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Fair energy transition at local level – challenges, financing and local perspectives, Hungary, Budapest, 12 May 2026

Updated: 2 days ago

On 12 May 2026, the Hungarian National Association of Local Authorities (TÖOSZ) organised a local stakeholder workshop within the framework of the Active Cities – Fair Cities project. The event took place at the TÖOSZ Information and Coordination Centre in Budapest and brought together representatives of local governments and relevant stakeholders to discuss the social, financial and governance dimensions of the green transition at local level.



The workshop focused on the question of how the green transition and energy efficiency policies can be implemented in a socially fair and inclusive way, particularly in the context of municipalities, vulnerable communities and local public services. Special attention was given to the financing of energy efficiency investments, the role of local authorities in supporting citizens and communities, and the importance of building social trust around climate-related policies.

The event was opened by Katalin Kolin-Sabján, international secretary of TÖOSZ and coordinator of the Fair Cities project. In her introductory remarks, she highlighted that the green transition can no longer be understood only as a technological or environmental issue, but increasingly as a social and democratic challenge. She stressed that for many citizens climate transition is experienced through everyday realities such as rising energy costs, housing insecurity, access to services and the fear of social exclusion.

She underlined that municipalities are in a unique position because they are the level of governance closest to citizens and local communities. According to the presentation, local authorities play a key role in maintaining social trust, mediating between policy objectives and local realities, reaching vulnerable groups, encouraging community participation, and supporting practical local solutions.


The presentation also reflected on experiences gathered during previous Fair Cities activities and international workshops. Several European examples were discussed in order to demonstrate how the challenges of climate adaptation, energy transition and social fairness are interconnected across Europe.

Particular attention was given to the Slovenian city of Velenje, where the transition of the district heating system has become a major local political and social issue. The case illustrated how ambitious energy transition measures, including building renovation, renewable energy integration and modernisation of district heating infrastructure, can create tensions when citizens perceive the costs of transition as unfairly distributed. Reference was made to public protests organised in Velenje in early 2024 against increasing heating prices and dissatisfaction with local responses to the crisis.


The workshop also highlighted positive examples of socially inclusive approaches to climate transition. One of the most important Hungarian examples presented was the “Social Solar Power Plant” programme of the Hungarian Maltese Charity Service. The initiative demonstrates how renewable energy production can be linked with social support measures for families living in energy poverty. Revenues generated by solar energy production are used to support safer heating systems, legal electricity access and healthier housing conditions in disadvantaged settlements. Participants discussed how such initiatives can contribute simultaneously to environmental sustainability, reduction of energy poverty, community resilience, and social cohesion.


The second part of the workshop focused on the financing dimension of the green transition. The invited expert speaker was László Bihari, Chair of the EEFC Hungarian Hub and representative of the National Energy Agency. In his presentation he introduced the activities of the European Energy Efficiency Financing Coalition (EEFC), an initiative launched by the European Commission to support the large-scale mobilisation of private capital for energy efficiency investments.


According to the presentation, achieving the European Union’s energy efficiency and climate objectives requires very significant investment volumes both at EU and national level. In Hungary, the estimated annual additional investment need related to energy efficiency measures is approximately HUF 612 billion. The building sector alone is responsible for around 44% of final energy consumption, while approximately 2.6 million homes require energy renovation.


Mr Bihari also introduced the structure and objectives of the EEFC Hungarian Hub and explained its role as a platform connecting government actors, financial institutions, technical experts, market stakeholders, and local authorities. Particular emphasis was placed on two thematic working groups: the Working Group Supporting the Development of the One-Stop-Shop (OSS) Ecosystem, and the Working Group Supporting the Development of the Energy Service Company (ESCO) Market. The presentation explored how integrated OSS approaches and ESCO-type financing models may help municipalities, citizens and building owners to access energy efficiency investments more easily and with lower administrative and financial barriers.

Participants also discussed the importance of reducing project preparation barriers, improving access to information and technical assistance, aggregating smaller projects into “bankable” investment portfolios, and strengthening cooperation between local governments and financing actors.


During the moderated discussion, participants reflected on the main challenges currently faced by municipalities in relation to energy transition and renovation projects. Several recurring issues were identified, including limited local financial capacities, lack of technical expertise, insufficient project preparation support, low public trust, and difficulties in reaching vulnerable groups and smaller settlements. At the same time, the discussion confirmed that municipalities can play a crucial facilitating role in local awareness raising, mediation between citizens and financing programmes, supporting participation, and promoting socially fair local transition pathways.


The workshop concluded with a shared understanding that the success of the green transition will largely depend on the local level and on the ability of public institutions to ensure that sustainability objectives are implemented in a socially inclusive and democratically legitimate way. Participants agreed that the Fair Cities project provides an important European framework for exchanging experiences and strengthening cooperation among local authorities and stakeholders working on fair and inclusive climate transition policies.



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