Industrial Decarbonisation in Hungary
30 / 11 / 2022
The Hungarian heavy industry has lost its significance in the past thirty years. The share of steel, cement, and chemical production in the Hungarian gross value added plummeted, but the incumbent industries’ energy needs are still through the roof. If we want to attain net zero emissions by 2050 in line with the Hungarian Climate Act, these industries need an overhaul. Investment in scalable abatement technologies tops the priority list, but it is equally important to continue testing new concepts and further industrial research.
Why is it hard to abate?
The hard-to-abate industries have a double whammy. Their production processes are one source of their carbon footprint, and their energy intensity adds another. Efficiency gains in energy use are no silver bullet because the process emissions are also substantial. The overall capital spending of the incumbent industry needs to expand to achieve meaningful carbon reduction. The question arises:
Can sustainable finance be an answer to the challenge represented by the decarbonization of the industrial sector?
Financial barriers to decarbonisation are still daunting. The government overlooks industrial decarbonization and seeks to increase energy efficiency in other sectors. Green private finance is still in its infancy but has potential.
We took positive note of the Hungarian central bank (MNB) launching a green capital requirement programme for banks. But what is missing is the central bank’s clear signal and commitment to continue with it.
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