Hungary set up watchdog over EV battery makers

Hungary will create a new top authority to monitor and sanction polluting industries, ruling Tisza ‌party lawmaker Zsolt Tarkanyi said, as part of a drive to tighten regulation of the EV battery sector that mushroomed under former leader Viktor Orban.

From 2021, Orban bet big on EV batteries, attracting foreign investment worth around €26 billion based on a government tally, ​mainly from South Korean and Chinese manufacturers, and making Hungary a key hub in Europe.

But environmental, ​health and safety concerns around the plants surfaced as a key issue ahead of an April ⁠election, where centre-right rival Peter Magyar defeated Orban in a landslide and pledged to take a tougher ​stance on the sector.

In a major policy shift, Environment Minister Laszlo Gajdos has threatened to close factories in the EV ​battery industry that fail to abide by environmental regulations.

"What we as lawmakers can, and will, do is establish a new top authority to monitor and sanction these major potential polluters," Tarkanyi said on Facebook late on Thursday.

The move follows a late-June decision ​by a government office to suspend Chinese battery parts maker Semcorp's production licence after authorities found large-scale aluminium ​pollution in water samples taken from monitoring wells around the plant.

Tarkanyi, the Debrecen lawmaker of Magyar's Tisza party, said the ‌Semcorp factory ⁠in Hungary's second-largest city, whose mayor has come under pressure to resign, would remain closed "for a long time."

Semcorp's press officials did not immediately respond to emailed questions on how a prolonged closure of the factory would affect their operations.

Semcorp told state news agency MTI it had launched a full-scale enquiry to determine ​the causes of the pollution.

Gajdos, ​who visited Debrecen alongside ⁠Tarkanyi on Thursday, said the new authority could be launched in September and apply what he described as "extremely stringent" standards.

Tarkanyi will also propose reforms setting pollution fines ​as a percentage of turnover instead of the current fixed amounts to act as ​a stronger ⁠deterrent.

He cited the example of Samsung SDI's battery plant in the northern town of God, which had been fined several times between 2022 and 2023 for exceeding emissions standards in the factory.

Hungarian Police have launched four criminal procedures against ⁠Samsung ​since 2023, including a 2024 probe into environmental damage and occupational ​endangerment, and a 2026 inquiry into waste management violations.

Before the election, Samsung said its Hungarian factory, which temporarily had its environmental licence suspended, ​strictly complied with environmental and safety regulations.

-Reuters