State Aid Compatibility Beyond State Aid Law? Public Procurement and the Inextricable Link Doctrine After Paks II

Abstract The Court of Justice's annulment of the Commission's approval of state aid for Hungary's Paks II nuclear project carries significance far beyond the resolution of a single dispute. Following the Russian invasion of Ukraine, many EU Member States began prioritising policy objectives such as energy security and decarbonisation over common market rules. In the nuclear sector, this has manifested itself in government efforts to select technology suppliers directly and provide state aid without a public procurement procedure. However, the Court of Justice of the European Union, in its 2025 judgment regarding the Paks II nuclear power plant, holds that broader policy objectives cannot displace existing energy market rules, including those governing state aid. Not every procurement issue needs to be automatically examined as part of a state aid review. However, where the procurement dimension is inseparably linked to the aid measure and has been raised during the administrative procedure, the Commission must address it in a reasoned and self‐contained manner. The ruling thus underscores the importance of EU internal market rules and instruments when granting state aid and could have a significant impact on the development of energy infrastructure in the EU.