Full Breakdown
European Court of Justice Rules Against Hungary's Paks II Nuclear Project Funding
9/11/2025, 9:09:18 PM
Court Ruling on State Aid
On September 11, 2025, the Court of Justice of the European Union (CJEU) annulled the European Commission's approval of state aid for Hungary's Paks II nuclear power plant project. The court determined that the Commission failed to adequately assess whether Hungary's direct award of the construction contract to the Russian state nuclear corporation Rosatom complied with EU public procurement rules. This ruling came in response to a lawsuit filed by Austria, which argued that the Commission's decision distorted competition and tied Hungary to potentially risky and overpriced nuclear technology.
Background of the Paks II Project
The Paks II project involves the construction of two new reactors at the existing Paks nuclear power station, which is approximately 120 kilometers south of Budapest. The contract for this project was awarded to Rosatom's subsidiary, Nizhny Novgorod Engineering Company Atomenergoproekt, without a competitive tender process. The European Commission had initially approved the state aid in 2017, despite concerns raised by environmental organizations, including Greenpeace, about the legality of the direct award.
Implications of the Ruling
The CJEU's ruling mandates that the European Commission must ensure no further public funds are allocated to the Paks II project and that any funds already disbursed to Rosatom be returned. Greenpeace's EU legal strategist, Andrea Carta, emphasized that the ruling highlights a significant regulatory failure by the Commission, which allowed Hungary to subsidize a project that could benefit Russia amid ongoing geopolitical tensions.
Official Responses
Hungary's Minister of Foreign Affairs and Trade, Péter Szijjártó, previously characterized the court's earlier dismissal of Austria's lawsuit as a victory for Hungary. Following the recent ruling, Hungarian EU Affairs Minister János Bóka stated that the court did not find the investment itself unlawful but criticized the Commission's reasoning. He affirmed Hungary's commitment to continue the Paks II project while cooperating with the Commission to address the court's concerns.
Conversely, independent MP Bence Tordai expressed skepticism about the project's future, suggesting that the ruling necessitates a reevaluation of the Paks II project, especially in light of the EU's goal to reduce dependency on Russian energy sources.
Criticism and Opposition
Environmental groups, including Greenpeace and Global 2000, hailed the CJEU ruling as a significant victory. They argue that the Paks II project represents a misallocation of taxpayer funds towards outdated nuclear technology, which could hinder Hungary's transition to renewable energy sources. Greenpeace called for the immediate withdrawal of the Commission's approval for state subsidies, advocating for investment in sustainable energy alternatives.
Conflicting Reports & Gaps
While the CJEU ruling has been interpreted as a setback for the Paks II project, Hungarian officials maintain that there are no legal barriers to continuing the investment as planned. The court's decision has raised questions about the adequacy of the Commission's previous assessments, but it remains unclear how this will affect the timeline for the project, which is slated to begin construction in November 2025.
Verbatim Quotes
“Greenpeace EU legal strategist, Andrea Carta, said: “Today’s ruling spotlights a spectacular regulatory failure on the part of the European Commission.” — Andrea Carta, Greenpeace EU Legal Strategist
“The court did not say the project failed to meet public procurement rules, only that its reasoning was not satisfactory,” — János Bóka, Hungarian Minister of EU Affairs
“Tax billions should not go into outdated, dangerous nuclear power, but must flow into the expansion of renewables,” — Marc Dengler, Climate and Energy Expert at Greenpeace
What's Next
The European Commission is expected to review the court's ruling and determine the next steps regarding the Paks II project. This may involve reassessing the legality of the state aid and the procurement process, particularly in the context of the EU's broader strategy to reduce reliance on Russian energy.
