Hungary profile

Overview

In 2018, the final energy consumption of Hungary was 13.8% higher (18.8 Mtoe) than in 2000 (16.5 Mtoe). The residential sector, the largest consuming sector, accounted for the largest share with over one third of total final consumption in 2018. The share of both the transport and industry sectors have been growing to 25.6% and 25.4% in 2018, respectively. The share of transport is continuously growing but it is still well below the EU average (EU-28: 30.1% in 2018). The share of services significantly decreased since 2000. The share of agriculture remained relatively low around 3.6%.

Energy efficiency improvement, measured by ODEX improved annually by 1.6%/year from 2000 to 2018, or 25.8% altogether. The main driving forces have been industry and services with an average of 2.3% and 3.6% improvement per year, respectively. Improvement in the industry and services sector were due especially to the introduction of energy efficiency requirements and labelling regulations affecting buildings, equipment, processes and appliances. Energy efficiency improvements in the transport were close to the average (1.3%/year between 2000-2018), while the progress was slower for the residential sector, with less than 1% per year (0.8%). Based on ODEX, no energy efficiency improvement is observed after 2015 in the residential and transport sectors.   

Hungary intends to achieve the target of 1.5% annual additional energy savings up to 2020 primarily with several alternative measures. A new energy efficiency obligation scheme was introduced from 2021 for electricity, natural gas and transport fuel sector. The rate of end-use energy savings in the period 2021-2030 is expected to achieve 0.8% per year compared to the average final energy consumption in 2016-2018 period. 

The most important energy efficiency measures are non- or partly refundable support schemes, outlined in the Operational Programmes (OPs), financed by EU Funds. The focus of the 5th priority axis of the Environmental and Energy Efficiency Operative Programme (KEHOP) is explicitly the improvement of energy efficiency, combined with the development of renewable energy solutions in public buildings, the development of heating systems, including district heating, and awareness raising. The TOP programme finances energy efficiency upgrades at local authorities. The GINOP programme has also sub-programmes that aim to promote energy efficiency in the enterprise sector and also finances a residential zero interest loan scheme operated by state-owned Hungarian Development Bank. The various OPs target a wide range of consumer groups, with potentially supportable projects, related to energy efficiency improvement in buildings, to industrial production and processes, and renewable energy.  

Buildings

There is no clear trend of energy efficiency improvement in household space heating (this is in part due to data problems). Fuel substitutions from gas and district heating to wood and waste, which are less efficient, may have played a role in the increasing space heating consumption after 2009. The share of gas for space heating decreased from 64% to 49% in the period of 2000-2015, while the share of solid biomass (wood and waste) increased from 8% to 40% in the same period. As residential network-based energy prices have been frozen in 2011 by Government (for electricity, gas and district heating, but not for wood and waste), relative prices of heating fuels influenced the choice of fuel mix. Since 2015, the share of wood in heating is decreasing and gas is growing again (gas 56% and wood 32% in 2018). Energy prices kept artificially low for households do not provide the necessary incentive for households to implement energy efficiency upgrades related to heating. 

Space heating accounts for 75% of final energy consumption of households, which is 10.5% points higher than the EU27 average. This share of space heating has been steadily growing from 64% in 2000 to 75% in 2018. Energy use for water heating and cooking show a declining trend. Energy consumption in the household sector increased by 4.7% from 2000 to 2018 (+0.28 Mtoe). The main driving forces behind the consumption variation have been the increase in the stock of household appliances and the increase in the average size of homes from 75 m2 in 2000 to 83 m2 in 2018, which contributed to raise consumption by 2.12 Mtoe over the period 2000-2018 (respectively 1.45 Mtoe and 0.67 Mtoe). Energy consumption of durable electric appliances has been rising, not only because of growing coverage, but also because the stock of existing appliances is old (8-10 years on average), the renewing rate is slow (Ceced, GKf). However, the replacement of inefficient equipment and appliances, have contributed to lower the consumption by 0.89 Mtoe. A decrease of 1.13 Mtoe of the consumption was the result of changes in consumer behaviour, changes in fuel mix and other unknown effects and data problems.

Due to a diffusion of electrical appliances in offices an increasing trend of electricity consumption can be observed over the period 2000-2010. No robust data are available afterwards. There was a regime change in data in 2012, efficiency improvement is observed afterwards. 

The 2002/91/EC directive (EPBD) was implemented in Hungary by the 7/2006 (V.24.) TNM Decree and the 176/2008 (VI.30.) Governmental Decree. In 2008, a building certification scheme was introduced. Due to the new regulations, technical heat requirements became 30% stricter than before. The recast directive of 2010/31/EU introduced stricter requirements that were implemented through several amendments of the TNM decree. An important amendment of the decree in 2014 made the cost-optimal energy efficient requirement a pre-condition for obtaining funding from either state budget or EU funds. TNM decree was further amended with effect from 2021. All new-construction buildings to be commissioned after 31 December 2020 must comply with the requirements of Annex 6 (nearly zero-energy buildings).

Implementing Article 5 of the 2012/27/EU Directive a national building registry system was set up in 2013 (NÉeR) by the ÉMI Non-profit Kft. As a result of panel house refurbishment programmes, that started in the 2000's, 35% of all panel buildings have been renovated till 2015. An interest-free loan scheme was introduced in 2017 for homeowners, multi-apartment buildings and housing cooperatives to trigger energy efficient building renovations and the use of renewable energy solutions in the residential building sector. The loan is financed through EU Funds, by two different operational programmes (OP). The loan is provided by the state owned MFB Hungarian Development Bank Plc. On 1 January 2021 the government launched a scheme for subsidising home renovations carried out by households with at least one child.

Transport

The share of cars in the final energy consumption of transport increased by 2.7 percentage point from 48.5% in 2000 to 51.2% in 2018. The share of trucks and light vehicles remained stable over time around 40%. On the other hand, both bus and rail lost share between 2000 and 2018 (bus from 5.9% to 5.3% and rail from 5.6% to 3.0%)

The stock of cars has been steadily growing over the periods 2000-2008 and 2013-2018 after the crisis. The average age of the car stock was 14 year in 2018, with a growing trend in the last ten years. Cars accounted for 68.2% of total passenger traffic in 2018, while the share of buses further decreased from 24.3% in 2000 to 20.1% in 2018. 

Freight traffic (in tonne-km) has been rapidly growing by 74% in the period 2000-2018. The share of freight traffic on road increased from 66% in 2000 to 76% in 2018, while the share of rail transported goods decreased from 31% to 21%. The share of goods transported on water is below 4%.

Energy consumption of transport grew by 57 % in the period of 2000-2018. The rise was mainly due to increased activity (+ 1.44 Mtoe). The growing share of car in passenger traffic and share of road in freight traffic explain the increase of consumption by 0.44 Mtoe (modal shift). After the recovery from the impact of the economic recession, both road passenger and freight transport are steadily growing, and have reached the pre-recession level in 2017. The increase of energy consumption due to activity was in part compensated by energy savings (-0.95 Mtoe). 

Measures targeting the transport sector include the Jedlik Ányos Plan supporting electro-mobility, a toll road system, various transport infrastructure projects, vehicle purchase support and infrastructural development projects in the Transport Operational Programme, financed by European Union Funds. The development of infrastructure for bicycle also played a role.

 In 2020 a tender for supporting the purchase of bicycles with auxiliary electric motors was created to fulfil the objectives of the Climate and Nature Protection Action Plan. 

Industry

Energy consumption in industry increased by 35%, at an annual average rate of 1.7% between 2000-2018. After the economic recession, final energy use increased again between 2010 and 2018, by 6.4%/year due to the continuous growth of the economy, which offset the energy savings in the industry sector.

Specific energy consumption per tonne of steel had decreased until 2007. Energy efficiency deteriorated after the crisis due to lower utilization rates, after which specific consumption decreased again. The unit consumption 0.32 toe/tonne in 2018 ranks Hungary in the medium range among EU countries. Unit consumption in the paper industry is growing after the recovery from the 2008 crisis, reaching 0.28 toe/t in 2018.  

The increase of industrial energy consumption was 35% from 2000 to 2018. This was to a large extent due to the expansion of industrial production (2.4 Mtoe), with about a yearly 6.4% growth rate of energy consumption after 2010. This was partly compensated by efficiency improvements of production and processes (-1.48 Mtoe). The economy has been continuously restructured from the 90’s by less energy intensive branches gaining larger share. Structural changes continued in the 2000’s, and to a smaller extent also after 2010, contributing to a decrease of energy consumption by 0.72 Mtoe.

There are several new measures targeting large enterprises based on the Energy Efficiency Act of 2015, including mandatory audit for large enterprises, the mandatory appointment of an energy manager in large energy consuming enterprises, and a corporate income tax incentive introduced in 2017 for the implementation and operation of investments aimed at improving energy efficiency. The Economic Development and Innovation Operational Programme finances various energy efficiency measures for SMEs. In addition, Energy Efficiency Obligation Scheme was introduced in 2021.