Judit Szemán has grown strawberries, tomatoes and cucumbers on her small, organic farm just outside Hungary’s second-biggest city, Debrecen, for many years. She never imagined living anywhere else.
Then, two years ago, Chinese electric vehicle battery giant CATL started building a massive factory about a kilometre from her polytunnels – the result of Prime Minister Viktor Orbán’s push to make Hungary the EV battery hub of Europe by courting investment from major producers, mainly Chinese and Korean companies.
For Szemán, it was a devastating blow.
“This is our home – we had planned to live here all our lives,” she told Climate Home News, standing among her vegetable patches on land she now expects to sell if an effort to stop the battery plant fails.
She and other local residents have filed a lawsuit against the county government office of Hajdú-Bihar Vármegye, disputing the decision to grant an environmental permit for the CATL factory. They argue that the plant poses a risk of pollution and should not be allowed to operate so close to their homes. The local authority refutes these claims.
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In recent years, billions of dollars in investment have poured into Hungary with the promise to create thousands of jobs and support Europe’s green transition, but stagnating EV demand and strong environmental opposition to new “gigafactories” have dogged Orbán’s showcase economic strategy.
Many battery producers in Europe are delaying or shelving plans to expand due to uncertainties about profit levels going forward as battery prices fall, according to the International Energy Agency – and the downturn hasn’t spared manufacturers in Hungary.
Meanwhile, weakening of the country’s environmental regulatory powers has left protestors like Szemán worried that authorities are unable to prevent pollution or hold those that cause it accountable. Activists argue that decision-makers have prioritised battery investments at the expense of environmental protection.
As Europe races to boost its production of key green-transition minerals and EV batteries instead of relying so heavily on imports from China, the emergence of a large-scale battery industry in Hungary has turned into a political flashpoint.
Local officials from the ruling Fidesz party have slammed campaigners opposing battery factories as political agitators funded by foreign agents while protesters consider the industry’s proponents to be supporters of Orban’s increasingly authoritarian government.
Gigafactory takes shape
Surrounded by fields on the outskirts of Debrecen, the CATL lithium-ion battery factory is huge, stretching across more than 220 hectares – an area about the size of 300 football fields. CATL – short for Contemporary Amperex Technology Co Ltd – is the world’s largest manufacturer of EV batteries.
The $7.6-billion battery plant represents Hungary’s largest-ever foreign investment and is expected to become one of Europe’s top EV battery manufacturing facilities, supplying automakers including Mercedes-Benz, BMW, Stellantis and Volkswagen, which are all expanding EV production in the country.
Commercial production is due to start by the end of the year, aiming to turn out 100 gigawatt (GW) hours of batteries per year by 2030. That would make Hungary Europe’s second-largest EV battery manufacturer after Germany and one of the world’s leading producers based on current investment announcements.
“The goal of the investment is to establish an environmentally friendly, high-tech factory that provides attractive workplaces and supports Hungary and Europe’s transition to sustainability,” a CATL spokesperson told Climate Home, adding that the plant was being built “in full compliance with environmental regulations” .
“We place particular emphasis on safeguarding the ecosystem surrounding the facility – including the air, water, and soil – and remain committed to preventing any harm in every respect,” she said.
Next to CATL’s factory, two other companies are building plants to supply the battery industry: China’s Semcorp will produce lithium-ion battery separator films and South Korean’s EcoPro BM will make cathode materials.
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For Orbán’s nationalist government, the battery industry is a key way to reboot the economy and create jobs. More than 40 plants involved in the battery manufacturing ecosystem are either currently operating, under construction or planned.
To attract investors, his administration has simplified rules for foreign investments and developed “incredibly generous” financial incentives and tax breaks, said Tamás Matura, associate professor at Corvinus University of Budapest and founder of the Center for Central and Eastern European and Asian Studies.
Local media have estimated the state aid granted to battery companies at about 1.5 trillion Hungarian forints ($4.2 billion) – equivalent to around 2% of the country’s annual GDP.
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Hungary is already an important hub for auto makers, including German car manufacturers, which lobbied Chinese companies to bring their battery production to the country, Matura added.
The strategy has attracted billions of euros in investment from leading Chinese and Korean battery giants, including CATL, BYD, the world’s largest EV producer, and Samsung SDI, which opened Hungary’s first EV battery factory in the town of Göd in 2017.
At the same time, successive governments have weakened local and national authorities’ environmental regulatory powers in favour of large infrastructure projects.
Following his return to government in 2010, Orbán closed the Environment and Water Ministry, handing the environment portfolio to the Agriculture Ministry, and regional environmental agencies were stripped of the authority to independently monitor factories and initiate inspections.
“State environmental protection is in a state of continuous decline,” said Simon Gergely, of Greenpeace Hungary, adding that “producing so many batteries for so many cars has a huge environmental impact”.
Neither the Agriculture Ministry nor the prime minister’s office responded to requests for comment for this article.
Europe’s appetite for EVs stalls
But fearful local residents and environmental challenges are not the only roadblocks facing the industry’s development.
Stagnating demand for electric vehicles in the European market saw Hungary’s battery production plummet last year, with production 51% lower in December 2024 compared to a year earlier.
At the end of 2024, Samsung SDI laid off hundreds of workers at its plant in Göd and was forced to temporarily shut down the factory, according to local news outlet Telex.
In its 2024 financial report uploaded on the government’s website, battery maker CATL said the second phase of its plant’s construction was “suspended” although it had the resources to restart it at any time.
Reuters reported last month that China’s BYD would delay mass production at its new EV factory in Hungary until 2026 and would run the plant below capacity for at least the first two years.
EVs powered by low-carbon electricity are regarded as the key technology to decarbonise road transport, which is responsible for more than 70% of all transport emissions, and are significantly less polluting than diesel and petrol cars across their lifecycle.
But some environmentalists question policy-makers’ emphasis on EVs to make transport greener, advocating for fewer individual cars on the roads and the promotion of alternatives such as better public transport, cycling and lightweight vehicles such as scooters.
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“Of course, battery factories are necessary, as energy storage and electromobility play a key role in the green transition,” said Greenpeace’s Gergely. But, he added, “the current model – which simply aims to replace internal combustion engine cars with electric cars – is not sustainable.”
Scientists have also warned that more effort is needed to reduce the environmental and emission footprints of battery production, which is water and energy-hungry. It also involves chemicals that can have damaging effects on people and the environment if not adequately managed.
Solvent leaks face scrutiny
In the Hungarian village of Mikepércs, which lies five kilometres from the CATL factory in Debrecen, mother-of-three Éva Kozma said she worries most about the risk of pollution from N-Methylpyrrolidone (NMP), a colourless liquid used as a solvent in the production of lithium-ion batteries that can be harmful to health.
NMP exposure has been found to impact the fetal development of unborn children and cause miscarriages. Studies also showed that NMP lingers in water and moist soils and can migrate to groundwater.
Although there are efforts to develop alternatives to NMP in battery production, these have yet to be widely adopted.
Kozma belongs to the Mikepércs Mothers for the Environment Association, a group that organises publicity campaigns in their fight against the CATL factory and monitors air quality around the site.
The spokesperson for the Chinese company said the Debrecen plant has “significantly reduced its emissions of NMP” and is “continuously working on implementing new solutions to further reduce emission levels”. All its plants have “advanced filtration and purification systems, along with robust technical safeguards to prevent leaks,” she added.
The office of Debrecen’s mayor Laszlo Papp, a member of Orbán’s right-wing Fidesz party, did not respond to a request for comment, but has previously said the plant will have to meet tough new environmental rules.
To address the sustainability concerns associated with Debrecen’s industrial development, the city has begun to monitor pollution, water use, noise and biodiversity protection and said it would make the data publicly available online.
Elsewhere in Hungary, a series of leaks involving the NMP solvent have become a focus of environmental opposition to battery plants.
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In Göd, a town near the capital Budapest, Greenpeace has found NMP in wastewater spills near South Korean battery maker Samsung SDI’s factory on several occasions. The company also came under intense scrutiny for releasing large quantities of NMP into the air in 2021, according to emissions data obtained by a local investigative outlet.
Since 2018, Samsung SDI has been fined 56 times including for environmental lapses, according to data obtained through freedom of information requests by the Göd-Ért association, a local campaign group demanding stricter controls on the battery industry. None of those fines related to releasing NMP in the local environment.
Activists say such fines – capped at 5 million forints ($14,400) each – are not high enough to hold large, multinational companies accountable for any environmental damage their operations cause.
Samsung SDI did not respond to repeated requests for comment, but an industrial and environmental risk analysis it commissioned previously said emissions of NMP at the Göd plant did not exceed prescribed limits.
In its 2025 sustainability report, the company identified “environmental impact on local communities,” including “hazardous substance release” as a risk of the battery manufacturing process.
To address these risks, the company said it monitors and controls air and water pollutants discharged into the environment and applies standards that are more stringent than legally mandated ones. It also said it is developing “an innovative and eco-friendly” manufacturing technology that is expected to minimise the use of NMP solvent and energy consumption while enhancing battery performance.
Nonetheless, companies’ green commitments are doing little to reassure campaigners like Greenpeace’s Gergely without robust government enforcement. “In the absence of independent environmental authorities, there is no real control,” he said. “This not only causes damage to nature, but also poses a serious risk to society.”
Main image: Containers in front of CATL’s EV battery factory under construction outside Mikepercs (Photo: Norbert Farkas)
