previous description of the implementation and monitoring aspects of the plan, as detailed in 
the previous Staff Working Document SWD (2022) 686 remains relevant. Concerning the EUR 
1.53  billion  allocated  to  financial  instruments  in  the  modified  RRP,  the  management  of  the 
instruments will be the responsibility of  an Implementing Partner (the Hungarian Development 
Bank)  with  a  proven  track  record  and  operational  capacity.  The  governance  arrangements  will 
ensure that the instruments are managed in a manner that is transparent, independent, and market-
conform. 

Gender equality and equal opportunities for all 

The previous description of the Hungarian RRP’s focus on gender equality and equal opportunities 
for all, as detailed in the previous Staff Working Document SWD (2022) 686, remains relevant. 

6 

 
 
 
 
 
 
 
In addition,  the modified RRP  contains measures  to  skill and upskill  workforce  needed for the 
green transition, including through micro-credentials courses. In selecting training participants in 
green  skills  courses,  priority  is  expected  to  be  given  to  unemployed,  inactive  labour  force  and 
workers from micro and small enterprises, thus ensuring equal opportunities for all. The modified 
plan  also  includes  a  scaled-up  investment  to  create  new  creche  places  in  addition  to  those 
envisaged in the initial RRP. This measure aims to contribute to higher employment rates among 
parents, notably women, thus increasing gender equality and social inclusion.  

Stakeholder consultation 

Hungary  indicated  that  it  had  conducted  dialogues  with  professional,  social  and  economic 
organisations  during  the  preparation  of  its  REPowerEU  chapter.  The  discussions  on  the 
REPowerEU chapter were occasionally linked to consultations on the National Energy Strategy 
and  the  National  Energy  and  Climate  Plan.  Hungary  launched  a  consultation  on  its  intended 
REPowerEU  chapter  28  July  2023,  open  until  11  August  20231.  Fourteen  civil  organisations, 
public and private companies as well as the municipality of Budapest provided observations on 
the dedicated web page. Six comments were submitted to the government via other communication 
channels. The dedicated web page provides access to the observations received via the dedicated 
digital  channel,  together  with  the  explanation  of  the  government  on  whether  and  how  the 
comments were taken into account. Most comments received from stakeholders related to fossil 
fuel  and  energy  efficiency  investments.  Hungary  described  its  consultation  process  and  the 
stakeholders who provided their opinion during the process as part of the submitted. 

State aid 

State aid and competition rules fully apply to the measures funded by the Recovery and Resilience 
Facility. Union funds channelled through the authorities of Member States, like the RRF funds, 
become State resources and can constitute State aid. When this is the case and State aid is present, 
these measures must be notified and approved by the Commission before Member States can grant 
the aid, unless those measures are covered by an existing aid scheme or comply with the applicable 
conditions of a block exemption regulation, in particular the General Block Exemption Regulation 
(GBER) declaring certain categories of aid compatible with the internal market in application of 
Articles 107 and 108 TFEU2. When State aid is present and it requires notification, it is the duty 
of  the  Member  State  to  notify  State  aid  measures  to  the  Commission  before  granting  them,  in 
compliance with Article 108(3) TFEU. In this respect, the State aid analysis carried out by Hungary 
in the recovery and resilience plan cannot be deemed a State aid notification. In as far as Hungary 
considers that a specific measure contained in the recovery and resilience plan entails de minimis 

1 Hungary published its consultation at: 
https://www.palyazat.gov.hu/kozlemenyek/rrf-repower-eu-tarsadalmasitasa  
2 Annex to the Communication to the Commission of 9 March 2023 on the Approval of the content of a draft for a 
Commission Regulation amending Regulation (EU) 651/2014 declaring certain categories of aid compatible with the 
internal market in application of Articles 107 and 108 of the Treaty and Regulation (EU) 2022/2473 declaring certain 
categories  of  aid  to  undertakings  active  in  the  production,  processing  and  marketing  of  fishery  and  aquaculture 
products  compatible  with  the  internal  market  in  application  of  Articles  107  and  108  of  the  Treaty;  available  at: 
https://competition-policy.ec.europa.eu/system/files/2023-
03/GBER_amendment_2023_EC_communication_annex_0.pdf 

7 

 
 
 
 
 
 
aid or aid exempted from the notification requirement, it is the responsibility of Hungary to ensure 
full compliance with the applicable rules.” 

3.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

3.1. Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation 

The modified RRP, including the REPowerEU chapter, cover in a comprehensive manner the six 
pillars  structuring  the  scope  of  application  of  the  Facility:  (i)  green  transition,  (ii)  digital 
transformation, (iii) smart, sustainable and inclusive growth, (iv) social and territorial cohesion, 
(v)  health  and  economic,  social  and  institutional  resilience,  and  (vi)  policies  for  the  next 
generation.  The  coverage  of  the  Hungarian  plan’s  components  towards  the  six  pillars  is 
summarized in table below. All pillars are covered by at least one component, while a component 
may contribute to several pillars.  

The range of actions of the modified RRP, including the REPowerEU chapter corresponds to the 
objectives of the Facility with an appropriate overall balance between pillars. The allocations to 
green and digital transitions  (of respectively 67,1% and 29,1%) exceed the requirements of the 
RRF  Regulation  (respectively  37%  and  20%),  and  the  modified  plan  therefore  contributes 
significantly to those objectives.  

The measures included in the modified plan and REPowerEU chapter contribute to the following 
pillars: 

Green transition 

The  RRP  revision  presents  reforms  and  investments  aiming  at  decarbonising  the  economy  and 
strengthening energy independence, security, and efficiency. The REPowerEU chapter includes 4 
main intervention directions: (i) the development of energy infrastructure to facilitate the further 
deployment  of  renewable  energy  sources;  (ii)  greening  industry  as  a  major  energy  user  and 
boosting green economic capacities; (iii) increasing the use of renewable energy and improving 
energy efficiency of households, companies and the public sector; and (iv) promoting alternative 
mobility both electric and hydrogen. In addition, dedicated reform and investment are directed to 
the  development  of  green  skills  through  skilling,  upskilling  and  reskilling  the  workforce  and 
increasing  public  awareness  on  energy  and  environmental  issues.  The  removal  of  investments 
“Construction of main water replacement systems, development of new networks and systems”, 
“Strengthening a smart, innovative and sustainable waste management industry and secondary raw 
materials  market”  and  of the  investment  “Installation  of  energy  storage  facilities  for  the 
transmission system operator and distribution system operators” lower Hungary’s ambition in the 
dimensions of water management, secondary raw materials as part of circular economy, and energy 
storage. 

Digital transformation 

The digital transformation still represents a significant part of Hungary’s modified RRP and the 
ambition  has  not  been  reduced  compared  to  the  initial  plan.  The  modified  RRP  continues  to 
significantly contribute to the digital targets through investments in  digital infrastructure, skills 

8 

 
 
 
 
 
development  programmes  and  related  education  content  and  materials,  deployment  of  digital 
information  systems  in  transport  systems,  digitalisations  in  the  energy  sector  and  water 
management monitoring systems.  

Smart, sustainable and inclusive growth 

The  modified  RRP  includes  several  measures  spread  across  different  components  aiming  to 
strengthen  Hungary’s  competitiveness  and  productivity,  as  well  as  to  improve  research, 
development and innovation. 

Policies for the next generation 

Several measures under the REPowerEU chapter support the improvement of social and economic 
well-being through investments in green and digital skills of youth and adults. For example, reform 
and the associated investment include measures supporting skilling, upskilling and reskilling the 
current  and  future  workforce  to  acquire  green  skills  based  on  labour  market  needs,  as  well  as 
increasing public awareness on energy and environmental issues. 

Social and territorial cohesion 

Among  the  interventions  under  the  sustainable  green  transport  component,  the  development  of 
suburban  and  regional  railway  networks  is  expected  to  increase  social  mobility  and  achieve 
territorial  reintegration  of  regions  previously  lagging  behind.  The  energy  component  includes 
dedicated  measures  in  the  form  of  energy  efficiency  subsidies  for  low-income  households  to 
support  use  of  sustainable  heating  systems.  Under  the  REPowerEU  chapter,  the  financial 
instrument in the residential energy efficiency sector will reserve a share of support for energy 
poor households.  

Green 
transition 

Digital 
transform
ation 

Smart, 
sustainable 
& inclusive 
growth 

Social and 
territorial 
cohesion 

Health, 
and 
economic, 
social and 
institution
al 
resilience 

Policies 
for the 
next 
generati
on 

Demography and public 
education 

Water management  
Transport 
Energy 
Circular economy 
REPowerEU 

○ 
● 
● 
● 
● 

○ 

○ 
○ 

○ 
● 
● 
○ 
● 

○ 
○ 
● 

○ 

○ 

● 

○ 

● 

● 
Key: “●” investments and reforms of the component significantly contribute to the pillar; “○” the component 
partially contributes to the pillar 

● 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Hungary,  its  modified 
recovery and resilience plan, including the REPowerEU chapter, continues to represent, to a large 
extent, a comprehensive and adequately balanced response to the economic and social situation, 

9 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
thereby contributing appropriately to all six pillars referred to in Article 3 of the RRF Regulation, 
taking the specific challenges and the financial allocation of Hungary into account. This would 
warrant a rating of A under criterion 2.1 in Annex V to the RRF Regulation.  

3.2. Link with country-specific recommendations and the European Semester  

The REPowerEU chapter is addressing almost all the energy-related challenges identified in 
the European Semester. As the size of the plan increased following an additional loan request 
intended  to  be  used  not  exclusively  for  REPowerEU  objectives,  all  2022  and  2023  structural 
recommendations  are  considered  in  the  overall  assessment.  The  loan  part  will  be  used  almost 
exclusively for REPowerEU objectives. Therefore, the assessment is focused on energy-related 
recommendations. The modified RRP changes a limited number of investments under Article 21 
of the RRF Regulation. These changes do not affect the overall level of ambition of the plan with 
regard  to  addressing  all  or  a  significant  subset  of  challenges  identified  in  country-specific 
recommendations. While the adopted RRP addressed already the energy related country-specific 
recommendations of 2022, the additional reforms and investments in the new REPowerEU chapter 
increase the ambition level by which the relevant recommendations are addressed. In addition, the 
REPowerEU chapter addresses most of the new energy related country-specific recommendations 
of 2023. 

The REPowerEU chapter includes reforms and investments with the objective to accelerate 
the deployment of renewables, in particular by streamlining the permitting procedures (CSR 
2022 6.2 and CSR 2023 4.2). The reform on renewing the product structure of regulatory reserve 
markets  will  facilitate  market  access  for  traditional,  non-traditional  and  renewable  energy 
producers thereby increasing the efficiency of the balancing market. The legal incentives for the 
uptake  of  energy  storage  will  simplify  the  process  and  requirements  for  grid  connection  and 
operation of energy storage. The simplification for the market entry and the operation of energy 
communities and aggregators will strengthen their role in the electricity market. The introduction 
of  dynamic  pricing  in  the  residential  sector  on  a  voluntary  basis  will  allow  for  demand  side 
response, where consumers will have the possibility to make use of their flexibility by consuming 
at  different  points  in  time  depending  on  the  price  of  electricity.  The  roll-out  of  smart  meters 
included both in the energy component and the REPowerEU chapter will be a key enabler for the 
introduction of dynamic pricing in the retail sector. The electricity grid connection procedure will 
be  harmonised  to  establish  a  standardised  approach  to  be  applied  by  all  distribution  system 
operators  when  treating  the  applications  for  the  electricity  grid  connection  procedure.  The 
REPowerEU chapter increases the ambition for grid connection authorisations issued for power 
plants based on renewable energy sources and raises the target envisaged in the initial plan of 10 
GW to 12 GW by 2026. The new legal framework for hydrogen will encourage the development 
of a renewable hydrogen ecosystem in Hungary, particularly focused on the domestic production 
of  renewable  hydrogen,  with  industry  and  transport  sectors.  The  geothermal  energy  regulatory 
framework  will  be  reviewed  to  encourage  geothermal  research  in  industrial,  urban  and  district 
heating, in light of the lower geological risk related to them. The greening of industrial parks for 
energy  purposes  will  contribute  to  the  deployment  of  renewables,  development  of  microgrids, 
improvement of energy efficiency, the uptake of energy storage and the use of residual heat. One 

10 

 
 
 
 
 
investment  in  the  plan  supports  renewable  hydrogen  production  and  the  use  of  hydrogen  for 
mobility. Another investment aims to increase the uptake of geothermal energy and improve access 
to finance in Hungary’s geothermal energy sector.  

Several measures in the REPowerEU chapter serve to upgrade the electricity infrastructure 
(2022 CSR 6.3 and 2023 CSR 4.5). This chapter also includes investments on electricity network 
development, which increases the ambition of the existing measure in the RRP. This investment 
will develop the electricity network to ensure integration of additional capacities from renewable 
energy  sources.  The  chapter  also  adds  further  investments  into  smart  meters  and  increases  the 
related targets significantly. The digitalisation of the electricity network will address the challenges 
stemming  from  the  reliance  on  different  energy  sources,  security  of  supply  and  cost-efficiency 
considerations, industry-wide monitoring and data management necessities. 

Several investments in the REPowerEU chapter improve the energy efficiency of buildings 
(CSR  2022  6.5  and  CSR  2023  4.7)  and  these  are  additional  measures  to  the  ones  in  the  other 
components of the plan. These additional measures include a financial instrument to improve the 
energy efficiency of residential buildings. Another investment in the plan aims at improving the 
energy  performance  of  public  buildings  by  improving  the  thermal  performance  of  buildings, 
reducing heat loss; modernization of heating, implementing digital energy management systems 
to reduce energy demand. The plan includes a support scheme for companies to improve the energy 
efficiency of buildings and their production flow. 

Investments  in  the  REPowerEU  chapter  contribute  to  further  addressing  the  challenge 
related to improve the sustainability of transport (CSR 2022 6.6). The REPowerEU chapter 
consists of an investment in the electrification of railways to reduce reliance on fossil fuels in the 
local transport system. It also includes subsidies for boosting the private sector’s uptake of electric 
vehicles and recharging stations. 

The  REPowerEU  chapter  contains  reform  and  investment  on  skilling,  upskilling  and 
reskilling the workforce to acquire green skills, which contribute to addressing the relevant 
country-specific recommendations (CSR 2022 5.3 and CSR 2023 4.9). As part of the investment 
at  least  40  new  green  skills  content  will  be  developed  for  courses  that  shall  be  integrated  into 
formal education and least 50 000 professionals will participate in adult training for green skills. 

The modified RRP increases the ambition of one already existing measure in the adopted 
RRP. This investment increases further the availability of early childhood education services by 
creating 519 new crèche places in addition to the 3984 new creche places created under the existing 
RRP. This measure is expected to contribute to higher employment rates among parents, notably 
women, thus contributing to gender equality and social inclusion. This additional measure of the 
modified  plan  will  contribute  to  addressing  the  country-specific  recommendation  on  the 
integration of the most vulnerable groups in the labour market is addressed (CSR 2019.2.1 and 
CSR 2022 3.1). 

Other modifications in the RRP do not change the overall ambition of the plan. The amended 
RRP removes measures from the plan and decreases the ambition of some others based on article 
21  of  the  RRF  Regulation  due  to  objective  circumstances.  The  modification  removes  one 

11 

 
 
 
 
 
investment in water management, the investment in energy storage capacity of distribution system 
operators and of the transmission system operator and the chemical recycling plant. The ambition 
for the investment supporting the installation of residential solar panels and heating modernisation 
is  reduced.  The  new  plan  decreases  the  target  level  of  the  investments  on  suburban  railway 
development and railways central traffic management system. However, ambitions in other areas 
are increased. The modified plan introduces a new investment to support sustainable mobility in 
Budapest, including the purchase of 51 new trams and the development of infrastructure of trams 
and  trolley  buses.  The  plan  also  adds  a  new  investment  on  purchasing  smart  bins  to  help  the 
separate  collection  of  the  municipal  recyclable  waste.  The  plan  scales  up  the  investment  in 
electricity grid to be able to integrate more energy from renewables. The plan also increases the 
ambition of the investment on installation of grid energy storage facilities for market participants 
and includes a new investment to support energy efficiency of public buildings. The scope and 
timeline of the reform regarding the introduction of separate accounting for the electricity fed into 
the grid and electricity consumed from the grid will be amended, but its ambition is not lowered, 
as it will ensure a gradual transition of all existing consumers to the desired separate accounting 
system. In the field of sustainable transport and energy the new or scaled up measures constitute 
an equal or higher ambition than the removed or scaled down measures in the same field. As a 
result  of  the  new  and  scaled  up  measures,  the  overall  ambition  level  of  the  plan  remained 
unchanged.   

The nature and extent of the proposed modifications to Hungary’s recovery and resilience plan do 
not have a material impact on the previous assessment (rating of A) of the contribution of the plan 
to  addressing  all  or  a  significant  subset  of  challenges  identified  in  the  country-specific 
recommendations, or challenges in other relevant documents officially adopted by the Commission 
under the European Semester, and of  the adequacy of  its response  to the economic and social 
situation of Hungary. 

3.3. Growth  potential,  job  creation,  economic,  institutional  and  social  resilience, 
European  Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social 
territorial cohesion and convergence  

The modified RRP including the REPowerEU chapter continues to support Hungary’s recovery 
and improve its long-term growth prospects through a range of investments and reforms. The main 
objectives of the plan are unchanged and aim to improve Hungary’s growth potential, job creation, 
and  economic,  social  and  institutional  resilience  that  should  ultimately  reduce  the  country’s 
vulnerability to shocks.  

Measures in the new REPowerEU chapter are expected to reinforce energy sovereignty and energy 
security, and decarbonisation through reforms and investment in renewable energy sources and 
electrification, improving energy efficiency and in the expansion of alternative mobility. In the 
REPowerEU chapter, the measure on the development of skills needed for the green transition will 
ensure the availability of skilled labour for the changing labour market. A share of support under 
the financial instrument in the residential energy efficiency sector will be reserved for energy poor 
households,  and  the  combined  grant  and  loan  support  provided  to  other  households  will  be 
modulated  also  based  on  their  income  level.  Through  reforms  and  investments  supporting 

12 

 
 
 
 
 
electrification through grid developments and the wider deployment of renewable energy sources 
such  as  wind  or  solar  power,  Hungary’s  resilience  towards  external  energy  shocks  will  be 
strengthened.  

Among the revised part, the increased support for the creation of new creche places will further 
improve women’s access to the labour market and will help reducing employment gaps.   

These measures will help deliver on the implementation of the European Pillar of Social Rights 
Action  Plan  endorsed  at  the  Porto  Summit  of  7  May  2021  and  are  expected  to  contribute  to 
improving the levels of the indicators of the Social Scoreboard. 

The nature and extent of the proposed modifications to Hungary’s recovery and resilience plan do 
not have a material impact on the previous assessment (rating of A) of the plan’s impact on the 
growth potential, job creation, and economic, social and institutional resilience of the Member 
State, on contributing to the implementation of the European Pillar of Social Rights, including 
through the promotion of  policies for  children and youth,  and on mitigating the economic and 
social  impact  of  the  COVID-19  crisis,  thereby  enhancing  the  economic,  social  and  territorial 
cohesion and convergence within the Union. 

3.4. The principle of ‘do no significant harm’ 

Hungary  has  submitted  one  scaled-up  investment  and  additional  scale-ups  through  two 
submeasures: the measure related to crèche places (C1.I4) which is being scaled-up has already 
been assessed as compliant with the ‘do no significant harm' principle under the original RRP. 
Parts of the REPowerEU investment on electricity network development (C10.I1), namely classic 
grid developments and smart meters, are also scale-ups which have previously been assessed as 
compliant. 

In addition, Hungary has submitted a REPowerEU chapter and additionally introduced new 
measures.  The  new  measures  are  the  construction  of  smart  waste  collection  infrastructure  and 
zero-emission collection vehicles (C7.I2) and the development of a tram- and trolleybus system in 
Budapest  (C5.I5).  Hungary  has  provided  self-assessments  on  the  compliance  with  ‘do  no 
significant harm’ (hereinafter DNSH) as regards environmental objectives within the meaning of 
Article 17 of Regulation (EU) 2020/8523 , as according to the DNSH technical guidance4. 

For measures where it is relevant, the potentially harmful environmental and climate impact 
is addressed through appropriate assurances that the applicable criteria are to be respected. 
Environmental risks are mitigated ex ante by the introduction of conditions: Activities under the 
EU Emission Trading System (ETS) are to achieve projected greenhouse gas emissions below the 
relevant benchmarks, and significantly below the relevant benchmarks as far as possible. For all 

3 The six environmental objectives comprise (1) climate change mitigation, (2) climate change adaptation, (3) 
sustainable use and protection of water and marine resources, (4) the circular economy, (5) pollution prevention and 
control, and (6) protection and restoration of biodiversity and ecosystems. 
4 COM (2021) C58/01, Technical Guidance on the Application of ‘do no significant harm’ under the Recovery and 
Resilience Facility Regulation. 

13 

 
 
 
 
 
 
financial instruments (C10.I12, C10.I13, C10.I14, C10.I15, C10.I16) and the investment on green 
economic production capacities (C10.I3), a list was introduced that aims to ensure activities and 
assets that are not in line with the principle of DNSH are not being supported. Similarly, safeguards 
to ensure that only sustainable biomethane and renewable hydrogen in line with RED II are being 
supported were introduced where necessary (C10.I2, C10.I3, C10.I4, C10.I12) and safeguards to 
geothermal drilling activities to ensure methane releases are being contained and equipment is not 
being  used  for  the  extraction  of  fossil  fuels  were  added  (C10.I2,  C10.I4,  C10.I11,  C10.I12, 
C10.I16). Moreover, Hungary noted that compliance with the circular economy objective could 
not be guaranteed ex-ante for one of the rail sections (Szeged-Rendező - Röszke – Border of the 
country project; C10.I9). Thus, a safeguard has been introduced to assess compliance with main 
provisions upon the completion of the project. 

The nature and extent of those proposed modifications of Hungary's recovery and resilience 
plan do not have a material impact on the previous assessment (rating of A) that no measure 
for the implementation of reforms and investment projects included in the plan is expected to do a 
significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 
No 2020/852 (the principle of ‘do no significant harm’). 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation of reforms and investments projects included in Hungary's modified recovery and 
resilience plan is expected to do a significant harm to environmental objectives within the meaning 
of Article 17 of Regulation (EU) 2020/852 (the principle of ‘do no significant harm’). This would 
warrant a rating of A under criterion 2.4 of Annex V to the RRF Regulation. 

3.5. Green transition 

The modified plan continues to fulfil the elements corresponding to assessment criterion 2.5 
of  Annex  V  to  the  RRF  Regulation.  The  modified  plan  continues  to  contain  measures  that 
effectively contribute to the green transition, notably the climate change objectives.  

The  REPowerEU  chapter  makes  the  electricity  network  fit  for  the  green  transition  and 
improves demand-side management, particularly through digital improvements. The original 
plan  already  includes  a  range  of  measures  that  target  improvements  in  the  electricity  sector, 
including to enable energy produced from renewable sources to be securely and flexibly integrated 
into the grid. The REPowerEU chapter closes many remaining gaps: Further electricity network 
development (C10.I1) is necessary to ensure the electric grid is fit for the net-zero economy in 
which an increasing share of electricity will be generated by renewable energy sources, leading to 
higher grid volatility. Digital solutions at the level of the system operator but also at the level of 
the consumer (smart meters) support grid balancing, operational efficiency (see also C10.I5 on 
energy digitalisation) and efficient end-use of electricity. A more accurate weather forecast can 
help  improve  the  system  calibration  towards  an  effective  use  of  energy  from  wind  and  solar 
sources.  These  investments  are  supported  both  by  reforms  in  the  original  plan  aiming  at  the 
improvement of the electricity grid, as well as new reforms, notably on strengthening the role of 
aggregators (C10.R4) and adapting the legislation on smart meters (C10.R3) while enabling wider 

14 

 
 
 
 
 
 
use of dynamic pricing (C10.R5) on the demand side, and on renewing the product structure of 
regulatory reserve markets to facilitate market entry for new types of flexibilities (C10.R6), legal 
incentives for the uptake of energy storage (C10.R8), improving transparency, predictability and 
availability  of  the  grid  connection  procedure  (C10.R1)  and  setting  network  tariffs  (C10.R2)  to 
optimise supply in line with green transition plans. 

Newly  introduced  measures  aid  emission  reduction  and  improve  sustainability  in  the 
transport sector. The timely deployment of zero-emission vehicles (C10.I6, C10.I10, C10.I15), 
electric charging (C10.I14) and hydrogen refuelling infrastructure (C10.I6), and the electrification 
of rail sections (C10.I9) help Hungary take steps forward in the decarbonisation of the transport 
sector, for which emissions continue to increase. Plans are aligned with national and union-wide 
strategies, for example the installation of two hydrogen refuelling stations along Trans-European 
Transport  Network  (TEN-T)  corridors  –  three  of  which  are  crossing  through  Hungary  –  and 
investment  into  electrolysis  for  renewable  hydrogen  production  (C10.I6)  will  be  the  basis  to 
eventually enable long-distance freight transport based on renewable hydrogen. Decarbonisation 
of transport is at the same time beneficial for biodiversity through the implied reduction of harmful 
air pollutants. 

Measures contribute to effectively decarbonising the economy. As noted in the 2023 European 
Semester  Country  Report,  ambitious  measures  to  increase  energy  efficiency,  focused  on  the 
building sector, including residential buildings, will be necessary for Hungary to reach its 2030 
targets and to preserve the competitiveness of its economy. The building sector has the highest 
potential to reduce energy consumption (about 40% of primary energy use). Medium depth-level 
renovation in the public, private and residential sectors help increase the energy-efficiency of the 
building  stock and increase air quality  through the adjustment to  zero-  and low-carbon heating 
systems  (C10.R12,  C10.I8,  C10.I12,  C10.I13).  Moreover,  industrial  processes  are  being 
decarbonised  and  their  energy  efficiency  is  being  improved  (C10.I2,  C10.I4,  C10.I12).  The 
acquisition of green skills needed to facilitate this transition is also supported (C10.R13, C10.I7). 
This is necessary as, as the 2023 European Semester Country Report notes, more green jobs would 
be created by tapping into the potential of geothermal, a further deployment of solar and wind, the 
roll-out of heat pumps and by boosting energy efficiency activities; activities that are all supported 
under REPowerEU and for which there is a labour shortage. Additionally, R&D&I activities, as 
well as products and services related to the decarbonisation of the economy can receive support 
(C10.I3). 

Finally, measures incentivise the uptake of renewable energy production across a range of 
technologies.  According  to  the  2023  European  Semester  Country  Report,  Hungary’s  share  of 
renewable energy in gross final energy production decreased from 14.4% in 2016 to 14.1% in 2021 
and  lags  significantly  behind  the  EU  average  (21.8%  in  2021).  The  envisioned  reforms  and 
investments are key to enabling Hungary's catch-up: Geothermal energy exploration (C10.R11, 
C10.I2, C10.I11, C10.I12, C10.I16), renewable hydrogen production (C10.R9, C10.I4, C10.I6), 
sustainable  bioenergy  use  (C10.R10,  C10.I2,  C10.I4,  C10.I12),  renewable  energy  production 
behind the meter (C10.I2, C10.I4, C10.I6, C10.I8, C10.I12) and corresponding storage (C10.R8, 

15 

 
 
 
 
 
C10.I2, C10.I6) are supported. Additionally, R&D&I activities, as well as products and services 
related to the uptake of renewable energy generation can receive support (C10.I3). 

The  modified  RRP  leads  to  a  decrease  in  ambition  with  regard  water  management  and 
circular  economy  but  includes  new  measures  maintaining  the  overall  green  transition 
ambition.  The  removal  of  investment  1  “Construction  of  main  water  replacement  systems, 
development of new networks and systems” under Component 4 (Water management) constitutes 
a  reduction  of  ambitions  with  regards  sustainable  water  management.  The  replacement  of  the 
building of a chemical recycling plant with  the adoption of a communication strategy for local 
awareness-raising measures and sorted waste-collection infrastructure is not comparable in nature; 
both the original RRP and the modified RRP aim at improvements  in circular economy. While 
Hungary's ability to recover raw materials is no longer improved through the RRP, it addresses 
one  of  the  gaps  identified  in  the  2023  European  Semester  Report;  the  achievement  of  50% 
municipal waste recycling (2021: 34.9%, far below the EU average of 49.6%) and reduction of 
illegal waste dumps. REPowerEU measures have an overall positive effect on biodiversity, notably 
through the indirect effect of preventing pollution through decarbonisation and energy savings. 

In accordance with Article 17 of Regulation (EU) 2021/241, the modified RRP is consistent 
with the information included in the National Energy and Climate Plan 2021-2030 (NECP). 
Hungary’s  climate  law  of  2020  sets  the  2030  objective  to  reduce  all  domestic  greenhouse  gas 
emissions by 40% relative to 1990 levels. Hungary was considered not to be on track for reaching 
final energy consumption targets (including a 21% share of energy from renewable sources) as 
notified  in  its  NECP,  according  to  the  2023  European  Semester  Country  Report.  Many  of  the 
measures of the REPowerEU chapter, as outlined above, can help achieve more rapid progress on 
this target. Reduction of energy consumption in public institutions, industry and transport are focus 
areas of the NECP; specific measures such as the increase of electromobility and the use of smart 
meters are fully aligned with the measures of the modified RRP. 

The tagging is based on a correct application of the methodology for climate tracking as set 
out in Annex VI to the RRF Regulation, by identifying intervention fields, and corresponding 
coefficients for the calculation of support to climate change objectives. With its modified RRP, 
Hungary provided a table indicating for each measure whether it contributes 0%, 40% or 100% to 
climate change or environmental objectives. The choice of intervention fields relevant for climate 
change is well-justified. As in the original plan, for broad measures, the climate contribution is 
computed  at  sub-measure  level  to  ensure  that  intervention  fields  are  accurately  selected  and  to 
avoid  any  overestimation  of  the  overall  contribution  of  individual  measures  to  the  climate 
objectives. Whenever a selected intervention field includes specific additional conditions, these 
are  substantiated  in  the  description  of  the  respective  measure  as  well  as  reflected  by  specific 
provisions in the milestones and targets to ensure that the characteristics of the measures conform 
to the conditions set out in Annex VI to the RRF Regulation. 

Based  on  plausible  and  reasonable  cost  estimates,  the  amounts  attributed  to  investments 
included in the REPowerEU chapter and contributing to climate change objectives account 
for 91,7% of the total estimated costs of the measures in the REPowerEU chapter. All reforms 
of the REPowerEU chapter are zero-cost and thus do not impact the climate change objectives. 

16 

 
 
 
 
 
The  contribution  of  the  revised  RRP  including  the  REPowerEU  chapter  to  climate  change 
objectives account for 66,7% of the estimated total costs. 

The newly proposed and modified measures establish legal and institutional frameworks that 
contribute to lasting structural changes. Building on a set of reforms in the original plan, new 
reforms contribute to accelerating the green transition by removing bottlenecks towards a swift 
increase  in  renewable  energy  generation  and  -use  (e.g.  energy  communities,  grid  connection 
reforms), by  optimising the energy system subject  to  increasingly volatile demand (e.g. energy 
storage, aggregators, network tariffs, dynamic pricing and smart meter reforms), and by legally 
embedding actions that are central to the green transition (e.g. grid access and balancing, as well 
the  biogas/biomethane  and  renewable  hydrogen  strategies).  Structural 
as  elements  of 
improvements are also achieved via energy and transport infrastructure investments and reforms 
such as the installation of electric recharging and hydrogen refuelling stations, and measures to 
ensure  a  balanced  grid.  Finally,  investments  into  energy  efficiency  and  decarbonisation  of  the 
building sector and industry lead to permanently reduced carbon emissions and demand shifts to 
lower- and zero-carbon alternatives. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 
transition or to address the challenges resulting from it and ensures that at least 37% of its total 
allocation contribute to the climate target. This would warrant a rating of A under criterion 2.5 of 
Annex V to the RRF Regulation. 

3.6. Digital transition  

Digital target 

The modified plan’s (excluding the REPowerEU chapter) contribution towards the digital 
objectives  amounts  to  29.1%  of  the  plan’s  allocation.  As  such,  the  digital  target  of  20% 
continues to be met. The modifications proposed to the original plan, including new measures 
without  a  digital  tag,  do  not  significantly  impact  the  ambition  towards  the  digital  transition, 
therefore the assessment remains unchanged.  In the modified plan, a vast range of reforms and 
investments  keep  contributing  to  the  digital  transformation  of  the  economy  and  society.  These 
reforms and investments range from developing digital skills, the digitalisation of public services, 
to the deployment of national single tariff, ticketing and passenger information system based on 
digital technologies.   

In the new REPowerEU chapter of the plan, various investments and reforms contribute to 
the  digital  transition.  While  the  REPowerEU  chapter  is  not  taken  into  account  for  the  digital 
objectives  in  line  with  Article  21c(5)  of  Regulation  (EU)  2021/241,  as  part  of  the  investment 
‘C10.I1: Electricity network development and digitalisation’, digital developments at the level of 
the  systems  operator  will  be  supported  as  well  as  additional  support  will  be  provided  to  the 
purchase  and  installation  of  smart  meters.  The  investment  in  energy  digitalisation  will  support 
digital  solutions  at  energy  companies  to  improve  the  security  of  electricity  supply  and  the 
operational  efficiency  of  the  electricity  system.  The  new  chapter  will  also  further  improve  the 

17 

 
 
 
 
 
digital  skills  through  the  investment  ‘C10.I7:  Strengthening  human  resources  in  the  green 
economy’ by supporting the development of digital learning materials related to green skills areas.  

The nature and extent of the proposed modifications to Hungary’s recovery and resilience plan do 
not have a material impact on the previous assessment (rating of A) of the contribution of the plan 
to the digital transition and to the digital target. 

3.7. Lasting impact of the plan 

The modified recovery and resilience plan with the addition of the REPowerEU chapter is 
expected to have lasting positive effect on the Hungarian economy, increasing the ambition 
of the initial plan in the field of energy and climate. Investment and reforms in the REPowerEU 
chapter reinforce the energy security of the country and contribute towards reducing the country’s 
reliance  on  Russian  fossil  fuel  imports.  By  supporting  the  electrification  of  the  mobility  and 
industrial sectors, investing in the energy efficiency of public and residential buildings, and further 
exploring the use of alternative energy sources such as geothermal energy, the modified Plan is 
expected to have lasting positive effects on the Hungarian economy and further boost its green 
transition.  

With  the  measures  and  investments  Hungary  is  addressing  various  systemic  challenges 
identified in the context of the European Semester. Reforms such as the facilitating the wider 
use  of  dynamic  pricing  in  electricity  purchase  agreements,  and  investments  such  as  energy 
efficiency  investment  in  residential  buildings  tackling  energy  poverty  address  earlier  identified 
challenges and contributes to the longer-term sustainability of the energy sector.     

The nature and extent of the proposed modifications to Hungary’s recovery and resilience plan do 
not have a material impact on the previous assessment (rating of A) of the lasting impact of the 
measures proposed by Hungary. 

3.8. Milestones, targets, monitoring and implementation  

Adequacy of the structure tasked with the implementation of the plan, monitoring of progress and 
reporting 

The modification of the Hungarian recovery and resilience plan includes an update of the 
monitoring and implementation framework to reflect the ongoing work to further streamline 
the monitoring and implementation set-up. The revised plan reflects the amended government 
decree 373/2022 that identifies new implementing bodies and regulates the task allocation between 
the  National  Authority  -  which  remains  the  coordination  body  for  implementation  –  and  the 
implementing bodies. The modified RRP also includes an extension of the monitoring framework 
to align with the introduction of new measures consisting of the set-up of financial instruments. 
The Implementing Partner (Hungarian Development Bank) entrusted with the management of the 
financial  instruments  is  deemed  to  have  the  financial  and  operational  capacity  to  manage  the 
proposed instruments. 

Milestones and targets  

18 

 
 
 
 
 
The milestones and targets of the modified Hungarian RRP enable an adequate monitoring 
of the plan’s implementation.  Each of the new reforms and investments introduced under the 
new  REPowerEU  chapter  includes  at  least  one  target  and/or  milestone  that  contains  the  key 
elements of the measure and allows for the assessment of the achievement of its objectives. The 
modified RRP includes a set of 108 new milestones and targets (including the 93 milestones and 
targets in the REPowerEU chapter), while 7 milestones and targets have been deleted from the 
original  plan. Milestones set  for reforms  are based on the achievement of decisive steps in  the 
implementation process, such as the entry into force of legal acts, the amendment of legislative 
framework, and the development of strategy. These milestones are clear and realistic as they reflect 
decisive steps towards the complete implementation of each reform. 

The performance of the investments included in the new components and REPowerEU chapter 
will be assessed on the basis of the achievement of multiple milestones and targets monitored by 
each public entity in charge of implementing the measures and capturing the key implementation 
stages of each investment. The targets chosen – some of which build on existing targets for scaled 
up measures - are consistent with the objectives, cost estimates and implementation schedule of 
each measure and quantified by specific indicators reflecting the result of the works undertaken. 

The adjustments made to the plan’s original milestones and targets under Article 21 of the RRF 
Regulation do not affect the plan’s overall level of ambition and are expected to contribute to its 
timely delivery by addressing current implementation challenges. In some cases, the amendments 
correct  clerical  errors  and  help  to  align  the  intent  of  the  original  plan  and  the  description  of 
investment and reforms with the content of milestones and targets to better assess the achievement 
of measures. 

Overall organisational arrangements  

The  modified  plan  sets  out  an  amended  organisational  structure  for  the  implementation  of  the 
measures  contained  in  it.  The  National  Authority  delegates  the  implementation  tasks  to 
Implementing  Bodies,  a  Sub-Granting  Body  (for  certain  measures  in  Component  C)  and  –  for 
financial instruments – the Hungarian Development Bank. The detailed task allocation between 
the National Authority and the different bodies involved in the implementation will be defined in 
the delegation agreement and in case of the Hungarian Development Bank in the implementing 
agreement.  The  responsibilities  of  the  different  bodies 
the  coordination, 
implementation, monitoring, control, and audit of the plan are set out in the amended government 
decree 373/2022 , which includes the implementation of financial instruments. The administrative 
capacity  of  the  additional  implementing  bodies  helps  ensure  the  effective  absorption  of  the 
additional incoming funds. 

involved 

in 

In addition, and as further developed below (see 3.10 Audit and Control), Hungary has sufficiently 
described the relevant verification mechanisms, data collection systems and responsibilities that 
also can be qualified as clear, robust and effective to ensure effective completion of milestones 
and targets. 

For  all  these  reasons,  the  arrangements  proposed  by  Hungary  in  its  modified  recovery  and 
resilience plan are expected to be adequate to ensure effective monitoring and implementation of 

19 

 
 
 
 
 
the recovery and resilience plan, including the envisaged timetable, milestones and targets, and 
the  related  indicators.  This  would  warrant  a  rating  of  A  under  the  assessment  criterion  2.8  of 
Annex V to the RRF Regulation. 

3.9. Costing 

Hungary  has  provided  individual  cost  estimates  for  all  the  amended  or  new  investments  of  its 
modified recovery and resilience plan. Hungary has provided sufficient information and evidence 
to  consider  that  costs  are  overall  reasonable  and  plausible.  Most  of  the  measures  have  been 
estimated based on a bottom-up approach, with the authorities presenting the units that make up 
the investment and their unit costs being estimated based on market prices or prices of similar units 
in past investments or on indicative offers. For other measures, a top-down approach is used where 
the overall cost of the project is based on similar projects from the past. In addition, the majority 
of costs are backed by appropriate justification and explanations that the amounts do not include 
costs  covered  by  existing  or  planned  Union  financing.  Costs  are  also  commensurate  with  the 
expected economic and social impact of the envisaged measures.  

Reasonable costs  

Based on the assessment of individual cost estimates and related supporting documents, the cost 
estimates for most of the measures in the plan are deemed reasonable. 

The reforms and investments included in the plan comply with the eligibility criteria set out in the 
Regulation. Based on the information provided by the authorities, costs supported under the RRF 
are incurred only for reforms and investments implemented after 1 February 2020 or 1 February 
2022 for REPowerEU chapter measures, exclude value-added tax (VAT), and do not substitute 
recurring national budgetary expenditure. The revised plan contains some recurrent costs, such as 
personnel costs, which are deemed duly justified and acceptable. The plan provides justifications 
to show that these costs are essential for the success of the reforms and investments to which they 
correspond and that they do not represent a significant burden on the national budget. Hungary did 
not provide an independent validation of the cost estimates. 

Plausible costs  

Based on the assessment of individual cost estimates and related supporting documents, most of 
the measures in the Hungary plan are deemed plausible. The amount of the estimated total costs 
of the plan revision is in line with the nature and type of the envisaged reforms and investments. 
Hungary has submitted extensive additional costing evidence underpinning the claims presented 
in the plan. These documents broadly substantiate the cost estimates. For the new and scaled up 
investments, including those in the REPowerEU chapter, the cost estimates have been deemed, to 
a medium extent, as plausible. 

No double funding 

Hungary  has  indicated  that  new  and  modified  measures,  including  those  in  the  REPowerEU 
chapter, funded under the RRF will not be financed by other Union funding. 

20 

 
 
 
 
 
Commensurate and cost-efficient costs  

The total cost of the modified RRP is commensurate with the expected social and economic impact 
of the envisaged measures. The new measures, included in the REPowerEU chapter, are expected 
to address challenges identified in climate and energy relevant CSRs. Therefore, the modified RRP 
is  assessed  as  being  in  line  with  the  principle  of cost-efficiency  and  is  commensurate  with  the 
expected national economic and social impact. 

The justification provided by Hungary on the amount of the estimated total costs of the modified 
recovery and resilience plan is to a medium reasonable, plausible, in line with the principle of 
cost-efficiency  and  is  commensurate  to  the  expected  national  economic  and  social  impact. 
Hungary provided sufficient information and evidence that the amount of the estimated cost of the 
reforms  and investments  of  the modified recovery and resilience plan  to be financed under the 
Facility is not covered by existing or planned Union financing. This would warrant a rating of B 
under criterion 2.9 of Annex V to the RRF Regulation. 

3.10. 

Controls and audit 

The  original  assessment  of  the  robustness  and  adequacy  of  the  control  system  and  other 
arrangements proposed in the Hungarian RRP had concluded that these arrangements are adequate 
to prevent, detect and correct corruption, fraud, conflict of interest and double funding, taking also 
into  account  the  27  audit  and  control  milestones  to  be  implemented  before  the  first  payment 
request.  This  warranted  a  rating  of  A  under  evaluation  criterion  2.10  of  Annex  V  to  the  RRF 
Regulation.  

The  nature  and  extent  of  the  proposed  modifications  to  the  RRP  and  the  introduction  of  the 
REPowerEU chapter as such do not affect the original assessment. However, in the context of the 
modification of the RRP, its audit and control system needs to be reassessed on the basis of criteria 
2.10 of Annex V of the RRF Regulation. Since the original assessment, the Commission obtained 
information on the actual implementation of legal provisions on the ground. This also includes 
audit  findings  on  the  protection  of  the  financial  interests  of  the  Union  carried  out  by  the 
Commission in Hungary in March 2023. 

In  view  of  this  information,  the  Commission  considers  that  the  internal  control  system  of  the 
Hungarian  RRP  is  overall  adequate  despite  some  deficiencies  identified  by  the  Commission 
services  in  the  context  of  its  audit  work,  which  Hungary  should  remedy.  through  the 
implementation  of  the  audit  and  audit  and  control  milestones  linked  to  the  protection  of  the 
financial interests of the  Union set  out in the Council  Implementing  Decision  of 15 December 
2022. These milestones cover also the necessary arrangements for newly involved bodies, such as 
implementing bodies and bodies involved in the implementation of financial instruments. Hungary 
has proposed to use the same control system for REPowerEU measures as the measures contained 
in  its  original  RRP.  Furthermore,  in  addition  to  these  general  provisions  that  are  also  to  be 
applicable to financial instruments, specific control arrangements for financial instruments have 
been identified and agreed to be included in the relevant measures. 

21 

 
 
 
 
 
 
Robustness of internal control system and distribution of roles and responsibilities 

The modification of the Hungarian recovery and resilience plan includes some modification in the 
audit and control framework as well. While the National Authority (the Office of the Deputy State 
Secretary  of  the  ministry  responsible  for  the  implementation  of  Union  support)  remained  the 
central  coordinating body, the new structure  assigns  the implementation  tasks to  implementing 
bodies, a sub-granting body and – in case of financial instruments – to the Hungarian Development 
Bank.  The  National  Authority  will  supervise  the  implementing  bodies,  the  Hungarian 
Development Bank and the sub-granting body and will carry out regular controls on them. The 
responsibility for the control of final recipients has been shifted to the implementing bodies and 
the  sub-granting  body,  while  EUTAF  (the  Directorate  General  for  Audit  of  European  Funds) 
remained  responsible  for  carrying  out  national  audits  related  to  the  RRF.  The  responsibility  of 
EUTAF also covers the audit of the work of the body implementing the financial instruments (the 
Hungarian Development Bank) with a similar approach as for implementing bodies.  

Adequacy of control systems and other relevant arrangements 

The control system and other arrangements to prevent, detect and  correct fraud, corruption and 
conflicts of interest when using funds provided by RRF continue to appear adequate overall. The 
arrangements and mechanisms to collect, store and make available data on final recipients will be 
ensured through the FAIR-EUPR monitoring IT system, however it will be the responsibility of 
the implementing bodies to verify the adequacy of the data based on documentary and on-the-spot 
checks. 

For  financial  instruments,  the  National  Authority  delegates  the  implementation  tasks  related  to 
financial instruments under the Plan to the Hungarian Development Bank in line with the necessary 
legal  mandate.  The  details  of  task  allocation,  responsibilities  and  controls  performed  by  the 
National Authority will be defined later in the Implementing Agreement. Further amendments of 
Government Decree 373/2022. (IX. 30.) are necessary to ensure that the necessary legal obligations 
are in place with regard to the prevention, detection and correction of fraud, corruption, conflict of 
interest,  double  funding  and  other  irregularities  in  the  case  of  the  implementation  of  financial 
instruments. It is also necessary to ensure by legal means that all relevant authorities, including 
the Hungarian Development Bank will also systematically and effectively use the Commission’s 
Arachne  risk-scoring  tool  to  contribute  to  the  identification  of  the  risks  of  fraud,  corruption, 
conflict of interest and double funding. These will need to be in place before the submission of the 
first payment request under the RRP in line with the audit and control milestones already in place. 
Furthermore,  in  addition  to  these  general  provisions  that  are  also  to  be  applicable  to  financial 
instruments,  specific  control  arrangements  for  financial  instruments  have  been  identified  and 
agreed to be included in the relevant measures. 

Adequacy of arrangements to avoid double EU funding  

The arrangements to prevent, detect and correct double funding described in the original plan, as 
assessed positively by the Commission remain unchanged. 

Legal empowerment and administrative capacity of control function  

22 

 
 
 
 
 
Legal  mandate  of  all  the  institutions  involved  in  implementation,  control  and  audit  has  been 
amended through a modification of Government Decree 373/2022. (IX. 30.) which entered into 
force  on  5  November.  In  line  with  the  Decree,  the  National  Authority  as  coordinating  body 
exercises all the tasks related to the overall coordination of the RRP and for monitoring progress 
towards  fulfilling  the  milestones  and  targets,  drawing  up  and  signing  payment  requests  and 
management declarations. The implementation of the Plan will be ensured by the implementing 
bodies,  the  sub-granting  body  as  well  as  by  the  Hungarian  Development  Bank  for  financial 
instruments in line with the abovementioned amendment. The audit and control milestones should 
be fulfilled before the first payment request, in particular in order to set out the precise roles and 
responsibilities of bodies involved in the implementation of financial instruments under the RRP, 
how their implementation will be controlled and how rules related to the prevention, detection and 
correction of fraud, corruption, conflict of interest, double funding and other irregularities will be 
applied for such instruments. The Directorate of Internal Audit and Integrity (Hereinafter: “DIAI”) 
will be entrusted to carry out conflict of interest controls related to the implementation of financial 
instruments  as  well. Audits  are  entrusted to  EUTAF.  Its  financial  and  functional  independence 
from the coordination body and institutions responsible for the implementation of the reforms and 
investments should be ensured by fulfilling milestone 225. EUTAF’s audit strategy needs to be 
updated to  adequately cover the  changed implementation  and control setup  and all new  bodies 
involved in the implementation of measures in the amended RRP, including in its REPowerEU 
chapter. 

The  entrusted  implementing  entities’  administrative  capability  and  professional  experience  to 
carry  out  their  duties  is  confirmed,  which  would  be  constantly  monitored  by  the  National 
Authority. The structure tasked with the implementation, monitoring, and reporting of the RRP 
has been reinforced and the overall arrangements proposed by Hungary in terms of organisation 
of the implementation of the reforms and investments remain reliable 

The arrangements proposed by Hungary in the modified recovery and resilience plan to prevent, 
detect and correct corruption, fraud and conflicts of interest when using the funds provided under 
the Facility, including the arrangements aimed to avoid double funding from the Facility and other 
Union  programmes,  are  assessed  to  be  adequate.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.10 of Annex V to the RRF Regulation. 

3.11. 

Coherence 

The recovery and resilience plan of Hungary includes ten coherent components with the addition 
of the new, REPowerEU  chapter. The modified  components  in  the new Plan support the same 
objectives as specified in the Staff Working Document (2022/686) with an increased contribution 
to the green transition through accelerating the clean energy transition, diversifying energy sources 
and energy efficiency related investments. The modifications to the RRP do not negatively affect 
the coherence between the components, nor does it change the coherence of the overall Plan.  

Mutually reinforcing measures 

The  addition  of  the  REPowerEU  chapter  is  in  line  with  the  measures  under  the  initial  RRP  to 
support the green transition. The measures under the new REPowerEU chapter further reinforce 

23 

 
 
 
 
 
the  ambition  on  energy  efficiency  related  investments  in  the  energy  component.  The  new, 
REPowerEU  chapter  is  built  around  a  consistent  package  of  both  reforms  and  investments 
improving the energy efficiency of enterprises, public and residential buildings, contributing to the 
electrification of transportation and developing alternative sources of energy such as hydrogen or 
geothermal energy. For example, the investment in grid development is supported by reforms on 
the  harmonization  of  the  grid  connection  procedure  and  on  grid  connections  authorization  for 
renewable power plants in the new REPowerEU chapter.  

Complementarity of measures 

The  modifications  made  to  the  existing  components  of  the  RRP  do  not  negatively  alter  the 
complementarity between and within components. New investments in the REPowerEU chapter 
such as energy efficiency improvements of residential buildings or the use of geothermal energy 
are  reinforced  by  complementary  reforms  developing  a  regulatory  framework  for  these.  At  the 
level of the modified plan, all components pursue complementary objectives with no contradictory 
aims. 

Taking  into  consideration  the  qualitative  assessment  of  all  components  of  Hungary’s  modified 
recovery and resilience plan, their individual weight (importance, relevance, financial allocation) 
and their interactions, the plan contains measures for the implementation of reforms and public 
investments  which, to a  high/medium extent,  represent  coherent  actions.  This  would  warrant a 
rating of A under the assessment criterion 2.11 of Annex V to the RRF Regulation. 

3.12. 

REPowerEU 

The  measures  included  in  the  REPowerEU  chapter  will  contribute  to  energy  security,  an 
increase in the uptake of renewables and in energy efficiency. This will contribute to decreasing 
overall energy demand and to replacing fossil fuels with renewable energy sources. 

Hungary’s REPowerEU chapter contributes to objective 21c(3), point (b) of Regulation (EU) 
2021/241,  through  reforms  and  investments  aimed  at  increasing  Hungary’s  renewable 
energy potential, improving energy efficiency of buildings and decarbonising the industry.  

Boosting the deployment of renewables is an important objective in many of the measures included 
in the REPowerEU chapter. It includes investments supporting the deployment of renewables at 
industrial  parks.  Further  development  is  envisaged  to  ensure  that  additional  capacities  from 
renewable energy sources can be integrated in the electricity grid. The chapter contains a scaled-
up commitment to reach 12 GW connection authorisations by 2026, the target in the initial RRP 
was  set  at  10  GW.  The  reform  adjusting  the  legislative  environment  to  encourage  hydrogen 
production  and  use  is  accompanied  by  the  investment  supporting  the  production  of  renewable 
hydrogen. The reform improving the geothermal energy regulatory framework is coupled with an 
investment  to  support  geothermal  energy  exploration  activities  and  a  financial  instrument  to 
support  geothermal  energy  exploitation.  The  chapter  also  envisages  developing  a  strategy  for 
biogas and biomethane with a biomethane action plan.  

Several  investments  and  a  reform  will  contribute  to  improving  energy  efficiency.  A  financial 
instrument  will  be  set  up  to  improve  companies  and  households’  access  to  finance  for  energy 

24 

 
 
 
 
 
efficiency investments. Another investment aims at improving the energy performance of public 
buildings.  

The  measure  targeting  industrial  parks  is  to  decarbonise  their  operation  by  supporting  the 
deployment  of  renewables,  installation  of  energy  storage,  the  use  of  residual  heat  and  energy 
efficiency  improvements.  Investments  into  the  manufacturing  of  products  and  providing  of 
services that contribute to the transition towards a net-zero economy as well as the investment into 
green technologies support the industry’s decarbonisation.   

Energy  poverty,  under  objective  21c(3),  point  (c)  of  the  RRF  Regulation,  is  addressed 
through a reform and an investment supporting energy efficiency in residential buildings. 
The reform is aimed at ensuring that potential beneficiaries of residential energy efficiency support 
schemes financed by EU funds, and in particular vulnerable households and households living in 
energy poverty, will receive technical assistance for the preparation of their applications. A part of 
the financial support under the financial instrument in the residential energy efficiency sector will 
be reserved for energy poor households. 

Several  investments  will  contribute  to  objective  21c(3),  point  (d)  of  the  RRF  Regulation, 
reducing Hungary’s energy demand. As described energy efficiency  improvements, industry 
decarbonisation  measures,  investments  related  to  green  technology  and  to  manufacturing 
capacities contributing to the transition to the net zero economy will serve this objective. 

Significant measures are envisaged to accelerate the integration of renewable energy sources 
and  the  reliance  on  storage  as  well  as  to  support  zero-emission  transport  and  its 
infrastructure, thereby addressing objective 21c(3), point (e) of the RRF Regulation.  

Several reforms aim at strengthening the electricity sector in the increasingly decentralised system. 
Certain reforms aim at incentivising and optimising the use of renewable energy sources. These 
should also contribute to the optimal use of the energy network. These include the strengthening 
the  role  of  energy  communities  and  aggregators,  improving  regulatory  reserve  markets, 
incentivising the uptake of electricity storage, enhancing the range of consumers that are to use 
smart meters and harmonising the way the connection application rules are applied by the DSOs. 
The introduction of dynamic pricing in the residential sector on a voluntary basis will pave the 
way for demand side response, where energy providers will send price signals to consumers to 
encourage them to use more energy at times away from system peak hours.  

The investment into the roll-out of smart meters included both in the energy component and the 
REPowerEU chapter will provide the necessary technical background to enable the introduction 
of dynamic pricing in the retail sector. The REPowerEU chapter also scales up the investment into 
the  grid  development  to  allow  for  the  secure  and  flexible  integration  of  renewables  into  the 
electricity grid. Investing in the improvement of the weather forecast system will provide more 
accuracy for energy production estimation of weather-dependent renewable energy power plants. 
Digital  improvements  in  the  energy  sector  are  expected  to  support  security,  flexibility  and 
operation efficiency. 

25 

 
 
 
 
 
The investments in electrifying railways, supporting the uptake of electric vehicles and recharging 
stations,  as  well  as  hydrogen  fuel-celled  vehicles  and  refuelling  stations  accompanied  by  the 
reform on hydrogen mobility will contribute to the REPowerEU objectives of supporting zero-
emission transport and its infrastructure.  

The retraining of the workforce for the green transition, under objective 21(3), point (f) of the RRF 
Regulation, is addressed through a reform on developing a green skills strategy with an action plan 
and an investment including educational content and training measures to acquire green skills.  

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged  in  the  REPowerEU 
chapter, the chapter is expected, to a large extent, to contribute effectively to energy security, the 
diversification of the Union’s energy supply, an increase in the uptake of renewables and in energy 
efficiency, an increase of energy storage capacities or the necessary reduction of dependence on 
fossil fuels before 2030. This would warrant a rating of A under criterion 2.12 of Annex V to the 
RRF Regulation. 

3.13. 

Cross-border or multi-country dimension or effect 

The  Hungarian  REPowerEU  chapter  contains  many  investments  contributing  to  reduce 
dependency on fossil fuels or energy demand.  

The electricity network development and digitalisation investment aims at supporting the uptake 
of renewable energy, improving the consumer and producer electricity connections and the quality 
of service offered by the system operators.  

The greening of industrial parks for energy purposes will support activities in decarbonisation and 
sustainable energy use in industrial parks, energy intensive companies and logistics parks.  

A financial instrument will be set up to improve companies’ energy efficiency. The aim is to reduce 
the energy demand by at least 30% after investment compared to the baseline. Another financial 
instrument will be developed to improve the energy efficiency of residential buildings. 

The  investment  in  railway  electrification  contributes  to  development  of  electrified  cargo  and 
passenger transport network in the EU. 

The total estimated costs of these measures account for a total of EUR 3 822 million, representing 
82,8% of the estimated costs of the REPowerEU chapter, exceeding the indicative target of 30%. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged  in  the  REPowerEU 
chapter, the measures in the chapter are expected, to a large extent, to have  a cross-border or 
multi-country dimension or effect. This would warrant a rating of A under criterion 2.13 of Annex 
V to the RRF Regulation. 

26 

 
 
 
 
 
 
REPowerEU measure 

Costs (EUR million) 

for 

and 

network 

Electricity 

technology- 

C10.I1: 
development and digitalisation 
C10.I2:  Greening  of  industrial-, 
science 
and 
logistics parks for energy purposes 
C10.I3:  Building  green  economy 
production capacities 
C10.I4:  Application  of  green 
the 
technologies 
decarbonisation of industry 
C10.I6: Hydrogen investments 
C10.I11:  Supporting  geothermal 
energy exploration and exploitation 
C10.I16: Setting up a financial 
instrument to support geothermal 
energy exploration and exploitation 
C10.I12:  Setting  up  a  financial 
instrument  to  improve  companies’ 
energy efficiency 
Energy 
C10.I8: 
investments in public buildings 
C10.I13:  Setting  up  a  financial 
instrument  to  improve  the  energy 
efficiency  of  residential  buildings 
and tackle energy poverty 
C10.I9:  Electrification  of  railway 
sections 
TOTAL  

efficiency 

6895 

529 

526 

111 

185 
68 

351 

461 

214 

589 

99 

3822 

Contribution  to  the 
target in % 
15% 

11.5% 

11.4% 

2.4% 

4% 
1.4% 

7.6% 

10% 

4.6% 

12.8% 

2.1% 

82,8% 

5 Excluding the digital elements of this investment. 

27 

 
 
 
 
 
 
 
 
ANNEX I: Climate tracking and digital tagging 

Note: while the total cost of Hungary’s recovery and resilience plan exceeds the total allocation of 
non-repayable financial support to Hungary, Hungary will ensure that all spending related to the 
measures mentioned in this table as contributing to climate and digital objectives are fully financed 
by the funds from the Recovery and Resilience Facility. 

Int. Field = intervention field 

Coeff. = Coefficient for the calculation of support to climate change objectives and to digital transition, 
on the basis of Annex VI and Annex VII of the RRF Regulation 

cros 

Measure/Sub-Measure Name 

C1.R1 

C1.I4.1 

C1.I4.2 

C1.I5.1  

C1.I5.2  

C2.R1.1 

C2.R1.2 

C2.I1.1 

C2.I1.2 

C2.I2.1 

Development of competitive 
public education using 21st 
century technology 
Creation of new crèche places - 
Renovation/extension of existing 
buildings 
Creation of new crèche places - 
New buildings 
Creation of additional new 
crèche places – 
Renovation/extension of existing 
buildings  
Creation of additional new 
crèche places – New buildings  
Modernisation of higher 
education courses – IT services 
and applications 
Modernisation of higher 
education courses – Support to 
digital content production and 
distribution 
Institutional innovation and 
strengthened activities in higher 
education – E-curriculum 
development 
Institutional innovation and 
strengthened activities in higher 
education – Micro-credentials 
Modernisation of infrastructure 
and digitalisation in higher 
education institutions – Capacity 
development activities, including 

Budget 
(EUR m) 

391 

Climate 

Digital 

Int. Field  Coeff. % 

Int. 
Field 

Coeff. % 

012 

100% 

17.6 

026 

40% 

111.9 

025ter 

40% 

2.3 

026  

40%  

14.6  

025ter  

40%  

0.5 

0.03 

23 

23 

7 

28 

012 

100% 

021bis 

100% 

108 

100% 

021bis 

100% 

016 

40% 

 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
cros 

Measure/Sub-Measure Name 

Climate 

Digital 

Budget 
(EUR m) 

Int. Field  Coeff. % 

Int. 
Field 

Coeff. % 

organisation of trainings, skill 
development 

Modernisation of infrastructure 
and digitalisation in higher 
education institutions - Digital 
equipment 
Modernisation of infrastructure 
and digitalisation in higher 
education institutions - Energy 
efficiency renovation 
Modernisation of infrastructure 
and digitalisation in higher 
education institutions - New 
buildings 
Development of digital curricula 
for vocational education and 
training - Digital learning 
materials 
Vocational education and 
training infrastructure for the 21st 
century - Energy efficiency 
renovation 
Vocational education and 
training infrastructure for the 21st 
century - Purchase of ICT 
equipment 
Development of the Central 
Examination Centre - Energy 
efficiency renovation 
Establishment of national 
research and development 
laboratories 
Production and use of renewable 
energy in disadvantaged 
municipalities 

C2.I2.2 

C2.I2.3 

C2.I2.4 

C2.I3.1 

C2.I4.1 

C2.I4.2 

C2.I5.1 

C2.I6 

C3.I2 

C4.R1  Awareness raising 

C4.I2 

Establishment of a monitoring 
system 

C4.I3  Nature protection 

C5.R1 

Deployment of a single national 
tariff, ticketing and passenger 
information system for bus and 

76 

012 

100% 

41 

026bis 

100% 

5 

025ter 

40% 

42 

108 

100% 

22 

026bis 

100% 

17 

108 

100% 

5 

026bis 

100% 

021 

40% 

055 

100% 

029 

040 

100% 

40% 

040 

40% 

070 

40% 

070 

100% 

184 

30 

0.1 

30.8 

7 

23 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
cros 

Measure/Sub-Measure Name 

rail by the National Public 
Transport Authority 

C5.I1.1 

Capacity building of suburban 
rail network - Rail Fixed 
infrastructure 

C5.I1.2 

Capacity building of suburban 
rail network - Multimodal hubs 

C5.I1.3 

C5.I2.1 

C5.I2.2 

C5.I3.1 

C5.I3.2 

Capacity building of suburban 
rail network - Rail Signalling and 
Management System 

Rail network congestion 
switching on TEN-T corridor - 
Almásfüzitő-Komárom 

Rail network congestion 
switching on TEN-T corridor - 
Békéscsaba-Lőkösháza 
Development of zero-emission 
bus transport - Electric buses 
Development of zero-emission 
bus transport - Charging stations 

C5.I4 

Deployment of central traffic 
management on TEN-T railways 

C5.I5.1 

C5.I5.2 

C6.I1 

C6.I2.1 

Development of tram and 
trolleybus system of Budapest 
(purchase of trams, and 
development of tram and 
trolleybus related infrastructure) - 
rolling stock 
Development of tram and 
trolleybus system of Budapest 
(purchase of trams, and 
development of tram and 
trolleybus related infrastructure) - 
infrastructure 
Classic and smart grid 
development of transmission 
system operator and distribution 
system operators 
Support for the use of residential 
solar panels and heating 
modernisation – PV panels, 
storage and heat pumps 

Climate 

Digital 

Budget 
(EUR m) 

Int. Field  Coeff. % 

Int. 
Field 

Coeff. % 

304.2 

069bis 

100% 

190.8 

079 

40% 

20.6 

070 

40% 

070 

100% 

51 

067 

100% 

372 

067 

100% 

143 

16 

89.6 

074 

077 

070 

100% 

100% 

40% 

070 

100% 

147.1 

074 

100% 

106.5 

073 

100% 

648 

033 

100% 

033 

40% 

361.3 

029 

100% 

30 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
cros 

Measure/Sub-Measure Name 

C6.I2.2 

C6.I4 

Support for the use of residential 
solar panels and heating 
modernisation – Renovation 
Installation of grid energy 
storage facilities for energy 
market participants 

C6.I5  Dissemination of smart metering 

56 

C6.I6 

Energy efficiency investments in 
public buildings 

55.6 

Climate 

Digital 

Budget 
(EUR m) 

Int. Field  Coeff. % 

Int. 
Field 

Coeff. % 

54 

025 

40% 

157 

033 

033 

026 

100% 

033 

40% 

100% 

033 

40% 

40% 

C7.I2 

C8.I1.1 

C8.I2 

C8.I3 

C9.R8 

C9.R14.2 

C9.R28 

C9.R29 

 Construction of smart waste 
collection infrastructure for 
separate collection and related 
zero-emission collection vehicles 
Developing the conditions for 
healthcare in the 21st century - 
New construction 

Supporting the digital 
transformation of health 

Remote health monitoring 
programme for the elderly 

Upgrading the cooperation 
systems of the prosecution 
service to tackle corruption 
practices 
Training scheme and support 
scheme for micro-, small and 
medium enterprises to facilitate 
their participation in public 
procurement procedures – 
Development of digital skills 
Support to the data-based 
decision-making and legislative 
process with a view to increasing 
efficiency, transparency and 
reducing risks of irregularities 
Extension of the automatic 
administrative decision-making 
system with a view to increasing 
efficiency, transparency and 
reducing risks of irregularities 

59.9 

042 

40% 

137 

025ter 

40% 

250 

229 

9 

0.8 

4 

6 

31 

095 

100% 

095 

100% 

011 
quater 

100% 

108 

100% 

011 

100% 

011 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
cros 

Measure/Sub-Measure Name 

C9.R30 

Strengthening the national IT 
equipment management system 
to increase the efficiency of 
public services  

C10.I1 

Electricity network development 
and digitalisation 

C10.I2.1 

C10.I2.2 

C10.I2.3 

Greening of industrial-, science 
and technology- and logistics 
parks for energy purposes – 
Renewable energy 

Greening of industrial-, science 
and technology- and logistics 
parks for energy purposes – 
Energy storage and smart 
systems 

Greening of industrial-, science 
and technology- and logistics 
parks for energy purposes – 
biomethane 

Climate 

Digital 

Budget 
(EUR m) 

Int. Field  Coeff. % 

Int. 
Field 

Coeff. % 

42 

011 

100% 

956.6  

033 

100% 

033 

40% 

317.4 

032 

100% 

132.3 

033 

100% 

033 

40% 

79.4 

030 

40% 

C10.I3 

Building green economy 
production capacities 

526.1 

047bis 

40% 

C10.I4.1 

C10.I4.2 

Application of green 
technologies for the 
decarbonisation of industry – 
REPowerEU-eligible carbon 
capture and digitalisation that 
indirectly contributes to GHG 
emission reduction 

Application of green 
technologies for the 
decarbonisation of industry – 
improvements enabling the 
deployment of alternative gases 
such as hydrogen and 
electrification 

C10.I4.3  Application of green 
technologies for the 

22.3 

027 

100% 

55.8 

032 

100% 

030 

40% 

33.4 

32 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
cros 

Measure/Sub-Measure Name 

decarbonisation of industry - 
biomethane 

Climate 

Digital 

Budget 
(EUR m) 

Int. Field  Coeff. % 

Int. 
Field 

Coeff. % 

C10.I5  Energy digitalisation 

236.8 

033 

100% 

033 

40% 

C10.I6.1 

Hydrogen investments – 
Hydrogen production 

135.2 

032 

100% 

C10.I6.2 

Hydrogen investments – 
Hydrogen trucks 

1.9 

ADHOC 

100% 

C10.I6.3 

Hydrogen investments – 
Hydrogen buses 

25.9 

074 

100% 

C10.I6.4 

Hydrogen investments – 
Hydrogen refueling stations 

22.2 

077 

100% 

C10.I7 

Strengthening human resources 
in the green economy 

36.8 

01 

100% 

C10.I8 

Energy efficiency investments in 
public buildings 

214.5 

026bis 

100% 

C10.I9  Electrification of railway sections 

99.3 

069bis 

100% 

C10.I10 

Boosting companies’ uptake of 
battery-electric vehicles (BEVs) 
with grant support 

105.2 

ADHOC 

100% 

C10.I11 

Supporting geothermal energy 
exploration with grant support 

68.4 

032 

100% 

C10.I12 

Setting up a financial instrument 
to improve companies’ energy 
efficiency 

461 

024ter 

100% 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
cros 

Measure/Sub-Measure Name 

C10.I13 

C10.I14 

C10.I15 

Setting up a financial instrument 
to improve the energy efficiency 
of residential buildings and 
tackle energy poverty 

Setting up a financial instrument 
to increase the rollout of 
recharging stations for electric 
vehicles (EVs) 

Setting up a financial instrument 
to support the purchase of 
battery-electric vehicles (BEVs) 
by fleet providers 

C10.I16 

Setting up a financial instrument 
to support geothermal energy 
exploration and exploitation 

Climate 

Digital 

Budget 
(EUR m) 

Int. Field  Coeff. % 

Int. 
Field 

Coeff. % 

589.3 

025bis 

100% 

79.2 

077 

100% 

52.6 

ADHOC 

100% 

351.2 

032 

100% 

34