Briefing Paper

Climate & Energy Snapshot: Hungary

By , , ,

Budapest parliament

This Briefing Paper presents an assessment of the political economy of Hungary with regard to the low-carbon transition. This paper is part of a series of briefings on the four Central European states forming the Visegrád Group. 

Hungary does not perceive itself as a high-carbon economy and therefore sees little necessity to reduce carbon emissions. This perception is correct when comparing Hungary’s energy intensity performance to the rest of the Visegrád states: its energy-intensity is the lowest among the four countries with 224 kgoe per €1,000 (2015). Compared to the EU-average of 120.4 kgoe per €1,000), however, Hungary is underperforming. This is mainly due to the poor energy efficiency performance in the residential buildings sector.  

Hungary’s energy strategy and its decarbonisation plans rely heavily on nuclear power. In 2015, nuclear covered over 60% of electricity generation. Hungary is planning to further increase its reliance on nuclear power with the expansion of the Paks nuclear power plant, thereby strengthening its ties to Russia, which is financing the new plant and supplying all of Hungary’s nuclear fuel. The Hungarian government frames nuclear power as a guarantee for energy independence, despite the exclusive reliance on Russia. The Government is expecting energy use to increase in the future and Hungary’s nuclear policy is based on this assumption.  Nuclear energy is the key low-carbon technology that Hungary is relying on.

Although mitigation measures are not very prominent in the Hungarian public debate, Hungary’s population is becoming increasingly aware of climate change as a significant risk to their homes and lives. Hungary is the most climate-vulnerable country of the Visegrád Group. Around 80% of the population state to be feeling the effects of climate change in their daily lives. Especially, heat waves (52% of area at risk) and inland floods (23% of area at risk) are posing a risk to the Hungarian population.

The Hungarian government itself is the largest obstacle to a low-carbon transition. It has put in place serious hurdels for renewables, such as a new regulation that de facto prohibits new wind power projects, and a new levy on solar power. Businesses and media are increasingly controlled by people close to the government, and the influence of civil society is being repressed since Orbán came to power in 2010.

The only active actor in favour of a low-carbon transition that can and has already influenced the Hungarian political system is the EU. Hungary develops its energy and climate legislation in accordance to the EU framework (e.g. Renewable Energy Directive and Energy Efficiency Directive) but the implementation lacks both rigour and ambition. The EU also presents an important source of funding for Hungary. Almost 80% of Hungarian public investment between 2011 and 2013 originated from EU funds.

Hungary has comparatively little influence at the EU level, and is usually not engaging constructively on the low-carbon transition. Most of the time, Hungary is aligned with Poland, the strongest and most vocal opponent of stricter EU climate and energy regulation. Although climate and energy issues are not a priority for the Hungarian government, it supports Poland in order to receive backing on other issues, such as migration and rule of law investigations. The partnership weakens the EU’s influence on both Member States. Despite challenging many EU policies and initiatives, Hungary was the first EU Member State to ratify the Paris Agreement. This step was attributed to Hungary’s president János Áder, who is attempting to promote a debate on the issue.

Overall, progress towards a low-carbon transition is difficult to achieve at the national level in Hungary. The reluctance of the national government to promote the low-carbon transition gives local communities an increasingly important role in promoting sustainable development. However, the financial situation of municipalities in Hungary is problematic, making their engagement in local climate action very difficult without new funding options.