Hungary is in talks with France about the possibility of enlarging the French role in refurbishing its nuclear programme. This could eventually lead to the replacement of Russia at Hungary's only atomic power plant, marking a shift in Prime Minister Viktor Orban's pro-Moscow stance.
Despite pressure from other EU states anxious to target Russia's nuclear exports with sanctions because of the war in Ukraine, Orban has maintained his cooperation with Russia.
According to a report in The Financial Times, the €12bn expansion of Hungary's Paks nuclear power plant, led by Moscow's state-owned Rosatom and financed mostly from a Russian state loan, is a flagship project in Hungary's economic cooperation with Russia.
This month the Hungarian news agency MTI reported that Hungary would increase French involvement in the Paks NPP expansion project.
It quoted Foreign Minister Peter Szijjarto as saying "the Paks expansion cannot be successful without French cooperation, since the control technology system, which is considered the 'soul of the power plant', was developed by the Franco-German consortium".
The expansion plans for the Paks plant date back to 2014 when Orban signed a deal with Russian President Vladimir Putin.
However, the ongoing war in Ukraine, which Orban had expected to be over quickly, has raised questions over the Paks timeline and the feasibility of long-term cooperation with Moscow. This has forced Hungary to look for potential alternatives.
Increased pressure
While Hungary and France have blocked efforts by other EU member states to directly sanction Rosatom, there is increasing pressure on the bloc to find ways of restricting the Russian company's future business.
The longer the war in Ukraine drags on and the sanctions regime lasts, the more likely it becomes that Russian participation in the project may have to be phased out altogether. Whether that means replacing Rosatom with another main partner or building an entirely new power plant is not clear.
Hungary is under a time constraint as it has banked on nuclear energy to complete its green transition, alongside renewable and other sources.
Paks is Hungary's only operating nuclear power plant, whose four Soviet-era reactors have been upgraded and equipped with western control systems, extending their lifespan into the 2030s.
Budapest wants to rely on nuclear power for most of the rest of the century, according to the government's energy strategy.
French President Emmanuel Macron and Orban discussed the Paks project and cooperation on nuclear at a meeting in Paris last week. Hungary is not yet ready to abandon the project altogether or replace the main Russian reactor design.
The country is intent on saving as much as possible from the originally approved plans to avoid having to re-approve them with local regulators, as well as those of the EU and the International Atomic Energy Agency, a process that could take years.
The loss of the Paks project would be a serious blow to Rosatom, which has lost its foothold in all other EU countries in recent years, leaving Hungary as the only EU country where Rosatom is still doing business.
It would also mean a shift from Orban's pro-Russia stance. Just days ago he declared that Vladimir Putin "would not be arrested" in case of a visit to Hungary, in spite of an arrest warrant recently issued against the Russian President by the International Criminal Court in The Hague.
Hungary is also one of a few EU member states that still receives Russian gas, and Orban has repeated on several occasions that he is not happy with EU- and Nato-sponsored military support for Ukraine.
No sanctions?
Meanwhile, Moscow's nuclear energy exports have not been subject to EU sanctions, in spite of Kyiv's request for a complete embargo on Russian nuclear exports.
Eight rounds of sanctions and targeted action against Moscow's energy exports did not include shipments of nuclear fuel from Russia that are still being sent to member states of the European Union, including France.
It was precisely because of the Hungarian Paks project that Victor Orban threatened to veto any EU sanctions related to nuclear energy.
"We will not allow the plan to include nuclear energy into the sanctions be implemented," the Hungarian premier said as recently as January. "This is out of the question."
Ariadna Rodrigo, EU sustainable finance manager at environmental group Greenpeace, was quoted by US TV station CNBC as saying that it is “absolute madness” for the bloc to continue bankrolling the Kremlin by exempting Russian nuclear trade.
In its explainer on sanctions against Russia, the European Commission does point out that export of "food and fertilisers coming out of Russia" are permitted as well as "overflight of [EU] airspace by Russian aircraft if that is required for humanitarian purposes," but no reason is given for the absence of measures against the importation of Russian nuclear fuel.
