The Hungarian language version of this article was published on Qubit.hu on August 28, 2025.

• It has been almost three years since the European Union provided Hungary with 250 million euros, or about 100 billion forints, from the so-called Just Transition Fund to address the negative effects of measures taken to reduce carbon dioxide emissions.
• The money was intended, among others, for microenterprises, small and medium-sized companies, private individuals, and workers who lost their jobs indirectly due to the transition.
• The total of 100 billion forints could be distributed in the form of tenders in three counties: Baranya, Borsod-Abaúj-Zemplén and Heves. The Mátra Power Plant, called a “climate killer” by environmentalists, and the mines serving it operate in the latter two counties.
• Although a decision was made at the end of 2022 that the program could be launched, not a single tender has been issued since then. Instead, the list of those affected was rewritten this year, and the population was simply left out.
• Many people associate the delay with the situation surrounding the Mátra Power Plant, namely that it will not close when the government promised the EU, yet Baranya County, which has nothing to do with the power plant, cannot access the funds either.
• Some of the money has almost certainly been lost in the meantime: we know that they are counting on only 80 billion forints instead of 100 billion.
• Since the amount may decrease year by year, it would be worth starting to spend the money as soon as possible, but no decision has been made on the applications.

The robust building of the Mátra Power Plant is hard to mistake for anything else, anyone visiting Visonta in Heves County can spot it from afar.

The power plant is Hungary's second largest electricity producer after Paks, contributing 4-5 percent of domestic electricity generation. At the same time, it is the country's most polluting power plant: the coal-fired Mátra Power Plant is responsible for 7-8 percent of domestic carbon dioxide emissions. Its closure is therefore essential, and furthermore, we have a legal obligation to do so, as Hungary, along with all other EU member states, has committed to becoming climate neutral by 2050, which is obviously impossible with the Mátra Power Plant.

However, such a step also entails numerous disadvantages. What will happen to the power plant's workers, many of whom will become unemployed? What will happen to the miners? What will happen to the businesses that sell equipment and services to the power plant and the mines that serve it? And what will happen to the entire region? If such a large operation closes, the economy of the affected areas will also be disrupted.

These problems are precisely what the so-called Just Transition Fund (JTF) within the European Union was created to address, aiming to help all those who may suffer disadvantages during the changes with EU funds. Hungary was entitled to 250 million euros, or about 100 billion forints, from the fund. The money was allocated to three counties: Heves County because the power plant and one of the mines serving it operate there, in Visonta and its surroundings, and Borsod-Abaúj-Zemplén County because the other coal-producing mine is in Bükkábrány. The third county, Baranya, was awarded the support, among other reasons, due to the cement factories operating there, which are also major polluters and are also undergoing transformation. (Baranya County will be discussed in the second part of our article series).

The money was allocated at the end of 2022, and Hungary's only task after that was to close the power plant and spend the tens of billions. However, this did not happen: none of the affected parties saw a single forint.

What happened? To find out, we spoke with numerous sources closely familiar with the affairs of the Just Transition Fund. Several of them spoke off the record, while others gave interviews. Among them is Alexa Botár, the climate protection and energy program director of the National Society of Conservationists (MTVSZ), Csaba Vaszkó, sustainability expert, Gábor Telekes, president of the Mining, Energy and Industrial Workers' Union (BDSZ), and Zsolt Medveczki, the power plant's union representative. Like our unnamed sources, they are intimately familiar with the events related to the fund, and three of them are members of the Just Transition Subcommittee, which is one of the program's official domestic decision-making bodies.

The scheme was accepted, but not implemented

To understand the story, we need to go back in time to 2021. This is when the decree on the establishment of the Just Transition Fund was issued, which also defined how each member state could access the funds allocated to it. One of the most important expectations was the preparation of the so-called territorial plans. These had to include not only the problems arising from the transition, but also when and how they intended to address them. In the case of the Mátra Power Plant, for instance, important questions were when the coal-fired blocks and mines would be closed, how many workers this would entail, and which sectors would be affected. And, of course, how the resulting negative impacts would be reduced in the two affected regions.

The documents were completed and made public by August 2022. These revealed that part of the funds would have been used to retrain workers and help them become entrepreneurs. As for micro, small, and medium-sized enterprises (MSMEs), the goal was, on the one hand, to find their role in other sectors, and on the other hand, to create jobs for employees who lost theirs. The plans also included households that heat with the same coal and lignite that powers the Mátra Power Plant. The program would have also addressed their situation, offering opportunities, among other things, to apply for renewable heating systems, and the plans also included a tender to support the energy renovation of residential buildings.

The documents were accepted by the European Commission, which is responsible for the program, at the end of 2022, so the preparation of the tenders could have started immediately. However, nothing substantial happened for years after that.

Reasons for the delay

“The tenders have not been published because none of them have been developed yet,” said one of our sources, adding that the one for SMEs alone has been prepared to some extent, “but even that is far from being called a call for tenders.”

This was partly confirmed by Alexa Botár, the program director of MVTSZ: “By 2024, the draft call for tenders for SMEs could practically be prepared on its own.” However, it has not been published either.

The reasons for the delay are diverse and mostly point in two directions. Among our sources was someone who mentioned the lack of capacity: the Just Transition Fund is a complex program, the management of which requires a sufficient number of specialists. However, this was not available in the Ministry of Energy, which manages the Just Transition Fund, and in the Ministry of Public Administration and Regional Development, which later joined the program.

“The professional resources that would be necessary for this simply were not there,” said a source who requested anonymity. We also wanted to ask the relevant ministries whether this was indeed the case, but despite our requests for an interview and subsequent requests for questions, they did not respond.

Perhaps an even bigger problem was that it turned out that the Mátra Power Plant would not close when the government had promised in the regional plans, and in the case of the mines, the situation became even more uncertain. However, the ministries did not inform the EU authorities about the details. In the regionial plans, the closure of both the power plant and the mines was set for the end of 2025. However, in the meantime, the Russian-Ukrainian war had broken out.

“Because of the war, the expectation was not just a reduction but an increase in production,” recalls Zsolt Medveczki, head of the power plant workers’ interest representation.

The expectation was made official in 2022 in the form of a government decree. In it, the government declared an energy emergency “due to the drastic increase in energy prices caused by the war emergency and the energy shortage in Western Europe,” and in order to avert it, it expected all four units of the Mátrai Power Plant to return to production and “to have continuous production.” (The Mátrai Power Plant originally had five units, of which only one or two units were in operation at the time, and in fact, only since then.)

A power plant expert explained the measure by saying that after the war, the main goal was to solve as much as possible with domestic raw materials. In the developing geopolitical situation, the government did not dare to shut down the power plant. "Because once it's closed, there's no turning back. Once we've said something, we can't go back on it. And then, come what may, whether there's electricity somewhere or not, we won't start it up again. Which, however, could endanger our energy supply," the expert said. The government communicated this precisely by saying that the power plant was needed "for the safe servicing of domestic demand."

It is worth knowing that in Hungary, as everywhere in the world, energy demand varies every hour. If the sun is shining, there is no problem, as solar power plants produce a lot of energy. However, when the sun goes down, the situation is different: that's when the Mátra Power Plant comes into play, which, if necessary, is "loaded up."

This can be done because the coal-fired power plant is very flexible compared to solar solutions. Its operation can be imagined roughly like a gas stove, which can be turned off when needed and turned on when needed. According to our source, the government did not want to lose this flexibility – at least not until a new, non-lignite-fired power plant is built.

The issue was finally resolved in 2023, when the new date was included in the National Energy and Climate Plan, considered one of the most important documents on climate issues, stating that the lignite blocks of the Mátra Power Plant must be shut down not by 2025, but "by 2030 at the latest." This date was later modified again: the latest version, updated in 2024, now states "by 2029 at the latest."

In parallel, thoughts also began on the mines serving the power plant, and it was suggested that they should be kept open as long as possible. It should be known that closing a mine is largely permanent: reopening it is very difficult, because after closure – since the pumps that drain the water breaking through during mining are shut down – millions of cubic meters of water flood the area. In the case of the Visonta mine alone, this amounts to three times the water volume of Lake Velence. Such a decision can therefore only be made once.

"Primarily, I would say that we can even be happy that we are closing a lignite mine and will not emit more carbon dioxide. However, the question can be viewed much more nuancedly," said Béla Viskolcz, university professor and head of the Institute of Chemistry at the University of Miskolc, who has been working with the Mátra Power Plant since 2023 on how lignite could be utilized other than by burning it. The question arose because there is a lot of lignite in the two affected mines, and when we say a lot, we are not exaggerating: this amount of coal would be enough to provide fuel for the country for two hundred years. As the government put it: "leaving it behind would be a crime, not using it would be a mistake."

According to Viskolcz, the solution could be agricultural use; for example, they developed a composite in which, very simply, fertilizer is mixed with lignite, which makes it much more effective. As he said, "with our composite, a farmer can achieve the same yield with significantly less fertilizer use than what is achieved with currently available fertilizers."The next step would be to test the research results in practice, but this requires new resources. It is unknown where the money for this will come from, but the government verbally supports the project. István Nagy, the Minister of Agriculture, for example, stated at a conference this January that "lignite can be the next innovative tool for agriculture, even one that considers sustainability."

They did not react, they were silent

The EU also sensed the changes surrounding the closure of the power plant and the mines, and asked the competent ministries to update the already submitted territorial plans in accordance with the changes, for example to prepare a new timetable for the transition in light of the new dates. However, the competent ministries reacted to this in a peculiar way: instead of showing a timetable or direction, they were silent. “The planning was overshadowed by the fact that the updated timetable for the phase-out of lignite burning and lignite mining was not incorporated into the territorial plans. Almost nothing happened in this matter in 2023, and we waited in vain in 2024,” Alexa Botár said in response to our question.

According to Gábor Telekes, a member of the mining union, “the target dates were not known, and tenders were not really advertised without dates. We saw that December 31, 2025, had become untenable, but the exact date of the actual closure was not known.”

However, the European Commission’s guidelines were clear. “You will get money if you describe when you shut down the units and when you start reducing the consequences in light of the new dates. If you do not describe this, you will not get money,” said Csaba Vaszkó, who formulated the EU guidelines.

We asked the government what the reason for the silence was, but they did not respond to our question either. According to unofficial information, the ministries were waiting for the public procurement for the new, natural gas-based power plant replacing the lignite units to be concluded, and they did not want to go into details until the situation was clarified. The public procurement was finally concluded in January this year.

As it turns out, the new units will be built by the company of Lőrinc Mészáros, an entrepreneur considered by many to be Viktor Orbán’s stooge, who will thus profit twice from the Mátra Power Plant. Once now, by building a new one in its place, and previously, when he bought it and then sold it to the state energy company, MVM. The main owner was previously a German company, which sold the power plant to Lőrinc Mészáros and his business partners for 5.9 billion forints in 2018. They then sold it to MVM for 17.4 billion forints two years later.

This is how we arrived at May of this year, when it seemed that something was finally moving. At least those involved in the planning received, after almost two years, updated versions of the territorial plans. However, these did not really bring any relief at first.

The new plan caused a surprise

The territorial plans were almost completely rewritten, for example, the population was simply removed from them. As we wrote, the previous plans included, for example, support for the energy renovation of residential buildings, but the new ones no longer mention this. According to Csaba Vaszkó, this was removed from the plans because “it would have been necessary to maintain contact with many clients, and the accountability would have been very difficult”. However, there are EU member states where this has been resolved, and “it could have been prepared for this in 5 years”.

Alexa Botár said that an argument was also raised that the Home Renovation Program, which also aims at energy modernization, addresses similar problems. However, this program is intended for those who have their own resources and are creditworthy, while the majority of households heating with lignite and affected by the just transition are not like this.

“In addition, the Just Transition Fund’s population measures should be tailored specifically to the households and needs of the three counties. It is understandable that the planning authorities are under increasing time pressure, and they have made significant efforts and consultations, but unfortunately the amended territorial plans have become weaker, not stronger, in terms of a just transition,” added Botár.

Another major change in the new plans affected SMEs, which slipped to second place among those supported in terms of the amount allocated to them, compared to industrial parks – so much so that industrial parks were not even mentioned in the original plans. In comparison, the new plans state that 30.8 billion forints would be spent on the development of industrial parks and 26.4 billion forints on SMEs.

The idea behind supporting industrial parks in the area may be that if they are developed, more and more companies will come to the region, which will help absorb the workers who lose their jobs. And here we come to one of the most important questions: does it serve the interests of the workers better if the government strengthens the SME sector or if it brings one or two large companies to the region?

The president of the power plant's trade union says that the solution lies somewhere in the middle. According to Zsolt Medveczki, it would be ideal if, in addition to SMEs, larger, capital-rich enterprises were also involved in the transition, whether through government support, tax breaks, or wage subsidies. If only because he believes that there is a fear that small and medium-sized enterprises will not be able to hire large numbers of the released workforce. In his opinion, the best thing would be if "the released employees could find employment in the MVM group, utilizing their already acquired knowledge and experience."

"The plan was for small businesses to provide jobs for the laid-off workers. If we only look at mining, nearly 1000 workers are affected by the transition, with an additional 800-850 people at the power plant, and approximately 10,000 people including related businesses and families. How many 10-20 person SMEs would need to be involved to provide jobs for so many people? From the very beginning, we asked to also consider large and multinational companies," argued the BDSZ president. Gábor Telekes emphasized, however, that he fully agrees that strengthening the SME sector is also necessary.

According to Csaba Vaszkó, another problem is that the Just Transition Fund, at the EU level, explicitly does not intend its resources for large companies, but rather places emphasis specifically on SMEs: "large companies should be supported with greater government involvement, not by using the small budget of the Just Transition Fund for this purpose." He added that there are member states where it is understandable to support large companies from the program, but their budget is much larger. Examples include Poland, Germany, and the Czech Republic. In their case, this direction is understandable, but Hungary's budget is small, and large companies would absorb it.

Furthermore, according to the sustainability expert, it also matters that while calculations were made regarding the effects of strengthening the SME sector on the affected regions and employment, he did not see anything similar concerning industrial parks.

Alexa Botár argued similarly: as she said, although the plans indicate that industrial parks would take a significant portion of the total budget, perhaps about a third, it is not elaborated what employment effects they would generate. "Who will settle there? Moreover, there are already many underutilized industrial parks in these counties. What is the guarantee that these will not remain underutilized and will adequately contribute to the just transition and decarbonization? The original regional plans had verifiable information/data supporting the measures, and these were based on studies."In the current situation, there are no substantive figures or justifications regarding industrial parks. This makes it difficult to make a decision."

According to Telekes, however, the criticisms regarding underutilization do not take into account the freed-up workforce. “Bükkábrány is the best example. There is a village, there is an industrial park. Currently, only a few businesses operate there, because the mine has absorbed the workers so far. However, if this number of people is freed up, the situation will be different.”

Based on the new territorial plans, not only did the SME sector fare worse, but the amount that could be spent on retraining was also reduced, which Botár says is a problem because the Just Transition Fund should be based on employment. However, this is where the fact that it is still unknown what will happen to the mines and miners comes into play, as the exact scenario for this has still not been received.

This may be because if Hungary submits the current territorial plans, they cannot be changed. So whatever they write about mine closures, they must be implemented, and in the way that is stated in the plans.

According to Telekes, the European Commission needs flexibility in this regard, and he hopes that Hungary will receive this. According to him, we are talking about a conditional approach in the case of mines for now: the system also includes the possibility of using lignite as a soil improver in agriculture. This requires finding a suitable market, but it may also be the case that this project is not sustainable in the long term. “But then the workers are in trouble,” he said. “So as a lobbyist, I think we need to have plans A, B, C, D.”

The fate of the mines may also raise questions of entitlement. The Just Transition Fund focuses on declining industries, that is, those that are either going to disappear or are in decline. If lignite mining continues, however, it is no longer considered a declining industry.

This raises several dilemmas. Why would we be entitled to the money we receive because mining is going to disappear if mining is not going to disappear? Mining was also one of the bases of the allocation. We receive as much money as we need because the miners’ jobs are going to disappear, and this money can be used to reduce the negative impacts. But if it doesn’t stop, there will be no negative impact.

The plans are not yet final, and the parties are still negotiating about them.

We contacted the European Commission, but they refused to comment. What seems certain is that the resources of the Just Transition Fund have been reduced: instead of 250 million euros, they are now counting on only 200 million euros, i.e. not 100, but 80 billion forints.

The reasons for the reduction, the corruption risks associated with the fund, and the situation of the third affected county, Baranya, will be discussed in the next part of our article series.

The article was produced with the support of Journalismfund Europe.