Chapter 1. Environmental performance: Trends and recent developments

This chapter examines the country’s progress in decoupling economic activity from environmental pressures. Drawing on indicators from national and international sources, it reviews progress towards national policy goals, international commitments and targets, focusing on the period since 2000. To the extent possible, it compares the state of the environment and key environmental trends with those of other OECD member countries. The chapter sketches out major policy developments in environmental sectors, including air, climate and water. Progress in the policy areas related to waste management and biodiversity is analysed in the respective thematic chapters of the report.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

1.1. Introduction

Hungary is a small open economy that has enjoyed strong economic growth over the past 15 years. However, gross domestic product (GDP) per capita remains below the OECD average. The country’s reliance on imports of oil and natural gas for energy supply, as well as intensive industrial and agricultural activities and growing road traffic, have exacerbated environmental challenges.

This chapter provides an overview of Hungary’s main environmental achievements and its remaining challenges on the path towards green growth and sustainable development. Drawing on indicators from national and international sources, it reviews Hungary’s progress towards national policy goals and international commitments, focusing on the period since 2000. To the extent possible, it compares the state of the environment and key environmental trends with those of other OECD member countries. The chapter outlines major policy developments in key environmental sectors, including air, climate and water.

1.2. Key economic and social developments

1.2.1. Economic performance and structure of the economy

Hungary experienced stronger economic growth than the OECD as a whole for most of 2000-16. However, its economy grew at a lower rate than in neighbouring Central and Eastern European countries (Figure 1.1). GDP increased by 37% or by about 2% per year. After the slowdown in 2008/09 caused by the global economic crisis, the economy recovered and reached pre-crisis levels in 2014 (Figure 1.1). This recovery was driven by macroeconomic stimulus, increased investment and private consumption, and strong exports. Per capita GDP (in real terms) increased by 43% over 2000-16, but is still one-third less than the OECD average (see Basic Statistics). Growth is expected to continue at a rate above 3.5% over 2017 and 2018. Hungary has an important agricultural sector, which accounts for more than 4% of its value added (one of the highest shares in the OECD) and 5% of its employment. Overall, in 2015, animals, vegetables, food products and wood accounted for more than 10% of total exports.

Hungary’s economy relies heavily on external trade. In 2015, exports accounted for 91% of GDP, among the top five rates in the OECD; imports represented 82% of GDP. Hungary’s participation in global value chains is one of the highest in the OECD. This is due to high inflows of foreign direct investment in the main exporting industries, such as those related to electronics, motor vehicles and machinery equipment. These industries exhibit a high share of produced intermediates in gross exports, as reflected by the backward participation index (Figure 1.2). The foreign content of value added in exports has increased considerably since 2008 to reach almost half of total exports. Overall, foreign-owned companies accounted for about a quarter of the employment and half of the value added of the business sector in 2014 (OECD, 2017a).

The unemployment rate declined to 5% of the labour force in 2016. This rate is projected to go down further due to extensive public work schemes and sustained private employment growth (OECD, 2016a). Shortages of skilled labour and the mismatch between skills of employees and labour market needs represent a challenge. Labour productivity has kept decreasing since 2008, and is one of the lowest in the OECD. This is due mainly to two factors. First, the educational system is slow to react to structural changes of the economy and new technological needs. Second, low business sector investment has led to increased emigration of the young, highly skilled labour force (OECD, 2016a). As a result, Hungary ranks among the ten OECD member countries with the lowest employment rate of people with tertiary education.

1.2.2. Population, well-being and environmental quality of life

Hungary’s population density is about three times the OECD average (see Basic Statistics). Yet Hungary has the fourth lowest urbanisation rate in the OECD, with only about one in five residents living in predominantly urban regions (OECD, 2016b). Hungary is facing high regional disparities, particularly regarding access to services, jobs, education and safety. Consequently, disposable income per capita in the bottom 20% of regions is less than half the OECD average.

Hungary is facing demographic and health-related challenges: its population has been decreasing at a yearly rate of 0.3% since 2000 and reached 9.8 million in 2016. Young people (under 20 years old) represent less than one-third of the working-age population, well below the OECD average. The ageing population imposes increasing pressures on health care expenditure and pensions. Life expectancy at birth is 76 years, the third lowest in the OECD after Latvia and Mexico. The health status of Hungarian citizens has worsened and remains low in international comparison. This is due to unhealthy lifestyles, increasing inequality in access to services and shortcomings of the health system. Health expenditure is lower than in most other OECD member countries (see Basic Statistics).

The level of income inequality, as measured by the Gini index on a scale from zero (full equality) to one (full inequality), is 0.29, slightly lower than the OECD average. However, inequality is increasing due to worsening living standards of poorer households (OECD, 2017b). Moreover, the share of income received by the top 20% of the population is increasing and is now more than four times bigger than that received by the bottom 20% (OECD, 2016b). The poverty rate has increased since 2000 to reach 10% of the population, still slightly lower than the OECD average. Reduction and prevention of poverty and social exclusion, as well as reinforcement of social cohesion with special regard to the Roma population, are the thrust of the National Strategy on Social Cohesion for 2011-2020. The strategy includes targets to reduce child poverty, material deprivation and social exclusion by 20%.

The OECD Better Life Index presents a mixed picture. Hungary ranks above the OECD average with respect to work and life balance, and education (due to the high percentage of people with upper secondary education). However, it underperforms with respect to other dimensions of the indicator. In particular, household disposable income is one of the lowest in the OECD, showing a high level of inequality in distribution across the population. Other indicators signalling a worsening well-being of Hungarian citizens are life satisfaction; civic engagement and social support network; and environmental quality, as measured by urban air pollution and access to clean water (Figure 1.3).

Hungarian citizens are acutely aware of many environmental challenges, with the notable exception of biodiversity protection (Chapter 5. ). Environmental issues rank high on the list of threats to the future of society (Forsense Institute, 2016). Hungarians’ satisfaction with the quality of their environment, measured by multiple international surveys, is consistently low. According to a survey of attitudes of the European citizens towards the environment, most Hungarians are concerned about growing waste generation and air pollution, and recognise them as serious issues (Figure 1.4). Another recent survey indicated that only half of the inhabitants of Budapest are satisfied with the air quality and noise levels in their cities, a low score compared to other EU capitals (Eurostat, 2016a).

1.3. Transition to an energy-efficient and low-carbon economy

1.3.1. Energy structure and intensity

Energy mix

Like most OECD member countries, Hungary relies on fossil fuels for its energy needs. In 2016, approximately 70% of the total primary energy supply (TPES) was made up of fossil fuels: oil, gas (about one-third each) and coal (8%). Nuclear power (16%) and renewables (11%) accounted for the remainder (Figure 1.5). Hungary has reduced its reliance on fossil fuels by about 15% since 2000.

Over 2000-16, energy supply grew at a lower rate than the economy. As a result, energy intensity (measured as TPES per unit of GDP) declined by almost a quarter (Figure 1.5) and is now on par with the OECD average. Energy supply per capita remained almost constant over the period at a level well below the OECD average (see Basic Statistics). Improvements in the energy intensity were due to structural changes in the economy and, to a lesser extent, to energy efficiency measures.

Nuclear power generates 50% of Hungary’s electricity, following a 30% increase in its use since 2000 (Figure 1.6). Although coal and gas have reduced their contribution, they maintain important shares in the electricity mix (18% and 20%, respectively). Meanwhile, the share of renewables has increased almost tenfold. However, they account for about 10% of total electricity generation, the third lowest share in the OECD after Korea and Israel. The lion’s share of renewable electricity (almost two-thirds) is generated through burning of biomass in old, inefficient carbon power plants or in stoves for residential heating. This contributes to the increasing emissions of particulate matter (PM) (MND, 2012). Electricity generated through hydro, solar and wind technologies has increased considerably in recent years, although starting from a very low base (IEA, 2017a).1

Renewable energy supply

Renewable energy supply has increased significantly since 2000, stimulated by a feed-in-tariff system in the electricity sector2 (Chapter 3. ). Its share in TPES reached 11% in 2016, up from 3% in 2000.3 However, it remains low in OECD comparison. Biomass, whose supply has almost tripled since 2000, dominates renewable energy sources (about 90% in 2016).4 The remainder is provided by geothermal energy (3%) and smaller shares of renewable waste, solar, wind and hydro. Renewables are mostly used for heating and cooling in the residential and public services sectors (about 80%) and as transport fuels (8%).

As indicated in the 2015 National Reform Programme and the National Renewable Energy Utilisation Action Plan, Hungary has committed to raising the share of renewable energy sources in the gross final energy consumption by 2020 to 14.65%.5 It is on track to achieve this target: in 2015, renewable energy sources already contributed 14.5% of gross final energy consumption, up from 4.4% in 2004 (Eurostat, 2017a). Most of the increase in renewables has been due to expanded use of biomass, which has now levelled off. Future growth should thus target other renewable sources such as solar and geothermal energy (IEA, 2017b). Hungary has been rapidly expanding the use of geothermal energy for district heating. It has the third largest geothermal district heating energy production capacity in the European Union after France and Germany (EGEC, 2017).

In 2016, the share of renewables in road transport fuel consumption accounted for 7.4%. With the current policy, it will be difficult for Hungary to reach the 2020 target of 10% biofuel content set by the EU Renewable Energy Directive (2009/28/EC).6 To address this challenge, the government decided to raise the biofuel blending obligation to 6.4% for 2019-20.

Energy consumption

Over 2000-15, the final energy intensity of Hungary’s economy decreased by 18% (Figure 1.7): the total final energy consumption (TFC) increased slower than GDP. The Hungarian National Energy Strategy targets primarily the residential and public sectors, which together account for the largest share (43%) of TFC. Over the last four years, their consumption decreased by 15% mainly due to improved energy efficiency.

Currently, 80% of buildings fail to meet energy efficiency standards. This is due to the poor condition of buildings, as well as outdated heating and cooling systems that use about two-thirds of the total final household consumption of energy (MND, 2015). Recent measures have improved space heating efficiency, which reduced energy consumption per floor area by one-third (IEA, 2017b). It is estimated that energy efficiency measures in new buildings could reduce related energy consumption by more than half (MND, 2015). There is, however, scope for further improving energy performance in existing buildings and promoting innovative energy-saving technologies.

Industrial energy consumption has on average been growing slower than industrial output. In 2015, it accounted for slightly less than a quarter of TFC (Figure 1.7). Four industries alone – chemicals, food and tobacco, wood products and machinery – account for two-thirds of the sector’s consumption.

Energy consumption of the transport sector (22% of TFC) has grown the fastest since 2000 despite the economic recession. As in many OECD member countries, road transport makes up most of the sector’s energy use (96%), and passenger cars account for the largest share of fuel consumption. While energy intensity of road freight transport has decreased since 2000, it has increased for passenger cars. This is a consequence of the old and inefficient car fleet: the average vehicle age is 15 years (HCSO, 2017). The share of diesel fuel in total road fuel consumption increased from 51% to 63% over 2000-15 (IEA, 2017a), even though only 28% of passenger cars are diesel-powered (Eurostat, 2017b). Diesel cars perform better than petrol cars in terms of energy use and carbon dioxide (CO₂) emissions. However, their contribution to fine particulate matter (PM_2.5) emissions is higher, with considerable impacts on air quality.

Energy demand in the transport sector is likely to continue rising fast. Hungary’s motor vehicle ownership, one of the lowest in the OECD at 40 vehicles per 100 inhabitants, will go up with rising income levels. Between 2000 and 2016, the total number of vehicles in Hungary grew by 42%, leading to considerable increase in road traffic. Likewise, freight transport is also expected to increase with economic growth. Rail has ceased to be the dominant mode of freight since 2000. It represents only 18% of terrestrial inland transport, while the volume of goods transported by road more than doubled during the same period.

Energy policies and measures

In line with a recommendation of the 2008 Environmental Performance Review, Hungary has introduced measures to improve energy efficiency on both the supply side (power sector) and demand side (residential and transport sectors). The key measures included:

Modernisation of heating systems of residential buildings and district heating systems, through several support programmes. As required by the EU Directive on Energy Efficiency in Buildings (2010/31/EC), the government introduced the National Building Energy Performance Strategy 2015-20. It envisaged energy efficiency standards for new buildings and other obligations for existing dwellings, energy audits of buildings, certification schemes and other instruments. Energy requirements for new buildings and major renovations were introduced in the 2014 Ministry of Interior regulation. Energy efficiency subsidies for apartment and public buildings were introduced in 2015 with respective budgets of HUF 10 billion and 150 million (Concerted Action for EED, 2016).
Reduction of emissions in the transport sector through renewal of the vehicle fleet to foster use of electric vehicles. The policy is in line with requirements of the EU Directive on the Deployment of Alternative Fuels Infrastructure (2014/94/EU). The measures include installing charging stations and allowing electric vehicles to use bus lanes (Chapter 3. ).
Increased reliance on economic instruments such as motor fuel and vehicle taxes, road tolls and parking meters (Chapter 3. ).Chapter 3.
Development of integrated public transport systems offering viable alternatives to private cars. This includes improving parking facilities close to public transport stations, upgrading metro lines in Budapest and promoting use of bicycles in urban areas.

The National Energy Strategy 2030 (adopted in 2011) aims to reduce Hungary’s energy dependence (MND, 2012). The National Renewable Energy Action Plan 2010-2020 seeks to increase energy efficiency economy-wide and boost the share of renewable energy sources. The fourth National Energy Efficiency Action Plan for 2010-2020 supports implementation of energy efficiency targets in the different economic sectors in co-ordination with related programmes and strategies.

The Transportation Energy Efficiency Improvement Action Plan (2015) falls under the umbrella of the 2014 National Transport Strategy. It lays out initiatives to support sustainable low-carbon modes of transport (bicycle lanes, bus replacement programmes, improved commuting facilities). The E-mobility Programme (the Jedlik Ányos Plan, see Chapter 3. supports electrification of the transport sector. As of 2016, a few municipalities have started to develop Sustainable Urban Mobility Plans and integrate them into local transport strategies, as is the case of the Budapest Balázs Mór Plan.7

1.3.2. Greenhouse gas emissions

Emissions profile

Hungary decoupled economic growth from domestic greenhouse gas (GHG) emissions. The economy’s carbon intensity, which is in line with the average for OECD Europe, has decreased by 40% since 2000. Over 2000-16, total GHG emissions – excluding land use, land-use change and forestry (LULUCF) – decreased by about 16%, while GDP increased by 37% (Figure 1.8). Restructuring of the chemical industry, modernisation of building stock and a lower share of fossil fuels in the energy mix contributed to this decline. Yet emissions have recently started to increase. In 2015, emissions grew by almost 6% over the previous year and by an additional 1% in 2016, mainly driven by the transport sector.

Extensive afforestation, which increased forest coverage to 23% of total land area, helped remove the country’s GHG emissions. Its contribution to absorption of GHGs fluctuated over time, ranging from 5% to 11% of total gross emissions over 2006-15.

The power sector generates 22% of total GHG emissions, making it the largest emitter. About half of its emissions result from old and inefficient lignite-fired power plants. Its emissions have decreased by more than 40% since 2000 due to the economic crisis and the change in the energy mix. This decrease contributed to more than 80% of the overall reduction of GHG emissions. Transport, the second-largest contributor, accounts for 20% of the emissions. Transport emissions have increased by about 40% since 2000. Moreover, they are predicted to increase further with the rapid growth of private vehicle ownership.

Industrial processes account for 10% of total emissions. Despite a decrease over the review period, emissions started to pick up in 2015. This is particularly apparent in the metal and mineral industries, where increased cement and lime production drove most of the increase. The agricultural sector contributes to a fairly high and increasing share of GHG emissions (12%). This puts Hungary among the top 15 OECD member countries regarding agricultural GHG emissions. Two main factors have driven the growth in agricultural emissions since 2010. First, use of urea fertilisers, an important source of nitrous oxide, has intensified. Second, Hungary has increased its livestock (Figure 1.9). Emissions from the waste sector continued to decline thanks to a reduction in the amounts of landfilled waste (OMSZ, 2017).

As in most OECD member countries, CO₂ accounts for the biggest share of GHG emissions. In 2016, CO₂ represented 77% of the total, followed by methane (12%), nitrous oxide (7%) and fluorinated gases (3%). The latter deserve special attention as their level, although low in absolute terms, has been steadily increasing. Hydrofluorocarbon (HFC) emissions have grown almost ninefold since 2000. The increase is due to more use of HFCs in the cooling industry (for refrigeration and air conditioning) as a replacement for ozone-depleting substances banned in the early 1990s.

Climate policies and measures

Hungary’s climate regulatory framework is shaped by the EU climate and energy legislation.8 As an EU member state, the country is part of the EU Emissions Trading System (ETS) and the Effort Sharing Decision (ESD).9 Hungary has achieved the Kyoto commitments for 2008-12. It is also on track to achieve the emissions reduction objectives set in accordance with the EU Climate and Energy Package, which foresees an overall 20% emissions reduction below 1990 levels by 2020 and a 40% reduction by 2030. Under the ESD, Hungary should not exceed a 10% increase in emissions for non-ETS sectors by 2020 and subsequently reduce them by 7% by 2030 compared to the 2005 base year. Hungary is on track for meeting the ESD targets. However, further efforts will be required to meet the 2050 targets set in the EU Reference Scenario 2016 and the EU Roadmap for a low-carbon economy in 2050.

Climate change is high on the national environmental agenda: Hungary was the first EU member state to ratify the Paris Agreement in October 2016. The first National Climate Change Strategy (NCCS) was approved in 2008. In April 2017, the government approved the NCCS-2 for 2017-30, with an outlook to 2050, which takes into account the objectives of the Paris Agreement. The document is based on three pillars: mitigation of GHG emissions across all economic sectors; adaptation to climate change; and implementation of the strategy by raising public awareness on climate change issues. Main areas of interventions are: energy efficiency in buildings, renewable energy use, transport and environment, and afforestation. The NCCS-2, developed with support from the National Adaptation Centre of the Mining and Geological Survey, is complemented by three other strategic documents:

The National Decarbonisation Roadmap provides guidelines for reductions of GHG emissions in the different economic sectors. It aims to achieve medium-term and long-term reduction targets, drawing upon emission projections with an outlook to 2050.
The National Adaptation Strategy analyses environmental risks and climate security issues posed by climate change and related impacts on rural development, water resources management, environmental health, energy policy and tourism. It examines the resilience of water infrastructure to floods and considers water scarcity problems and potential impacts in the agriculture and energy sectors.
The Climate Awareness Plan was developed by the National Adaptation Centre (NAC) of the Hungarian Geological and Geophysical Institute. It supports implementation of the NCCS-2 through analysis, research and dissemination of information. The NAC also develops the National Adaptation Geo-information System, a multipurpose database supporting decision making in the area of climate change adaptation.

Overall, Hungary has developed a wide range of climate-related strategies falling under the responsibilities of different ministries. However, linkages among those strategies, and monitoring of their contribution to achieving the respective objectives, could be further strengthened.

Hungary is a lowland country. About one-quarter of its territory is exposed to floods, and 18% of its population lives in risk areas. As recommended by the 2008 Environmental Performance Review, Hungary has taken measures to address flood risks and reduce environmental vulnerability to extreme climatic events. These included the adoption of a national risk management plan in 2016, the completion of high-water-level riverbed management plans and construction of flood emergency storage reservoirs along the Tisza River and several smaller rivers. In accordance with the 2007/60/EC Directive on flood management, it has developed flood hazard and flood risk maps. Hungary should also continue strengthening protection measures against floods, improve rainwater drainage systems and promote measures to retain rainwater that could be used for irrigation.

Other climate change adaptation challenges are posed by the intensification of extreme drought events (OECD, 2013a). These events resulted in financial losses worth HUF 400 billion (about EUR 1.4 billion or 1.4% of GDP) in 2012 (EC, 2017b). Hungary should develop policies for drought management and restoration of land affected by droughts.

1.3.3. Air quality management

Air emissions

Air emissions decoupled from economic growth over 2000-15 and declined significantly for all key pollutants except PM_2.5 (Figure 1.10). Intensities of emissions, both per capita and per unit of GDP, are lower than the OECD average. However, local air quality has been worsening since 2000. On average, the Hungarian citizen is exposed to about 22 micrograms of PM_2.5 per cubic metre (μg/m³). This is a value higher than the OECD average of 14 μg/m³. It is also higher than the annual guideline limit of 10 μg/m³ set by the World Health Organization (WHO).

Hungary has met its 2010 targets under the EU National Emission Ceilings (NEC) Directive for sulphur oxides (SO_x), nitrous oxides (NO_x), ammonia (NH₃) and non-methane volatile organic compounds (NMVOC).10 Between 2000 and 2015, SO_x emissions plummeted by 94%. The reduction came primarily from the energy sector due to a shift from coal to natural gas and other technological improvements in power generation. In 2014, non-industrial combustion and power stations generated about 50% and 40% of SO_x emissions, respectively. NO_x releases have dropped by one-third since 2000, mainly due to reduced emissions from road transport (thanks to modernisation of the car fleet) and power generation. Emissions of non-methane volatile organic compounds (NMVOC), largely dependent on non-industrial combustion (mining and oil refining), have decreased by 12% since 2000 due to reduced activities in these sectors and to installation of catalytic converters on motor vehicles.

Ammonia emissions, generated primarily by the agricultural sector, have decreased by 10% since 2000. The sharp decrease in livestock-related emissions was counteracted by increased emissions from fertiliser use. With the economic recovery, however, ammonia emissions rebounded and were almost a quarter higher in 2015 than the previous year. This trend raises a concern about the contribution of ammonia to eutrophication of water bodies and acidification of soils, as well as to the formation of secondary PM. Recent studies indicate that NH₃emissions from agriculture were contributing to about half of the background concentration of urban PM_2.5, the third highest value in more than 20 EU countries examined (EC, 2015c).

Emissions of PM_2.5have increased by about 10% since 2000 and by 40% since 2005. In the absence of adequate reduction measures, it will be difficult for Hungary to meet its commitments under the EU Clean Air Programme (whose legislative instrument is Directive 2016/2284/EU). Household heating is the largest emitter, followed by road transport. The residential heating sector largely relies for energy on natural gas (44% in 2015) and biomass, whose share has tripled since 2007 to about 30%. The use of lignite, despite its low share of total consumption, also increased threefold over the same period. The illegal burning of waste for heating raises concerns, particularly in poor areas. It has contributed to high concentrations of benz(a)pyrene, which exceed EU guidelines (Chapter 4. ).

Eurostat (2016b) indicates that noise pollution is of increasing concern in Hungary as one of the most important causes of premature death after air pollution. Road, rail and aviation traffic, as well as industry and construction, are the main causes of noise nuisances. Despite some progress in this area, Hungary failed to fully comply with the EU Noise Directive 2002/49/EC. Following the European Commission’s instructions, Hungary has developed action plans for main roads and railways, but has yet to produce noise maps for the Budapest agglomeration.

Air quality

Hungary is facing a growing challenge of air pollution from PM_2.5. Annual average exposure to PM_2.5 has increased considerably during the review period, with only Turkey and Israel showing higher growth rates (Figure 1.11). In 2015, the national mean concentration of PM_2.5 reached 22.4 µg/m³, one of the highest values in the OECD and well above the WHO guideline value of 10 µg/m³. About 83% of the population was exposed to an annual average PM_2.5 concentration of 15-25 µg/m³. The remaining 17% faced yearly average exposure to PM_2.5 of 25-35 µg/m³. About half of the population of Budapest is exposed to the most severe concentrations of particulates (higher than 25 µg/m³). PM₁₀ and NO₂ concentrations, particularly in large urban areas, are also a concern: the European Commission has started infringement procedures against Hungary for the violation of requirements of the Air Quality Directive for these pollutants.

The annual average exposure of Hungary’s urban population to ozone concentrations is higher than in most EU countries and has been increasing since 2000. In 2014, Hungary registered ozone concentrations above the EU threshold for the protection of human health (EEA, 2016a). The main causes are the emissions of ozone precursors and increased summer temperatures. In addition, several air quality zones have registered exceedances for benzo(a)pyrene (EC, 2017b).

Air pollution is the single most important factor of environmental health risks. It is responsible for the premature death of an estimated 6.5 million people worldwide every year (WHO Europe, 2017). In 2013, the mortality rate for PM_2.5 in Hungary was the fifth highest in the EU-28 and the highest in European countries of the OECD (almost 13 000 premature deaths). PM_2.5 pollution caused 1 400 years of life lost per 100 000 inhabitants – the second highest such rate in the OECD Europe after Poland. (EEA, 2016a). According to recent OECD estimates, increasing concentration of PM_2.5 and ozone in Hungary are projected to lead to an economic loss equivalent to 9% of GDP, the second highest value after Latvia (Roy and Braathen, 2017).

Air policies and measures

Hungary has transposed EU directives on air quality and emissions, including the NEC Directive, into the national legislation (Chapter 2. ). It is also pursuing efforts to meet international commitments under the Convention on Transboundary Air Pollution and associated Gothenburg Protocol, which sets emission reduction targets for 2020 based on 2005 levels. With the support of EU funding, Hungary has extended and upgraded its air quality monitoring network. The Department of Air Hygiene of the National Institute of Environmental Health has developed an Air Hygiene Index (AHI) to regularly monitor concentrations of main air pollutants. Further improvements, such as installation of more representative and better equipped monitoring stations, are planned with EU funding.

In 2011, Hungary introduced an Action Programme for reduction of PM₁₀ in response to an EU infringement procedure. The programme envisages measures to reduce PM₁₀ emissions by 10% to 15% by 2020. This, in turn, is backed up by investments of up to HUF 700 billion (about EUR 2.3 billion) for various measures. These include creation of low emission zones in selected urban areas, introduction of electronic tolls for heavy-duty vehicles, tax exemptions for electric and plug-in hybrid cars, along with measures to promote e-mobility. The programme also envisages further development of technologies aimed at curbing emissions in the industry sector. Other emissions reduction measures are targeting agriculture (e.g. less fertiliser use) and the residential sector (e.g. more efficient and less polluting heating systems). In 2012-16, the government spent over HUF 160 billion implementing this programme, mostly on optimising the road network and promoting cleaner vehicles. However, there is no similar programme to address PM_2.5 pollution.

1.4. Transition to efficient resource management

1.4.1. Material consumption and waste management

Hungary’s domestic material consumption (DMC) per capita remains low (30 kg per person per day), significantly below the OECD Europe average (35 kg per person per day). Total DMC decreased by 20% between 2008 and 2016. However, Hungary is an average performer in terms of material productivity: nearly 15% of Hungary’s material consumption ends up as waste (Chapter 4. ).

Total waste generation decreased by 17% between 2008 and 2015. The generation of both total primary and municipal waste has been decoupled from economic growth. Despite strong annual variations, hazardous waste generation (550 000 tonnes in 2016) has also decreased substantially. Material recovery is on the rise for significant waste streams such as construction and demolition waste (63% in 2016) and municipal waste (32% in 2015). However, the landfilling of municipal waste remains the most frequent treatment option (54% of the generation volume in 2015). More information on waste and material management, and the transition to a circular economy, is found in Chapter 4.

1.4.2. Agriculture

Agricultural areas cover about 60% of the total land area, with important implications for the management of natural resources. Between 2000-02 and 2012-14, the consumption of nitrogen fertilisers increased by about 25% compared to the growth of about 40% in total crop production (Figure 1.13). On a per hectare basis, the intensity of nitrogen fertiliser use increased by about 40% over the same period, faster than in other OECD member countries. The excessive agricultural use of fertilisers and nutrients in wastewater discharges lead to eutrophication of water bodies (EC, 2017b). About 70% of the Hungarian territory has been designated as a nitrate-vulnerable zone.

Hungary succeeded in reducing its nitrogen surplus by about 20% between 2000-02 and 2012-14. However, the country maintained a negative phosphorus balance over the review period, which could raise concerns about losses in soil fertility (OECD, 2013b).

As recommended by the 2008 Environmental Performance Review, Hungary has developed measures to limit the use of pesticides. A 2010 government decree, for example, sets maximum levels of pesticide residues in food with plant or animal origin. The National Environmental Programme (NEP) for 2015-20 introduced several measures to reduce use of pesticides. These include promoting public awareness of the adverse environmental and health effects of pesticide use, promoting less risky pesticides and periodic revision of pesticide safety regulation. However, the intensity of pesticide use (measured in quantity of active ingredients per hectare of agricultural land) is still higher than in many other OECD member countries. Sales of pesticides have also increased (by 11% over 2011-15). It is therefore important to carry out the most relevant measures in the NEP for 2015-20 to reduce diffuse pollution from pesticides and nutrients.

1.5. Management of natural assets

1.5.1. Biodiversity and ecosystems

Over the last decade, Hungary has made several improvements related to biodiversity. It was one of the first EU member states to have its Natura 2000 network of protected areas declared complete in 2011. However, most habitats remain in an unfavourable state. Further effort is needed to reduce pressures on biodiversity from land-use change, habitat fragmentation, pollution, invasive species and climate change. Chapter 5 addresses these in more detail.

1.5.2. Water resources management

Water resources

Hungary’s entire territory lies in the Danube River Basin, the second largest European basin shared by 19 countries. Over 90% of its watercourses are transboundary, making international co-operation on water resource management a cornerstone of Hungary’s environmental policies.

Hungary is endowed with about 11 900 m³ of renewable freshwater resources per capita, about one-third more than the OECD average. Freshwater abstraction, mainly for electricity cooling, amounted to 67% of internal water resources, the second highest rate in the OECD after the Netherlands (Figure 1.14). Water abstraction decreased by almost a quarter over 2000-12 due to reduced demand for electricity cooling, higher water prices, increased fees for wastewater discharges (Chapter 3. ), and reliance on other sources of freshwater supply (e.g. private wells).

Water abstraction per capita varies significantly across counties (regions). Pest and Veszprem have rates 300% and 150% higher than the national average, while Budapest and Békés are at the bottom of the spectrum. These variations are largely explained by technological differences in water abstraction equipment, access to public facilities and water prices (HCSO, 2015). In 2012, power plants abstracted most water (for cooling purposes only), about 72% of the total. Public water supply accounted for 12% of freshwater abstraction (Figure 1.15). All sectors have reduced their water intake since 2000, with the notable exception of irrigation (4% of total abstraction).

Water quality

The ecological status of Hungarian water bodies has not improved. In 2015, according to the revised National River Basin Management Plan (RBMP2)11, 88% of Hungarian rivers had a bad to moderate ecological status. Only 7% of rivers and 12% of lakes had a good ecological status (Figure 1.16). The pressures were mainly due to flow regulation (56% of surface water bodies), followed by diffuse and point sources of pollution (26% and 19%, respectively). Bathing water quality has improved since 2013, and 71% of inland bathing waters had excellent water quality in 2016. Less than 2% of waters have poor quality (EEA, 2017). The proportion of surface water bodies with unknown status has been reduced due to an improved information base. However, it remains high (accounting for more than half of lakes, by number) and represents a challenge for interpretation of the data.

The excess of nutrients coming from agriculture and wastewater discharges poses a problem in the Danube River Basin. Despite recent improvements, the nitrogen and phosphorus loads are 30% and 20% higher, respectively, than the reference conditions of the 1950s.

The situation is better for groundwater bodies, half of which achieved good status in 2015. Groundwater quality threats stemmed mostly from diffuse pollution sources.

Public water supply and sanitation services

The quality of drinking water has improved over time, driven by extensive EU financing. A 2011-13 assessment showed compliance with the EU Drinking Water Directive of 99.7% for microbiological parameters and 98.6% for chemical parameters. Compliance with other parameters (arsenic, boron and fluoride) will be assessed in 2018. According to national estimates, the share of population without drinking water supply of satisfactory quality decreased from 45.6% to 38.1% between 2008 and 2012. Further investment is required to rehabilitate the public water supply systems; renew existing water wells and, if necessary, drill new ones; and build new wastewater treatment plants.

The share of the population connected to public wastewater treatment has increased by 70% since 2000. It reached 78% of the total population in 2016. The improvement was driven by substantial investment in new technologies that replaced obsolete infrastructure. This included the opening of a wastewater treatment plant in Budapest in 2010. Despite the considerable progress, the percentage of the population connected to wastewater treatment remains one of the lowest in the OECD.

In 2016, the length of public sewerage network increased by 19% compared to 2008. In the same year, the percentage of dwellings connected to public sewerage reached 89% in towns and 59% in villages (HCSO, 2017). Sewerage connection rates are uneven across regions and income groups. The lowest connection rates are in the eastern part of the country (about 75%); the highest rates are in Central Hungary and Western Transdanubia (about 90% and 83%, respectively) (HCSO, 2017).

Only 94% of the citizens in the bottom 40% of the wealth distribution have access to piped water compared to the national average of 97%. At the same time, only 87% of this group have access to a flush toilet compared to the national average of 93%. The lowest shares are recorded for the lowest quintile of the population, to which the majority of Roma belongs (World Bank, 2015).

During the review period, Hungary became 100% compliant with requirements of the EU Urban Wastewater Treatment Directive (91/271/EEC) for sewerage systems. In addition, the country reached a 95% compliance rate for secondary or biological treatment and 92% for tertiary or chemical treatment of pollution load generated in agglomerations of over 10 000 population equivalents, fully complying with the directive’s requirements. However, compliance is still not achieved in 22 agglomerations, and for which the European Commission opened an infringement procedure in February 2017. Following the 2009 decision to designate the territory located in the Danube River Basin as a sensitive area, Hungary committed to more stringent treatment standards and reducing 75% of the overall load entering treatment facilities for both nitrogen and phosphorus by the end of 2018. In 2014, according to the latest available data, Hungary achieved an 80.2% reduction of the nitrogen load entering wastewater treatment and an 83.5% reduction for phosphorus in sensitive areas (EC, 2017b).

Water management policies and measures

The National Water Strategy, the pillar of water, irrigation and drought management policy, was revised in 2017. Its objectives include developing water retention measures and integrating agriculture and nature conservation issues into water resources management. In addition, a new water resources management and planning approach would include adaptation measures and reduce the vulnerability to extreme climatic effects such as damage to infrastructure and increased risk of sewer overflows.

The fourth NEP for 2015-20 includes objectives for conservation of water resources and prevention of water pollution. These are set in accordance with the EU legislation. They are also in line with Sustainable Development Goal 6 to ensure universal access to safe and affordable water and sustainable management of water and sanitation for all by 2030. In accordance with EU requirements, Hungary has developed one national river basin management plan (RBMP) for the Danube River Basin, covering the whole country. It also has four sub-basin RBMPs for Danube, Tisza, Lake Balaton and Dráva.

The State Programme for National Drinking Water Quality Improvement aims to achieve safe drinking water standards for all public water supply systems, as required by the EU Drinking Water Directive. According to the latest data review in October 2017, public drinking water supply in 337 of 365 water supply zones complies with EU requirements. More detailed analysis and targeted monitoring programmes could provide useful insights on the causes of non-compliance in the remaining 28 water supply zones and for appropriate corrective actions.

Significant parts of the catchment area are outside national borders and subject to other countries’ water management systems. This makes transboundary water issues particularly relevant in Hungary. As part of the Danube region, Hungary takes part in the European Strategy for the Danube River (2011), leading priority areas on water quality and environmental risks. For example, Hungary has promoted sustainable use of pesticides to help implement the strategy. The country is also involved in several Danube River Basin co-operation programmes for 2014-20 and in bilateral water committees that manage issues related to floods, water quality and other transnational concerns.

Recommendations on climate change, air pollution and water management

Climate change

Strengthen efforts to co ordinate the implementation, including monitoring and reporting, of energy- and climate-related strategies and action plans; develop ambitious targets for reducing domestic GHG emissions and analyse the economic, environmental and social impacts of different scenarios to achieve them.
Integrate adaptation concerns into the National Climate Change Strategy and infrastructure investment plans; address the risk of increased flooding and resulting vulnerability of the water supply and sanitation systems through improved engineering and water management practices.

Air quality

Significantly reduce particulate emissions from solid fuel combustion in residential heating and mitigate related adverse health impacts by introducing more efficient and less polluting heating and cooling systems and better insulation of buildings.

Water

Reinforce measures to reduce the abstraction of freshwater through enhanced water use efficiency in irrigation and other agricultural practices.
Reduce diffuse water pollution from agriculture by promoting sustainable use of fertilisers; complement EU funds with increased national public and private investment to upgrade wastewater treatment; increase the share of population connected to the sanitation infrastructure and improve access to drinking water fully compliant with EU requirements.

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Notes

← 1. Recent amendments to the Energy Act limit installation of wind turbines near populated areas and in farmed agricultural areas.

← 2. The feed-in-tariff system was set up under the legal framework of the 2007 Electricity Act and the Decree 389/2007 on the compulsory purchase of energy from biomass and waste and other renewable sources (solar photovoltaic, geothermal, biogas, hydropower, biomass and wind). Its last revision was carried out in 2014. Tariffs depend on plant capacity (below 20 MW and 20-50 MW), location, time and season and are revised every year (IEA IRENE database). In January 2017, a new Renewable Energy Support Scheme (METÁR) was introduced, complementing the feed-in-tariff system.

← 3. In 2017, in application of EU Regulation 431/2014, the Hungarian Energy and Public Regulatory Office revised the energy-related accounting methodology for firewood. Consequently, the 2015 share of renewable energy sources in total primary energy supply increased from 8% to 12%.

← 4. The relatively high share of biofuels in TPES is partially explained by the inclusion of conversion losses in biofuels used in heat and power generation. This is not the case for other renewable sources (hydro, solar and wind) (IEA, 2017).

← 5. The national shares of renewable energy sources (RES) in gross final consumption of energy are calculated according to specific provisions of Directive 2009/28/EC and Commission Decision 2013/114/EU. Gross consumption excludes all non-energy use of energy carriers (e.g. natural gas used not for combustion, but for producing chemicals). Beyond the general target of 20%, EU members have agreed to increase final consumption of energy from RES to 27% by 2030. Different sub-targets are specified for electricity generation (10.9% of electricity generated by RES), transport (10% of energy demand met by RES) and heating and cooling (18.9% of heat consumption met by RES).

← 6. The 10% minimum target must be achieved by all member states for the share of biofuels in transport petrol and diesel consumption by 2020.

← 7. Budapest was one of three cities selected in the context of the 5th EU Sustainable Urban Mobility Planning Award on the theme of urban freight. Among other objectives, the plan sought to increase the connection network by disseminating intelligent technologies, improving quality of services, developing attractive vehicles and promoting efficient governance.

← 8. Under the 2009 EU Climate and Energy Package Directive, member states must achieve a quantified economy‐wide GHG emission reduction target of 20% below 1990 levels by 2020. An additional reduction of 30% is conditional upon other comparable emission reductions agreed by developed countries and adequate contributions by developing countries. This reduction objective is divided between two sub-targets, for ETS and non-ETS sectors (transport, buildings, agriculture and waste). The EU reduction targets (compared to 2005 levels) are a 21% reduction for ETS-covered emissions and a 10% reduction for non-ETS emissions.

← 9. The ESD is part of the EU Climate and Energy Package and establishes binding GHG emission reduction targets for 2013-20 for non-ETS sectors. For these sectors, individual member states’ efforts have been calculated according to their GDP per capita. They vary from a 20% emissions reduction for wealthier countries to a 20% increase for several others, compared to 2005 levels.

← 10. Due to a recent revision of the methodology assessing biomass use for residential heating, Hungary’s NMVOC emissions appear to be slightly above the 2010 ceiling.

← 11. In application of the EU Water Framework Directive, Hungary adopted the first National River Management Plan (RBMP1) in 2010. It aimed at protecting water resources and promoting their sustainable use through measures for 2012-15. RBMP2 (the revised RBMP1), adopted in 2016, contains updated measures for 2018-21.