Hungary

The UNFCCC was ratified and promulgated into law under the UNFCCC Act of 1995. The Kyoto Protocol was ratified in 2002, and Hungary has a target to reduce emissions by 6% from the average of 1985-1987. In terms of EU commitment, Hungary has a target to reduce its emissions by 18.3% by 2020. Hungary has submitted six national communications to the UNFCCC, the latest in January 2014.

Between 2003 and 2010, the Ministry of Environment and Water (now taken over by the Ministry of Rural Development) and the Academy of Sciences jointly conducted multidisciplinary scientific research on climate change impacts and responses, and produced the VAHAVA Report. Following this research progress, an overarching climate strategy, National Climate Change Strategy (NCCS) of 2008-2025, was prepared by the Ministry of Environment and Water. It creates the strategic framework for implementation of the UNFCCC and Kyoto Protocol. The strategy defines three main directions and implementation guideline for the government and other stakeholders: reduction of greenhouse gases, adaptation and raising public awareness of climate change. General objectives are defined for different sectors including energy, transport, agriculture, forestry and waste.

As defined in the NCCS, climate policy is an integral component of development policy and society, business and regional actors are expected to be involved. Climate change offers the potential for green growth and enhancement of international economic competitiveness through an increase in the supply of renewable energy and a subsequent fall in long term energy costs. The NCCS is implemented by the National Climate Change Programme that addresses actions for two years.

The Minister of Rural Development is responsible for overall co-ordination of the NCCS, and a Climate Change Working Group ensures co-ordination across different sectors of government. The implementation process is assisted by the Climate Change Commission, a consulting body composed of representatives from relevant ministries, the Academy of Science, NGOs, individuals and business actors.

Energy supply

More than two-thirds of consumed energy is supplied by natural gas and oil, with more than 75% of it imported. 80% of natural gas is imported from Russia. According to the Hungarian Energy Strategy 2030, primary energy intensity in 2007 was nearly 2.4 times the EU average. The reliance on Russian supplies is seen as a vulnerability, and energy security tops the country’s agenda. The National Renewable Energy Action Plan (NREAP) adopted in 2010, set a target to source 7.4% of energy from renewable sources by 2012 and 14.65% by 2020; in 2012 the actual figure was 9.6%. A review of this action plan was expected to be completed in 2014. Renewable energy sources considered important are biomass, geothermal and solar sources.

But energy policy is centred on nuclear power as a cost-effective energy source with low GHG emissions. 42% of electricity is generated by the Paks Nuclear Power Plant, which produces the lowest cost electricity in the country (HUF10.67/kWh – USD 0.04 – in 2009). A resolution to extend the service life of Paks Nuclear Power Plant by 20 years was passed in 2005 to ensure long-term domestic electricity supply. In 2009, Parliament approved the commencement of preparatory activities for the construction of new units at Paks. A recent increase in demand has spurred the search for uranium in southwest Hungary. In June 2014, Parliament approved a EUR10bn (USD12.5bn) loan agreement with Russia to finance the construction of two blocks at the Paks Nuclear Power Plant.

Energy demand

The residential sector is the largest final energy consumer, responsible for 30% of total CO2 emissions. The Green Investment Scheme established under the NCCP arranges the sale of surplus assigned amount units (AAUs) primarily to improve energy efficiency of existing buildings.

The government is developing the National Building Energy Strategy and the National Energy Efficiency Action Plan III. The Environment and Energy Operative Programme of the New National Development Plan 2007-2013 prioritised an increase in energy efficiency and the promotion of sustainable energy production and consumption patterns. For 2014-2020, energy efficiency improvements, support of renewable energy solutions and adaptation to climate change are among the priority areas of the programme.

Carbon pricing

Hungary is part of the EU ETS. Connected to the sale of surplus AAUs under the Kyoto Protocol, Green Investment Schemes (GIS) fund projects and programmes to mitigate global climate change. The GIS is being reformed to enable more effective emission reductions. A GIS Credit Guarantee Fund is being set up to enable applicants to draw state-guaranteed credit to fund measures aimed at reducing GHGs. The fund provides credit to finance building energy renovations, which often is not adequately available through traditional mortgage and personal loans.

REDD+ and LULUCF

The first forestry law dates back to 1791 and was implemented to stop overexploitation and ensure sustainable use of wood. The forestry framework is defined by the 2009 Act on the Forest, Protection of Forestry and Forestry Management. Forest legislation provides a comprehensive framework with detailed operational rules and a centralised database to protect forests from harm and support reforestation.

There was 7.4m ha of forest at the end of 19^th century, which fell to 1.1m ha by 1930, but forest area has gradually increased since then, reaching 2 million ha by 2010, thanks to afforestation measures. Multiple forest programmes are in place with collaborations with non-governmental organisations including the World Wildlife Fund (WWF).

Transportation

The transport sector is petroleum intensive, accounting for 68% of the total petroleum consumption in 2009. Two-thirds of transport-derived carbon emissions come from vehicles, because the number of cars has increased while the average Hungarian vehicle is over 10 years old.. The Hungarian State Railway (MÁV) is being reformed to cut public transport costs. The National Transport Strategy initiated by the Ministry of National Development in 2012 was due to lead to adoption of an action plan for 2014-2020 by the end of 2014. The Transport Operative Programme of the New National Development Plan 2007-2013 prioritised improvements in public transport to provide economically and environmentally sustainable alternatives to individual transport and these priorities continue into the 2014-2020 programming period.