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Hungary urges EU to start infringement procedure against Bulgaria concerning the energy tax on Russian gas

Hungary’s Minister of EU Affairs János Bóka has issued a strong critique against Bulgaria’s new energy tax on Russian natural gas, highlighting potential violations of EU law and a threat to regional energy security. In a Facebook video, Mr Bóka announced steps to challenge the measure, including a call for an EU infringement procedure against Bulgaria.

Earlier in October, Bulgaria introduced a tax on Russian-owned gas operations: a charge of 20 Bulgarian lev (approximately 10.2 euros) per megawatt-hour (MWh) of natural gas produced by Russia. According to the Bulgarian government, the tax is expected to generate an additional 1.1 billion euros in revenue. The levy will apply to grid operators and final importers, although an exception for compressed fuel transported on specific containers has been included in the bill.

According to the Hungarian minister of EU affairs, the tax, which applies to gas entering or passing through Bulgaria, was adopted without prior consultation with Hungary and poses a significant threat to the energy security of both Hungary and the broader region.

A threat that was also previously recognised by Belgrade as well. In fact, while Bulgaria has not received any Gazprom shipments in the past year, it allowed Russia to use the TurkStream pipeline that passes through the country to supply Serbia and Hungary,

Mr Bóka strongly criticised the Bulgarian measure, stating that it contravenes EU law by effectively acting as a customs duty, thus undermining the principles of the EU’s internal market, customs union and common trade policy. He also highlighted its violation of the Energy Charter Treaty.

On the other hand, according to Bulgarian Prime Minister Nikolay Denkov, “there is a good chance that this [tax] would create real competition” on the gas market “from which the whole of Europe would benefit.”

Minister Bóka has urged the European Commission to initiate an infringement procedure against Bulgaria, requesting also, in the meantime, that Bulgaria suspend the energy tax until the conclusion of the procedure. If the European Commission fails to respond adequately, Hungary said to be prepared to escalate the matter to the Court of Justice of the European Union before the end of the year.

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