Environment at a Glance Indicators

Hungary

This country profile features selected environmental indicators from the OECD Core Set, building on harmonised datasets available on OECD Data Explorer. The indicators reflect major environmental issues, including climate, air quality, freshwater resources, waste and the circular economy, biodiversity, and selected policy responses to these issues. Differences with national data sources can occur due to delays in data treatment and publication, or due to different national definitions and measurement methods. The OECD is working with countries and other international organisations to further improve the indicators and the underlying data.

Context

Hungary is a small open economy. Heavy industry is a predominant sector, in particular the energy-intensive chemical and steel industries. Having been severely affected by the 2008 global crisis, the economy recovered and reached pre-crisis levels in 2014.

Hungary’s population density is about three times the OECD average. Yet the country has one of the lowest urbanisation rate in the OECD, with only about one in five residents living in predominantly urban regions. Agriculture covers more than half of total land area, owing to large-scale canalisation and land reclamation (at the end of the 19^th century) that drained floodplains to make way for crop production. Following frequent changes in its institutional framework, Hungary is one of the few EU member states without a dedicated Environment Ministry, where environmental responsibilities are fragmented across several large ministries.

Hungary is a landlocked country of 93 030 km² lying between the Carpathian Mountains and the Alps. It is also a lowland country: 84% of its territory lies less than 200 metres above sea level. The country is crossed by a chain of mountains of medium height and is relatively poorly endowed with natural resources. Its fertile soil is the most important asset. There are 1 200 natural and artificial lakes, including Lake Balaton, the largest freshwater lake in Central Europe. Hungary’s vast grasslands, caves, rivers and wetlands are home to an abundance of biodiversity, including many autochthonous species.

Climate change

Hungary decoupled CO₂ emissions and energy supply from economic growth. Per person intensities of both production-based and demand-based (footprints) CO₂ emissions are well below the OECD and OECD Europe averages.

Greenhouse gas (GHG) emissions (excluding LULUCF) decreased until 2014, due to the economic crisis, the restructuring of the chemical industry, the modernisation of building stock and a lower share of fossil fuels in the energy mix. Emissions rose then again until 2018 mainly driven by the transport sector. Extensive afforestation, which increased forest coverage to 23% of total land area, helped reduce the country’s net GHG emissions. In 2020 GHG emissions declined by 2.7%, due to the COVID-19 pandemic and the associated restrictions put in place to contain its spread.

Energy mix

Although their share has decreased, fossil fuels continue to dominate the energy mix. The share of renewables in total energy supply peaked in 2013 and has decreased since then. Most of the increase in renewables was due to the use of biomass, which has now levelled off. Nevertheless, the share of renewables in the electricity continue to increase.

Air quality

Air emissions

Emissions of most major air pollutants have decreased due to the shift from coal to natural gas, other technological improvements in power generation, the modernisation of the car fleet and reduced activity from mining and oil refining. Emissions of fine particulates (PM_2.5) peaked in 2012 due to the burning of biomass in old, inefficient carbon power plants or in stoves for residential heating. They have decreased since then. Emissions intensities are below the OECD average. Road transport and agriculture are major sources of nitrogen oxides (NOx) emissions. Hungary reached its 2020 Gothenburg Protocol objectives for sulphur dioxide (SO₂), NOx, and Non-methane volatile organic compounds (NMVOC), but not for ammonia (NH₃) emissions.

Local air quality has slightly improved. Average population exposure to fine particles (PM_2.5) decreased since 2010 but nevertheless remains above the OECD average and the new guideline value of 5 µg/m³ recommended by the World Health Organization.

Freshwater resources

Use of freshwater resources

Hungary is relatively well endowed in freshwater resources thanks to its 1 200 natural and artificial lakes, including Lake Balaton, the largest freshwater lake in Central Europe. However, Hungary strongly depends on river inflow from other countries: 94% of inland water flows from neighbouring countries, which puts the country under high water stress, when measured as a share of internal resources, while water stress is low in terms of available total resources. Freshwater abstractions for public supply per person have declined until 2014 but are since then, on the rise again. They remain low compared to most other OECD countries.

The share of the population connected to public wastewater treatment has significantly increased thanks to substantial investment in new technologies that replaced obsolete infrastructure. Most wastewater is treated in plants with tertiary (“advanced”) treatment. However, water quality remains an issue in Hungary, of 876 natural and 150 artificial water bodies identified in Hungary, 579 freshwater surface bodies (56%) have been classified as being “at risk” from organic, nutrient or priority hazardous substances (according to the EU Water Framework Directive definitions). Approximately 70% of artificial lakes (mainly fishponds) are “at risk” due to organic and nutrient loads. None of the 108 groundwater bodies identified are considered to be “at risk” due to human intervention however 46 sites are listed as “possibly at risk” (due mostly to nitrate pollution from various sources).

Waste, materials and circular economy

Municipal waste

Municipal waste generated per person decreased following the 2008 financial crisis and has remained relatively stable since 2013. Material recovery rates (including recycling, composting and incineration with energy recovery) steadily increased over the last decade. Landfilling decreased but remains the main treatment method.

Material consumption

Hungary is relatively poorly endowed with raw materials and relies heavily on energy and material imports. The peak in domestic material consumption in 2005 is due to the construction of a highway. Domestic material consumption decreased between 2008 and 2012 due to the economic crisis, but increased again with the economic recovery. Material productivity has fallen since 2012 and is below the OECD and OECD Europe averages.

Biodiversity

Hungary has one large biogeographic region – the Pannonian – that consists of a large flat alluvial basin and two major rivers, the Danube and Tisza. Compared to other European countries. Hungary is one of the least forested among OECD countries, but it has one of the largest continuous grasslands. Agricultural areas cover about 60% of the total land area, with important implications for the management of natural resources. Drastic changes in land use have occurred previously, since the political regime change in the late 1980s and accession to the EU in 2004. Many arable lands and other agricultural areas have been abandoned, over-grazing has stopped, and agricultural intensification (use of chemicals) has decreased. Although these changes have favoured agrobiodiversity, traditional land use forms have disappeared. Large-scale vegetation mapping conducted between 2003 and 2006 indicates that only 3.2-9.8% of Hungary’s natural capital of former times remains, with forest area having increased primarily as a result of plantations. 

More than 53 000 species are present in Hungary, 82% of which are animals, with 3% of the total number of species protected under national law. The plains, home to endemic plants and animals, are important for birds and rodents. Hungary has an extensive system of underground caves that are home to bats, as well as other unique species. There are also a range of wetland types. Since 2003, the number of protected species has grown by 6%. Common bird populations on agricultural habitats are stable. Forest bird populations show great fluctuations with no apparent long-term trend. Population trends of long-distance migratory birds show declining tendencies most frequently, compared with more stable resident, partly-migratory and short-term migratory species. The most frequently identified pressures on species are agricultural intensification, fragmentation of habitats and resulting loss of connectivity, pollution (especially eutrophication), land take and intensification of forestry.

Protected areas

Hungary already achieved in 2004 the Aichi target to protect at least 17% of land and water under its jurisdiction by 2020. Hungary’s protected areas consist primarily of national parks and protected landscapes. Only a limited number of sites have strict management objectives (IUCN categories I and II) and 0.8 % of the country’s land is covered by protected areas that have had management effectiveness assessments. Protected Area Management Effectiveness (PAME) evaluations, can be defined as: “the assessment of how well protected areas are being managed – primarily the extent to which management is protecting values and achieving goals and objectives" (Hockings et al. 2006).

Policy instruments

This section shows selected policy instruments based on data available for most OECD countries and does not provide a complete overview of countries’ policy mix to achieve their environment-related objectives. Interpretation should consider the country specific context.

Environmentally-related taxation

Revenue from environmentally-related taxes is relatively high compared to the OECD average. However, the environment-related tax burden in the economy has been declining in recent years, equalling the OECD Europe average of 1.9% in 2022. With the economic recovery and recent tax hikes, environmentally related tax revenue (in real terms) has increased but at a lower rate than GDP and total tax revenue. Registrations of new passenger cars have declined sharply, while registration and ownership vehicle tax rates decrease with car age. The latter provides an incentive to keep a car in use for longer than with age-neutral taxes and to purchase used cars. With a growing stock of cars that are over ten-years-old, revenue from vehicle taxes has declined.

As in all other OECD member countries, Hungary collects most environmentally related tax revenue through taxes on consumption of energy products and to a lesser extent, vehicle ownership and use. Compared to many other countries, Hungary relies more on energy taxes and pollution and resource taxes than on vehicle taxes. Taxes on pollution and resource use include the landfill levy, an air emission charge and water-related levies. In addition, use of road fuel declined sharply between 2009 and 2013, especially petrol, which is taxed at a higher rate than diesel. Increasing excise duties since 2011 have helped stabilise revenue from energy-related taxes despite lower road fuel consumption.

Government support to fossil fuels and effective carbon rates (ECR)

Like many other EU countries, Hungary puts a price on GHG emissions via energy taxes and participation in the EU Emissions Trading System. About 60% of GHG emissions (including combustion of biomass) are priced and 8% are priced above 120 EUR/tonne of CO₂. These shares increase to 74% and 8.8% respectively, when excluding emissions from the combustion of biomass, meaning that most emissions from biomass are less taxed.

Hungary implicitly supports the consumption of fossil fuels through favourable tax treatments, such as a reduced VAT rate for district heating, a fuel tax refund for agriculture, railways and commercial use as well as payments to natural gas and heat suppliers to reduce the price for low income households. In addition, there are direct support for the decommissioning the state-owned Márkushegy mine and the consequent coal sector reorganisation. Hungary aims at phasing out coal completely by 2030. In response to the high inflation rise in 2022, the government introduced price caps for fuel and food prices.

Technology and innovation

The shares of environmentally-related public R&D and the share of renewables in public energy R&D are quite volatile, and remain at relatively low levels. Hungary is also a marginal player in environmentally-related inventions, with less than 60 patent applications annually by national inventors in more than two jurisdictions. Their share in total inventions is also below the OECD average.

Environment-related official development assistance (ODA)

Hungary’s official development assistance has consistently increased since 2012 – with the exception of a drop in 2017. Total official development assistance (ODA) decreased slightly in 2021, representing 0.29% of gross national income (GNI).  In 2020, Hungary surpassed the 0.25% ODA/GNI it had set itself to reach by 2025. It remains committed to achieving a 0.33% ODA/GNI ratio by 2030 and collectively at the EU level to achieve a 0.7% ODA/GNI ratio by 2030.

Hungary’s growing development co-operation programme focuses on economic development, support to crisis situations and scholarships. Its bilateral portfolio includes select partner countries in Europe, the Middle East, Asia and Africa. Much of Hungary’s ODA is channelled multilaterally through European Union (EU) institutions. Hungary’s total ODA (USD 371 million) decreased in 2022 due to reduced contributions to international organisations. It represented 0.26% of gross national income (GNI). In 2020-21, Hungary committed 10.1% of its total bilateral allocable aid in support of the environment and the Rio Conventions (DAC average of 34.3%), down from 22.2% in 2018-19. Nine percent of screened bilateral allocable aid focused on environmental issues as a principal objective, compared with the DAC average of 11.3%. Nine percent of total bilateral allocable aid focused on climate change overall (the DAC average was 29%), up from 0.8% in 2018-19. Hungary had a similar focus on mitigation (8.9%) as on adaptation (8.9%) in 2020-21. Six percent of total bilateral allocable aid focused on biodiversity (compared with the DAC average of 6.5%), up from 0.2% in 2018-19.

References and further reading

CBD (2022), Country profiles: Hungary, https://www.cbd.int/countries/profile/?country=hu

OECD (2023), "Hungary", in Development Co-operation Profiles, OECD Publishing, Paris, https://doi.org/10.1787/2dcf1367-en.

OECD (2022), OECD Economic Outlook, Volume 2022 Issue 1, OECD Publishing, Paris, https://doi.org/10.1787/62d0ca31-en.

OECD (2018), OECD Environmental Performance Reviews: Hungary 2018, OECD Environmental Performance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264298613-en.

UNEP-WCMC (2024), “Protected Area Profile for Hungary”, the World Database of Protected Areas, www.protectedplanet.net