Europaudvalget 2015
KOM (2015) 0572
Offentligt
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EUROPEAN
COMMISSION
Brussels, 18.11.2015
SWD(2015) 227 final
COMMISSION STAFF WORKING DOCUMENT
Country Factsheet Hungary
Accompanying the document
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL
COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN
INVESTMENT BANK
State of the Energy Union
{COM(2015) 572}
{SWD(2015) 208 à 209}
{SWD(2015) 217 à 226}
{SWD(2015) 228 à 243}
EN
EN
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Towards an Energy Union
Hungary
Macroeconomic relevance of energy
IMPORTANCE OF THE ENERGY SECTOR
The energy sector plays an important role in the Hungarian economy, where its contribution to the gross value
added and to employment is much greater than the European average. Recently, the contribution of energy to
gross value added increased, whereas the share of total employment in the energy sector remained quite
stable between 2005 and 2012.
Value added of energy sector
% of
gross
value added (total economy)
2.8
2.4
2.0
1.6
1.2
0.8
0.2
0.4
0.0
1.0
0.8
Employment in energy sector
% of total employment
HU
EU27
0.6
0.4
HU
EU27
0.0
2005
2012
2005
2012
Source: EUROSTAT – National Accounts
According to EurObserv'ER, in 2013, the share
of direct and indirect renewable energy
related employment in total employment of
the economy in Hungary was at about 0.18%,
below the EU average of 0.53%.
Source: European Commission, based on EurObserv'ER and
EUROSTAT
TRADE BALANCE OF ENERGY PRODUCTS
Hungary is a net importer of energy products, mainly due to considerable oil and gas imports, even
though the contribution from electricity import also increased between 2006 and 2014. The energy
trade deficit is higher than the EU average. In 2006, the current account and the energy trade balance
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Towards an Energy Union - Hungary
were both in deficit. By contrast, in 2014 the net positions in the accounts diverged: the current
account was in surplus, while the energy balance was still in deficit.
Trade balance of energy product and current account
balance, 2006
6
4
Trade balance of energy product and current account
balance, 2014
6
4
2
% of GDP
% of GDP
2
0
-2
-4
0
-2
-4
-6
-8
HU
EU28
-6
-8
HU
EU28
Coal
Oil
Electricity
Gas
C. A. Balance
Coal
Oil
Electricity
Gas
C. A. Balance
Source: EUROSTAT
Note: Current account balance for EU28 from European Commission (AMECO)
1. Energy Security, solidarity and trust
ENERGY MIX
The energy mix of Hungary is relatively similar to that of the EU-28, with the notable difference of a
higher share of gases and nuclear. Compared to 1995, the share of renewable energy and nuclear
increased more than the EU average (from 3% to 9% and from 14 to 18% of gross inland energy
consumption respectively), while the share of gases slightly decreased (by 3 percentage points) The
main decrease concerns the use of solid fuels (by 8 percentage points). The share of low carbon
emission energy sources (if renewables and nuclear are put together) was slightly above the EU
average.
Gross inland energy consumption in 2013
Source: European Commission, based on EUROSTAT
IMPORT DEPENDENCY
For overall fossil fuels, Hungary's import dependency is higher than the EU28 average. Import
dependency for petroleum products is at the EU average, while that of gas is above, although having
2
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Towards an Energy Union - Hungary
decreased since 2005. Hungary imports gas almost exclusively from Russia
1
. Hungary has a significant
energy trade deficit, expressed as percentage of GDP.
Import dependency 2013
81%
82%
84%
87%
81%
72%
Top non-EU gas suppliers in 2013 (% in total imports)
Hungary
European Union
country
[%]
country
[%]
Russia
95.0
Russia
39.0
Not specified
5.0
Norway
29.5
Algeria
9.7
Qatar
6.7
63%
2005
52%
52%
2013
53%
2005
2013
2005
57%
2013
All fuels
Petroleum and
products
HU
EU28
Natural gas
Source: European Commission, based on EUROSTAT
2. A fully-integrated internal energy market
INTERCONNECTIONS
The Hungarian interconnection capacity for electricity was 29% in 2014,
which is above the 2020 target. Additional interconnectors between
Hungary and Slovakia would, among others, allow increased electricity
imports in the mid-term.
In the case of gas, the main element that requires urgent
implementation and hence was also identified as very important project
in the European Energy Security Strategy is the reverse flow from
Romania towards Hungary and the reverse flow from Croatia to Hungary.
This project would allow future Black Sea sources to flow towards
Hungary and Austria / Slovakia and would increase trade already in the
short term. The reverse flow from Croatia would connect Hungary to
Liquefied Natural Gas (LNG) and other western gas sources. The
Hungary-Slovakia gas interconnector became operational as of 1 July
2015, giving Hungary access to competitively priced North and West
European gas markets and thereby allowing the diversification of supply
routes and sources.
Source: European Commission based
on ENTSO-E scenario outlook and
adequacy forecast 2014
Note: Reference to 2030 target is
based on October 2014 European
Council conclusions stating that
"the Commission will also report
regularly to the European Council
with the objective of arriving at a
15% target by 2030"
1
Top non-EU gas suppliers table is based on EUROSTAT data. The share of imports from non-EU countries is calculated
as the ratio between volumes of imports from that specific non-EU supplier and total imports (from EU and non-EU
countries).
3
65%
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ELECTRICITY AND GAS MARKETS
Market concentration index for power generation (left)
and gas supply (right) (2013)
(Herfindahl index – 10000 means
monopoly)
Sources: European Commission based on ESTAT, CEER and Platts
Power Vision
Sources:ESTAT and European Commission Calculations
The concentration of power generation (based on installed generation capacities) in Hungary is below
the EU average, while the concentration of the wholesale gas market is high, primarily owing to the
dominant import supply source and to the decreasing share of indigenous production in the national
consumption. Wholesale gas and electricity prices are comparable with EU average. In September 2012,
the market coupling of the Czech, Slovak and Hungarian day-ahead markets was successfully launched
(Romania joined in 2014).
Retail market performance indicators show no signs of competition at retail level. Switching rates for
electricity and gas markets are insignificant in the case of households, while for industrial consumers
switching rates are higher. In 2013 and 2014 significant retail electricity and gas price cuts have been
implemented by the government. As a result, by the end of 2014 electricity and gas retail prices for
household consumers were down by more than 20% compared to 2012. In combination with other
regulatory measures (e.g. special levies in the energy sector) and market interventions, network
operators and energy suppliers suffer financial losses in the regulated utility business segment, implying
that current retail electricity and gas prices are not fully cost reflective. According to an EU-wide
survey
2
, consumer's satisfaction with regard to the retail electricity market in Hungary is slightly below
the EU average while it is lowest in the EU in the case of the gas market. Following a first economic
assessment of long term costs and benefits, there is no legal framework in Hungary for a mandatory
roll-out of smart metering. Instead, it has been decided to undertake a further assessment of related
costs and benefits (scheduled by end 2016) based on results from ongoing pilots.
CONTRIBUTION OF ENERGY TO CONSUMER PRICE EVOLUTION
Energy prices have contributed to inflation to a large extent until recently. From 2005 to 2012 their
contribution was positive while more recently their effect on consumer prices is negative, an effect
linked to the falling oil prices. This recent trend is more evident in Hungary than in the EU and can be
at least partially explained by the high contribution of oil imports to the Hungarian energy trade
balance. Another contributing factor is the recent round of price cuts in regulated households energy
prices (-25-30% on energy prices) implemented by Hungarian authorities in 2013-2014.
2
10th Consumer Markets Scoreboard (June 2014),
http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm
4
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Hungary : Price evolution & the contribution
of energy prices
% increase on a year earlier
4
3
2
1
0
-1
EU28 : Price evolution & the contribution of
energy prices
% increase on a year earlier
6
4
2
0
-2
2005
2007
2009
2011
2013
2005
2007
2009
2011
2013
Non Energy
Energy
All items
Non Energy
Energy
All items
Source: DG ECFIN based on Eurostat
VULNERABLE CONSUMERS
Based on a EUROSTAT survey on income and
living conditions, three proxy indicators are used
to assess fuel poverty. The values presented on
the chart indicate that fuel poverty is a relevant
issue in Hungary. Since 2008, the legislation
recognises vulnerable consumers on a social and
on a health-related basis. Depending on their
category vulnerable consumers may benefit from
deferred payment, prepayment options,
individual assistance to help consumers
understand their bills, etc.
Source: European Commission, based on on EUROSTAT SILC survey
3. Energy Efficiency and moderation of energy demand
ENERGY EFFICIENCY TARGET 2020
(24.1 Mtoe primary energy and 14.4 Mtoe final energy)
Hungary's recently updated its 2020 energy
efficiency target, as comparing to the previous one
reported in 2014 (from target number 26.6 to 24.1
Mtoe expressed in primary energy consumption
and from 18.2 to 14.4 Mtoe expressed in final
energy consumption
3
), did not seem to incentivise
improvements in energy efficiency, as the 2013
annual figures were already significantly lower than
the 2020 target. This target was based on forecasts
made before the global economic downturn at the
end of the last decade, implying higher than
currently foreseeable energy demand for the
forthcoming years.
Source: European Commission, based on EUROSTAT and on
national energy efficiency targets as declared by the MS under the
Energy Efficiency Directive
3
It should be noted that the Hungarian national statistical definition of final energy consumption includes non-energy
consumption as well. For this reason the new energy efficiency target number is defined as 693 PJ (16.6 Mtoe),
mentioning 603 PJ (14.4 Mtoe) target without non-energy consumption in the new National Energy Efficiency Plan,
approved as the Decision of the Government 1601/2015. (IX.8.).
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Towards an Energy Union - Hungary
The new 2020 energy efficiency target is better
streamlined to the new economic environment. It is
clear that the trend of primary energy consumption
decoupled from the evolution of the GDP over the
last decade. Yet, Hungary needs to continue its
current efforts in order to meet the updated energy
efficiency target, assuming that the current
economic rebound continues in the next five years.
On 20 February 2015 the Hungarian Government
adopted the new scenario for primary energy
consumption
4
. In accordance with the new
scenario, Hungary is committed to decrease
primary energy consumption by 10.4% until 2020
compared to 2005.
ENERGY INTENSITY
Primary energy intensity in Hungary has decreased significantly since 2005, though it remained
significantly above the EU average. Although recent trends showed an improvement in energy intensity
in the industrial sector, this trend was reversed in 2013.
Primary energy intensity of the economy
Final energy intensity in industry
Source: European Commission based on EUROSTAT
Source: European Commission based on EUROSTAT and European
Commission/AMECO
Final energy consumption in households in Hungary is still slightly above the EU average, though it
showed rapid decrease since 2005. The specific energy intensity of passengers cars and freight
transport decreased slightly between 2005 and 2010 and it is well below the EU average.
Final energy consumption per m2 in
residential sector, climate corrected
Specific energy intensity for passenger cars and freight transport
5
Source: European Commission based on Odyssee
database
Source: PRIMES model background data and estimations based on EU Commission
and EU MS inputs
4
5
The new National Energy Efficiency Action Plan has been adopted by the Hungarian government and communicated to
the European Commission in September 2015.
Statistics on energy demand for passengers and freight transport are not available and model estimates have been
used instead. These issues should be borne in mind when comparing energy intensity in freight or passenger transport
between Member States, which should be regarded as merely indicative.
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EU legislation sets mandatory CO2 emission reduction targets for new cars and vans. By 2021, the fleet
average to be achieved by all new cars is 95 grams of CO2 per kilometre. For new vans, the fleet
average is set at 147 g/km by 2020.
Source: European Environmental Agency. 2014 values are provisional. 2013 EU average refers to EU-27.
Regarding transport performance, in EU-28 the inland freight modal shares are 71% by road, 17% by
rail, 7% by inland waterways and 5% by pipelines. The respective inland passenger modal shares are
82% by private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro. Compared to
the rest of Europe, Hungary reports the highest share of buses and coaches use, and in general the
highest share in public passenger transport use.
Modal share Hungary
Source: Eurostat and EU transport in figures 2015. Data refers to 2013. Modal shares based on tonne-kilometres for freight sector and
passenger-kilometres for passenger sector, freight data based on activity within country territory. Estimates are made when data is missing.
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4. Decarbonisation of the economy
NON-ETS GHG EMISSION REDUCTION TARGET 2020
(+10% by 2020 as compared to 2005 in the non-ETS sector)
In 2014 emissions were lower by 30%
compared to 2005 (based on 2014
approximate data).
According to the latest projections, Hungary
is on track to reach its greenhouse gas
emission reduction target for 2020, with
approximately a 40% margin as compared to
2005.
Non-ETS
Emissions
(vs. 2005)
Projections with
existing measures
2020
Proxy 2014
Projections/proxy
-30%
-30%
target
+10%
-3%
Source: European Commission
inventory data.
based on EEA. Based on preliminary
ESD (Effort Sharing Decision) emissions are the emissions from sectors not
covered by the EU ETS.
RENEWABLE ENERGY SHARE TARGET 2020 (13%)
With a renewable energy share of 9.8% in
2013, Hungary is currently on track to reach
its 13% target in 2020. In comparison to its
National Renewable Action Plan (NREAP),
Hungary is in line with its indicative trajectory
for renewable heating and cooling and
transport sectors. However, the share of
renewable electricity is below the value
envisaged by NREAP. Therefore additional
efforts need to be made to ensure that the
2020 target is met.
Source: European Commission based on EUROSTAT
GREENHOUSE GAS EMISSION INDICATORS
Greenhouse gas emissions per capita in Hungary are about 30% below the EU average. At the
same time, due to the low GDP in Hungary, the carbon intensity of the economy is nearly 75%
higher than the EU average.
In 2014 revenues from the auctioning of ETS allowances amounted to EUR 56.5 million.
8
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GHG Emissions
Largest Sectors of GHG
Emissions in 2012 (*)
Energy/power industry
Transport
Industry
Agriculture (incl. forestry &
fishery)
Residential & Commercial
Waste & others
Hungary
30%
18%
14%
15%
18%
5%
EU
Average
33%
20%
19%
12%
13%
3%
EU ETS auctioning revenues
in 2014(EUR millions)
Share of ETS emissions in
2013
GHG emissions/capita in
2013 (tCO
2
equivalent)
Carbon intensity of
economy in 2013
(tCO
2
equivalent/EUR
millions)
Hungary
56.5
34%
5.7
EU
3205
42%
8.5
570
328
(*)Sectoral breakdown for 2013 data not available
Source: European Commission based on EEA
.
ENERGY & TRANSPORT TAXATION
The share of energy-related and transport-related taxes compared to GDP is broadly in line with the
EU-average. The main share of the tax burden can be linked to transport fuels, followed by the share of
taxes on transport vehicles. Tax burden on heat and electricity was of comparable magnitude with the
EU average in 2005, however, by 2012 it decreased significantly and became lower than the EU
average.
Energy & Transport related taxes
% of GDP, 2005
3.0
3.0
Energy & Transport related taxes
% of GDP, 2012
2.0
Transport
vehicles
Transport fuel
2.0
Transport
vehicles
Transport fuel
1.0
Heat &
Electricity
0.0
HU
Source: Eurostat
1.0
Heat &
Electricity
0.0
EU-28
HU
EU-28
5. Research, innovation and competitiveness
RESEARCH AND INNOVATION
Hungary is above the EU average, the US and South Korea in terms of the share of public support
allocated to research and innovation in the field of energy and environment. In terms of intensity of
low-carbon technology patents, Hungary is lagging behind the EU average and the main worldwide
partners. Hungary faces new challenges in managing its energy transition and therefore is active in the
field of research in nuclear technologies.
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Source: European Commission based on EUROSTAT
COMPETITIVENESS
The real unit energy costs
6
for the manufacturing
Real unit energy costs (% of value added)
sector have remained higher in Hungary than in
25
the EU or in the US. This reflects that the energy
19.6
20.0
20
7
17.5
intensity of Hungary's manufacturing sector is
higher than in the EU and in line with the US,
15
13.2 13.7
while real energy prices have increased in
10
9.5
8.2
8.8
8.0
Hungary over the past ten years. Thus, energy
5
prices are higher than both the EU average and in
the US.
0
HU
EU27
US
More specifically, electricity prices paid by
2000
2009
2011
industrial customers are in line with OECD
average, while for gas, they are slightly above.
Source: European Commission
Source: European Commission based on EUROSTAT and IEA
6. Post-2020 Energy and Climate policy Strategy
COMPREHENSIVE MEDIUM TO LONG-TERM STRATEGY (post-2020)
FOR CLIMATE AND ENERGY
6
7
Hungary has set a general strategy for energy and climate for the period post-2020, although
mostly without specific targets for 2030.
The energy-related medium-term objectives are outlined in the 2030 National Energy Strategy,
adopted by the Parliament in 2011, which covers the key issues of energy savings and energy
This indicator measures the amount of money spent on energy sources needed to obtain one unit of value added.
The energy intensity presented here is derived from Use Tables of WIOD, see "Energy Economic Developments in
Europe SWD(2014)19".
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efficiency, renewable energy, nuclear energy, and integration of the Hungarian energy market. A
biennial review of the Strategy is foreseen.
The 2008 National Climate Change Strategy covers the period until 2025 and includes conditional
GHG reduction targets, which will be set based on targets established at EU level. An update of
the Strategy (2
nd
National Climate Change Strategy) has been drafted, taking into account the
evolution of the EU 2030 framework, though it still has to be finalized and adopted by the
Parliament. The Hungarian Low Carbon Development Strategy and a National Adaptation
Strategy are also planned to be part of the Strategy update, along with the Hungarian
Decarbonisation Schedule
analysing the scenario of reducing GHG emission by 40% until 2030
and by 80-95% until 2050.
NATIONAL TARGETS, especially for 2030
Objectives, 2030-2050
GHG reduction
Targets
Yes (only for
2025)
Comments
Conditional target for 2025
16% to 25% reduction
compared to 1990 level in case of a 20% EU 2020 target; 27%
to 34% reduction compared to 1990 level in case of 30% EU
2020 target
Indicative forecast for 2030
share of renewables in
primary energy use expected to reach 20% by 2030
The
Energy Strategy
does not include a specific 2030 target.
However, it has the purpose of reducing by 30% heating
energy requirements of buildings by 2030. The energy
consumption by 2030 should not be higher than before the
economic crisis.
Renewable energy
Energy Efficiency / savings
Yes
(indicative)
No
7. Regional cooperation
Hungary participates in the Central East South Europe Gas Connectivity (CESEC) High Level Group,
operational since the beginning of 2015. The objective of this group is to establish and implement a
regional priority infrastructure roadmap in order to improve interconnections and security of gas
supplies.
Hungary is one of the coordinators of the energy related actions in the "EU Strategy for the Danube
Region", which groups fourteen countries (both EU member states and non-member states). The
primary aim of this cooperation process is to coordinate energy policies in the involved countries.
The strategy is implemented by mobilising and aligning existing funds to its objectives, where it is
appropriate and in line with overall frameworks. The specific actions cover energy infrastructure
development, for example, "The Danube Region Gas Market Model"; the "Danube Region Gas
Storage Analysis" or the "Danube Region Smart Grid Concept". Other actions cover renewables, for
example the "Danube Region Geothermal Concept" and the "Danube Region Biomass Action Plan" or
other actions, such energy efficiency.
Hungary actively participates in the cooperation of the Visegrad 4 Group (CZ, HU, PL and SK) in the
field of energy policy. V4 aims at regional integration of the energy markets in particular for the gas
and electricity sectors and with the Allegro project in the nuclear sector. The Allegro project is aimed
at demonstrating the operability and technological feasibility of gas-cooled fast reactors.
The Czech, Slovak and Hungarian day-ahead electricity wholesale markets have been coupled since
September 2012 which Romania joined in November 2014. The price convergence between these
countries reached 76% after the launch of the market coupling. The Central Allocation Office
11
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manages the allocation of longer term capacity rights in the whole Central-East region, and with the
exception of the borders of CZ, SK, HU and RO it manages the day-ahead capacity allocation on all
other Central-East borders.
8. Cohesion policy contribution
The EU Cohesion policy provides for important investment possibilities to implement energy policy
objectives in Hungary which will be complemented by national public and private co-financing,
aiming at optimal leverage. It also ensures integrated territorial solutions to challenges by supporting
capacity building, technical assistance and territorial cooperation, including the macro-regional
strategy for the Danube Region in which Hungary takes part.
Energy efficiency:
Over 2014-2020, EU Cohesion Policy will invest some EUR 1 245 million in energy
efficiency improvements in public and residential buildings and in SMEs, as well as in district heating
in Hungary. A further estimated EUR 2 439 million will be invested in supporting the move towards
an energy-efficient, decarbonised transport sector. These investments are expected to contribute to
around 76 000 households with improved energy consumption classification and a decrease of
around 67 251 000 kWh per year of decreased primary energy consumption of public buildings, as
well as to around 470 km of reconstructed or upgraded railway lines, 130 km of new or improved
tram and metro lines and 50 km of new or improved inland waterways.
Decarbonisation:
Overall, the EU Cohesion Policy investments in Hungary over 2014-2020 are
expected to contribute to an estimated annual decrease of GHG of around 2 964 000 tonnes of
CO2eq. Over 2014-2020, EU Cohesion Policy will invest some EUR 876 million in renewable energy in
Hungary. These investments are expected to contribute to around 1 980 MW of additional capacity
of renewable energy production.
Research, Innovation and Competitiveness:
Over 2014-2020, EU Cohesion Policy will invest
significantly in R&I and in SME competitiveness in Hungary. This will be based on the national
strategy for smart specialisation. For Hungary, the Strategy includes a focus on clean and renewable
energies and on advanced technologies in the vehicle and other machine industries. At this stage, the
allocations foreseen for investments in R&I and adoption of low-carbon technologies in Hungary are
not specified, but should become available in line with the evolving content of the smart
specialisation strategy.
12