The Hungarian government introduced last week further amendments to Government Decree No. 197/2022 regulating the extra profit tax. Among others, the executive introduced certain emergency rules concerning the operators of facilities “receiving a significant free allocation of emission units.”

According to the new provisions, facilities need to pay a €40/tone carbon tax if “the free allocation of emission units equals to at least 50% of the average of the total emissions of carbon dioxide verified in the year preceding the current year and the previous three years, and during this period the annual average of carbon dioxide emissions exceeded 10,000 tons.”

Furthermore, the beneficiaries of such large amounts of free allowances are obliged to pay a 10% transaction fee to the authority responsible for climate protection in case it transfers permits that were handed out for free. The transaction must be reported within 10 days and the payment must be made within 30 days following the notification from the authority.

The new provisions have already come into effect as of July 20, 2023