Despite mounting opposition from Hungarian residents and environmental groups over the expansion of battery plants across the country, Prime Minister Viktor Orban’s nationalist government continues its push for Hungary to become Europe’s battery hub. But at what cost?
In the past decade, Hungary has positioned itself as the fourth largest producer of batteries globally, making up 3% of the world’s batteries. This places it behind China (77%), the US (6%) and Poland (6%), according to data from S&P Global Market Intelligence. Hungarian Prime Minister Viktor Orban, who has held office since 2010, has been a driving force in supporting the country’s expansion of battery plants.
However, residents from various regions of the country and environmental groups have criticised Orban’s nationalist government for neglecting environmental concerns, leading to what they call a “battery wasteland”. Government opposition has also expressed concerns about the nationalist government’s restrictions on human rights and weak oversight of foreign investments in battery production.
Growing unpopularity of Hungary’s battery boom
From the destruction of agricultural lands to the depletion of the country’s water and energy sources, Hungarian residents and environmental groups have criticised the environmental and social impacts caused by battery plants. This has led to fears of a ‘battery wasteland’ and mounting public disapproval of Hungary’s battery boom.
In the city of Debrecen in Eastern Hungary, experts have estimated that a Chinese battery plant will strain the city’s water resources to its limit to support the plant’s cooling facilities. The plant, owned by Chinese battery manufacturer, Contemporary Amperex Technology Co. Ltd. (CATL) is worth EUR 20 billion in investments and expected to be in production by 2026.
There is also mass concern about the impacts of battery plants on the health of workers and residents. For instance, since the opening of a South Korean battery factory in the Northern Hungarian town of Batonyterenye in 2021, workers have documented cases of skin irritations. Residents have also complained of an increase in respiratory issues among the town’s children. Meanwhile, a 2023 study in Scientific Reports found traces of lithium in the tap water in 19 counties in Hungary, although not in harmful quantities.
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Regarding the wider impacts of battery production for electric vehicles (EVs), it has been recorded that EVs emit more carbon emissions than traditional, diesel-powered vehicles during production. Battery production for EVs is extremely energy-intensive, especially during the mining of battery raw materials such as lithium, cobalt, and nickel. More than 50% of the earth’s lithium supply is found across three regions in South America consisting of Argentina, Bolivia, and Chile. Dubbed the “Lithium Triangle”, these countries experience intense water loss due to lithium mining which in Chile alone, accounts for 65% depletion of the region’s water.
Similarly, the extraction of cobalt has led to a reduction of life in over 570 hectares of land and contamination of over 10 kilometres of coastline in Cuba. Moreover, nearly 75% of cobalt is extracted in Congo, which also exploits a significant amount of child labour.
How Hungary’s ‘illiberal democracy’ has ensured the expansion of foreign battery plants
As negative perceptions of the EV battery industry in Hungary grow and concerns about its environmental and social impacts become more widespread, the government is increasingly relying on authoritarian tactics to assert control. For instance, a public survey conducted in February 2023 revealed that half of the Hungarian population supports a nationwide ban on the construction of new battery factories. But despite significant opposition, in the following month, Orban’s government rejected proposals for local referendums on factories.
This move has further sparked criticism of Orban’s nationalist leadership, which critics have labelled as ‘illiberal’ due to his government’s increasing crackdown on silencing critics. In recent years, the EU has also accused the right-wing government of democratic backsliding due to its growing restrictions on human rights, weakened checks and balances, and institutional corruption.
A 2024 study on Hungary’s illiberal political framework revealed that the Hungarian government establishes “extremely favourable regulations” to facilitate low-cost battery manufacturing, promoting rapid industry growth. These lenient regulations have also centralised permission and licensing for building battery plants under Orban’s right-wing government instead of local municipalities.
Meanwhile, Hungary’s low battery production costs and access to the EU market have attracted foreign investments, primarily from East Asia. This reliance on foreign companies has prompted the government to prioritise economic interests over environmental concerns.
“This reliance on foreign companies has prompted the government to prioritise economic interests over environmental concerns.”
Currently, over 20 companies, mostly from South Korea, China and Japan, are engaged in battery recycling or manufacturing components for battery production in Hungary. The majority of battery plants or sites are located in three regions: northwest Hungary, the wider Budapest area, and Eastern Hungary.
Hungary’s heavy dependence on foreign investment has also resulted in a shortage of research and development centres, mostly controlled by East Asian companies. This is concerning because research and development in the battery industry is vital not only for extending battery lifespans and advancing battery technology but also for exploring ways to reduce the mining industry’s environmental footprint. In countries like the UK and Sweden, investments in education and R&D ensure a “sustainable battery value chain” to mitigate environmental damages.
Hungary’s progress in the battery sector serves as a “cautionary example” for the EU
Despite fears over the environmental impact of battery plants, Orban’s government shows no signs of slowing down in turning Hungary into Europe’s battery hub. By 2030, approximately 30 battery factories are expected to be in production in Hungary, generating more than 30,000 jobs by the mid-2020s.
However, experts question the necessity of Hungary’s battery industry expansion as the planned capacity for electric vehicle batteries far exceeds requirements. In addition, given Hungary’s illiberal democracy and its low priority on environmental issues, there have been calls for improvements regarding the lack of EU-wide environmental standards. To tackle these challenges, they recommend that the EU regulate the production process, limit fossil energy imports and establish better standards for working conditions and environmental impacts.
That said, the EU has implemented regulations across the bloc to enhance environmental and social standards in the battery industry. In 2023, it adopted rules requiring 100% recycling of electric vehicle batteries which have become stricter over time. By 2030, the EU aims for 95% recycling rates for cobalt, copper, lead, nickel, and 70% for lithium in batteries, with new batteries required to contain recycled materials by 2031.
Nonetheless, implementing better regulations for battery production will largely depend on national-level institutions within the EU, considering the vast differences in political and economic environments among member states. Thus, as EU countries move towards ending the production of new petrol and diesel vehicles by 2035, Hungary’s recent battery boom and creation of a ‘battery wasteland’, serve as a warning to the rest of the EU. The pursuit of one climate objective must not be at the expense of another.