Country Report maps Hungary's bio-based potential

Coinciding with the Hungarian Presidency of the Council of the European Union conference, “BIOEAST and Beyond: Partnering for the Future” , the Bio-based Industries Consortium (BIC), has published “Mapping Hungary’s bio-based potential”, highlighting the many untapped green commercial opportunities in the country.

The bioeconomy made up 5% of the European Union’s GDP in 2021. It was worth 2.3 trillion euros, with the bio-based industries contributing 720 billion euros.

In 2020, Hungary’s bioeconomy was worth €9.6 billion, employing more than 374,500 people across different sectors (data JRC, BioReg EU). The whole sector has huge potential for further expansion and diversification.

Agriculture is the cornerstone of this sector, with over five million hectares of arable land, making up 55% of the national territory and supporting the rural population. The sector’s diversity spans major crops—such as maize, wheat, sunflower and rapeseed—and livestock, primarily poultry and pork, which contribute significantly to Hungary’s exports. The majority of farms are small in size. There are around 200,000 farms, 30% of which operate under 5 hectares. Despite challenges posed by climate change, decrease in population, necessity of upskilling and a notable trend of rural-to-urban migration (especially from young people), Hungary's agricultural sector holds several strengths and opportunities that can drive further growth.

Hungary’s forestry sector covers approximately two million hectares (23% of national territory), with both ecological and economic importance. Deciduous species dominate, particularly black locust and oak, which serve wood-based industries and rural economies. Nearly half of the forests are being protected; the remaining part is valorised for roundwood harvesting, the majority (53.6 %) being used for fuelwood while 18.2% for sawlogs and veneer logs and 16.8% for pulpwood.

Manufacturing of food and beverage contributes considerably to Hungary’s economy, with SMEs contributing to approximately50% of the net turnover of the sector.

Hungary's biotech industry is a growing sector, playing a key role in the country's economy, supported by a strong tradition in pharmaceutical research and manufacturing. Agriculture biotechnology, food biotechnology, and environmental biotechnology are also growing and promising sectors – although not as large as the pharmaceutical and medical biotech industries.

The potential for biorefineries — where agricultural and forestry biomass can be converted into added-value bio-based products — exists but is largely untapped. Existing biorefineries mainly focus on producing biofuels. However, a few biorefineries with a focus on the production of sustainable bio-based products are emerging in Hungary.

While a dedicated national bioeconomy strategy is being developed, different existing strategies and action plans both at national and regional levels are relevant to the bioeconomy sector, highlighting policy support for the contribution that the whole bioeconomy sector can provide for achieving specific targets in terms of decarbonisation/defossilisation; increased competitiveness and socio-economic growth; strategic autonomy; and resilience. Towards this direction, the BIOEAST initiative is strategic for shaping the future of the bioeconomy in Hungary and beyond.

Considering the high vocation of the country in agriculture and food production, a significant amount of residual biomass from agri-food industries, agricultural crops cultivation and forest-based value chains  is available for potential further valorisation into bio-based value chains (more than 9.000 kton d.m. /year). Additionally,  only 16% out of 2.3 million tonnes of food and garden bio-waste are currently separately collected and mainly valorised into compost production.  Marginal lands mainly focused on the Central-Eastern corridor could be also valorised with an eye towards future biorefineries, establishing a win-win cooperation model between farmers and industries, providing additional sources of income to the primary sector, while contributing to soil regeneration and an increase in green jobs.

According to the European Innovation Scoreboard , Hungary belongs to the group of ‘Moderate Innovators’ in 2024, with a performance of 70.5%. Compared to the EU average, Hungary has lower per capita income but a faster growing economy with a high share of non-innovators with the potential to innovate.

Hungary presents a fertile ecosystem of universities and research centres working on different aspects of the bio-based economy. However, their involvement in EU bioeconomy projects can further growth in cooperation also with industries. In fact, Hungary is a modest actor with reference to participation in co-funded projects under H2020 and Horizon Europe programmes. Some 252 bioeconomy related projects have been funded with a net EU contribution of €63.9 million. The CBE-JU programme, Just Transition Fund, Innovation Fund and European Circular Bioeconomy Fund are valuable instruments which could be better valorised by Hungary in a synergistic way to financially support the deployment of demo and full scale flagship biorefineries and related value chains.

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