The project is one of several announced Wednesday, to be backed by total investment of EUR 121 million (USD 145.59 million) for new integrated projects under the program.

"Gradual phasing-out of lignite (brown coal) plays a key role in Hungary's National Energy and Climate Plan," the Commission said as quoted by S&P Global Platts.

Mátra is Hungary's last remaining lignite-fired power plant but accounts for nearly 50% of the country's energy sector CO2 emissions. The goal of the project is to decarbonize the plant by 2030, via a mix of renewable energy, energy storage and natural gas technologies, and close two associated open-cast lignite mines by the same date. The phase-out would reduce Hungary's greenhouse gas emissions by 14%, or around 6.5 million metric tons of CO 2 per year, it said.

Hungary's National Energy and Climate Plan, adopted by the government on Jan. 8, 2020, aims to reduce greenhouse gas emissions by 40% by 2030 compared to 1990 levels, and increase the share of renewables to 20% in the generation mix. Other projects selected for support under the LIFE program included implementation in the Malopolska region in Poland of a regional action plan for climate and energy, and restoration in Ireland of around 10,000 hectares of peatlands with high carbon storage potential.