In the future, Hungary wants to be at the forefront of the production of e-car batteries. The government is attracting investors with generous subsidies – including a Chinese gigafactory. There has been a lot of criticism for this.
Construction work for the Chinese company CATL near the city of Debrecen has already begun
With a busy buzzing, rattling and beeping, excavators and dump trucks are working on a large piece of land in eastern Hungary, not far from the Romanian border. Here, on a previously derelict site on the outskirts of Debrecen, the extent of Hungary's ambitions to be part of the mobility revolution is evident: Within this decade, one of the largest electric car battery factories in Europe is to be built here.
The plant of the Chinese company Contemporary Amperex Technology Co. Limited (CATL) will cover an area the size of more than 280 soccer fields after completion of all construction phases and will produce batteries with an annual capacity of 100 gigawatt hours (GWh).
That would not only be enough for around a million electric cars, but would also make Hungary one of the largest battery producers in Europe – in the spirit of the government, which wants to make the country a “great power” in this area.
The strategy follows the trend of the automotive industry, a vital sector for Hungary, which was responsible for about five percent of gross domestic product (GDP) in 2021. The country wants to prepare its economy for a future without internal combustion engines.
Residents fear drought
About a kilometer south of the construction site, a handful of houses are lined up along a bumpy gravel road. Albertné Lovas and her husband have been growing cabbage here for 35 years, which they sell in town. Now they fear the new factory could pose a health risk to their crops and the people of the region – despite promises from politicians to closely monitor pollutant emissions.
Lovas is particularly concerned about industrial water use, which could pollute the already arid region. “We haven't been able to water with river water for five years, it's so dry,” she told DW. Many residents share their concerns. Manufacturing batteries is a water-intensive process, and in recent years Hungary has been hit by droughts with increasing frequency.
Farmers around Debrecen are worried that the battery factory will exacerbate the water shortage
Confused information
It is unclear how much water the battery factory will actually use. This is also due to the fact that reliable information about the project is very difficult to access and is often only published in bits and pieces, complains Marton Völgyesi. The cook is one of the organizers of the local initiative “Debreceners against the battery factory”.
“If the champagne corks are to pop, the factory is 220 hectares in size. When it comes to regulation, it's suddenly 65 hectares,” says Völgyesi. The individual construction sections of the factory would each be approved separately. “We want information about the capacity of the entire investment, not just for the individual sections,” he demands.
The non-transparent communication causes frustration among many residents, who feel ignored when deciding on the major project. According to a survey, around two see third of Debrecen critical of the battery factory.
Many of them are venting their anger on the street, demanding a freeze on construction or at least a vote on the project. “The goal is a referendum with which we can at least stop the expansion of the factory,” agrees Völgyesi. His initiative submitted a corresponding petition to the city administration in February and is now waiting for an answer.
When asked by DW, the mayor declined to comment. A CATL spokesman said they were monitoring the protests but would not comment further. In any case, they were largely based on misunderstandings and false information.
According to the activists, more than 12,000 people opposed the petition signed the battery factory, which was handed over to a representative of the city of Debrecen in February
Dependence on fossil fuels and authoritarian states
Local residents and professionals are also concerned about the immense energy consumption of such a large factory. CATL claims to invest in renewable energies and strive for CO2 neutrality. With Hungary's current energy mix, however, this goal is still a long way off. Only recently three new gas-fired power plants were approved to cover the energy needs of the industry. These could be operated with Russian gas until 2050.
In addition to being dependent on Russian imports, Hungary is also becoming more closely tied to China with the factory. The project makes China – after Germany – the second largest investor in the country. Critics fear that Beijing could use its economic clout to exert political influence.
Prime Minister Viktor Orbán's government is nonetheless digging deep into its pockets to lure Chinese companies: CATL alone have been granted tax and infrastructure incentives worth 800 million euros – that's about 10 percent of the total investment volume.
“This money is used elsewhere, especially for classic government tasks such as education, health care or social affairs,” says Dora Györffy, an economist at Corvinus University in Budapest.
In a strategy paper, the government describes the “supportive political environment” as an important location advantage and has thus contributed to a boom. The Chinese battery supplier SEMCORP is building a new factory in CATL's immediate vicinity, and BMW is building a new plant for electric cars on the other side of town.
The battery factory is part of a new industrial zone and will occupy over 220 hectares when completed
Chinese workers to help jump-start CATL
All these companies need workers – CATL alone wants to hire 9,000 of them. But: “One of the biggest problems is finding enough workers,” argues Marton Czirfusz, who recently researched the Hungarian battery industry. Many jobs in these factories do not require any special training, he explains. This would put them at risk of poaching the workforce of local companies.
But in view of the acute labor shortage in Hungary, even that will probably not be enough. “I assume that a large number of foreign workers will work in these factories,” predicts Czirfusz. CATL itself objects that Chinese workers would be needed mainly in the first two years to get the factory up and running.
Hungary's government has recognized the difficult situation and has relaxed the entry requirements for workers from several – primarily Asian – third countries. This is in stark contrast to the xenophobic rhetoric that one hears so often from Budapest – and which the government could now step on to its toes: Many local residents are also opposed to the factory because they do not want foreign workers in their city.
The factory should be able to supply more than one million electric cars a year with batteries from 2030
Resistance from all political camps
In view of the numerous concerns, opposition parties from the Greens to the extreme right have spoken out against the battery factory. Activist Marton Völgyesi would rather keep party politics out of the protest movement: “I think it's better if Debrecen's civil society takes matters into its own hands. And anyone who wants to support us can do so.”
So far the project is progressing despite local resistance. Although cabbage farmer Lovas supports the protest movement, she has little hope that they will make a difference. It is clear to her that the government is putting economic profit above the interests of the population: “They sold the land to the Chinese,” she says.