To achieve the EU’s 2050 climate neutrality targets, the EU has created a Green Deal Action Plan, which includes a Sustainable Finance Action Plan. As part of this, the EU Taxonomy (Regulation 2020/852) came into force on 12 July 2020, setting 6 environmental targets:
Along the lines of the above objectives, green activities can be identified that contribute significantly to the transition to a sustainable economy.
The activities covered by the Regulation include forestry, manufacturing, energy, water and wastewater management, transport and haulage, infocommunications, construction and real estate. The eligibility must be assessed.
On 31 August 2021, the Hungarian National Bank (MNB) announced the Green Capital Relief Scheme for corporates and municipalities, and extended its conditions in March 2022. This introduced a green financing incentive into the lending mechanism of commercial banks.
In practice, this means that lending for certain “green” activities can benefit from a so-called “capital relief” if the appropriate requirements are met. In case of real estate, for example, the discount can be 5% or 7% (to encourage credit institutions to finance more green projects, as they can substantially reduce their capital requirements, which the MNB expects to ensure the stability of the banking system.)
The MNB has identified three possible ways in which individual properties can qualify for the discount:
according to the EU Taxonomy, which is based on the EU Taxonomy Climate Delegated Act Annex I, point 7, sub-points 7.1, 7.2 and 7.7. Available discount: 7%
according to the “Hungarian specific” taxonomy, which is a version of point 1 tailored to domestic industry practices and specificities. Available discount 5%
according to green building certification (BREEAM, LEED, DGNB, etc.), which builds on the application of international green building certification standards. A 5% discount is available.
In relation to compliance under points 1 and 2, the MN6 Energy Agency team supports interested companies with consultancy and EU Taxonomy eligibility assessment services in their real estate related activities, which activities can be the following: