[Opinion] Hungary: Why we oppose carbon price, but back gas

Because of its geography, Hungary stands among those EU countries most impacted by the effects of climate change. We need to address the potential risks posed and assess how such a seemingly unfavourable situation could be turned to our advantage.

‘If you can’t beat ’em, join ’em’ – and when you do so, try to come out ahead. That’s exactly what we’re doing.

We urgently need a programme that can win the support of the people because it will directly affect their lives. Thus, affordability, security of supply and competitiveness must be kept in mind.

Hungary was first in the European Union to enshrine in law the historic 2019 EU climate neutrality target, demonstrating that even during a pandemic, the Hungarian government makes it a priority to take action on these critical issues.

Hungary was also one of the first in the EU to ratify the Paris Agreement and has reduced its emissions by 33 percent compared to the 1990 baseline year.

EU greening efforts in Hungary — clean, smart and affordable energy — are already well underway, and the Climate and Nature Protection Action Plan, announced just a year ago, has already produced tangible results.

Hungary’s National Energy and Climate Plan aims to increase renewable energy from the current 13 to 21 percent by 2030.

By modernising our last coal-fired power plant, Hungary’s carbon dioxide emissions will be drastically reduced – a huge step towards carbon neutrality.

We have also joined the Powering Past Coal Alliance alongside 33 other countries.

Paks nuclear plant

A diversified and balanced energy mix remains crucial. Due to an increase in solar power and the reliable output of the Paks nuclear power plant, Hungary is well on its way to fulfilling commitments.

Plus, the EU now recognises that meeting goals is only possible with nuclear energy and renewable sources.

Approximately 40 percent of Hungary’s energy production is provided by Paks, and Paks 2 will guarantee this in the long run, safely, in accordance with strict EU regulations and mandates from the commission’ Joint Research Centre report.

From 2022, new buses in big cities will be electric only, and the Hungarian government subsidises the purchase of electric cars, scooters and bicycles. Hungary has also bolstered production of batteries for e-vehicles.

Our comprehensive hydrogen strategy should also be completed this year. Hydrogen is an important solution for transmission and can play a significant role in the integration of renewable electricity generation, strengthening domestic security of supply, and contributing to decarbonisation goals.

We have high hopes for the upcoming discussion of EU leaders on the enabling framework, but for Hungary, key issues must be taken into account.

Together with several other central and eastern European (CEE) countries, we do not support the introduction of a single EU carbon price for all sectors because this could significantly increase the overhead costs for CEE households.

Among other technologies, natural gas is critical to ensure a secure energy supply and is key as a transitional solution.

If the 2030 climate target is increased, an increase in the Modernisation Fund would be warranted, as the CEE region will face higher costs relative to GDP to achieve climate neutrality.

The Visegrad Four countries, plus Bulgaria and Romania, now enjoy close cooperation since the publication of the commission’s proposal in September 2020 to raise the 2030 climate target.

The region has specific characteristics and needs and, as with many EU policies, the streamlining, one-size-fits-all concept does not work.

Not least because, in the wake of post-coronavirus economic recovery, the central and eastern European region could become one of the EU’s key economic powerhouses.

In light of all this, the Hungarian government intends to represent Hungarian interests in close cooperation with the other countries in the region during the upcoming climate protection debates.

One point, however, is not up for debate: all member states must make a proportionate effort to achieve the ambitious 2050 target and set a good example for other continents to follow.

To this end, the European Union can now do its utmost not to hold a tender but to take concrete action and establish the appropriate regulatory framework. Hungary will be a partner in this.