Hungary became Europe’s battery factory, but Orbán’s departure exposes serious environmental problems

In recent years, Hungary has become one of the European countries that has received the most investment from Chinese and South Korean battery manufacturers. However, Viktor Orbán’s departure from power is having direct impacts on this thriving industry; in fact, some facilities have halted production since the arrival of the new prime minister, Peter Magyar.

For example, Semcorp’s separator plant in Debrecen has been closed for five months after toxins were detected in the soil during tests conducted near the facility. This factory is one of the few of its kind located outside China, supplying separators to well-known companies such as LG Energy Solution and CATL.

Semcorp claims that the reading that led to the plant’s closure was a laboratory error, which is why numerous drills have been conducted in the area to analyze the soil and groundwater (at a cost of approximately $500,000) to prove to authorities that the country’s environmental regulations are being followed.

Although under Orbán’s leadership Hungary managed to attract over $20 billion in investments for battery plants and components, the government turned a blind eye to environmental regulation compliance. Magyar plans to impose very high fines on large companies that violate these rules, marking a 180-degree shift from his predecessor’s approach.

Hungary is one of Europe’s key hubs for battery production

In addition to suspending production at the Semcorp factory, fines have been imposed on SK On, and part of the production at South Korean cathode manufacturer EcoPro’s plant has been halted. The new government’s goal is to attract high-value investments rather than merely building assembly plants as before. "A research and development center is worth a hundred times more than one of the battery factories they brought here."

The rise of electric cars in Europe is greatly benefiting Hungary’s industry: due to rising fuel prices caused by the war in Iran, demand for BEV (Battery Electric Vehicles) has surged for months in countries like Germany and France. BMW’s factory in Debrecen currently produces the successful iX3 on three shifts, while CATL has established one of the largest battery factories on the old continent nearby.

Spain is another country benefiting from Chinese investment in the electric vehicle sector: companies such as Chery, Geely, Leapmotor, and SAIC already manufacture (or will soon manufacture) such vehicles in Spanish plants, in addition to projects like CATL’s giant battery factory in Figueruelas (Zaragoza).

Source | The Japan Times