Hungary has made progress on greening its economy and now needs to raise its ambitions

This article is brought to you in association with OECD. Hungary has made progress in greening its economy and cutting emissions, but it needs to speed up efforts to replace fossil fuels with renewable energy sources, improve energy efficiency in buildings and promote sustainable transport, according to a new OECD Review. The OECD’s third Environmental Performance Review of Hungary says more also needs to be done to address air and water pollution. The level of exposure in Hungary to air pollution from particulate matter is among the highest of OECD countries. Nearly four in 10 people have poor quality drinking water, and almost a third of the population is not connected to public wastewater treatment facilities. The Review says that while Hungary has strengthened its environmental laws, their implementation has been hindered by frequent institutional changes and fragmentation of national-level responsibilities following successive administrative reorganisations. It recommends making environmental goals more ambitious, stepping up the enforcement of regulations, bringing water management back under the same roof as environmental management, and regrouping staff working on compliance and inspection under one authority. “Rising industrial activity and energy consumption are intensifying pressures on Hungary’s environment. Yet the economic rebound is an opportunity to invest more in energy efficiency and renewables, to accelerate the transition to green growth and a circular economy,” said Acting Environment Director Anthony Cox, presenting the Review in Budapest. Fossil fuels make up around two thirds of Hungary’s energy supply. Greenhouse gas emissions have started rising again, after dropping 35% from 1990 to 2015, driven by transport and, to a lesser extent, agriculture. The level of car ownership in Hungary is growing fast from a low base, and taxes on road fuels are among the lowest in the OECD. Residential housing is Hungary’s biggest consumer of energy, with some 80% of buildings lacking modern, efficient heating systems. The report says that introducing energy efficiency measures in new buildings could reduce related energy consumption by more than half. The use of solid fuel, including general waste such as unwanted furniture, in household heating systems is a major source of air pollution. Emissions of fine particulate matter (PM 2.5) are rising fast, and the average exposure of people in Hungary is more than twice the World Health Organisation’s guideline limits. Hungary has made good progress on biodiversity. The conservation status of most habitats and species has improved in recent years and Hungary now protects over 22% of its land and inland waters, well above internationally agreed targets. However, as in much of Europe, pressures are still high with 62% of species in an unfavourable state. More will need to be done to reduce pressures from land use change, habitat fragmentation, pollution, invasive species and climate change.

Recommendations in the Review include:

• Introduce more efficient and less polluting heating and cooling systems and better insulation of buildings
• Establish a process for systematically reviewing environmentally harmful subsidies
• Phase out heating subsidies in favour of cash transfers to poor households
• Increase opportunities for meaningful public participation in environmental rulemaking
• Connect more rural areas to public waste water treatment facilities
• Implement additional incentives for municipalities to improve waste management and continue increasing the landfill tax that was frozen in 2014
• Introduce biodiversity specific commitments and indicators for the energy, transport, tourism, industry and mining sectors