As electric cars boom, locals fear Chinese battery plant will harm land in drought-stricken Hungary

Residents, environmentalists and opposition politicians in eastern Hungary are worried that a sprawling battery factory will exacerbate existing environmental problems and hit the country’s precious water supplies

Just beyond the pastoral gardens and traditional homes of an eastern Hungarian village, a gigaproject of Chinese industry is taking shape.

Bulldozers and excavators are already preparing the land for construction of a nearly 550-acre electric vehicle (EV) battery plant. The 7.3 billion euro ($7.9 billion) factory will be one of Hungary's largest-ever foreign investments, and the government hopes it will make the Central European country a global hub of lithium-ion battery manufacturing in an era where governments are increasingly seeking to limit greenhouse gas emissions by switching to electric cars.

But residents, environmentalists and opposition politicians worry that the sprawling factory — built by China-based Contemporary Amperex Technology Co. Limited (CATL) — will exacerbate existing environmental problems, hit the country's precious water supplies and further undermine its economy to China.

“You have this viscerally bad feeling when you walk past the area where they are building. I simply feel this bad feeling in my stomach,” said Eva Kozma, 47, a local mother who has joined with other residents of a village near the building site to oppose the project.

“This is progress, this is the future? Pouring concrete over nature while we know how polluting the factory is going to be?” she said.

Kozma and others on the outskirts of Debrecen, Hungary's second-largest city, say they were blindsided by the announcement that the factory would be built on valuable agricultural land. They fear that the large quantities of water diverted to the plant for cooling equipment will threaten their water supply, and that chemicals from the plant could leech into the soil and water, damaging the region's natural resources.

That region, the Great Hungarian Plain, is threatened by desertification, a process where vegetation recedes due to high heat and low rainfall. Climate change-driven droughts and record heat waves in the area have compounded heavy water use by agriculture and depleted groundwater, resulting in devastating crop yields.

Last year, Hungary experienced its hottest summer on record, and nearly 2.5 million acres, or 20% of the country's croplands, dried out. Experts say that unless a comprehensive water retention plan is enacted, much of the region will soon be unsuitable for agriculture.

Yet despite these environmental struggles, Hungary's government believes that the European Union's ambitions to phase out the manufacture of internal combustion engine vehicles by 2035 present a unique opportunity for the country to take its place as a leader in EV battery production, and has embarked on a major push to attract such investments.

And there will likely be buyers: transport represents nearly a quarter of Europe’s greenhouse gas emissions, and more than 70% of those emissions are caused by road transport. If the EU is to reach its goal of net zero emissions by 2050, EVs will play a pivotal role.

CATL's 100 GWh battery plant in Debrecen, which is expected to create around 9,000 jobs, is the largest of a number of EV battery factories popping up around the country, part of the government's strategy to serve foreign car manufacturers present in Hungary — like German carmakers Audi, BMW and Mercedes-Benz — as they transition to battery-powered vehicles.

Hungary’s foreign minister, Peter Szijjarto, said earlier this month in Beijing that the presence of those German carmakers had “inspired” the recent spate of Chinese investments in EV battery plants, and that "the Chinese suppliers of these German companies continue to regard Hungary as the meeting point of East-West investment.”

Gabor Varkonyi, an auto industry expert, agrees that the effort to attract battery makers makes good sense for Hungary’s economy — especially given that more than 20% of the country's exports comes from the automotive industry.

“It is very much in Hungary’s interest for these investments to appear here, especially arm in arm with German technology,” Varkonyi said. “This way, both can be tied here in the medium term, so that neither will be able to work successfully without the other. In this sense, it is an absolute national interest.”

But Dalma Dedak, an environmental policy expert with WWF Hungary, says that despite intentions to reduce greenhouse gas emissions by making cars electric, there's been a lack of environmental impact studies on the longer term consequences for Hungary's air, soil and water.

Details have only been released on the first phase of the CATL plant's multi-stage construction, she said, so its footprint on the environment once it is fully running remains unknown — something that has eroded trust between the affected population and the government.

“It is of concern that the approval procedure for the first phase of the plant does not show what kind of water consumption and emissions can be expected when the entire plant is built,” she said. "That is, will Hungary’s resources be sufficient for these ambitious plans?”

The water consumption of the industrial park where the factory is located is expected to amount to more than 40,000 cubic meters (10.5 million gallons) per day — doubling the drinking water consumption of Debrecen and laying a major burden on a region in the midst of a historic water crisis, Dedak said.

“In the long run, it's a problem and a question of how to supply water to such a water-scarce city,” she said.

CATL says that 70% of its water consumption will come from gray water — household wastewater that has been purified — though this plan was not present in the environmental impact study for the first phase of the factory. Hungary's Ministry of Economic Development did not respond to a request for comment.

Other critics of the investment point to the economy's dependence on foreign-owned automobile companies, and see it as a deepening of the foothold Hungary has provided to China in Central Europe.

Laszlo Lorant Keresztes, president of the Hungarian parliament's Committee on Sustainable Development, said that Hungary's economy "is very vulnerable to the automotive industry, and this (plant) increases that vulnerability.”

Speaking at a protest opposing the factory in Debrecen this week, Keresztes said the roughly 800 million euros ($861 million) in infrastructure and tax incentives Hungary's government will supply to CATL is “an unrealistic amount of money per job," and that — as in the case of German car makers — the majority of capital generated would be exported.

"These are essentially assembly plants, and they take the profits away from here. It is also typical that they do not give work to Hungarian people, not to the local people, but to foreign guest workers,” he said.

Some of the residents outside Debrecen worry that the massive plant will bring traffic and noise that will spoil the idyllic community where they came to raise their children. But mostly, they're afraid of the irreversible impact it could have on their natural world.

“They took the lands, they destroyed the soil, they destroyed the air, the water,” said Eniko Pasztor, 65, a local activist who plans to leave the area if the plant is completed as planned.

“There’s no amount of money that can fix what we have ruined. We have to make sure that what we have remains," she said. "We’ve done a lot of damage already. I don’t understand why we need more, more, more.”

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