Is Hungary ready to move away from Russian gas? Preparations have secretly begun

Europe’s gas market has come under sustained pressure in recent years, driven largely by the dramatic collapse in Russian imports. Hungary has so far maintained a stable position, yet the post-2028 era could bring unprecedented challenges: are we ready to move away from Russian gas?

Over the past three years, Central and Eastern Europe’s gas market has undergone a structural shift of historic proportions. While European industry remains unable to meaningfully reduce its dependence on natural gas, the region is experiencing an infrastructural shock that fundamentally disrupts its previous operating model, Portfolio reports.

Declining consumption, stable role: gas remains essential

Natural gas continues to be one of the most critical energy sources for European industry — cleaner alternatives still cannot provide the continuous, high-intensity energy supply required by sectors such as chemicals, metals, food and paper production.

Although Europe’s overall gas consumption has been declining in the long term, ABN Amro’s analysis shows that EU usage increased by 3% between January and September 2025. Demand also rose in two-thirds of member states, with Austria recording a 14% increase and Portugal 12%.

Gas’s role in industry remains almost unchanged. In 2023, gas accounted for 31% of industrial energy use — roughly on par with electricity — and still around 5% above 1990 levels. Emissions data reinforce this: 65% of industrial CO₂ emissions come from fossil fuel combustion, with gas being the largest contributor.

Multiple shocks hit the Central European gas market

Meanwhile, Central Europe’s infrastructure has faced extraordinary pressure. Between 2022 and 2025, three major shocks struck the region’s gas market: an 80% drop in Russian exports, the mass termination of long-term EU transit contracts, and a reversal of gas flows.

Instead of the traditional east–west direction, more gas is now flowing from west to east, particularly towards Ukraine — a shift that has caused capacity shortages and rising tariffs across several networks.

In Austria, entry tariffs will double from 2026, while exit fees will rise by 77%. Slovakia’s transit revenues have almost halved in the past seven years, and the 70% tariff hike planned for 2026 could even bring an end to eastward transit.

Countries across the region are trying to adapt. The Czech Republic, for instance, has begun lowering tariffs and is opening up towards German LNG routes.

Could Hungary detach from Russian gas?

Hungary, by contrast, has maintained one of the most stable tariff systems in the region, thanks partly to the continued availability of cheap Russian gas via southern routes and the stable tariffs introduced after the 2021 price adjustment. The domestic system operator also works under strict cost regulation, requiring 1.5% efficiency gains each year.

However, this stability is fragile. If EU plans lead to a complete halt of Russian gas flows from 2028 onwards, Hungary will face the same risks now confronting its neighbours.

• IMF warns: Hungary could suffer Europe’s worst economic hit if Russian gas supply ends

This is why extensive diversification of the gas market is already underway. The Krk LNG terminal will provide Hungary with 1 billion cubic metres of capacity annually until 2028, while Engie (2028–2038) and Shell (2027–2036) will supply 0.4 and 0.2 billion cubic metres of LNG per year, respectively.

From 2030, pipeline supplies of 1.5 billion cubic metres a year could arrive from Azerbaijan’s Shah Deniz field. These options offer tangible alternatives should Russian imports cease — albeit at higher cost levels.

The biggest question is how the network’s utilisation will develop. Numerous regional examples show that falling volumes lead to tariff increases aimed at compensating lost revenue, which then trigger further volume declines, creating a tariff spiral. Hungary has so far avoided this, but the high tariffs and limited capacities of new west–east routes could easily feed into domestic prices.

In this shifting landscape, moving away from Russian gas may soon become less of an option and more of a necessity for Hungary.