The Guest Blog

Posted by Brook Riley (FoEE), Erica Hope (CAN-E), Arianna Vitali (WWF), Christian Debono (EEB)

In six weeks time Hungary will take over the EU presidency. With many major legislative proposals under preparation for 2011, this is a critical time for the EU’s climate and energy policy. Decisions made next year will set the stage for decades of European investment. Key questions, therefore – which four NGOs travelled to Budapest to ask – are “how will Hungary manage the Presidency’s energy dossiers?” And “will the Hungarian presidency speak out in favour of binding legislation for energy savings?”

Most countries claim to support energy efficiency, but fall short on action and results. Hungary could well buck the trend: one month after winning a landslide victory in April 2010, centre-right party Fidesz promised an impressive 100 billion forints (roughly €360 million) for efficiency investments to cut household energy use.

This renovation scheme was a very popular move. Fuel poverty is widespread (as indeed it is throughout the EU). Previous government policies, moreover, had not been helpful to consumers: Hungary has the highest VAT rates on electricity and natural gas in Europe. Retrofitting buildings to cut energy use is clearly an obvious solution, but requires a hefty governmental shot in the arm.

The €360 million scheme hinted at Hungary as an EU leader for energy savings. Real progress during the presidency looked likely. And given the major knock-on effects of reduced energy consumption on energy security, signs were good for a strong Central and Eastern European (CEE) position during the special Heads of State energy meeting in Brussels on the 4 th of February.

Major problems, however, persist. Funding lacks transparency: the scheme partly relies on revenues from auctioned emissions permits, but government sources claim that at least €17 million have gone missing during the handover to the new government. Meanwhile, power company opposition to effective energy savings is a constant pressure. The result: enthusiasm risks fizzling out amid fears that the government is backpedalling on its funding pledges. If true, this would be a huge setback.

These are tough times for every EU government, but this is exactly the moment to be thinking about a green new deal. Senior Hungarian government officials we have met are enthusiastically supportive of energy savings and a binding EU-wide target for 2020. And a study published in June by the reputed Central European University (located in Budapest) makes for compelling reading: a wide-spread deep retrofitting programme could avoid up to 85% of Hungarian energy use for heating in buildings by 2020 – and create over 130,000 new jobs.

So what will happen during the Hungarian Presidency? Finding common, EU wide solutions to fund up-front investments in energy savings and overcome vested interests won’t be easy. Despite enthusiasm in some quarters, there are also question marks over governmental priorities. The trick is to remember that success means more than simply compromising. It means daring to do what you know is in your best interests.

Posted by Brook Riley (FoEE), Erica Hope (CAN-E), Arianna Vitali (WWF), Christian Debono (EEB)

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