Less than two years ago, the Ministry of Innovation and Technology declared that it is of primary national economic interest for Hungary to join the developments generated by electric cars and to be at the forefront in the introduction and dissemination of innovative technologies (Ányos Jedlik Plan 2.0).
“The Hungarian government has recognized the population's need for cleaner and better air quality and the importance of preserving our created world in its present state for future generations. It is well known that one of the most important driving sectors of the Hungarian economy is the automotive industry, so strengthening the electromobility sector is our top priority,” Attila Steiner, State Secretary for the Development of Circular Economy, Energy and Climate Policy at the Hungarian Ministry for Innovation and Technology explains to Diplomacy&Trade.
Under the auspices of the broader climate policy context, but in the spirit of innovation and the development of the electromobility sector, which primarily means the modernization of urban transport, the Ányos Jedlik Plan was adopted in 2015, laying the foundations for the strategic background of electromobility. “Hungary is, by the way, one of the first countries in the European Union to have drawn up a comprehensive electromobility plan in the framework of which the government has been promoting the purchase of purely electric vehicles through several calls for tenders and a budget of more than HUF 12.5 billion,” he adds.
Since electromobility is developing extremely fast, on July 3, 2019, the Hungarian government adopted a revised version of the Plan, 2.0. The aim of the new construction is to make the opportunities and benefits of electromobility available to the widest possible audience, and to support the greening of transport with an additional HUF 5.88 billion.
Subsequently, in 2020, the Climate and Environmental Protection Action Plan was adopted, the seventh point of which aims to ensure affordable electromobility, among other things.
In terms of numbers, the State Secretary stresses that they have provided state support for more than 3,500 electric bicycles, over 500 electric scooters and now the purchase of 1,500 new, low-cost electric cars. “In addition to the above, I would like to highlight the Green Bus Program, which will not only make public transport more cost-effective, but also greener, as the CO2-absorbing capacity of 800 trees will be released for each electric bus. From 2022, only electric buses will be able to be commissioned as new buses in our big cities. Within the framework of the ‘Green Bus Demonstration Project’ operating as a test project, people had the opportunity to try these climate-friendly buses in Debrecen, Nyíregyháza, Békéscsaba, Székesfehérvár, Zalaegerszeg and Kecskemét.”
Among the government measures concerning e-mobility, the best known to the public is the financial support for those purchasing electric vehicles mentioned by the State Secretary. In
summarizing how the government is helping to promote electro-mobility in Hungary, he goes into more details. “Thanks to the tenders announced in connection with electromobility between 2016 and 2019, the purchase of more than 4,500 electric vehicles were put on the country’s roads, and the network of charging stations is also constantly expanding. About a thousand affordable electric cars have already been purchased thanks to the program, and by the way, we have just had the opportunity to hand over the one thousandth such vehicle to a customer.”
Last October, a call for tenders – in a total amount of a HUF one billion – was issued to support the purchase of electric-assisted bicycles (‘pedal electric cycle’ or pedelec). Under the tender, a non-refundable grant can be claimed for the purchase of a new electric-assisted bicycle in 12 stages. The first five phases of the period available for submission have already been completed, the sponsorship decision has been made regarding the submitted applications, in the total amount of HUF 376 million.
As Attila Steiner adds, “with the implementation of the points of the Action Plan and the procurement subsidies, we have created a secure demand for the products of the electric vehicle manufacturing and distribution industry in the field of electromobility. Thanks to the Green Bus Program, among other things, domestic bus manufacturers – for example, IKARUS – and charging infrastructure operators could count on the Action Plan in the midst of the pandemic. Thanks to the incentive measures, opportunities offered by electromobility have become available to a wider audience, electric transport is no longer the privilege of the rich. By January 2021, more than 25,000 green license plates will run on domestic roads.”
Modernizing the bus fleet
Vehicle manufacturing, one of the most important industries in Hungary, is also responding to the 'call of times' and turning to e-mobility. The State Secretary says the aim of the Green Bus Program he mentioned is to replace the bus fleet in public transport by stimulating domestic bus production (at least 60% Hungarian added value is expected by the end of the Program), reducing the average age of the buses in operation, the emission values as well as the maintenance and operating costs of bus transport, and improving the quality of travel services. The government will provide HUF 36 billion between 2020-2029 to municipalities and public transport operators in cities with a population of over 25,000 to replace their outdated bus fleet. The Green Bus Project Office's call for proposals provides municipalities and public transport operators with up to 80% support for the purchase of electric buses and self-driving trolleybuses, and up to 60% support for infrastructure improvements necessary for the operation of the vehicles.
For sustainable battery production
In addition to traditional vehicle manufacturing, the government is promoting the production of electric batteries as well as related industries. As to how the balance between the environmental benefits of driving an electric vehicle and the not-so-environmentally friendly battery production can be created, Attila Steiner points out that “we are actually working on the National Battery Industry Strategy, which will cover the complete battery value chain from purchasing the raw materials and components to recycling. The Strategy will also include human resource development issues in order to provide the needed human capacity in this industry.”
The Strategy aims to achieve battery production that is sustainable from an environmental, social and economic point of view. The Strategy also underlines the importance of creating a circular economy as an integral part of the production, use and re-use of batteries. Sustainable battery production and the re-use of batteries will be the two key driving forces in order to create a solid basis for the transition to climate-neutrality.
The recovery, recycling and reuse of raw materials for battery production create value and business opportunities in the transition to a sustainable and circular economy. Recycling rare earth metals from used batteries is an important step to reduce the need for new raw materials, he states.
Applying the circular economy principle, battery packs from electric vehicles, once they can no longer be used to store the energy needed to move vehicles economically, should be given further possibilities for reuse before recycling. One potential use for this is battery farms, or energy storage, as energy storage systems for solar power plants, other photovoltaic or other renewable energy generation installations, thus creating a second life cycle.
With hundreds of electric buses to be put into service in the near future under the Green Bus Program, where the fate of the bus batteries beyond their useful lifecycle will also need to be addressed, the Green Bus Project Office is investigating the potential for a second lifecycle for batteries.
The manufacturing of electric vehicles is just one of the elements of e-mobility. As regards the Ministry’s plan to cover the country with a network of charging stations and related developments, the State Secretary explains that the Green Bus Project Office's first call for proposal of bus procurement, which will close soon, also supported the installation of charging infrastructure alongside the vehicles, an opportunity that all applicants took advantage of.
In line with the principle of gradual replacement of up to 35% of the bus fleet in service in local public transport with electric buses, the first call for applications has been already announced by the Green Bus Program Office. “In order to reduce the pollution from transport, the government tries to promote electromobility as much as possible. Under the support program launched in 2020, we support the appearance and use of low-cost electric buses, cars and electric bicycles with an increased amount of support. On our long journey to achieve climate-neutrality in the transport sector, we do not want to rely purely on battery-based e-mobility. The first hydrogen filling station has just been opened in Hungary. The National Hydrogen Strategy aims to increase the production of carbon-free – and during the transition process also low-carbon – hydrogen. The surplus hydrogen supply will be used in the transport sector mainly for heavy freight and in buses,” he says.
Working to achieve goals of sustainability
Sustainability is one of the areas covered by the state secretariat Attila Steiner is heading. As for how much electro-mobility can contribute to achieving Hungarian and international Sustainable Development Goals, he highlights that in Hungary, the transport sector is responsible for one-fifth of all CO2 emissions, with road transport accounting for 98%. So, a very important element of the Action Plan is the greening of transport. “The Green Bus Program is a key part of this, but the individual decisions and choices of the population also play a significant role, which is why we encourage and support people to give priority to environmentally friendly transport as well. However, the social support for the 2050 climate neutrality target date is very high, which is well shown by the 92% support measured during the 2019 social consultation. We believe that at the local level, everyone can do something to contribute to a higher goal. Although the Union's greenhouse gas emissions account for less than 10% of global emissions, EU member states, including Hungary, are committed to taking real action that will have tangible results globally. Therefore, we hope that as Hungary sets a good example with its ambitious initiatives for other EU countries, so will Europe play a leading role among the continents,” the State Secretary concludes.