Hungary

1) REFERENCES

Commission Opinion [COM(97)2001 final - Not published in the Official Journal]Commission Report [COM(98)700 final - Not published in the Official Journal]Commission Report [COM(99)505 final - Not published in the Official Journal]Commission Report [COM(2000)705 final - Not published in the Official Journal]Commission Report [COM(2001)700 final - SEC(2001) 1748 - Not published in the Official Journal]Commission Report [COM(2002)700 final - SEC(2002) 1404 - Not published in the Official Journal]Commission Report [COM(2003) 675 final - SEC(2003) 1205 - Not published in the Official Journal]Treaty of Accession to the European Union [Official Journal L 236 of 23.09.2003]

2) SUMMARY

The July 1997 Opinion believed that Hungary should be in a position to comply with most of the EU energy legislation in the next few years, provided it continued with its efforts. However, the Opinion also asked for matters such as the adjustment of monopolies including import and export, access to networks, energy pricing, State interventions in the solid fuels and uranium sectors, and the development of energy efficiency and fuel quality standards to be closely followed. The Opinion did not foresee any major difficulties as regards compliance with Euratom provisions, provided nuclear safety standards were tackled appropriately in order to bring the single Hungarian nuclear power plant to the level required. It nevertheless called for surveillance of the long-term solutions to the problems of nuclear waste.

The November 1998 Report noted that progress had been made on the adjustment of monopolies, network access and energy pricing. It nevertheless called for close attention to be paid to State intervention in the solid fuels and uranium sectors, and the development of energy efficiency and fuel quality standards.

The October 1999 Report emphasized that progress had been achieved, particularly with regard to the adoption of the new energy strategy. Nevertheless, particular efforts were still needed in certain sectors, such as the preparation for the internal energy market (electricity and gas directives) and the adjustment of energy monopolies. No major difficulties were foreseen for compliance with Euratom provisions. Nuclear safety issues had to be carefully monitored, as in the past.

In its November 2000 Report, the Commission noted that Hungary had already adopted the main principles of the internal energy market, but these principles still had to be fully implemented, and more progress was required in particular with regard to further liberalisation in preparation for the internal energy market (the electricity and gas directives), and energy efficiency.

In its November 2001 Report, the Commission considered that limited progress had been achieved in this area since the last regular report. Although Hungary had already adopted an administrative framework for this sector, there was a delay in the preparation of the internal market since the draft law on the liberalisation of the market in electricity had not yet been adopted and no progress had been made in the gas sector. Particular attention had to be paid to this aspect of the energy sector. There had been progress on the reform of the institutions and the government was continuing to promote energy efficiency. Hungary was also making progress in the important field of nuclear safety.

The October 2002 Report noted that Hungary had made progress in preparing for accession in the field of energy, although alignment with the acquis in both the electricity and gas sectors had been slower than originally envisaged. However, a major positive development was the adoption of the Electricity Act as an important step towards integrating Hungary into the internal EU electricity market.

The 2003 Report stresses that Hungary respects the main commitments and requirements of the accession negotiations in the energy sector. However, it must continue to liberalise the electricity and gas markets and complete the alignment of its legislation with the acquis in these areas.

The Treaty of Accession was signed on 16 April 2003 and accession took place on 1 May 2004.

COMMUNITY ACQUIS

The key elements of the energy acquis comprise Treaty provisions and secondary legislation concerning in particular competition and State aid, the internal energy market (including directives on electricity, price transparency, gas and electricity transit, hydrocarbons, licensing, emergency response including security stock obligations), nuclear energy, energy efficiency and environmental rules.

The Community acquis in the field of nuclear energy today consists of a framework of legal and political instruments including international agreements. At present, it addresses issues of health and safety, including radiation protection, safety of nuclear installations, management of radioactive waste, investment, promotion of research, nuclear common market, supplies, safeguards and international relations.

The White Paper (preparing the associated countries of Central and Eastern Europe for their integration in the internal market of the European Union) stresses in the section on energy the need for full application of key internal market directives in combination with EU competition law. As regards the nuclear sector, the White Paper refers to supply problems, safeguards and shipments of nuclear waste.

EVALUATION

The framework for further alignment with the energy acquis was set with the adoption of the long-term energy strategy in July 1999. Overall, Hungary is making progress in implementing the acquis and is continuing to consolidate its administrative framework. Hungary has already adopted the main principles of the internal energy market and continues to implement them. However, it has incurred a delay in this field. It must further intensify its efforts to prepare for the internal market by speeding up the adoption of new legislation on gas and electricity in order to avoid any further delay in the opening up of the markets. The Energy Office must also be given more authority.

As regards security of supply, stocks of crude oil and petroleum products are at the required level. Current levels of oil stocks exceed EC requirements.

In the area of competitiveness and the internal energy market, Hungary adopted the Electricity Act which aims to align Hungary's legislation with the acquis and constitutes an important development in the energy sector. It is planned to open 44% of the gas market to competition from January 2004.

As regards energy efficiency and renewable energy, Hungary introduced an energy efficiency programme with the main objectives of promoting the use of renewable energy sources and improving public energy awareness.

Hungary has a well developed institutional structure in the energy sector. This structure has been improved since the last report. Hungary now has, among other things, a nuclear safety body, an Energy Interest Reconciliation Council, a centre responsible for energy efficiency and an independent network manager. Nevertheless, some of these need to be strengthened. At the end of 1999, the Government adopted an energy efficiency programme and is continuing to promote this policy.

With regard to nuclear energy, Hungary has four VVER 440/213 nuclear reactors in operation at Paks. The reactors are of Soviet design and are considered to be upgradable to international safety standards.

Hungary is pursuing an upgrading programme at the Paks nuclear power plant which should be completed by the end of 2002 and more than two thirds of the planned work had already been carried out by the end of 2000. These measures have made it possible to reduce the risk of damage to the reactor core by a factor of ten. Hungary still has to provide further information on measures taken with a view to implementing the recommendations of the Council report on nuclear safety in the context of enlargement, published in 2001.

The Atomic Energy Authority is responsible for regulation, licensing and controls in the nuclear energy sector. Although it is answerable to the Government, it is independent and has its own separate budget. A mission from the International Atomic Energy Agency (IAEA) has confirmed that the Authority is a highly competent body. In June 2001, the Council of the European Union took note of a report on nuclear safety in the context of enlargement. The report presents general recommendations for all candidate countries which concern among other things the completion of modernisation programmes and the safe management of radioactive waste and spent fuel. The Council recommends a number of specific measures for Hungary. It considers that Hungary should for example provide sites for the storage of low or medium-level radioactive waste.

Hungary is a party to all major international agreements and is a member of the International Atomic Energy Agency and the OECD Atomic Energy Agency. Hungary has concluded a full-scope safeguards agreement with the IAEA. Nevertheless, steps should be taken to ensure that Hungary complies fully with Euratom requirements and procedures.

Hungary is participating in the Community programme for energy efficiency - SAVE II (1), and in the JOULE-THERMIE Programme.

See also

Decision of the Association Council on association between the European Communities and their Member States, of the one part, and the Republic of Hungary of the other part, of 22 June 1999, adopting the terms and conditions for the participation of Hungary in the Community Programme for Energy Efficiency - Save II.

Official Journal L 247 of 18.09.1999

Last updated: 16.01.2004