Critics argue that the project’s reliance on Russian financing and the legal scrutiny over EU state aid rules undermine fair competition and raise geopolitical concerns.

Hungary’s plan to expand the plant with two Russian reactors, each with a capacity of 1.2 GW, was awarded to Rosatom without a tender in 2014, with delays pushing scheduled operation into the early 2030s.

The Court of Justice of the European Union has annulled the European Commission's 2017 approval of Hungarian state aid for the Paks II nuclear project, citing failure to properly assess whether the direct award of contracts to Russian company Rosatom complied with EU public procurement rules.

Hungary’s government insists the court ruling does not violate EU law and remains committed to completing the project, despite opposition calls to halt Russian involvement and broader EU concerns over energy dependence.

The original Paks plant, built in the 1980s, has four reactors with a total capacity of 2,000 MW, and the new reactors are intended to replace aging units, with operational life expected to end between 2032 and 2037.

Hungary granted Rosatom a license to build Paks-2 in late summer 2022, and the EU approved the continuation of construction in May 2023, despite ongoing delays.

This ruling challenges the legality of bypassing EU tendering procedures, which allowed Hungary to award the project directly to Rosatom without a competitive process, and raises questions about the project's legal and financial compliance.

The legal challenge was initiated by Austria in 2018, which argued that the aid violated fair competition principles; the recent ruling overturns a previous dismissal by a lower EU court, creating uncertainty over the project’s future.

As a result, Hungary faces uncertainty over the future of the Paks II project, which involves a €12.5 billion investment primarily financed by Russian loans, with construction scheduled to start in November 2025 after delays.

The project is part of a cooperation agreement between Russia and Hungary, with Russia committing a €10 billion loan and Hungary planning to contribute an additional €2.5 billion, aiming to expand the existing nuclear plant near Budapest.

Environmental groups such as Greenpeace have criticized the ruling, viewing it as a failure by the EU to support renewable energy and reduce dependence on Russian nuclear technology, especially amid EU efforts to phase out Russian fossil fuels.

The recent court decision could weaken Russian nuclear influence in Europe, prompting the European Commission to review all nuclear-related state aid to ensure compliance with EU law and promote sustainable energy.

Hungary maintains that the court’s ruling does not prevent the project from proceeding under the current schedule, and officials like Minister János Bóka and Foreign Minister Peter Szijjártó have affirmed the project’s continuation.