The European Commission (EC) has approved a Hungarian support scheme for renewable energy, saying that it will help Hungary reduce its CO₂ emissions — and is in line with EU rules on state aid.

Margrethe Vestager (pictured), the European commissioner for competition, said: “The Hungarian support scheme will increase the share of green energy in Hungaryʼs energy mix, while preserving competition in the electricity market.”

The scheme, which has an annual budget of up to HUF 45 billion, will involve a feed-in tariff for installations with a capacity below 500kW and a premium over market prices for installations above 500kW.

For installations with a capacity above 1MW, as well as for wind installations, the premium will be determined in a competitive bidding process.

The EC noted that Hungary will partially open up its renewables support scheme to foreign producers to avoid discrimination.