Consequences of environmental compliance breaches in priority investment projects

A bill submitted to Parliament in autumn 2026 could further strengthen the importance of environmental and nature conservation compliance in the case of priority investment projects. Under the proposed rules, an environmental or nature conservation authority proceeding could directly affect or suspend the construction permitting process of an investment project. If a final decision establishes an environmental or nature conservation infringement, no construction or establishment permit could be issued until the unlawful condition has been remedied.

One of the most significant elements of the proposed legislation is that it would create a closer link between environmental and nature conservation authority procedures and the construction permitting process of priority investment projects.

Under the proposed framework:

• If an environmental or nature conservation authority initiates proceedings in connection with a priority investment project, it would be required to notify the construction authority.
• Based on such notification, the construction authority would suspend its ongoing permitting procedure until the environmental or nature conservation authority’s decision becomes final.
• If the authority ultimately establishes an environmental or nature conservation violation, then, pursuant to the legislation designating the project as a priority investment, no new construction or establishment permit could be issued until the unlawful condition has been eliminated, but for a minimum period of six months.

The transitional provisions of the bill may also be significant for projects already underway. In certain cases, the new rules could apply to final authority decisions issued within the six months preceding the legislation’s entry into force, provided that the unlawful condition continues to exist. This could materially affect project timelines and the ability to obtain further permits.

While environmental infringements have always involved considerable legal and financial risks, the proposed amendment could transform environmental compliance into an even more direct project scheduling risk.

An authority proceeding may not only concern the specific environmental issue at hand but may also delay the next construction or permitting milestone of the investment project. In the case of large-scale developments, the resulting financial impact, such as construction delays, increased financing costs, potential contractual penalties, or postponed commencement of operations, could substantially exceed the amount of the environmental fine itself.

In addition, Hungarian environmental legislation already associates certain serious environmental violations with funding-related consequences. An entity committing a significant environmental infringement as defined by law may be excluded for a specified period from receiving subsidies related to its environmental use activities.

For large-scale investment projects, it may therefore be advisable to separately assess how an environmental violation could affect state aid, incentives, or other support schemes associated with the project.

Should the bill be adopted, environmental compliance could become even more closely connected to critical permitting milestones. Accordingly, developers and operators of major investment projects may wish to:

• Map permitting procedures in advance and identify which environmental or nature conservation authority proceedings could represent critical risks to project timelines.
• Continuously monitor compliance with permit requirements throughout the entire project lifecycle, from planning and construction to operational phases.
• Establish appropriate monitoring and reporting systems to enable the early identification and management of deviations from emission limits, permit conditions, and reporting obligations.
• Strengthen contractor and supplier oversight mechanisms, and ensure that contractual arrangements adequately allocate responsibilities related to environmental compliance and the consequences of potential violations.

If you would like to assess how the proposed changes may affect an ongoing or planned investment project, or review the related regulatory, compliance, or funding risks, Deloitte’s specialists would be pleased to assist.