Background information

Under government decree 670/2021. (XII. 2.) on changes to the Electricity Act in light of the pandemic emergency, SMEs will be able to buy electricity at a preferential rate. Household electricity customers were already in the scheme (from 1 January 2013) offering lower utility rates even before the COVID-19 outbreak, but now a select group of SMEs can join this preferential circle of electricity buyers.

Content of measure

Companies with annual net revenue of HUF 4 billion (€11.11 million) or less and no more than 10 employees are eligible for the utility cost cut, which only applies to electricity and for companies registered before 22 November 2021. The SMEs must file a request to make use of the measure, which will be available “as long as the prices justify it,” according to the government, but the decree ordering the preferential price band specifies that its effect is until the end of the pandemic emergency, currently 30 June 2022.

The proposal for the measure had noted that the targeted group of companies mainly operate in fields where it is not possible to transfer the burden of higher energy prices to their customers. This situation means that these companies are losing position in profitability and competitiveness, they can only operate at a loss and would soon go bankrupt if the government did not interfere.

Use of measure

The measure could help 120,000 SMEs, including 104,000 agricultural and 3,100 food processing enterprises, and it could prevent the bankruptcy of about 21,000 struggling SMEs, according to government sources.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	SMEs	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: N/A

Involvement

No known involvement of social partners.

Views and reactions

Social partners did not express any views on this measure.

Sources

• 19 November 2021: Energy crisis: 21000 SME bankruptcies to be prevented (www.portfolio.hu)
• 19 December 2021: Govt decree 670/2021