National Clean Development Strategy 2020-2050.

This Hungarian National Clean Development Strategy (or NCDS) for the planned period from the year 2020 until the year 2050 has an integrated modeling approach that was used to explore the specificities of the sectors as well as the system-wide and cross-sectoral dynamics of the decarbonization process. The development of projections was helped by applying two models: 1) The Green Economy Model (GEM) is an intersectoral model that uses system dynamics as its foundation. This methodology supports the estimation of the macroeconomic outcomes of decarbonization, including the economic evaluation of several social and environmental externalities in addition to changes in the labor market. 2) The HU-TIMES model was used iteratively with the GEM to simulate the energy sector and to outline the emission routes of the energy and industrial sectors. TIMES is a bottom-up, partial equilibrium optimization model used to analyze the different pathways of energy flow within the energy subsectors. Three main scenarios for greenhouse gas (GHG) emissions up to 2050 have been developed and analyzed this text.
The objective of the NCDS is to outline the socioeconomic and technological pathways toward achieving the 2050 climate neutrality target, which has been enshrined in law by Act no. XLIV of 2020 on Climate Protection. 6 The Strategy prioritizes the prosperity, growth, and well-being of Hungarian families by integrating development and well-being goals into measures that prevent negative impacts or prepare for the unavoidable consequences of climate change. Clean development is a model of development that nurtures sustainable economic growth and creates green jobs and economic development opportunities while minimizing environmental pollution and greenhouse gas emissions. The emissions reduction pathways presented in the NCDS integrate currently available and future technological solutions and show that it is possible to achieve the 2050 climate neutrality target in a socially just and cost-efficient way. While achieving climate neutrality requires significant effort in all sectors of the national economy, action by the polluting industries and the private sector is essential. The government of Hungary is determined to ensure that the biggest polluters pay for the majority of the costs associated with the transition and that Hungarian families do not bear the costs of the transition. Although climate neutrality requires significant investments, it also presents major welfare opportunities for the next 30 years and after by laying the foundation for sustainable economic growth. Although the green transition offers unique opportunities, it also holds challenges and temporary trade-offs. For this reason, the Strategy emphasizes a just transition through which everyone shares its benefits despite facing temporary difficulties. By undertaking this approach, the NCDS promotes public acceptance of ambitious climate action by demonstrating that the benefits can compensate for the negative impacts associated with the climate mitigation measures. The long-term vision of the NCDS should be underpinned by promoting research, development, and innovation as well as continuous improvement at all levels through education and training and enhancing green finance opportunities.
To achieve net zero GHG emissions by 2050, based on currently available technological developments, efforts are needed in the following areas: 1) Energy efficiency improvement in all fields of the national economy and establishment of a circular economy; 2) Electrification in all areas of the economy, based on domestic nuclear and renewable energy sources; 3) Application of CCUS technologies in the energy sector and in high emitting industrial facilities; 4) Use of hydrogen and upscaling of the related hydrogen technologies; 5) Sustainable utilization of bioenergy (within limits); 6) Sustainable, modern, and innovative agriculture; 7) Increase in natural sink capacities, mainly through the absorption of CO2 by forests and maintaining forests as the most potential natural sinks as well as rethinking economic and financial incentives for forestry; and 8) Research, development, and innovation as well as corresponding education and training programs. Main directions for interventions: Support is needed for residential energy saving; Acceleration and expansion of energy efficiency investments are necessary, especially in the residential and commercial sectors; Significant investments will be needed to electrify the economy, especially in the transport, residential, and commercial sectors. One of the main conditions for the electrification of the economy is the modernization and climate-friendly transformation of the energy sector; Further investment will be necessary in the development of CCUS technology, as well as in the increasing the utilization of renewable energy sources and energy storage systems. Given carbon phase-out efforts, new investment in fossil fuel-based technologies and industries runs the risk of rapidly depreciating assets (i.e. stranded assets); Besides more efficient industrial processes and product use (IPPU), CCUS technologies and alternatives to replace fossil energy sources (as raw material feedstocks) are needed in the future. These alternatives can be carbon-free or low-carbon hydrogen and its derivatives as well as alternative biological raw materials. Furthermore, raising public awareness to shape consumption patterns and promoting the transition to a circular economy will have a significant positive impact on industrial emissions; Besides the electrification of the transport sector, expanding the application of second-generation (or advanced) biofuels and hydrogen, as well as the more efficient usage of fuels and the gradual decrease in using liquefied petroleum gas (LPG) on the market, will contribute to decarbonizing and modernizing the sector; In the agricultural sector, a reduction in fertilizer use; a more efficient use of organic fertilizers; and a wider application of precision farming, automatization, and digitalization will be needed. Moreover, investments targeting feeding, irrigation, and energy efficiency are key requirements. The LULUCF sector will require significant investments to enhance net CO2 capture (sink capacities) after 2030. This will be especially needed for measures that improve forest adaptation, reduce logging in the medium term, and increase afforestation efforts in the long term. For sustainable forestry, the maintenance of stocks with the most optimal CO2 equilibrium and business model (regarding area and age structure) needs to be emphasized. Furthermore, interventions should support maintaining and developing forests while protecting their natural levels despite climate change impacts; The waste sector will require significant investments to drastically reduce landfilling. Reducing landfills, diverging waste flows, and improving waste treatment methods account for around 90% of the emission reductions of the sector. Further investments will be needed to reduce the amount of industrial waste, to improve municipal waste treatment, and to prevent waste in the first place. To reduce emissions in waste management, additional investments are necessary in other sectors (e.g., in the transport sector because of waste transport, or in the energy sector because of nonrecyclable waste combustion); Research, development, and innovation will be one of the main pillars of achieving these energy and climate goals. Through the research development and further improvement of new technologies and processes, as well as their market introduction, a degree of cost reduction can be achieved to greatly help the spread of clean technologies; The education and (re)training of professionals capable of developing and/or applying new technologies and processes is also crucial to reach climate neutrality.