The Legislation for the Extraction of Geothermal Energy May Change

On 18 May 2022, the European Commission presented its REPowerEU plan as a response to the hardships and global energy market disruption caused by the conflict between Russia and Ukraine. REPowerEU seeks to end the EU’s dependence on Russian fossil fuels, make further advances in tackling the climate emergency, promote energy efficiency and savings, and boost the share of renewables in EU energy consumption.

The chapter titled REPowerEU of Hungary’s Recovery and Resilience Plan is designed to plan how to contribute to the objectives set out under the Commission’s REPowerEU. The chapter outlines 14 investment points and 14 reform points, one of which deals with the development of the geothermal regulatory framework. The regulations regarding the exploration of geothermal resources and the use of geothermal energy changed significantly in 2023. The previous concession obligation and redundant authorization processes have been abolished, and a wide range of legal entities can apply for geothermal exploration permit to the mining authority.

The planned reform aims at amending the regulation to ensure the quality of geothermal research and exploitation work programmes submitted by developers. The quality of the work programme is understood in the context of the exploration concept and the market needs for geothermal energy. Proposals for changes to the current legal framework will be fleshed out after an evaluation of the lessons learned from the current exploration licensing process.

The planned deadline for implementing the reform is set for the last quarter of 2024. The reform is expected to make the regulation of geothermal energy exploitation transparent and competitive, improve geothermal exploration and exploitation work programmes and consolidate the regulated market for potential geothermal energy suppliers.

By Gabriella Galik, Attorney at law, KCG Partners Law Firm