Hungary is establishing a powerful new environmental authority from January 1, 2027, tasked with tighter oversight of the country’s expanding electric vehicle (EV) battery industry, Prime Minister Péter Magyar said at a September 3 press briefing, state news agency MTI writes. 

The new authority will be set up in several stages, with the government planning to give it nationwide responsibility for environmental, nature, climate, water and animal protection, water management and forestry-related regulatory tasks.

The government would raise the maximum fine for the most serious environmental violations by large industrial companies to HUF5bn (€13.7mn) and introduce a "three strikes" system under which repeat offenders could face penalties equivalent to at least 0.5% of their annual net revenue.

The measures represent a significant tightening of environmental enforcement against battery manufacturers, a strategically important industry. The country has attracted billions of euros in investment from Asian battery makers, which expanded rapidly as the Orban government sought to position itself as one of Europe’s main EV production hubs. Hungary has become the world’s fourth-largest EV battery maker, and investments in the sector in recent years have created over 10,000 jobs.

Critics have raised concerns about the environmental impact of the plants, including water use, chemical pollution, waste management, and the ability of local authorities to effectively monitor large industrial facilities. The change of government, however, has marked a clear shift as companies faced growing scrutiny.

Magyar cited Samsung SDI’s battery plant in God, 20km north of Budapest, which was fined several times in 2022-23 for exceeding emissions limits. The South Korean company has previously said its Hungarian factory complies with environmental and safety regulations, after its environmental licence was temporarily suspended. Magyar said the plant’s annual revenue is above HUF1 trillion (€2.8bn), meaning that a 0.5% minimum penalty would amount to around HUF5bn.

In June, authorities suspended the production licence of Chinese battery-parts maker Semcorp after finding significant aluminium pollution in groundwater monitoring wells near its plant; the company said it was investigating.

CATL, which is building its largest manufacturing base outside of China, is investigating the source of increased nickel exposure detected in several of its employees during work inspections in July. The company promised to tighten safety rules. Last week, the Chinese manufacturer announced it had received a permit to operate its first cell manufacturing facility. The 350,000 sqm cell factory could reach an annual production capacity of 40 GWh.

"We will not compromise on the health and safety of the Hungarian people for the sake of any single investment or any single investor," Magyar said.

Magyar said the new regulator would be required to inspect industrial facilities with high environmental impacts on a strict professional basis and ensure that both Hungarian and EU environmental rules are respected.

Emphasis will be placed on environmental permitting and supervision of battery manufacturing, recycling, and decommissioning, Magyar said.

Under the proposed system, the size of a waste-related penalty will depend on factors such as the seriousness of the violation and the volume and hazardousness of the waste involved.

The review is also relevant to the battery industry because Hungary will likely need to develop larger, more sophisticated recycling and waste-treatment capacity as the first generation of locally produced EV batteries reaches the end of their useful lives, analysts said.

Magyar said electronic waste will also enter the system next year, although the necessary collection and recycling arrangements have not yet been fully established

In related news, Hungary’s chemical trade union, VDSZ, signed a coopéeration agreement with the Hungarian Battery Association on September 3, aimed at improving the sector's competitiveness and labour retention capacity.

Peter Kaderjak, managing director of the Hungarian Battery Association, said the objective was to ensure that battery production in Hungary operates sustainably, with higher added value, while remaining competitive and retaining the more than 10,000 jobs created. The industry’s public perception needs to improve, he said, arguing that the sector was currently "undervalued".

The tightening of regulations targeting the EV battery chain is part of a broader government review of Hungary’s environmental and waste-management system. At the press briefing, Magyar announced that the government had completed an initial review of MOHU, a subsidiary of oil and gas giant MOL, which operates a 35-year state waste-management concession since 2023. He claimed that the company "was not meeting its commitments or targets in the contract."

Hungary remains well behind other EU member states on waste recycling. Around 54% of waste is currently landfilled, 33% is recycled, and 12% is used for energy recovery, while the country is also missing EU-related targets. He said municipal waste processing had been targeted at 50% in 2025 but remained below 36%.

The government estimates that meeting its previously established waste-management targets could reduce public expenditure by as much as HUF90bn a year by 2027, partly by reducing the financial consequences of failing to meet EU requirements.

Magyar said the review of MOHU began after a "flood of complaints" by local municipalities over the quality of the survey.

Radical right-wing Our Homeland criticised MOHU in a statement for its plans to end cash payouts at the country’s deposit-return points. The REpont deposit-return scheme, under which consumers receive HUF50 (€0.14) for bottles and cans, was introduced in 2024. The parliamentary party argues that the move is an attack on the constitution, which guarantees the use of cash in Hungary.

The prime minister also unveiled a national tree-planting and afforestation programme running through 2030, with the government to provide tens of billions of forints in annual non-repayable funding from 2026. The scheme will support new forests and riverside planting, prioritising climate-resilient species and expanding tree cover in settlements while maintaining existing trees. 

Magyar also called for invasive species to be replaced, forests restructured and forest managers given greater professional support, to significantly increase forest cover and shade-providing trees by 2030.