Hungary profile

Overview

In Hungary, final energy consumption has increased from 15.8 Mtoe to 18.4 Mtoe, i.e by 16.6% between 2000 and 2021. The residential sector has the biggest share, but its part has somewhat decreased over time (from 36.7% in 2000 to 34.1% in 2021). Transport is the second largest sector and its share has rapidly grown from 19.1% to 26.7% between 2000 and 2021. However, it is still well below the EU average of 29.7% in 2021. Industry is ranking third with the rise of 4.1 percentage point over the given period. The share of services has significantly decreased since 2000, while the share of agriculture remained almost at the same level (around 4%).

Energy efficiency, measured by ODEX has improved annually by 1.3%/year from 2000 to 2021, i.e. by 23.6% over the entire period. The most significant improvement occurred in the services sector (49.9% or 3.2% on average per year) and in the industry sector (37.0% or 2.2% on average per year), while only a lower development can be seen in the residential sector (13.6% or 0.7% on average per year) and the transport sector (4.6% or 0.2% on average per year).

Hungary’s main energy efficiency target is that the country’s final energy consumption in 2030 does not exceed 750 PJ. We also set a target of 336 PJ (NECP) of cumulative final energy savings by 2030 – a new saving of 61 PJ over 10 years. To achieve these, Hungary has introduced EEOS with several alternative policy measures. EEOS was introduced in 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. 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. Hungary is committed to allocating significant amount of RRF resource to energy efficiency and renewable energy improvements.

Buildings

Space heating accounted for 72% of final energy consumption of households in 2021, which is 7% points higher than the EU average. Nevertheless, there is a slight decreasing trend in energy consumption of space heating per m2 visible in the last ten years. Overall, it has decreased by 4.8% between 2000 and 2021. The reason for this slight decrease is rather the lower growth rate of households heating energy consumption compared to the increase of occupied dwelling area size in m2. The second largest end-use is water heating, the share of which decreased by 2 points from 2000 to 2021. The greatest decline is seen in cooking, which has decreased by 3.3 points. On the other hand, the use of electrical appliances and lighting increased by 1.8 points. Unit consumption per dwelling for air cooling increased, but its quantity was still marginal in 2021.

Energy consumption in the household sector increased by 14.6% from 2000 to 2021 (+0.82 Mtoe). The main driving forces behind the consumption variation have been the increase in the stock of household appliances (+1.73 Mtoe)  and the increase in the average size of homes (+0.72 Mtoe). On the other hand, energy savings, have contributed to lower the consumption by 0.93 Mtoe. A decrease of 1.38 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.  There was a regime change in data in 2012, slight efficiency improvement is observed afterwards (3.6%/year in total energy consumption and 1.7%/year in electricity consumption between 2012 and 2021). 

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 30 June 2024 must comply with the requirements of Annex 6 (nearly zero-energy buildings). From November 2023, the TNM decree became null and void and was replaced by the 9/2023 (V.25.) ÉKM decree. On 1 January 2021 the government launched a scheme for subsidising home renovations carried out by households with at least one child. Half of the renovation costs up to a maximum of HUF 3 million per renovation will be covered by the state.

Transport

The share of cars in the final energy consumption of transport increased by 3.5 percentage point from 48.6% in 2000 to 52.1% in 2021. 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 2021 (bus from 5.9% to 4.5% and rail from 5.5% to 2.7%).

Between 2000 and 2021, the share of cars in passenger traffic has significantly increased from 59.8% to 77,7%. During the same time, passenger rail performance declined by 41.5% and also bus decreased by 34.9% falling public transport heavily to individual traffic.

In 2020, passenger transport decreased due to COVID effect, especially modal share of public transport declined dramatically. However, rail transport increased by 7.2% from 2020 to 2021, although it did not reach the 2019 level.

Freight traffic (in tonne-km) has been rapidly growing by 61.6% in the period 2000-2021. The share of freight traffic on road increased from 63.5% in 2000 to 69,2% in 2021, while the share of rail transport decreased from 33.1% to 26.4%. The share of goods transported on water is below 5%.

Energy consumption of transport grew by 1.9 Mtoe (+63%) in the period of 2000-2021. The rise was mainly due to increased activity (+1.11 Mtoe). The growing share of car in passenger traffic and share of road in freight traffic explain the increase of consumption by 0.57 Mtoe (modal shift). The increase of energy consumption due to activity was only in a small part compensated by energy savings (-0.19 Mtoe). 

Measures targeting the transport sector include the Jedlik Ányos Plan supporting electro-mobility, a toll road system, various transport infrastructure projects, electric vehicle purchase support and infrastructural development projects in Operational Programmes, 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. In addition, several other electric vehicle purchase support schemes have been running. 

Industry

Energy consumption in industry increased by 40.3%, at an annual average rate of 1.6% between 2000 and 2021. Final energy use in industry increased steadily from 2010 by an average of 7.3%/year due to the continuous growth of the economy, which offset the energy savings in the industry sector. The only temporary break was experienced in 2020 due to the COVID crisis. 

Specific energy consumption per tonne of steel production has decreased by 16.3%, at an annual average rate of 0.8% between 2000 and 2021. The unit consumption was 0.33 toe/tonne in 2021. Specific energy consumption per tonne of paper production decreased by 4.4%, at an annual average rate of 0.2%. Despite the downward trend, both started to rise at the past few years due to lower utilization rates.  

Final energy consumption in industry increased by 1.29 Mtoe from 2000 to 2021, mostly caused by change in industrial activity (+2.58 Mtoe). This was partly compensated by efficiency improvements of production and processes (-1.49 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 0.8 Mtoe.

There are several 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, however, its effect is likely to be measurable through statistical data released on the upcoming years.