In a Nutshell

  • Hungary committed to becoming carbon-neutral by 2050 through its 2020 Climate Law, with an interim target of 40% reduction in emissions compared to 1990 levels by 2030.
  • In 2021, the National Clean Development Strategy (NCDS) was developed to support these goals, which relies heavily on the carbon removal capacity of the LULUCF sector. BECCS is also included among potential areas of development.
  • The Strategy aims to raise forest coverage to 27% from 20% by 2050 and increase the carbon sink capabilities of Hungarian forests. It would be achieved by an investment of 964 billion HUF (about EUR 2.5 billion) until 2050. This investment would prevent forests from becoming net emitters due to climate change and contribute to the removal of 4.5 million tonnes of CO2 annually, up from 3.8 Mt between 1985 and 2018.
  • In addition, the plan calls for investments into forestry and CCS (carbon capture and storage) technologies, with the New National Research, Development and Innovation Strategy 2021-30 set up to support Hungarian research.

Role for carbon removal in national climate policy

The Hungarian Climate Law of 2020 commits to achieving net zero emissions in Hungary by the year 2050. Accordingly, the National Clean Development Strategy (NCDS) was devised in 2021 which outlines the potential scenarios and steps necessary to achieve the desired target. It outlines two potential courses of action, an early action (EA) and late action (LA). Both would reach the carbon-neutrality target by 2050 (and the interim EU target of 55% compared to 1990 levels by 2030), but the EA scenario will contribute to more growth, and thus is considered the preferred alternative by the Ministry of Innovation and Technology.

 

Greenhouse gas emissions by sector in Hungary, Gg of  equivalents, 1990-2017 and targets, Hungary’s Fourth Biennial Report, United Nations Framework Convention on Climate Change (UNFCCC)

 

The Hungarian National Strategy largely relies on the carbon-removing potential of the LULUCF sector. In the period between 1985 to 2018, Hungarian forests removed  an average of 3.8 million tonnes of CO2 from the atmosphere yearly, which is about 6% of Hungarian GHG emissions in 2018. Since climate change-related warming can lead to loss of Hungarian forests, and forest coverage could change (and degrade) significantly in the upcoming decades, these could become net emitters of CO2 unless appropriate action is taken.

Prediction of Hungarian forest coverage, 2021-50 Challenges of forestry and climate change, Erdészeti lapok 152/6 (June, 2017)

 

The strategy outlines several policy actions to protect the capabilities of the LULUCF sector. It calls for raising forest coverage from the current 20% to 27% by 2050 and helping forests adapt  to a warmer and dryer climate. According to the report, 964 billion HUF (about EUR 2.5 billion) would be needed to enhance the carbon sink capabilities of the sector (approximately 4% of 24,709 billion HUF/EUR 64 billion in total investment required to achieve the goals of the NCDS). With the implementation of these measures, forests could remove 4.5 million tonnes of CO2 annually, as opposed to emitting 140-145 thousand tonnes should no action be taken (-7% or 0.2% of Hungary’s 2018 emissions respectively).

Investment costs under early action scenario in Hungary by 2050 according to sectors, Billion HUF, National Clean Development Strategy

 

According to the strategy, CCS and CCU (carbon capture and utilisation) technologies will be essential in hard-to-decarbonise sectors (especially in energy production and industry), but modelled scenarios only expect such technologies and approaches to be economically viable after 2030, since in many cases cheaper abatement alternatives exist, with many CCUS technologies in the early phases of development. By 2050, CCS could capture 3 and 7 million tonnes in industry and in the energy sector respectively. Widespread use of bioenergy with carbon capture and storage (BECCS) is expected to form part of this, especially after 2040. The plan also states that more R&D will be needed in this area.

 

According to a report by WiseEuropa, plans for CDR are among the most detailed in Hungary’s national climate policy among the Visegrad countries (V4 – Slovakia, Czechia, Hungary and  Poland). On the other hand, the Alliance of Hungarian Conversationists criticised the plan as it relies too heavily on CCS, CCU and BECSS in the 2040s which brings great uncertainty as this set of technology is not yet ready for wide-scale application.

Support for R&D and Innovation

The NCDS states that R&D and innovation are necessary elements in achieving net zero emissions by 2020. It mentions CCS and CCU in the energy sector and industry, using specific agricultural practices to speed up the absorption of CO2 in soils, and forestry as specific areas where innovative technologies could be used and more research is needed.

 

The strategy emphasises the government’s role in encouraging private-sector green innovation. To support this role, the New National Research, Development and Innovation Strategy 2021-30 was developed, which emphasises the need for green investment and circular economy but makes no specific mention of CCS or CDR technologies.

On the horizon

According to the Hungarian Ministry of Agriculture, 310 billion HUF (about EUR 806 million) will be allocated to maintaining Hungarian forests from the EU budget until 2027, three times as much as during the previous period.

 

There are no specific policies on the horizon regarding CDR in Hungary outside of the LULUCF sector, with the majority of CDR or CCS use in the NCDS expected around 2030-40 due to technological immaturity. On the other hand, several private sector actors, such as MOL, MVM Group and Siemens are considering using CCS and CCU.

 

According to estimates by the team of experts at Cambridge Econometrics, Hungary could store 97 million tonnes of CO2 in depleted oil and gas reservoirs, and potentially up to 750 million tons in deep saline aquifers. This storage capacity means that besides storing its own CO2 emissions, Hungary could provide storage for other countries, an opportunity which should be addressed by the government or market participants. One such market participant is the integrated oil company, that already plans on developing a potential 70 million tonnes of storage in the region by 2026, including for third parties.

 

A stakeholder opinion poll conducted during the same study as above shows that more research is needed into CO2 storage in deep saline aquifers, and that the government has a key role in coordinating market participants in the implementation of CCS and CDR projects. High CO2 quota prices encourage the use of CCS, but volatility in prices means increased risk for such ventures. Establishing a dedicated department within the newly created Ministry of Energy responsible for CCS and CDR could also help raise interest and awareness.

Contributors

Targets

  1. Net zero target: 2050
  2. Net Negative Target:

    No

  3. First interim target: 2030
  4. Type of interim target: Emissions reduction target
  5. GHGs covered: Carbon dioxide and other GHGs
  6. Separate target for emission reduction and removals: No
  7. Comprehensive CDR Target: no
  8. CDR Target for Conventional Removals: no
  9. CDR Target for Novel Removals: no
  10. Historical emissions: No
  11. Annual reporting mechanism: No reporting mechanism

CDR Plans

  1. Plans for carbon removal (CDR): Not Specified
  2. Planning to use external carbon credits: No
  3. Conditions on use of carbon credits:

Key stakeholders

Other Potential Stakeholders: