Climate Leaders Discussed Green Transition at 4th Budapest Climate Summit

The Budapest Climate Summit was opened by Attila Steiner, State Secretary of Energy and Climate Policy at the Ministry of Energy of Hungary who presented Hungary’s position and progress on the green transition.

"Hungary already managed to reduce GHG emissions compared to 1990 by 37%, but there is still a need for improvement. During the revision of the National Energy and Climate Plan, the government raised the emission reduction target for 2030 to 50% instead of the previous 40%. The State Secretary also touched on the fact that the country is increasingly switching from fossil energy sources to green energy sources, which the government is helping with significant subsidies. He also highlighted the importance of supporting green electricity storage, electromobility, and nuclear energy production. "If we proceed at this pace, we can reach our 2030 goals years earlier!" highlighted Steiner.

Diana Ürge-Vorsatz, Vice Chair, Intergovernmental Panel on Climate Change (IPCC) presented the 6th assessment report of the benchmark organization. The report confirms that we missed many opportunities but we still have a choice to change the course. “The world’s infrastructure is built for a climate that no longer exists,” she underlined.

“We witnessed an amazing drop in the cost of renewables technology, thus we are expanding renewables-based power generation but energy demand keeps exceeding even the most ambitious growth in renewables, which we need to address.

One of the key enablers of the green transition is financing. At the Budapest Climate Summit speakers discussed the potential of sustainable investment in climate change mitigation.

“We created the "Sustainable Future Bank" program based on the five pillars of MBH Bank's ESG strategy adopted in 2022,” said András Puskás, deputy CEO of MBH Bank. “During the development process, we paid special attention to contributing to the achievement of Hungary’s climate goals with all three commitments made in the program. That is why, as a 100% Hungarian-owned bank, the joint cooperation with the Hungarian National Parks is of great importance to us," said András Puskás, Deputy CEO of MBH Bank.

On the sidelines of the Budapest Climate Summit András Puskás, deputy CEO of MBH Bank and István Nagy, Hungarian Minister for Agriculture signed an agreement and in the coming years, they will jointly begin developing comprehensive biodiversity conservation programs.

Antonella Sopranzetti, director, Government Relations and Advocacy Europe, Low Carbon Solutions/Upstream of ExxonMobil presented ExxonMobil’s Global Outlook-2050 which projects the development of the world's energy system. The projections at the heart of the Global Outlook represent ExxonMobil’s most likely view of the world in 2050, based on examining the existing policies and policy directions. It predicts that global energy demand will grow by 15% by mid-century. Reducing demand is not easy, she underlined, adding that we need to keep our options open as excluding technologies and solutions can increase costs and slow down progress toward goals.  

“All energy types are vital to a prosperous lower-emission future. Renewable energy will grow, but oil and natural gas are still projected to be critical to meet the world’s needs. Achieving net-zero emissions will require the adoption of constructive policies, new technologies, and market-driven mechanisms”.

Speaking about the new realities of the energy world, Zsolt Jamniczky, deputy CEO of E.ON Hungaria Group said that old cheap prices are gone for sure. Volatility is constant, which makes planning difficult. Speaking about how E.ON Hungaria coped with this situation he said, “We realized that we have to create new solutions overnight.

”On the positive side, he highlighted that for instance Power Purchase Agreements (PPA) are gaining momentum, as customers start to value long-term stability versus the price itself. However, he is worried about the industry’s long-term competitiveness in Europe compared to the United States and China,” he said.

László Fazekas, deputy CEO and CFO of MVM also underlined that the last year was very challenging. The main task is to guarantee the security of supply for this reason, for this end, the government introduced many policies that impacted MVM. He underlined that apparently, the price signal that was given by the government was effective as data show a decrease in the power and natural gas consumption of households. Finally, he underlined that MVM Group will have a key role in meeting the decarbonization targets of Hungary’s National Energy and Climate Strategy.

Reflecting on the continuous growth of green energy, Mátyás Vajta, CEO, HUPX underlined that they see a continuous shift of focus from conventional to renewable power trading.

“The role of power exchanges is expected to grow drastically in the short-run, as the EU-level and national market developments are all pointing at the penetration of renewables. Automated data processing, forecasting, and the GO market are the keywords in the future of power trading. The price signals of the power exchanges are key inputs for making good and sustainable business and policy decisions,” he stated.

Speaking about energy efficiency, Trang Nguyen Thu, head of Energy Efficiency Business Development at MET Central Europe noted that the foundation of energy efficiency lies in monitoring and measuring energy consumption. “Mindset transformation plays a crucial part at both individual and corporate level. The importance of companies providing complex energy solutions will be substantial,” she underlined.

At the Budapest Climate Summit, speakers also discussed how advanced nuclear power can support energy security and the potential of small modular reactors (SMR). At the COP28 conference, 22 countries agreed that we should triple the share of nuclear energy by 2050, Hungary was among the signatories. Small modular reactors (SMRs) are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors. The construction time is much shorter (2-4 years) than pressurized water reactors, cost of capital could be lower. “In the regulatory environment, we need flexibility, technology neutrality is key,” started Andrea Beatrix Kádár, President of the Hungarian Atomic Energy Authority. 

“One of the biggest questions is financing and nuclear technology is very sensitive to this. Even with the proven technologies, it’s complicated, new R&D technologies are even more difficult, warned Dr. Csaba Kiss, deputy CEO, chief generation officer and chief nuclear officer of MVM Zrt. He highlighted that one of the most important benefits of SMRs, can be that they are closer to end-users but finding a good site is necessary.

“There is a huge interest regarding SMR technology but regulation needs to be in place,” said Dóra Zombori, partner at Dentons adding that regional cooperation is also crucial for SMRs to proliferate.

Réka Janosik, executive director in Quantitative Research and head of Budapest Climate Risk Center of MSCI pointed out that working towards our net-zero goals also means that we have to understand where our emissions are coming from, we need to set targets and rethink if they are ambitious enough. 

Julian Toth, COO of the International Sustainable Finance Center highlighted that ESG is an opportunity to reflect on our procedures and how we can make our operations greener. 

Krisztina Kulcsárné Takács, chief financial officer of SolServices concluded that the future is here and we shouldn’t be afraid to step into it, we have to share knowledge and learn from each other.