Hungary Navigates Energy Choices Amid Shifting Alliances

Hungary is facing pivotal energy decisions as it seeks to balance its ties with Russia and the European Union (EU). Last month, the EU announced plans to purchase $750 billion worth of energy from the United States. This move is seen as a step towards reducing dependence on Russian energy sources during a time of heightened geopolitical tensions.

Ursula von der Leyen, President of the European Commission, emphasized the urgency of this transition, stating, “We want to absolutely get rid of Russian fossil fuels, and therefore it is much welcome to purchase the more affordable and better LNG from the United States.” Despite the ambitious target of sourcing $250 billion annually in oil, gas, and nuclear energy from the U.S., experts express skepticism regarding the feasibility of achieving this goal within the timeline of President Donald Trump’s administration.

The situation is particularly complex for Hungary, which currently relies on Russia for approximately 75 percent of its natural gas, between 60 to 80 percent of its oil, and 100 percent of its nuclear fuel. The ongoing conflict in Ukraine has intensified discussions within the EU about energy diversification, and Hungary’s commitment to Russian energy has raised concerns among its EU partners.

Shifts in Nuclear Energy Alliances

In a notable development, Hungary’s nuclear energy firm, Hunatom, has partnered with Polish developer Synthos Green Energy to explore the construction of up to ten BWRX-300 Small Modular Reactors (SMRs). Designed by GE Hitachi Nuclear Energy, based in Wilmington, North Carolina, these reactors may represent a significant shift in Hungary’s energy landscape. Analysts suggest that this cooperation could indicate Hungary’s intention to pivot away from Russian energy dependence.

According to the Atlantic Council, “This civil nuclear cooperation agreement might signal a policy shift, suggesting Hungary is looking away from Russia and toward the EU and United States.” The long-term implications of such partnerships are substantial, as nuclear agreements typically establish relationships spanning up to one hundred years.

While Hungary explores these new energy avenues, it remains economically tied to Russia, particularly through the Paks Nuclear Power Plant, which supplies nearly all of the country’s electricity. Hungary has no plans to phase out Russian technologies at Paks; rather, it aims to upgrade them. The country’s reliance on Russian nuclear fuel is unlikely to diminish soon, as the U.S. is not a major uranium producer and imports a significant portion of its supply.

Challenges and Future Directions

Amid these developments, Hungarian Prime Minister Viktor Orban recently urged the EU to reconsider a ban on Russian energy imports. He warned that such actions could lead to steep increases in energy prices for Hungarians, particularly in light of the ongoing conflict in Iran, which has further strained global energy markets. “This is a serious threat. Therefore, we must remove in Brussels the regulations and bans on Russian energy,” Orban stated.

Despite the EU’s efforts to pivot away from Russian energy, Hungary’s apparent reluctance to sever ties indicates a careful balancing act between EU obligations and Russian influence. The Atlantic Council remarked on this dynamic, noting, “Hungary’s apparent intention to continue its dependence on Russian technologies may indicate that it is merely hedging its bets and walking a fine line between its EU membership on the one hand, and Russia’s influence on the other.”

While the introduction of SMRs represents a step toward diversification, it is unlikely to match the output of Hungary’s existing energy infrastructure at Paks. Nonetheless, these developments signal a willingness for increased collaboration between Hungary and the United States, indicating a potential shift in Hungary’s long-standing energy policies. The evolving landscape of energy partnerships in Europe will be closely monitored as Hungary navigates its position within the broader geopolitical framework.