Transformation to a competitive “green” and low-carbon economy is a major challenge for most countries. It can only be achieved through cooperation across borders, exchange of fresh ideas and best practice, and new investments. The EU “Europe 2020” strategy points a way forward for the member countries but also for their partners.
At the same time, green transformation is not just a challenge; it rather means an enormous opportunity for our small countries towards a wealthier economy. Well-designed investments in the field of renewable energy and energy efficiency will generate long-term sustainable growth which is clearly demonstrated by the success of the countries in the Nordic Region.
Energy is the core of the “green economy”. Sustainable, safe and affordable energy are clear policy goals of our governments, in line with the economic, environmental and social aspects of sustainable development.
Fossile energy sources, nuclear energy and renewable energy will continue to be important parts of national and European energy policy. Clearly, a more widespread exploitation of solar, thermal and biomass sources will contribute to improved security of supply and the reduction of dependence. This is, in fact, also what the Government of Hungary strives for. Cooperation with the Nordic countries, in research, technology and investment, is one of the platforms for Hungary in this regard.
A high level of renewable energy consumption characterizes all the five Nordic countries while in certain instances this is coupled with large-scale oil and gas offshore extraction or electricity generated in nuclear power plants. The wider use of renewable energy inevitably requires the support of the entire “green economy” production chain in various industries as well as support for the spread of environmentally sustainable solutions.
Market forces alone will not succeed in bringing about change. Strong EU and national regulation is also necessary. Governments have an important role in creating platforms for cooperation across sectors, stimulating competition and business-to-business interaction.
In several business sectors, Hungary and Hungarian companies are followers in the competition in the field of environmental sustainability, green economy and green energy. Although they could try to benefit from the advantages of latecomers, in order for them to be successful in the international market later on, in most cases there is a need for knowledge and technology import, foreign direct investment and transfer of know-how from forerunner countries and companies. Promoting green development efforts also at the municipal level is of paramount importance. Sustainable and smart solutions are gaining ground both in larger cities and smaller municipalities.
The countries of the Nordic region are considered as leaders in the field of environmental sustainability. Hungarian companies and, as end-users, municipalities may expect to gain important and useful competencies from the Nordic companies. Through green economy development, the Nordic region could bring significant knowledge and capital transfer to Hungary and it could also contribute to improving Hungarian business culture as well as to making it more transparent and more predictable.
The Nordic region has already become an important investor in Hungary. The Government of Hungary has signed strategic partnership agreements with six Nordic firms including Coloplast, Ericsson, Grundfos, Lego, Nokia and Telenor. Danish companies employ 14,000 people in the country; the number of Swedish firms is close to 200 employing more than 17,000 Hungarians; Finnish Nokia operates Hungary’s biggest research and development and innovation center in Budapest with 1,900 employees; every third cell phone subscription belongs to Norwegian Telenor, while Icelandic Mannvit – due to its office in Budapest - is one of the major players of geothermal developments in Hungary.
The Nordic countries have a very long and successful history of cooperation and integration. Their regional parliamentary cooperation, in the form of the Nordic Council, started in 1952. Already in 1954 a common Nordic labour market was established and passport-free movement and settlement internally in the region achieved. In 1971 the five governments established the Nordic Council of Ministers, thereby promoting policy coordination and implementation between the governments, the line ministries and specialized agencies. The depth of integration between the Nordic countries in certain domains surpasses that of the European Union, for instance in the electricity market which - due to the creation of interconnector networks – also contributes to environment friendly economies. Hungary has the same ambition: to create, even though significant efforts are still needed, a level of interconnection of energy networks in Central Europe that provides security and stability and enables sharing of energy sources within the region, entailing cost-effective and environmentally sound solutions.
The Paris Climate Agreement induced a shift of focus for both Nordic and flagship Hungarian energy companies. Now it is time to determine those investment areas that may be part of an economic boom. Green transport will definitely be among them, putting special focus on the car industry, which is of utmost importance for the Hungarian economy. The question remains, however, if electro-mobility, CNG and other alternative propulsion systems can all be competitive.
E-government, smart Internet solutions, Industry 4.0, Internet of Things, digitalization and smart gadgets keep on transforming our daily life to an extent never seen before. The electric power industry is in the limelight as it creates new opportunities for other businesses yet at the same time undergoes profound transformation itself as well with many small energy market actors popping up.
District heating is well-presented in Nordic countries, and the market for district cooling is also growing. In Hungary, district heating is dominated by gas combustion power plants, yet the winds of change are already blowing. Local governments are increasingly under pressure to shift towards renewable energy. In theory, Hungary has huge yet underutilized opportunities in biomass, solar energy, in the use of geothermal energy and – not the least – in energy efficiency and smart use of existing energy. How to move forward in this area?
Green buildings represent an increasing share of commercial real estate development in Hungary, although the notion of green construction has just recently taken off in the field of residential property. Many Hungarian small and middle size enterprises are searching for proven best practices. How to establish the best matches for these projects?
Our six countries and 35 million people agree on the overall policy goals. But how to do it in practice?
Answers to the above questions will be sought at the Nordic Green Light environmental sustainability business forum organized by the Ministry of Foreign Affairs and Trade of Hungary, in cooperation with the Embassies of Denmark, Finland, Norway and Sweden in Budapest and the Embassy of Iceland in Vienna together with the respective trade sections and chambers of commerce for Hungarian and Nordic companies, municipalities and other interested parties on 8 May 2017 in Budapest.
We are convinced that this forum and the new relations to be established between companies, municipalities and other stakeholders there will offer added value to the cooperation between the Nordic countries and Hungary.
László Szabó, Minister of State, Ministry of Foreign Affairs and Trade
Olav Berstad, Ambassador of Norway
Kirsten Geelan, Ambassador of Denmark
Niclas Trouvé, Ambassador of Sweden
Petri Tuomi-Nikula, Ambassador of Finland
Thórdur Ingvi Gudmundsson, Minister Counsellor, Embassy of Iceland, Vienna
(Ministry of Foreign Affairs and Trade - The Hungarian version of the article was published in Világgazdaság, April 7, 2017)
(Ministry of Foreign Affairs and Trade)