Hungary introduced its carbon tax in 2023, set at €36 (US$38.70), targeting installations under the EU ETS that emit more than 25,000 tons of CO2e annually and receive at least 50% of their allowances for free. This tax, which applies retrospectively from January 2023, originally had a higher rate of €40/tCO2 but was reduced to the current level, reflecting adjustments made to the emission threshold. A 15% transaction fee applies for any transfer of allowances, and eligible taxpayers can reduce their tax base by 50% if they meet specific conditions. The carbon tax is closely linked to the EU ETS framework, incentivizing emissions reductions among participating installations.