Geothermal concession – new rules, new opportunities

A new chapter is beginning in the renewable energy sector in Hungary: the utilization of geothermal energy is once again subject to state concession in certain areas. Amendments to the Mining Act in August 2025 and the connecting SZTFH (Supervisory Authority for Regulated Activities) regulations reintroduced the concession system for this field. The goal of these changes was to ensure that the exploration, extraction, and use of domestic geothermal resources take place within a transparent, secure, and professionally grounded framework under a unified set of rules. At the same time, this shift represents a significant change for municipalities, businesses and energy developers involved in the sector, as they will now need to obtain concessions to operate in designated areas.

One of the most important elements of the new regulation is the designation of “closed geothermal areas”. These are regions where the underground thermal water reserves are particularly sensitive and vulnerable, so their use for energy purposes can only take place under a concession-based management system. Among these designated zones is Budapest and its wider surroundings, covering an area of approximately 939 square kilometres. This means that in the future, all new geothermal projects in and around the capital will require state supervision and approval before they can begin.

The professional community has responded to the reform with mixed feelings: while some see the concession model as a way to ensure greater long-term predictability and sustainability, others fear that the process could become more complex, making it harder for smaller players to enter the market. One thing is certain, however: geothermal energy, as a clean and domestic resource, may play a strategic role in the future of Hungary’s energy planning, and this new regulation marks the restart of that journey.