The confirmed future opening of a CATL battery manufacturing plant in Debrecen has stirred up intensive public debates in Hungary over the past months. In the wake of the high-profile controversy, Mathias Corvinus Collegium decided to host a short panel discussion featuring four experts on the subject, with the title Battery Industry — Economy Put on a Charger on Friday, 31 March at the Buda campus of MCC.
Nándor Flór, a senior analyst at the Oeconomus Economic Research Foundation, was doing the lion’s share of the talking at the event. He was mostly referring to a recent study his institution carried out on European car battery production, in collaboration with MCC. He shared with the audience that about seven per cent of the European Union’s GDP is contributed by the automobile industry. In our country per se, that share is just 4.5 per cent; while in neighbouring Slovakia, it is as high as 14 per cent. About 2.5 million people are directly employed by the automotive sector in the EU, and 14 million people in total have indirectly-related jobs.
Mr Flór went on to state the industry has been going through an electrification process in the past decade,
which has had some positive and negative consequences. The collective greenhouse gas emission of personal vehicles within the EU has gone down. 23 per cent of the Union’s total harmful gas emission comes from transportation, 70 per cent of which are attributed to personal vehicles. So, overall, this is some good news.
However, manufacturing electric vehicles does have its challenges. About 70 per cent of the auto parts needed for these new machines are different from what is needed for the ones with ‘classic’ combustion engines. On the other hand, electric cars only need less than half the parts in the manufacturing process, 30,000 compared to 70,000. As a downside of the EV surge, the elevated demand for car batteries has caused a lithium shortage in Europe, 80 per cent of which is imported from Chile, Mr Flór highlighted.
Erik Kovács, senior research fellow at the Climate Policy Institute elaborated on what the ‘electrification process’ means in numbers. Electric vehicles first entered the market in 2010. That year, only 590 cars of this sort were sold. By 2020, 1.5 million were on the roads of Europe; and by 2022, their numbers rose to 2.2 million. As a result, CO2, N2O, and other harmful gas release has decreased in European transportation, especially in the Northern and Western regions. As Mr Kovács pointed out, Sweden saw the biggest increase in electric vehicles on the roads since the COVID-pandemic broke out, 46 per cent.
Gergő Sárdi, the other speaker from the Oeconomus Economic Research Foundation, introduced the phrase ‘climate neutral fuels’ into the discussion. Balázs Zay from the Climate Policy Institute, went on to further elucidate that there are multiple technologies competing against each other in this niche.
Fuel cells storing hydrogen, synthetic fuels (made from CO2 extracted from the atmosphere), and electric batteries
are environmentally friendly solutions to powering vehicles.
On this subject, Mr Flór pointed out that battery manufacturing capacities are likely to increase fivefold in the upcoming years; and that there is intent on the EU’s part to keep a large share of the production in Europe. Hungary is doing well in that regard: it is already fourth in the world in terms of battery manufacturing.
The Thorny Issue of the Debrecen Battery Plant
After the in-depth discussion about the automobile industry and electric vehicles in general, it took quite a while for the speakers to actually get to the topic most people in the general public are most interested in: the opening of the battery factory, under the ownership of the Chinese manufacturer CATL, near Debrecen.
Mr Zay confidently stated the factory in question will not pollute the environment. As he emphasised, there are laws on the books to prevent any establishment from doing such harm—even for small bakeries, which could theoretically be polluters, not just automobile part plants. He went on to say that these are both EU and local Hungarian laws, the latter of which are actually stricter than the former. As he put it:
‘Every industrial facility has emissions. There are legally mandated limits to these in the entire European Union, and since it’s part of the Union, there are in Hungary, too. These [Hungarian] regulations are stricter than the standard European mandates, by the way. Authorities are monitoring if these limits are met. Also, even NGOs can hire laboratories to make measurements of their own.’
At this point Mr Kovács chimed in, telling that Greenpeace did their own tests at the Samsung factory in Göd, and could not find harmful emission levels higher than the legal threshold. He then drew attention to the fact that in Western Europe, universities, research centres, and battery factories are collaborating on developing new technologies.
Mr Záy ended his part by reminding that a former Finance Minister of Slovakia described it as a ‘tragedy’ that the often-attacked battery factory ended up being built in Hungary, and not in his home country.