With the carbon dioxide quota tax, the previous government left a potential budgetary pitfall of hundreds of billions of forints for its successor. This is what the Court of Justice of the European Union (EUJ) said in April he saidthat it “seems contrary to EU law”, the investigation of which is the task of the Hungarian courts from now on.
In 2023, the government will retroactively impose a carbon dioxide quota tax until the beginning of the year introduced for the biggest domestic polluters. Since 2023, companies whose carbon dioxide emissions exceeded 25,000 tons in the previous three years will have to pay this tax of 36 euros per ton, and they will also have to pay a 15 percent transaction fee after trading quotas.
This also affected companies from several industries (e.g. oil industry, chemical industry, construction materials production) in Hungary. Among the biggest taxpayers were Mol and Nitrogénművek, as well as the operator of the Kárályegyház cement factory, the Swiss Holcim, and the operator of the Vác and Beremend cement factories, Duna-Dráva Cement Kft., which is 50-50 owned by Germany’s Heidelberg Materials and Schwenk Zement. In other words, the previous government at the same time imposed a penalty on László Bige’s company, Nitrogénművek, which was critical of it, and on the foreign construction material manufacturers that announced a campaign.
The previous government’s tax was based on the European Emission Reduction System (ETS). In a very simplified way, the essence of this is that in the European Union, companies carrying out highly polluting activities must cover their emissions with quotas. Some of these are given to them for free, but the number of quotas decreases from time to time, and the part above free must be covered with purchased quotas. The essence of this system is to encourage companies to reduce their emissions in the long term. According to the Court of the European Union, the tax introduced by the Orbán government in 2023 went against this logic, as it taxed the entire emission.
Unprofitable cement factories
Just like last year in our November article we wrote in more detail, not all companies were affected by this type of tax to the same extent, as there were big differences in the exact amount of the tax to be paid as a proportion of sales revenue. While, according to our estimate, this item did not even account for half a percent of Mol’s sales in some years, it accounted for almost 12 percent of Nitrogénművek’s sales in 2024, and 8 and 14 percent of Holcim’s and Duna-Dráva Cement’s sales.
Compared to 2024, Nitrogénművek’s sales increased last year, while its tax burden decreased, so last year this item accounted for only 6 percent of sales, while László Bige’s company became profitable again after two loss-making years. As in 2025, however, Duna-Dráva Cement again became unprofitable, whose report for 2025 no longer included how much quota tax it paid. However, the document mentions that while they were able to compensate for this cost by selling a company share in 2023, in 2024 and 2025 only the quota tax’s “result-destroying effect prevailed without the possibility of compensation”.
Until the publication of our article, Holcim, which operates the cement factory in Kárályegyháza, had not published its report, but it revealed to us that it had a tax liability of HUF 1.1 billion last year. Between 2023 and 2025, the company thus incurred a total of HUF 8.1 billion in liabilities, and up to last year HUF 7 billion, of which it paid approximately HUF 6.3 billion to the tax authority by the end of the first quarter of 2026. The difference between the two amounts is explained by the fact that Holcim scheduled its payments through various legal protections and tax suspension and payment deferral requests that were positively evaluated by the tax authorities. This is important, because if other companies have used such a method, it may influence how much money the state will have to pay back, if the Hungarian court confirms the decision of the EU court.
In recent years, in addition to Mol, Nitrogénművek, Holcim and Duna-Dráva Cement, Hamburger Hungária, which operates the Dunaújváros mixed-fuel power plant, the owner of Columbian Tiszai Koromgyártó, the American-based Birla Carbon Hungary and BorsodChem have also been significant quota tax payers.
Several hundred billion items in the budget
Based on the final accounts of the 2024 budget, the state received a total of HUF 67.14 billion in revenue from the carbon dioxide quota tax the year before last, which is more than one and a half times the revenue in 2023, when HUF 41.47 billion was collected from this tax. In both the 2025 and 2026 budgets, the government calculated HUF 75 billion in revenue from this type of tax. If all the planned revenues were to be met, the state would have to return almost HUF 260 billion without interest to the relevant companies after four years of taxes paid.
At a press conference on Tuesday last week, Finance Minister András Kármán mentioned in connection with this year’s budget that there will be very significant one-time items, for example due to the court decision regarding the carbon dioxide quota tax. In this regard, we asked the Ministry of Finance whether they are calculating that the state will have to pay back the previously paid tax to the companies concerned this year, and if so, how much expenditure is expected to be incurred, but we did not receive an answer until the publication of our article.
It cannot be ruled out as a 2027 item either
In this case, the budget planning depends on a factor over which the government has no influence, because now the further fate of the case depends on the decision of the domestic courts. They will make their own judgment on the case, taking into account the decision of the Court of Justice of the European Union. This means more courts, as the cases of the companies involved are handled by the competent courts based on their headquarters.
In response to G7’s question, the Budapest District Court, which has jurisdiction over the lawsuits of the plaintiffs based in the counties of Pest and Nógrád, wrote that the quota tax cases will be heard in the fall, but “due to the number of influencing circumstances, the time for the completion of the lawsuits cannot be accurately predicted”, but “there is currently no need to expect a delay in the completion”. In response to our question about how long after the final decision and in what schedule (instalments or one-time payment) the refund can be made to the companies concerned, the court wrote that it could not provide information on this.
Not only the timing, but also the specific amount to be refunded is uncertain, because as we saw in the case of Holcim, the tax paid did not match the amount of the tax liability. At the same time
the tax paid must be repaid with interest, which may increase the state’s one-time expenditure if the Hungarian courts confirm the EU court’s decision.
All in all, the budget situation, which is by no means simple at the moment, is further complicated by the matter of the quota tax, which may cause significant expenditure of hundreds of billions of forints in this year’s or 2027’s budget. In comparison, public media will spend 155 billion in 2026 itemand some on the decrease in government bond interest rates according to estimates this year, the budget can save up to HUF 100 billion.
In addition, the budgetary situation is also worsened by the fact that – as the 24.hu reported – in January, the Court of Justice of the European Union cut off the additional mining royalty payable to several quota tax-paying companies (Duna-Dráva, Holcim), and since June 1, it no longer has to be paid.
