Briefing notes

The Hungarian economy wins with the green transition

The European Union is responsible for 8 percent of global emissions, and Hungary accounts for 1 percent of this share.

Climate change has become more pronounced in everyday life in the form of devastating floods and forest fires. It is no coincidence that concrete steps can be taken in political decision-making at the level of nation states and the European Union, Attila Steiner, State Secretary for the Development of the Circular Economy, Energy and Climate Policy, said at the Portfolio Sustainability Conference.

According to this year’s report from the United Nations Intergovernmental Panel on Climate Change (IPCC), the last five years have been the warmest since 1850. When measuring the reduction of carbon emissions, 1990 levels are used as a comparison. Hungary wants to achieve carbon neutrality by 2050, and we are now halfway there, Steiner said. Europe has now reduced its CO2 emissions by a total of 24 percent, which is a good result in terms of meeting the previously set 20 percent target, he added.

The carbon emissions of the Hungarian economy dropped by 32 percent by 2018, and a 40 percent reduction seems to be achievable by 2030. True, this target may be further tightened by the Fit for 55 package. This means that as many emissions are allowed as the forests of Hungary can capture. In addition to Hungary, only Germany, France and Denmark aimed to achieve climate neutrality by 2050, while Sweden expects to achieve it by 2045, Steiner added.

With the results so far, Hungary is in the top third of EU countries, the Baltic states are in the lead with savings of around 50 percent.

Among the cornerstones of achieving the goals outlined, Hungary should ensure the growth of final energy consumption only through renewable production, which could allow it to achieve 90 percent of electricity production without carbon by 2030. In addition to increasing solar capacity, this also requires investment to maintain the capacity of the Paks Nuclear Power Plant. 

A new player will also have to enter, which could be hydrogen, a national strategy for which was adopted by the government in May. 

The Mátra Power Plant is responsible for 14 percent of domestic emissions, and the planned gas-fired unit will provide short-term carbon reductions while maintaining energy supply, the state secretary said. 

According to Steiner, the greatest potential for energy savings lies in residential and industrial use. Transportation is transforming, but its energy needs are not changing drastically, he added. 

The government has two scenarios: an early and a deferred action scenario. With both, the 2050 targets can be met. In the case of the early action scenario, more expensive technologies will be brought to market earlier. The green transition will require significant investment and will be financed by the government through green bonds in addition to EU and state funds, he added.

Finally, the state secretary also spoke about the carbon tax planned in the Fit for 55 program. According to this package, Hungarian families would have to reckon with an additional expenditure of about HUF 100,000, which the government wants to avoid.

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