This chapter offers tailored policy recommendations for Hungary to strengthen climate-resilient water governance, informed by a comprehensive gap analysis. In line with the OECD Principles on Water Governance, the chapter identifies key governance gaps and assesses their implications for water and climate resilience. It suggests recommendations across five areas: strengthening institutional foundations, leveraging economic and regulatory instruments, adopting a long-term vision for water resilience, improving multi-level governance, and enhancing transparency and stakeholder engagement.
Water Governance for Climate Resilience in Hungary
Abstract
While Hungary has a well-established water governance framework (Chapter 2), its governance model largely reflects historical hydrological and climatic conditions and needs to continue evolving to address the accelerating impacts of climate change. Intensifying drought and flood risks coupled with greater hydrological variability are placing new pressures on water systems and challenging the sustainability of past management approaches, focused primarily on flood protection. Adapting to emerging challenges while continuing to address existing ones requires adjusting Hungary’s water governance system, intended as a means of mastering the complexity and fragmentation inherent to water policy (OECD, 2015[1]).
Hungary’s water governance gaps, such as weak regulatory oversight and enforcement, insufficient use of economic instruments, and inadequate implementation and monitoring of existing water and climate adaptation policies, are rooted in broader governance challenges. These include frequent changes to institutional leadership for environmental policy following the 2010 merger of the Ministry of Environment and Water into the Ministry of Rural Development, later renamed Ministry of Agriculture; the lack of independence of the environmental authority and its reduced level of technical and human capacity; and a weak environmental compliance strategy (OECD, 2018[2]). In 2024, Hungary scored below the OECD average for all regulatory policy and governance indicators, especially stakeholder engagement, ex post evaluation and transparency of primary legislation and subordinate regulation (OECD, 2025[3]). While Hungary has set up a Medium-Term National Anti-Corruption Strategy for 2023-2025 and created an Integrity Authority in 2022, it has ranked highest among EU Member States on Transparency International’s Corruption Perceptions Index1 for four consecutive years (Transparency International Hungary, 2025[4]). Hungary’s Control of Corruption Index2 followed a steadily declining trend between 1996 and 2023, from 74% to 55% (World Bank, 2025[5]).
In line with the OECD Principles on Water Governance (Box 3.1) (OECD, 2015[1]), this chapter analyses gaps and suggests tailored policy recommendations for Hungary around five key areas: (i) Consolidating institutional foundations for climate-resilient water governance, (ii) Leveraging economic and regulatory instruments to manage water demand, (iii) Adopting a long-term vision for water resilience, (iv) Strengthening multi-level governance for a place-based approach, and (v) Enhancing transparency, engagement and monitoring for integrity and trust.
The OECD Principles on Water Governance (Figure 3.1) aim to enhance water governance systems that help manage “too much”, “too little” and “too polluted” water and foster universal access to drinking water and sanitation in a sustainable, integrated and inclusive way, at an acceptable cost and in a reasonable timeframe. The Principles acknowledge that good governance is a means to master complexity and manage trade-offs in a policy domain that is highly sensitive to fragmentation, silos, scale mismatch, negative externalities, monopolies and large capital-intensive investment. The Principles consider that governance works if it can help solve key water challenges using a combination of bottom-up and top-down processes, while fostering constructive state-society relations. It does not work if it generates undue transaction costs and does not respond to place-based needs. The Principles support the achievement of effective, efficient and inclusive water governance systems, where:
Effective governance defines clear, sustainable water policy goals and targets at all levels of government, implements these policy goals, and meets expected targets.
Efficient governance maximises the benefits of sustainable water management and welfare at the least cost to society.
Trust and engagement build public confidence in the governance system and ensure the inclusiveness of stakeholders through democratic legitimacy and fairness for society at large.
The 12 principles are the following:
Principle 1. Clearly allocate and distinguish roles and responsibilities for water policymaking, policy implementation, operational management and regulation, and foster co-ordination across these responsible authorities.
Principle 2. Manage water at the appropriate scale(s) within integrated basin governance systems to reflect local conditions, and foster co-ordination between the different scales.
Principle 3. Encourage policy coherence through effective cross-sectoral co-ordination, especially between policies for water and the environment, health, energy, agriculture, industry, spatial planning and land use.
Principle 4. Adapt the level of capacity of responsible authorities to the complexity of water challenges to be met, and to the set of competencies required to carry out their duties.
Principle 5. Produce, update and share timely, consistent, comparable and policy-relevant water and water-related data and information, and use it to guide, assess and improve water policy.
Principle 6. Ensure that governance arrangements help mobilise water finance and allocate financial resources in an efficient, transparent and timely manner.
Principle 7. Ensure that sound water management regulatory frameworks are effectively implemented and enforced in pursuit of the public interest.
Principle 8. Promote the adoption and implementation of innovative water governance practices across responsible authorities, levels of government and relevant stakeholders.
Principle 9. Mainstream integrity and transparency practices across water policies, water institutions and water governance frameworks for greater accountability and trust in decision-making.
Principle 10. Promote stakeholder engagement for informed and outcome-oriented contributions to water policy design and implementation.
Principle 11. Encourage water governance frameworks that help manage trade-offs across water users, rural and urban areas, and generations.
Principle 12. Promote regular monitoring and evaluation of water policy and governance where appropriate, share the results with the public and make adjustments when needed.
Source: OECD (2015[1]), OECD Principles on Water Governance, https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/water-governance/oecd-principles-on-water-governance-en.pdf/_jcr_content/renditions/original./oecd-principles-on-water-governance-en.pdf
Gaps
Hungary’s institutional framework for water governance is characterised by a high degree of institutional fragmentation, creating challenges for policy coherence, design, implementation and accountability (OECD, 2018[2]). Institutional changes such as the dismantling in 2010 of the Ministry of Environment and Water and associated inspectorates, combined with frequent changes in ministerial responsibilities and the abolishment or restructuring of background institutions such as the Water Research Institute (VITUKI), were intended to enhance administrative efficiency. However, these changes hindered co-ordination between water and environmental policies, weakened data collection systems (OECD, 2018[2]) and reduced capacities for policy implementation such as in the case of the water abstraction charge (Ungvári et al., 2011[6]). The State Audit Office (SAO) (2025[7]) highlighted that the dissolution of key bodies involved in water permitting and agricultural water management, including the merger of the National Land Centre and its Irrigation Development Department in 2024, with the Ministry of Agriculture becoming its general legal successor, alongside the transfer of water authority functions from Territorial Disaster Risk Management Directorates to County Government Offices, adversely affected the sector’s operational performance.
Co-ordination across national government entities with water-related responsibilities remains limited to specific issues (e.g. irrigation), while there is no formal mechanism on water that includes all eight ministries with water-related functions. In order to improve dialogue and communication, until recently weakly structured and informal (e.g. through ad hoc working groups), Hungary established an Inter-Ministerial Committee on Water Management in 2024 and a Drought Protection Operational Task Force in 2025. The Committee represents a positive development towards enhanced co-ordination at national level. However, its current ministerial membership is limited to three ministries – the Ministries of Energy, Agriculture, and Public Administration and Regional Development – and too narrow to meet its broad objectives of aligning long-term water management strategies with other sectoral objectives, improving information sharing across relevant government entities and stakeholders, and suggesting regulatory changes and action plans to improve water governance. Other government entities with a role in water governance and policy, such as the Ministry of Interior, the Ministry of Construction and Transport, the Ministry of Finance, the Ministry of Foreign Affairs and the Energy and Public Utility Regulatory Authority’s (MEKH) are not formally part of the committee. Their responsibilities in civil protection from water-related disasters, water infrastructure, water-related charges and budgetary planning, the EU Strategy for the Danube Regions (EUSDR) and water supply for households and businesses, respectively, could inform the committee’s work and support the achievement of its objectives.
Institutional and regulatory grey areas challenge the effectiveness of water governance. The 1995 Water Management Act focuses on flood and inland excess water protection and drainage, with insufficient legal and institutional focus on water retention and water scarcity management. Additionally, the fragmented national, municipal, or private ownership of tertiary water infrastructure (including agricultural water supply systems, drainage channels, and dual-purpose channels located between the water facilities operated by VIZIGs and irrigation sites) has resulted in maintenance challenges and the deterioration of some of these assets, with many left overgrown or silted, and sluices and locks remaining unmanaged on smaller canals, leading to unintended consequences for water drainage and retention (State Audit Office, 2025[7]). Furthermore, legislation does not clearly delineate public sector responsibilities for agricultural water management between the water management and agricultural sectors. The SAO (2025[7]) highlighted that this legal ambiguity coupled with a fast-changing regulatory environment complicated irrigation governance and promoted irrigation expansion without considering water availability between 2019 and 2023.
Frequent institutional restructuring has also contributed to eroding administrative capacity for water management. The reallocation of water permitting and compliance responsibilities from the Environmental, Nature Conservation and Water Chief Inspectorate and its regional offices to County Government Offices (CGOs) reduced the technical expertise and human capacity of those authorities (OECD, 2018[2]). Water and air quality are priority areas where administrative capacities require urgent strengthening to ensure the implementation of EU environmental law (European Commission, 2022[8]). While the General Directorate for Water Management (OVF) retains solid professional expertise and a strong reputation, its operational continuity and effectiveness are affected by recurrent institutional shifts. Furthermore, while its core technical expertise lies in water drainage, capacities related to emerging water retention needs and climate-resilient water management are still under development.
Recommendations
Given that water governance systems should be designed according to the challenges they are required to address, Hungary should ensure that forms of governance (e.g. structures such as ministries) follow functions (e.g. water resources management for climate adaptation). This would involve:
Raising the profile of water policy at the highest executive level, such as within the Prime Minister’s Office, to ensure sustained political momentum and non-sectoral strategic oversight that would make water a matter of strategic importance and national security.
Enabling the OVF to serve as the cross-sectoral reference institution for water management with a long-term perspective that transcends policy silos and political cycles.
Expanding the existing focus on disaster risk management to water management for climate adaptation, building on the move of the State Secretariat of Water Management from the Ministry of Interior to the Ministry of Energy, in which the State Secretariat for Circular Economy and Climate Policy is located. This is an opportunity to enhance co-ordination and synergies between water and climate adaptation policy.
Clarifying grey areas in the allocation of responsibilities for certain water management functions, such as agricultural water supply and demand between the Ministry of Energy and the Ministry of Agriculture, notably in Government Decree 182/2022 (V. 24.) on the responsibilities and powers of the members of the Government.
Creating a legal basis to strengthen and accelerate the adoption of emerging water management concepts that are critical for climate resilience in Hungary, such as water retention, water reuse and nature-based solutions.
Strengthen inter-governmental co-ordination on water and climate adaptation by inviting additional ministries and agencies with water-related competencies to join the Inter-Ministerial Committee on Water Management. To strengthen its effectiveness, the Committee should consider formalising the involvement of all ministries with water-related competencies, such as the Ministry of Interior, the Ministry of Construction and Transport, the Ministry of Finance, and the Ministry of Foreign Affairs. This would (i) allow relevant ministries to design policies and legislative proposals in a co-ordinated way; (ii) ensure linkages with civil protection, water infrastructure, water-related charges and budgetary planning, and the EUSDR, in line with current regulations on the competencies of each ministry; (iii) better coordinate the National Water Strategy with broader social, economic, and environmental objectives, reducing fragmentation, improving the efficiency of investments, and delivering more sustainable and climate-resilient outcomes. The Committee could be chaired by the ministry responsible for water, the Prime Minister’s Office, or co-chaired. International experiences offer a range of possible options. For example, in Ireland, the Climate Action Delivery Board is jointly chaired by the Secretaries General of the Department of the Taoiseach (Prime Minister) and the Department of the Environment, Climate and Communications (Government of Ireland, 2024[9]).
Strengthen the capacities of key water-related government entities at national level, with a focus on climate resilience functions. The 2025 amendment to the Water Management Act adds water conservation and water shortage management to the list of the State’s water-related responsibilities. Building on this, Hungary could:
Build capacities for OVF employees to effectively transition from an approach focused on drainage to water retention and sustainable water resources management and planning, to address evolving climate challenges and support the activities of relevant ministries and VIZIGs.
Align the Ministry of Energy and the Ministry of Culture and Innovation’s objectives in relation to higher education, especially to update tertiary curricula in engineering, geology, hydrology and related water management disciplines with new water retention priorities.
Following the dissolution of the VITUKI, bolster the role of the National Adaptation Centre hosted by HungaroMet under the Ministry of Energy as a governmental “knowledge broker”, translating scientific research on climate adaptation (including water) into actionable policy recommendations. The National Adaptation Centre should capitalise on the wealth of knowledge on water and climate produced by national and international projects, including LIFE and Interreg initiatives (e.g. Danube Water Balance, Raab Flood 4Cast), the ICPDR, the HUN-REN Centre for Agricultural Research, key universities (e.g. Hungarian University of Agriculture and Life Sciences, University of Public Service with the UNESCO Chair of Water Conflict Management), professional associations (e.g. Hungarian Hydrological Society), NGOs (e.g. Water Guardians, Water Coalition, Climate Alliance Hungary, Equilibrium Institute, as well as emerging “catchment communities” at subnational level) and Territorial Water Management Councils. The Scottish Centre for Expertise on Water could serve as an example in this area (Box 3.2).
As part of its 2011 Strategic Research Programme, the government of Scotland (United Kingdom) supported the establishment of the Centre for Expertise on Water (CREW), serving as a research-policy platform for environmental, land, agriculture, food, rural and economic matters. The Centre enables ten public bodies to make policy enquiries on a range of topics (e.g. water quality and health, hydrological extremes, coasts and risk management), which are then linked to relevant academic and research institutions across Scotland, fostering interdisciplinary collaboration to identify and address policy gaps. This research provides the scientific evidence necessary for effective governance, whether by informing policy needs or enhancing comprehension of policy mechanisms. The operational costs of the Centre amounted to approximately GBP 1 million for the 2022-23 period. An independent strategic review conducted in 2022 underscored the tangible benefits derived from the Centre's activities. These include the consideration of stakeholder concerns, the enabling of paradigm shifts in policymaking, and practical foundations for policy development and enhancement.
Source: (OECD, 2024[10])
Gaps
Economic instruments
Current water utility tariffs do not fully enable cost recovery, water efficiency and demand reduction. At less than 1 USD/m3, Hungary is the OECD Europe country with the second-lowest tariffs for water and wastewater, with residential tariffs frozen since a 2013 government policy aiming to ensure affordability for households. The cost recovery ratio for public drinking water supply was 81.5% on average in 2018, down from 99.2% in 2009 (OVF, 2022[11]). Since then, the sharp rise in energy and labour costs in 2022-2023 has further increased utilities’ operational costs (CKA, 2024[12]). Despite the decline in water utilities’ operating results and the increase in resources required for maintenance and investment indicated in their annual 15-year investment plans between 2017 and 2022, the MEKH’s annual tariff change proposals were not adopted (State Audit Office, 2024[13]). Furthermore, the SAO highlighted a correlation between the deteriorating operating results of utilities and growing water losses in their respective networks, with non-revenue water accounting for one-quarter of the volume of water abstracted for public supply at an estimated value of over HUF 17 billion (EUR 44 million) per year. The 2023 tariff increase for non-residential water users ended a ten-year period of frozen water tariffs and increased utility revenues, but the extent to which it reflected actual cost recovery and investment needs is unclear. Limited communication around the tariff increase contributed to low levels of acceptance for the new tariffs among non-residential water users. Additionally, while not an explicit objective of water tariffs, their level is too low to incentivise sustainable water use, which is becoming increasingly urgent amid rising water scarcity. The SAO (2024[13]) highlighted that the water tariff structure between 2017 and 2022, which was frozen for both residential and non-residential users, did not encourage efficient and sustainable water consumption.
Despite its sophisticated design considering multiple factors, the success of the water abstraction charge in achieving its stated objectives has been limited. Initially intended to manage water demand, allocate water efficiently, prevent conflicts, and ensure stable revenue flows to the Water Fund and subsequently to the national budget, rates have not been systematically adjusted to achieve these objectives and have remained relatively low. As a result, the charge has mainly served as a relatively small revenue source and has not encouraged efficient water use. Managing water demand through economic and regulatory instruments has received limited attention in Hungary, with government responses to emerging water scarcity issues predominantly focused on technical supply-side solutions. In May 2025, for instance, based on a proposal by the Drought Protection Operational Task Force, the government mandated HUF 4.7 billion (EUR 12.2 million) of “immediate interventions” to ensure technical conditions for increased water resources through retention measures (i.e. maximum use of the storage capacity of canals, reservoirs and backwaters). At the same time, agricultural water users were exempt from paying both the water abstraction charge and the agricultural water service charge, thereby weakening incentives for efficient agricultural water use.
Exemptions further undermine the effectiveness of water charges, especially in agriculture. Irrigation water users have been exempted from paying water abstraction charges for volumes below 4 000 m³/ha/year since 2018, a threshold well above the national average irrigation use of 1 448 m³/ha/year (State Audit Office, 2025[7]). Moreover, legal provisions introduced in 2016 enable the Minister responsible for water management to declare periods of permanent water scarcity and exempt farmers from paying water abstraction charges and, since 2023, agricultural water service charges. Since 2017, a period of permanent water scarcity has been declared for several months in most years, undermining the agricultural water supply charge’s objective of recovering water supply costs. By eliminating cost signals from the water abstraction charge and the agricultural water supply charge during periods of water scarcity, these exemptions act as a distortive subsidy, encouraging irrigation, discouraging the adoption of more water-efficient practices and crops, and undermining both cost recovery and the efficient allocation of water resources. The 2025 amendment to the Water Management Act allows for the designation of targeted areas rather than applying exemptions nationwide, thereby mitigating revenue losses. Nevertheless, exemptions will continue to apply in the most water-stressed areas, incentivising abstraction and exacerbating water scarcity.
Regulation
Insufficient registration and oversight of small‑scale groundwater abstractions and wells have created data gaps and weakened the ability to plan and allocate water resources sustainably. This lack of control increases contamination risks, threatening drinking water security and the environmental rights of future generations. For water abstraction volumes below 500m3 per year, registration and permits are not required for domestic wells less than 50 metres deep that do not reach the aquifer in areas classified as risk-free from a water resources protection perspective. In the case of agricultural wells, either a notification or a permit is required for construction and subsequent operation. In all other cases, water abstraction is subject to a permit. Efforts to reintroduce mandatory notification for domestic wells and retroactive reporting for wells under 50 metres repeatedly stalled before being abolished (Equilibrium Institute, 2025[14]). The lack of data on the location, volume, and purpose of groundwater use limits the capacity of water authorities to plan and allocate resources sustainably. Furthermore, the lack of oversight of well drilling practices raises contamination risks, threatening groundwater quality and drinking water security, 82% of which comes from groundwater, while undermining the constitutional right3 of future generations to a clean and healthy environment and access to natural resources. While only professionals holding the qualifications and authorisations defined by decree are permitted to design and construct wells, and the Hungarian Association of Well Drillers (a professional civil organisation) maintains an informal registry of certified contractors, this list is not updated frequently enough to ensure reliability and compliance with regulations.
Water abstraction permits do not systematically account for water scarcity constraints. The Water Management Act sets out high-level principles for issuing water abstraction permits and requires the hierarchy of water uses to be considered during the permitting process. Permits are issued for a limited period and can in theory be refused or revised to maintain or achieve River Basin Management Plan (RBMP) objectives (European Commission, 2025[15]). However, VIZIGs and water authorities often lack the capacities and resources to systematically consider these principles and water scarcity constraints in water resource allocation and permit issuance, leading to risks of water over-allocation, structural water deficits and conflicts. The risk of over-allocation may be magnified by the national Irrigation Administration Authority having jurisdiction over agricultural groundwater abstraction permits. As a result, VIZIGs and local water authorities often lack a complete view of water abstraction permits in their territory, while decisions on agriculture groundwater abstraction permits may not consistently account for existing abstraction and scarcity levels. However, there is no established mechanism for reviewing water abstraction permits during periods of water scarcity, nor a clear administrative method to equitably reduce permitted volumes across users. VIZIGs and water authorities have limited awareness and enforcement of the hierarchy of water uses set out in the Water Management Act. Notably, there are no legal provisions ensuring the allocation of minimum ecological flows, ranked fourth in the hierarchy of water uses, and drought conditions have not yet triggered any restrictions on water abstraction, even as such conditions become more frequent and severe. Water charge exemptions for irrigation during periods of water shortage incentivise water abstraction for agricultural use, effectively elevating irrigation (ranked fifth) above higher priority uses.
Limited enforcement, non-compliance issues, and cases of illegal abstraction further exacerbate these issues. Water was the environmental domain with the highest share of non-compliance with regulations (17.5%) based on inspections between 2008 and 20154 (OECD, 2018[2]). Illegal wells are illustrative of this issue: an estimated 19% of groundwater abstractions for agricultural purposes are unauthorised, and the number of illegal wells for agriculture may exceed 100 000 (State Audit Office, 2025[7]). Overall, only an estimated 10% of wells in Hungary are officially authorised (OVF, 2022[11]). Sanctions for non-compliance are insufficiently dissuasive, with penalties for water abstraction without a permit set between HUF 300 000 and 1 million (EUR 778 and 2 594). VIZIGs and Couty Government Offices (CGOs) lack the capacities and resources needed to ensure a robust permitting process and adequate monitoring and enforcement of water permits (i.e. ensuring the quantity abstracted is in line with the maximum quantity defined in the permit).
Recommendations
Set water tariffs and water abstraction charges at levels that enable cost recovery and water demand management. This would involve clearly (re)defining the intended objectives of each charge and tariff, setting a clear charging and tariff structure that supports their objectives (Box 3.3), phasing in new charges and tariffs gradually and predictably, and ensuring their regular update (e.g. based on annual tariff recommendations by the MEKH, which should follow a well-defined methodology). Maintaining affordable water tariffs has been a clear government priority; going forward, a balanced approach could help reconcile affordability with the need for sustainable investment in water infrastructure and climate adaptation. Postponing tariff increases and infrastructure investment against a declining cost recovery and EU investment may jeapordise the security of water supply and compound future investment needs to comply with increasingly stringent EU standards for drinking water and urban wastewater treatment.
Better reflect the level of scarcity and incentivise reduced abstraction, including through:
Seasonal or drought-based charges reflecting variations in water availability, which could encourage water conservation during dry periods.
Differentiating agricultural water service charges based on the degree of consumptive use of different activities, with higher charges for irrigation than for fish farming and rice, which have higher rates of return of abstracted water to the environment. This was the case in Hungary before the introduction of uniform charges in 2020.
Water charges combined with targeted subsidies for water-saving technologies (e.g. drip irrigation and rainwater retention ponds), which could help incentivise more efficient water use. Subsidising these technologies would be more cost-effective than current distortive subsidies of irrigators’ water charges and would help align farmers’ production and investment decisions with actual water availability.
Differentiating water charges to incentivise reused water for agricultural uses rather than freshwater abstraction. In any case, water charges should ensure the full recovery of costs related to administration, water resources monitoring and forecasting, permit compliance monitoring and enforcement.
Avoid providing blanket exemptions from paying charges during periods of water scarcity. Such exemptions can unintentionally incentivise additional abstraction when resources are most constrained. Given that farmers are compensated for crop losses resulting from flood events, a similar mechanism could be established to compensate losses incurred when irrigation is restricted.
Consider the pros and cons of earmarking revenue from water charges for water, as was previously the case when revenues from the water abstraction charge paid into the Water Fund. Earmarking revenue from water charges for reinvestment in water resources management could strengthen the legitimacy and public acceptance of higher water charges by highlighting the benefits of water charges to end users (e.g. by allowing them to access funds for water conservation measures). Beyond infrastructure improvements, revenue could be used to fund the monitoring and assessment of water resources, the costs of compliance monitoring and enforcement, and broader human and technical capacity development in national and subnational institutions related to water.
Adopt complementary measures to enhance the effectiveness and acceptance of water charges. A clear communication strategy reaching all sectors (e.g. agricultural water users, industry, other non-residential users and households) could be devised to inform users of the objectives of water charges and tariffs (e.g. incentivising sustainable consumption, ensuring cost recovery) and communicate transparently about possible future adjustments to ensure predictability. Public acceptance of adjustments to water tariffs should be enhanced by ensuring the affordability of water services for low-income households through social measures. These include targeted financial support for low-income households, progressive elements in pricing structures, and reviewing taxation options related to water supply services, which currently have a 27% value added tax (VAT) rate. Non-residential water tariffs could apply lower rates to “social” users such as schools, hospitals and other public services. An awareness-raising programme on efficient water use could target non-residential users, notably in industry and agriculture. Household demand management could also involve education and awareness raising, the distribution of water efficient fixtures and fittings such as low-flow shower heads and cistern displacement devices, and nudge messaging on bills (OECD, 2022[16]).
Tariffs for drinking water supply and charges for water use can be used to manage water demand, recover service provision costs and signal the value and scarcity of water resources. When designed effectively, they can incentivise more sustainable water use, support the achievement of environmental objectives and contribute to the financial viability of water management systems. However, the structure and effectiveness of tariffs and charges varies depending on the pricing mechanism, the implementation capacity, and local hydrological conditions.
Tariffs for drinking water supply
Flat charge tariffs charge all customers the same amount regardless of the volume consumed. The rate may be uniform or vary according to criteria such as user characteristics or seasonal factors. Historically common in areas with abundant water and limited metering, its use has declined. While administratively simple and ensuring stable revenue, the flat rate does not reflect the actual cost of service, sends no price signal to users, and may lead to low-volume consumers cross-subsidising high-volume consumers.
Two-part tariffs, such as in the case of Hungary, combine a fixed charge with a volumetric price. The fixed charge, which may be uniform or differentiated based on user characteristics, typically covers costs related to meter reading, billing, and infrastructure, while the volumetric component reflects variable costs and incentivises conservation. Volumetric pricing can be uniform, charging a single rate per cubic metre consumed, or non-uniform, such as Increasing Block Tariffs (IBTs), where the unit price rises with consumption to promote efficiency, equity, and affordability. IBTs aim to protect low-income households by offering subsidised rates for basic needs, although outcomes may vary depending on factors like household size or shared connections. Some systems adjust block sizes or rates according to user characteristics. The relative simplicity of two-part tariffs supports transparency and cost recovery, but careful design of the volumetric component is essential to ensure intended social and environmental objectives are met without creating unintended distributional impacts, especially in block structures. Italy has applied an IBT system for water services since the 1970s, for instance.
Seasonal or drought-based tariffs reflect variations in water availability and encourage water conservation during dry periods. In the state of New South Wales, Australia, for example, drought pricing comes into effect after a 31-day transition period when dam storage levels fall below 60%. Conversely, when storage exceeds 70%, standard pricing is reinstated after 31 days. While these tariffs may help address short-term water scarcity, they might not be appropriate for frequent or prolonged droughts, as they could have negative social consequences for certain segments of the population.
Water abstraction charges
Licence-based charges associate a fixed fee to water abstraction permits to recover the administrative costs of the permitting system. They act as regulatory instruments rather than as economic signals to influence water use. While they are simple to implement and effective in ensuring compliance, they do not promote water efficiency or reflect the scarcity value of water. Most Canadian provinces apply such charges to major industrial and commercial users.
Volumetric charges depend on the volume of water abstracted, directly implementing the user-pays principle. Rates may be uniform or vary according to factors such as the type of use, the source (e.g. groundwater or surface water) or location. By linking payment to consumption, these charges internalise environmental costs and promote a more equitable allocation of water resources. They incentivise water efficiency but require robust metering, monitoring, and enforcement systems to function effectively, as well as safeguards to ensure affordability for some users. In France, Water Agencies have applied volumetric charges for over 50 years. Rates vary by use type, water source, and geographic zone, with higher rates in water-scarce areas. Exemptions exist for certain uses (e.g. geothermal energy), and revenues are reinvested in the protection and improvement of water resources.
Progressive and differentiated volumetric charges impose higher rates based on the volume abstracted or environmental risk factors, such as aquifer vulnerability or local water scarcity. This approach incentivises water conservation and discourages abstraction in overexploited areas by more accurately reflecting the environmental costs of water use. However, their design and implementation require detailed data and strong institutional capacity. In the region of Flanders, Belgium, groundwater charges rise progressively with the volume abstracted and vary according to aquifer conditions and local groundwater pressure.
Two-part abstraction charges combine a fixed fee with a volumetric charge, separating the cost of access rights from actual water use to promote both allocation efficiency and revenue stability. This approach is well-suited to systems with clearly defined water rights but requires reliable metering systems and may involve greater administrative complexity. In New South Wales, Australia, users pay a fixed amount for their entitlement and a volumetric charge, encouraging users to hold only the rights they require and promoting water efficiency in use.
Seasonal or drought-based charges apply higher rates during certain seasons or periods of scarcity, creating economic signals that reflect temporal variations in water availability. By linking prices to climatic and hydrological conditions, these charges incentivise water conservation and more efficient use during critical periods. Their effectiveness relies on timely and accurate monitoring of resource conditions. However, they can introduce cost uncertainty for water users. In the semi-arid state of Ceará, Brazil, abstraction charges increase during drought years to reflect higher water delivery costs and incentivise more efficient water use when water is most scarce.
Penalty-based and overuse surcharges may apply when users exceed authorised abstraction limits. Surcharges can strengthen compliance, but they require accurate measurement and consistent regulatory oversight. In Cyprus, water abstractors face a surcharge for every cubic metre of water abstracted above their permitted allocation, ensuring adherence to authorised volumes and discouraging overuse.
Sources: (OECD, 2010[17]), (WaterNSW, 2025[18]), (Cecchi, Conti and Ravagli, 2022[19]), (Leflaive and Hjort, 2020[20]), (IEEP, 2022[21]), (European Court of Auditors, 2021[22])
Review and reform potentially harmful subsidies, while exploring the taxation of negative environmental externalities, to strengthen the financial sustainability of water services and promote climate resilience. Hungary could consider introducing economic instruments such as a stormwater fee for non-residential areas, calculated on the basis of impermeable surfaces, or a rainwater contribution linked to land size (OECD, 2023[23]). These instruments would help view rainfall as a resource, encouraging greater water retention and groundwater recharge and avoiding storm overflows, while generating revenue streams to fund infrastructure improvements needed to adapt to changing rainfall patterns. As such, they would help address the current imbalance whereby utilities are responsible for managing excess stormwater in their networks, but receive no compensation for this service given rainwater management is excluded from their service contracts. The feasibility, equity implications and stakeholder acceptance of new economic instruments should be carefully assessed prior to their introduction.
Adopt a resource-based approach to water permitting that incorporates water scarcity considerations. The special water resource management zones introduced by the 2025 amendment to the Water Management Act is a positive step forward. Similar measures should be extended to surface water bodies and applied nationwide. As a first step, special water resource management zones could be extended to the micro-regions with groundwater bodies identified as being vulnerable to climate change in RBMP3. Water abstraction permits could be more systematically issued based on consistent criteria and informed by comprehensive and regularly updated overviews of water availability and abstraction at the sub-basin level. This could include the establishment of clear and transparent rules for water allocation, pre-defined thresholds to trigger abstraction restrictions, and a transparent framework for the periodic review and adjustments of permits during drought events, in line with the hierarchy of water uses set out in the Water Management Act. Strengthening the technical and human capacities of water authorities would be a pre-requisite to enabling consistent oversight and reducing the risk of over-allocation and resulting conflicts between water users, which current staffing levels do not systematically allow.
Review water abstraction permitting thresholds and requirements to enhance data collection on water use and better manage demand as a result, building on the new practice of designating special water resource management zones.
First, foster smart regulation that sets place-based minimum thresholds for requiring water abstraction permits, in line with the user pays principle. Regulation could focus on non-residential water users to target, understand (through data collection) and monitor the largest water users to ensure sustainable resource use. Permits should be subject to periodic review to adapt to the hydro-climatic situation.
Second, consider reinstating broader mandatory permitting regardless of depth, to strengthen oversight of groundwater and mitigate associated environmental risks. To ensure proportionality and minimise administrative burdens for household users, Hungary could introduce a simplified registration process (e.g. an online platform) and provide targeted technical and financial support to facilitate compliance. Furthermore, communicating an official and up-to-date list of licensed well drilling contractors would help ensure adherence to technical standards, reduce the risk of groundwater contamination, and streamline data collection, as contractors could be made responsible for notifying water authorities of newly drilled wells. To enhance monitoring and enforcement, Hungary could also explore the deployment of smart metering technologies that enable the automatic transmission of water use data.
Third, consider extending simple registration requirements to water abstraction for all domestic wells, irrespective of depth, abstraction volume and zone, to ensure that their location is systematically considered in land-use planning (e.g. to avoid contamination through waste management facilities or quarries). A comprehensive register would also reveal concentrations of small abstractions, enabling targeted local monitoring and inspections where necessary.
Strengthen compliance with water regulation, notably regarding illegal wells and water abstraction, through adequate inspections and sanctions. The compliance regime should be rooted in a solid regulatory framework and co-operation across relevant sectoral ministries (e.g. Ministry of Energy and Ministry of Agriculture) and water authorities. Enforcement should rely on inspections, direct monitoring and metering across water uses and sources (currently only 57% of water users with abstraction permits meter their water use), and innovative techniques such as satellite imagery, remote sensors, artificial intelligence, or flying and underwater drones to ensure more cost-effective inspections and monitoring. Sanctions should be effective and proportionate to ensure compliance. Making water abstraction permits conditional to compliance and installing on-site monitoring systems where appropriate could both strengthen compliance and improve water resources monitoring and allocation. To ensure effectiveness and public acceptance, such measures should be accompanied by robust stakeholder engagement and awareness-raising efforts (OECD, 2022[16]).
Gaps
Hungary’s legislative framework for water is rooted in historical hydro-climatic conditions and priorities, which may limit its effectiveness in addressing emerging water scarcity challenges. Hungary has a well-established water management system shaped by its history of floods and excess inland water, supported by robust alert systems, especially along the Danube, and grounded in EU and national legislation. Recent legislative developments, such as the 2025 amendment to the Water Management Act, added water conservation and water shortage management to the list of the State’s water-related responsibilities and defined special water resource management areas, strengthening the definitions and legal foundations for drought management in Hungary. Additionally, Hungary has transposed EU regulations on minimum requirements for water reuse, and defined nature-based solutions and set out general requirements to be observed through decrees5. However, further provisions and instruments such as guidance could enable the widespread and full-scale adoption of approaches and tools such as water retention, water reuse, water re-allocation and nature-based solutions, which could foster further climate resilience in water management. For example, although the Water Management Act sets out a hierarchy of water uses and principles for issuing water abstraction permits, there is no detailed secondary legislation that turns these principles into an operational and quantitative water allocation regime and triggers automatic and proportionate water abstraction curtailments for permit holders based on drought alert levels. Moreover, the bilateral agreements underpinning the work of Hungary’s Transboundary Water Committees, which are essential to managing growing water scarcity challenges, focus on flood control and water quality – which have been the most significant issues to date – and could further embrace emerging water scarcity and drought management concerns.
Hungary does not yet have a forward-looking water policy grounded in long-term hydro-climatic projections. The existing National Water Strategy, developed in 2013 and valid until 2030, has faced implementation challenges and its review, which is currently underway, could better reflect the increasing frequency and severity of droughts observed in recent years. While the second National Climate Change Strategy (NCCS2) and the third River Basin Management Plan (RBMP3) respectively provide qualitative and scenario-based descriptions of long-term water trends and short-term socio-economic forecasts linked to water demand trends, future iterations of water policies and plans could provide a more comprehensive assessment of long-term water availability, water demand and water-related risks to have a better understanding of the long-term sustainability of current abstraction levels. Moreover, limited evaluations of the long-term evolution of water-related risks mean that potential disruptions to economic activities arising from droughts and floods are insufficiently understood.
A long-term vision for climate-resilient water management and effective drought and flood risk assessment requires robust projections of future water availability and demand at both national and subnational levels. In addition, data and information gaps can hinder evidence-based and forward-looking decision-making for water and climate adaptation. In particular:
Water and climate data are scattered across sources and sometimes lack integration, interoperability and accessibility, potentially hindering their effective use in policymaking. Hydrological, meteorological, and agricultural data are dispersed across institutions (OVF, HungaroMet, Ministry of Energy and Ministry of Agriculture), with limited integration and comparability between datasets. Notably, two key management systems – the National Environmental Information System (Országos Környezetvédelmi Információs Rendszer, OKIR) operated by the Ministry of Energy and the Water Management Information System (Vízgazdálkodási Információs Rendszer, VIZIR) operated by the OVF – are not yet fully interoperable and integrated. There is no unified information system for water.
Although framework conditions for data collection are included in legislation, data for key indicators such as water consumption (total water withdrawn minus water returned to the source) and the economic impacts of water-related disasters are not systematically collected and available. These issues are exacerbated by institutional and regulatory changes. For example, the irrigation data gathered by the National Land Centre ceased to be collected following its dissolution due to an unclear allocation of responsibilities between the Ministry of Agriculture and the Ministry of Energy (State Audit Office, 2025[7]). Water abstraction data are based on permits and are as such limited by non-reported and illegal wells. Methodological shortcomings further affect the quality and comparability of datafor decision-making. For instance, the current absence of a uniform valuation method for water utility assets, the lack of comprehensive infrastructure inventories, and the diversity of contractual arrangements also limit data comparability across operators and evidence-based decision-making and planning in the sector (State Audit Office, 2024[13]).
Enhancing data granularity would better support place-based policymaking. Although Hungary compiles water balance data at national and sub-catchment levels, data are not available at the sub-basin level, where operational and permitting decisions are made. While some spatial datasets are available free of charge, most are scattered across multiple organisations, with unclear access procedures, limited interoperability, and high transaction costs (OECD, 2023[23]). Free geospatial databases relevant for runoff modelling or water deficit monitoring are lacking. Despite recent progress, Hungary has been flagged for insufficient implementation of the Inspire Directive on environmental spatial data (European Commission, 2022[8]) and scored below the OECD average on the “open by default” indicator of the OECD Digital Government Index in 2023 (0.076 compared to the OECD average of 0.088), reflecting broader challenges in open and accessible environmental data.
Sectoral plans and policies beyond water are not yet systematically aligned with water availability and risks, resulting in inconsistent objectives and measures. Although sectoral ministries are informed of the measures needed to achieve good quantitative and qualitative water status within the RBMP, there is no formal requirement for all ministries to consider water availability, water quality and water-related risks magnified by climate change in their sectoral policies. While climate adaptation and environmental protection are primarily supported through the Environmental and Energy Efficiency (KEHOP Plus) operational programme, others (e.g. for economic development and innovation) do not consider climate change and environmental issues as priorities. This fragmented approach undermines the effectiveness of water governance, as policies across sectors such as energy, industry, agriculture, forestry and land use often fail to consider their impact on water resources or their vulnerability to water-related risks. Several key policies consider water and establish links with the National Water Strategy and the RBMP, such as the National Climate Change Strategy, the National Landscape Strategy and the National Environmental Protection Programme. Despite recent developments such as the creation in 2024 of the Interministerial Water Management Committee to strengthen links between agriculture and water management, alignment with policies relating to economic sectors (e.g. agriculture and industry) and other domains (e.g. forestry) remains limited, resulting in competing priorities and unintended impacts on water resources. For example:
Energy is the largest water abstractor in Hungary, primarily for cooling purposes. While the National Energy Strategy to 2030 prioritises nuclear and renewable energy (mainly solar), it does not provide evidence on the impacts of changing hydrological conditions such as floods, droughts or rising river temperatures on energy production and cooling needs.
Industrial policy, notably the 2016 Irinyi Plan, aims for strong industrial growth based on the expansion of water-intensive sectors such as food processing and automotive manufacturing. While the Plan emphasises energy and material efficiency, it does not consider water availability. Since 2022, the National Battery Industry Strategy to 2030 sets out Hungary’s ambitions to become the world’s third-largest battery producer, but it does not mention water resources, set targets or measures for water use, or acknowledge Hungary’s growing water scarcity constraints.
Agriculture has promoted irrigation as a climate adaptation strategy against the backdrop of growing water scarcity since 2019, largely through supply-side interventions. However, this approach has lacked complementary demand-side measures. In fact, exemptions from irrigation water charges have encouraged its expansion (State Audit Office, 2025[7]). Longer-term trends show that the land area sown with the six arable crops most vulnerable to climate change increased from 67% in 1991 to 77% in 2020 (Pinke et al., 2024[24]). This shift indicates an increasing concentration of agricultural production in crops that are more sensitive to water stress concurrently with a rising frequency and intensity of drought events, heightening agriculture’s exposure to climate and water-related risks.
Forestry legislation, namely the 2009 Act on Forests, mandates the replanting of harvested tree plantations to meet reforestation targets. This nationally uniform rule does not account for place-based differences and may risk unintended consequences or maladaptation in certain areas, such as the semi-arid Kiskunsági and Nyírségi sand ridges, where trees with deep roots such as poplars may contribute to depleting groundwater resources.
Spatial planning frameworks, both at national and county levels, insufficiently integrate water risk considerations. The current National Development Concept does not align with the RBMP, and while water-related maps (e.g. water retention maps) are generally provided as input for regional development plans, they are not systematically integrated. Flood risk zones, flood protection areas, and water retention functions are not systematically designated at national and county levels (OECD, 2023[23]).
Persistent gaps in environmental impact assessments (EIA) and the use of exemptions further contribute to the misalignment of sectoral economic policies with water availability and risks. While Government Decree 259/2024 (VIII.29) introduced improvements to Hungary’s EIA framework, shortcomings remain regarding the EU EIA Directive, which requires major construction and development projects to undergo ex ante environmental assessment. Notably, Hungary allows broad exemptions from EIAs rather than limiting them to exceptional cases and applies insufficiently dissuasive fines for non-compliance (European Commission, 2025[25]). For instance, water management activities are exempt from carrying out ex ante EIAs, even though practices such as dredging and vegetation clearance can have significant impacts on biodiversity and the ecological status of surface water. In recent years, the rapid expansion of the water-intensive battery industry in Hungary has heightened water security concerns. Battery production facilities often receive support under the Individual Government Decision (Egyedi Kormánydöntés, EKD) regulation, which allows one-off government decisions granting non-repayable financial incentives for major investments. However, this legal framework does not require EIAs during the decision-making phase (State Audit Office, 2025[26]). Environmental considerations, including water, are deferred to later permitting stages, once government support has already been committed.
Ad hoc regulatory changes and inconsistent subnational co-ordination also undermine the alignment of economic development policies with water availability and related risks. Such changes may temporarily alleviate the adverse impacts of climate change on economic activity but have implications for long-term environmental quality and water security. In August 2024, following record temperatures in the Danube River, Government Decree 12/202 of the Minister of Energy allowed the existing water temperature threshold of 30 °C for cooling Paks nuclear power plant to be temporarily exceeded on a case-by-case basis approved by the Minister of Energy. At subnational level, although legislation requires ex ante water-related assessments for the delivery of permits in other sectors (e.g. construction) and co-ordination between permitting across sectors, permitting authorities across municipal, county and sub-basin scales do not co-ordinate systematically. As a result, projects with potentially significant impacts on water resources, such as residential developments or industrial expansions, can be implemented without considering current water availability and future hydrological risks, shifting the responsibility for managing the consequences to local authorities with limited capacities. This issue is compounded by limited institutional arrangements for conflict prevention and resolution at subnational level.
Recommendations
Define a long-term vision for water resilience under a changing climate in Hungary in the form of a strategy or plan, setting a clear direction and objectives for water and climate adaptation. This water resilience strategy could be the successor of or embedded in the National Water Strategy, which is currently under review with the objective of placing greater emphasis on sustainable water resources management. This long-term vision should aim to tie existing water-related plans and operational programmes together under an overarching, long-term vision and corresponding targets for water resilience. The strategy or plan should:
Define measurable and overarching objectives (e.g. reducing water use by a defined percentage or increasing average soil moisture) in line with key EU legislation and initiatives such as the Water Framework Directive (WFD), the Drinking Water Directive, the Urban Wastewater Treatment Directive, the Floods Directive and the ongoing work of the Danube Water Balance. Notably, Hungary’s strategy could aim for a 10% increase in water efficiency by 2030, in line with the 2025 EU Water Resilience Strategy.
Be grounded in long-term (e.g. 20 or 25-year) projections of hydrological and meteorological conditions, water availability, and demand at national, sub-basin and sub-catchment levels. These projections should identify activities that are vulnerable to flood and drought risks under different climate change scenarios, varying rates of population growth and household demand, and uncertainties over water demand for energy and industry. The California Water Plan could serve as inspiration (Box 3.4). Projections should also identify thresholds such as river levels at which critical infrastructure risks flooding, groundwater levels endangering drinking water supply, and soil moisture deficits affecting crop viability. Adopting a longer-term view of water resources would enable large-scale infrastructure investment and regulatory reform to be properly planned and funded. Setting up and sustaining national-level capacities for data collection, modelling, and risk assessment will be essential to support regular updates.
The California Water Plan (CWP) is the State of California’s (United States) long-term strategic framework for the sustainable management and development of water resources to meet current and future needs. Mandated under the State’s Water Code, the CWP assesses the status and trends of water-dependent natural resources, water supplies, and agricultural, urban, and environmental demands under a range of plausible future scenarios to identify gaps between supply and demand. It evaluates and recommends demand management strategies and supply enhancement options to address California’s evolving water needs.
The Water Evaluation and Planning Model developed by the Stockholm Environment Institute provides the analytical foundation for the Plan. The model, tailored to the Californian context, simulates integrated water management scenarios for six of its 10 hydrological regions. It is used to conduct integrated scenario analysis, assessing different water management strategies within a range of uncertainty relating to future trends in water demand and climate change. The analysis involves (i) quantifying a small set of scenarios developed by the California Water Plan Update staff and advisory committee, and (ii) generating a larger package of plausible scenarios to evaluate the performance of different water management response plans in the face of uncertainties, including climate change.
Renewed every five years, the Plan ensures adaptability to changing conditions across the state. Update 2023 aims to respond to the urgent threat of climate change by focusing on the innovation and investments needed in watersheds, water infrastructure and local communities for a resilient and equitable future. Beyond providing technical guidance, the CWP acts as a policy platform, facilitating collaboration among elected officials, state agencies, California Native American Tribes, resource managers, businesses, academia, stakeholders, and the public to shape water policy directions and investment priorities.
Source: (OECD, 2019[27]), (Stockholm Environment Institute, n.d.[28])
Define a programme of measures to achieve overarching objectives. Measures should have a clear timeline, designate responsible authorities and stakeholders, and identify budget allocations and funding and financing sources (e.g. Operational Programmes, cohesion funds, CAP funds, EIB financing, etc.). The programme of measures should consider existing plans and initiatives such as the RBMP, Flood Risk Management Plans and the Water in the Landscape programme.
Engage relevant subnational authorities and stakeholders in the definition of acceptable levels of risk and the development of the programme of measures to generate a consensus and buy-in. This process would involve discussing and setting explicit standards and objectives, such as the level of flood protection to be provided for settlements and critical infrastructure, the extent to which agricultural land may be used for water retention, the frequency and severity of water supply restrictions during droughts, objectives for wastewater treatment in terms of water quality, and acceptable levels of overflow incidents, in line with relevant EU directives.
Establish a robust monitoring framework to track progress on the implementation of the strategy, ensure accountability, and enable adaptive management over time. Water planning should use adaptive and scenario-based principles to deliver resilient and scalable solutions to existing and future challenges.
Ensure adequate legal provisions and regulatory requirements to implement the programme of measures of the strategy and achieve its objectives in co-ordination with relevant ministries to ensure coherence with sectoral legislation in areas such as land use, agriculture, and industry. This could be a key part of the forthcoming legislative proposal for a new Water Management Act currently underway. Hungary could draw inspiration from the Netherlands’ Environment and Planning Act (Box 3.5). This process could also involve reviewing and updating transboundary water agreements in light of climate change, in co-operation with neighbouring countries, to better manage emerging water scarcity concerns.
The Netherlands’ Environment and Planning Act, which entered into force in January 2024, establishes a single, integrated legal framework for environmental and spatial governance. By replacing multiple existing laws, such as the Spatial Planning Act, the Crisis and Recovery Act, and the Soil Protection Act, the Environment and Planning Act harmonises and simplifies regulations related to water management, land use planning, environmental protection, nature conservation, construction, major infrastructure projects, cultural heritage, and resource extraction.
The reform streamlines administrative procedures by enabling permit applicants to submit a single permit application through a one-stop digital portal and receive one integrated decision, with standard processing times reduced from 26 weeks to 8 weeks in most cases. Existing permits issued prior to the Act’s entry into force remain valid, ensuring legal continuity. The platform allows applicants to check location-specific requirements, determine whether they need an environment and planning permit or simply need to notify authorities, and submit applications or reports.
Source: (KVK and RVO, 2025[29])
The strategy should support the integration of water security considerations into sectoral policies for agriculture, industry, energy, and land use, among others. This should involve:
Cross-sectoral collaboration with relevant ministries under the leadership of the ministry in charge of water (currently the Ministry of Energy) and a mapping of policies affecting water resources to identify synergies, trade-offs and potential conflicts, guiding the adjustment of objectives and measures where necessary.
Exploring win-win solutions across the water-energy-food-climate-biodiversity nexus to support the shift from crisis to risk and opportunity management. For instance, boosting renewable energy sources (e.g. solar and wind) would reduce the water dependence of energy production and enhance energy security during droughts while supporting decarbonisation goals. Similarly, enhancing water retention in agricultural soils through soil quality improvements could simultaneously improve soil moisture levels, groundwater recharge, and crop yields and resilience to droughts. The water resilience strategy could complement the irrigation strategy through demand-side measures and the promotion of more water-efficient agricultural practices such as the shift to less water-consumptive and more drought-resistant crops.
Making EIAs mandatory in the decision-making phase of investments under the EKD regulation to strengthen water security and deliver wider environmental benefits.
Ensuring that other sectoral plans are informed by the water strategy, notably the (delayed) revision of the 2021-2023 and 2024-2026 climate actions plans supporting the National Climate Change Strategy, the 4th RBMP, the 2nd FRMP and the National Development and Territorial Concept. The latter, in particular, offers significant potential to strengthen its consideration of water resources, given that spatial plans are a pre-requisite for land-use changes in Hungary, such as new agricultural, industrial and residential developments. Within the realm of water policy, the strategy could also provide opportunities to reflect on trade-offs between water quantity and water quality management. For example, clearing riverbanks and dredging waterways may be carried out for flood protection and to help mitigate the impact of drought conditions, but can degrade freshwater biodiversity and water quality, compromising the good ecological status of waterbodies.
Building on Hungary’s recognised leadership in water diplomacy and multi-lateral co-operation, including hosting high-level events and sharing water expertise in international forums, to strengthen its role as a champion for sustainable water management and climate adaptation. The strategy could serve as a platform to showcase Hungary’s integrated approach to managing floods and droughts simultaneously, positioning the country as a reference for climate-resilient water management and providing a blueprint for other countries facing similar hydrological extremes.
Finally, enhance the quality, coverage, harmonisation and granularity of water-related data to support evidence-based decision-making. This would involve:
Mapping existing indicators to identify data gaps and determine priority indicators for water planning and decision-making, in view of establishing mechanisms to collect, store and disseminate new data that are sufficiently granular to inform decision-making at lower levels of government. Addressing these gaps may require clarifying institutional mandates (e.g. for irrigation), updating regulatory thresholds (e.g. for abstraction reporting), and standardising methodologies (e.g. for asset valuation in water utilities) to improve decision-making.
Leveraging digital tools to improve data collection and regulatory enforcement. For example, remote monitoring and metering can provide precise and localised water abstraction data, while satellite imagery can support the monitoring of remote or inaccessible areas with unparalleled spatial coverage.
Integrating existing datasets (e.g. hydrological, meteorological, economic, etc.) to improve accessibility, comparability and interoperability for climate-adaptive decision-making across levels. This could involve developing a national water data platform that is interoperable, open by default, and tailored to the needs of both national and subnational actors. National data should be aligned and interoperable with international basin-wide information systems, especially existing ICPDR ones, to fully unlock the benefits of data collection. Hungary can build on its active and substantial role in advancing these international efforts to achieve this goal.
Gaps
The administrative reforms of the 2010s significantly reduced the competences of subnational authorities, making Hungarian water policy increasingly centralised. To improve water service provision and efficiency, Hungary reduced the number of water and wastewater utilities from over 400 in 2011 to 34 in 2025, consolidated service provision under the state-owned National Waterworks, and introduced nationally uniform tariffs in 2024. While fostering economies of scale, these reforms have weakened the application of the subsidiarity principle in the drinking water supply sector.
The effective operational capacity of subnational entities is limited. VIZIGs, which are central to implementing water policy locally, face significant capacity challenges, including staffing shortages, an ageing workforce - with 65% of public water management staff6 aged 50 and over- and low recruitment rates. The latter is due to limited secondary education opportunities, bounded financial resources, and comparatively low wages relative to national agencies and the private sector. However, wages in the public water management sector increased by an average of 30% in January 2025 and are planned to be followed by an additional 12% in 2026 and a further 10% in 2027, implying a 60% wage increase within two years. Water authorities, which share responsibility with VIZIGs for water allocation and permitting at the sub-basin level, face significant human and technical capacity constraints, compromising the rigour of water allocation and permitting processes at times. Additionally, while VIZIGs receive central funding to cover additional labour and operational costs for flood and inland water management, no equivalent mechanisms support water retention activities. Recent developments have steered public action towards improved water drainage, notably the addition of water conservation and water shortage management to the State’s water-related responsibilities, and the resolution7 setting out water management projects to restore and secure water resources for the drought-prone Homokhátság region. Going forward, further efforts are needed to build capacities for water drainage as part of the new operational mandate of VIZIGs.
The role of subnational Water Management Councils, established to engage stakeholders and oversee territorial water management, has so far been mostly consultative, with gaps in fulfilling this function. In particular:
The influence of sub-catchment and sub-basin Water Management Councils on final decisions is limited: in practice, RBMPs are typically approved, sometimes with limited scrutiny. VIZIGs are not required to consider or respond to council inputs on decisions and plans, limiting the councils’ role to a consultative function.
Co-ordination between VIZIGs and Water Management Councils is often limited to biannual meetings where topics are largely defined by the former, reflecting a top-down approach rather than genuine engagement.
Information on the operations of subnational Water Management Councils (e.g. minutes of meetings) is not available on each of the councils’ dedicated webpages, and no comprehensive assessment of the effectiveness of subnational Water Management Councils has been carried out.
Meaningful stakeholder involvement is constrained by uneven involvement and representation gaps. Participation in meetings is uneven, as civil servants attend meetings during paid working hours, while non-government stakeholders often lack the time and financial resources to engage. Key stakeholder groups such as municipalities, residential water users, vulnerable communities (e.g. Roma) and small-scale farmers are insufficiently represented, undermining the inclusiveness and perceived legitimacy of councils. The permanent membership of Territorial Water Management Councils is limited to 25 representatives. Given Hungary’s high municipal fragmentation8 and limited municipal capacities to meaningfully participate in meetings, permanent membership tends to be limited to the county government and active, high-priority or major (e.g. county seats) municipalities. Other municipalities may participate in meetings as permanent invitees or have consultative rights, particularly when they are affected by agenda items such as flood protection plans, feasibility studies for municipal investments, or wastewater agglomeration issues. In practice, however, most municipalities are marginally involved, highlighting challenges in aligning decision-making across administrative and hydrographic boundaries.
Outside of Budapest, municipalities face significant capacity, financial, and data constraints for effective climate adaptation and water security. These constraints partly stem from disparities in fiscal capacity, with smaller municipalities often lacking adequate funding and capacities to initiate and sustain water retention projects. Although the central government supports some municipalities through targeted projects featuring capacity-building components, there is no systematic national strategy to strengthen municipal capacities in climate-adaptive water management. Integrated Municipal Water Management Plans can support municipalities in aligning water management with broader environmental, social, and economic objectives. However, the requirement to submit such plans as part of funding applications often results in their preparation under significant time constraints and with limited technical capacity, undermining their quality and strategic value. Despite water retention being a stated objective across strategic documents across levels, and some municipalities being frontrunners in this domain, municipal projects often prioritise greywater and wastewater drainage, with grey infrastructure remaining the default option (OECD, 2023[23]). This reflects longstanding approaches to water management and is partly driven by a funding model reliant on EU and national operational programmes, the latter offering the largest volume of funding for infrastructure investment by municipalities. This model favours large-scale, capital-intensive infrastructure over smaller investments such as nature-based solutions with relatively lower capital costs but higher operation and maintenance needs.
Recommendations
The high level of heterogeneity between regions and sub-basins in terms of water availability and climate risks justifies a place-based approach to water resources management in Hungary. A place-based approach implies tailoring policies and measures to local specificities, concerns and priorities, including through effective multi-level governance.
Strengthen the capacity of VIZIGs through targeted financial and technical support to enable place-based implementation of national water objectives. The following measures could be considered:
A nation-wide assessment of the human and technical capacities of all 12 VIZIGs and corresponding water authorities could help identify key challenges, resource gaps, and priority needs for support across sub-basins. This assessment should inform the design of a structured staff development programme as well as targeted support packages for relevant sub-basins covering staffing, technical expertise and data aligned with the complexity of the local water challenges at hand.
Financial support could be made conditional to progress toward pre-defined objectives, financially rewarding the achievement of pre-defined objectives. One relevant example in this area comes from Brazil’s National Water Pact (Box 3.6).
A reform of the incentive framework governing VIZIGs could ensure that water retention is adequately rewarded alongside water drainage. Compensation schemes could be developed for water retention operations under low-risk conditions. Additionally, the reviewed operational rules of canals and drainage channels could fully operationalise the new balance between water drainage and retention favoured by the 2025 amendment to the Water Management Act.
A co-ordination mechanism linking hydrographic (i.e. sub-basin) and administrative (e.g. municipal, county) levels could support the coherent implementation of water management measures across territories. In France, for example, “river contracts” are signed between municipalities, river basin organisations and public authorities for planning purposes and to restore water uses and functions through dialogue between partners (OECD, 2015[30]).
Brazil’s National Pact for Water Management instituted in 2011 and operationalised through the Progestão programme is a voluntary multi-level governance contract supporting the implementation of an integrated, decentralised and participative water management model. Recognising that improving water management requires better integration of federal- and state-level water management systems, the Pact was designed to improve capacity and strengthen water resources management at the state level. It aims to foster convergence between states and increase flexibility and adaptability to address the diverse situations and differing levels of capacity between states. Its overarching goals consist in:
Establishing commitments among federative units to overcome common challenges and lack of harmonisation.
Encouraging multiple and sustainable use of water resources, especially in shared river basins.
Promoting an effective articulation between water resources management and regulation processes at the national and state levels.
Empowering states towards greater capacity and awareness in dealing with water risks.
Through the pact, the Brazilian National Water and Sanitation Agency (ANA) builds capacity at the state and municipal levels by providing target- and results-based funding of up to BRL 100 million (approximately USD 40 million) available over a 5-year period to states reaching their goals. Funding is proportional and contingent on the successful implementation of what states themselves have committed to undertaking. Progestão also interacts with other ANA programmes, such as Interáguas, which contributes to strengthening planning and governance. ANA also provides technical support, instruments and resources to shed light on the weaknesses and needs of states.
Source: (OECD, 2015[30]), (OECD, 2021[31])
Support municipalities through targeted and conditional financial support, capacity building, and knowledge sharing. Central government resources should be allocated based on objective vulnerability criteria to floods and droughts as well as assessments of local financial and capacity needs, to ensure that support reaches the municipalities most in need. Small-scale funding schemes with capped allocations can promote low-cost, high-impact interventions, such as nature-based solutions and non-structural measures like public awareness campaigns. For example, the LIFE LOGOS 4 WATERS Municipal Support Programme provided grants of up to EUR 6 000 to support local climate adaptation initiatives in several municipalities. An additional replicable model includes the city of Siófok’s rainwater harvesting scheme, which provides interested residents with subsidised rainwater containers and provides an additional discount to those who share a photo of their garden to show how the containers will be used. The municipalities most vulnerable to water-related risks could be supported in developing Integrated Municipal Water Management Plans to guide local water-related decision-making. To further unlock municipal innovation and the uptake of best practices, the Ministry of Public Administration and Regional Development could foster peer learning between municipalities on water drainage and retention to mitigate flood and drought risks. This could involve the organisation of a periodic forum or workshop on municipal water management to present case studies and good practices; free access to technical guidance and training on a dedicated platform; and an interactive platform hosted online (e.g. on Facebook, which is used widely to communicate on policy matters in Hungary) to facilitate continuous exchange and peer learning between municipalities. To encourage participation, a national recognition programme featuring an annual award and associated funding could be established to showcase municipalities leading the way.
Equip subnational Water Management Councils with clearer mandates and enhanced resources to serve as effective forums for stakeholder engagement and water policy oversight at sub-basin level. Hungary could consider different mechanisms for inclusive and meaningful engagement in basin management, drawing from experience from the Netherlands and Spain, which have long-established institutions for water management and public participation at hydrological scales (Box 3.7). To ensure more inclusive basin planning and management, council membership could be broadened on a statutory basis to include currently under-represented groups such as residential water users, minorities (e.g. Roma communities), small-scale farmers, and smaller municipalities. To ensure meaningful contributions from all members of subnational councils, particular attention should be paid to ensuring that non-governmental members are endowed with the appropriate information for their effective participation. One option would be to accompany plans and proposals presented to members with ex ante impact assessments and financing plans when relevant. Enhanced information sharing and transparency, combined with systematic follow-up on council opinions and proposals, would improve the councils’ legitimacy and support more accountable water planning and implementation at sub-basin level. Once the institutional capacities of subnational Water Management Councils are strengthened, their mandate could evolve to include an oversight function. In this role, they could monitor, for example, whether different sectoral water users (e.g. agriculture, industry, energy) are implementing adequate measures, and assess whether land use practices are sufficient to ensure the desired level of water security.
The EU Water Framework Directive (WFD) gives high importance to the consultation and participation of stakeholders in water resources management. Public participation is a legal requirement for the development of RBMPs and includes informing, consulting, and involving all relevant stakeholders such as water users, NGOs and local authorities across key stages of the planning process. This participatory approach aims to ensure transparency, improve decision-making, and foster shared accountability for achieving WFD objectives.
In the Netherlands, achieving WFD objectives is a shared responsibility between the Ministry of Infrastructure and Water Management, provinces and regional water authorities or water boards (waterschappen). Water authorities are an autonomous level of government with their own legal responsibility to comply with WFD requirements and can be held liable in case of non-compliance with targets. To ensure their democratic legitimacy, general elections are held for water authorities, with some political parties specialising in this level of public authority. While they enjoy specific taxation powers, they are submitted to the administrative and financial rules and inspection of provinces and the central government. They operate under the “interest-pay-say” principle, meaning that stakeholders who benefit from water management and bear its costs have a voice in governance. The democratically elected general assembly of each water authority includes representatives of the general interest (local residents) and special interests such as agriculture, businesses, and managers of forests and natural reservices, who contribute to water management costs through levies. In addition to this formal representation of stakeholders within the general assembly, water authorities involve stakeholders in local project implementation.
Spain manages inter-regional river basin districts through hydrographic confederations (confederaciones hidraúlicas). These bodies are public law entities with their own legal personality operating under the Ministry for the Ecological Transition and Demographic Challenge. They are supported by river basin councils (consejos del agua de la demarcación) that serve as multi-stakeholder platforms, including representatives from national and regional administrations, water users, NGOs, and civil society. Their role is to advise on hydrological planning, review draft RBMPs, and ensure compliance with WFD objectives. Participation in planning is guaranteed at three levels - information, consultation, and active involvement - through mandatory consultation periods of at least six months for key planning documents. At the start of each planning cycle, the Ministry publishes a series of documents including a public participation project outlining how stakeholders can engage throughout the process. These documents are made available online and in hydrographic confederation offices, allowing citizens and organisations to submit comments and proposals.
Embed place-based water retention and drainage measures in the next cycle of RBMPs (2027-2032). More specifically, RBMPs at sub-basin and national levels should base measures on the geographical, hydrological, climatic and economic characteristics of urban and rural territories within sub-basins. For example, measures in urban areas may focus on stormwater management, a key issue in Hungarian municipalities (OECD, 2023[23]), through minimum thresholds for green spaces and adaptive urban design (Box 3.8). Measures in rural areas could focus on fostering water retention in soil, rainwater infiltration ponds on farms, or the maintenance of the extensive network of canals, watercourses and ditches to enable both water drainage and retention. Place-based measures should be rooted in data analysis and stakeholder consultations and leverage existing work such as that of the University of Agriculture on options for water retention across the country. The lead authorities, timeline and budget, including the source of funding (e.g. operational programmes, CAP funds, etc.), of RBMP measures should be clearly established.
Launched in 2018, the ParisPluie programme is the City of Paris’ (France) plan to transform rainwater management by restoring the natural water cycle in a highly urbanised and impermeable environment. Founded on legally binding rainwater zoning (zonage pluvial), the plan requires both public and private construction and redevelopment projects (e.g. streets, schools and housing and commercial sites) to manage rainwater at the source. These include green roofs, permeable surfaces, buffer zones, and rainwater harvesting systems designed to retain, infiltrate, and reuse precipitation onsite. By targeting common rainfall events, corresponding to 8 millimetres of rainfall over a 24-hour period and accounting for approximately 80% of annual rainfall, ParisPluie aims to significantly reduce runoff into the combined sewer system, limiting pollution discharges into the Seine River and mitigating flood risks.
The plan contributes to broader climate objectives, including the creation of green spaces for water retention and urban cooling, and reduced consumption of potable water through rules allowing the reuse of rainwater for irrigating green spaces. Over time, the city aims to green up to 570 hectares of urban space and reduce stormwater runoff into the Seine by around 21%. Implementation is supported by an online portal providing technical guidance to developers, city officials and citizens, complemented by financial incentives from the Seine-Normandie Water Agency. New initiatives such as CoprOasis further promote action by co-owners of buildings to green courtyards and install rainwater collection systems.
Source: (Paris, 2025[35]), (Parisian Climate Agency, 2025[36]), (Eurocities, 2020[37])
Strengthen upstream and downstream co-operation on floods and droughts with neighbouring countries and riparian countries of the Danube and Tisza basins. Co-operation within the International Commission for the Protection of the Danube River (ICPDR) has been instrumental in strengthening basin-wide water management through information sharing, joint planning, and co-ordination tools such as the Danube-GIS, the Accident Emergency Warning System, and the Trans-National Monitoring Network, which support monitoring, early warning, and response to floods and droughts. Given its location in the middle of the Danube River and its heavy reliance on external inflows for its renewable freshwater supply, Hungary has a strong incentive to continue working in close collaboration with upstream countries on the Danube and Tisza rivers to implement flood and drought prevention measures that also benefit Hungary. Transboundary agreements with neighbouring countries have historically focused on flood risk, with an increasing focus on water scarcity. Hungary should drive efforts within other international basins, notably the Tisza, to develop common responses to climate impacts on water resources. In co-operation with its neighbouring countries, Hungary could also consider reviewing and updating transboundary water agreements to address emerging water scarcity concerns. Finally, the OVF should ensure that VIZIGs and Water Management Councils are systematically made aware of and granted access to data generated in international forums, such as the Danube Water Balance developed within the ICPDR, to align local decisions with basin‑wide information.
Gaps
Transparency in water and climate policy faces challenges and could be further improved. The latest OECD Environmental Performance Review of Hungary highlighted progress in environmental information management but noted barriers to public dissemination, including the introduction of fees and restrictions in 2011 (OECD, 2018[2]). Hungary scores below the OECD average in the transparency of primary legislation and subordinate regulation development processes (OECD, 2025[3]). Access to water-related information remains constrained, particularly regarding economic considerations. While RBMP3 features economic information and analyses on public water supply services, it offers little economic information on other significant water uses such as agriculture and industry (European Commission, 2025[38]). When it comes to water utility tariffs, the decree underpinning the Water Utility Development and Compensation Fund identifies cost categories and publishes actual payment and compensation amounts per utility, but the methodology for revenue redistribution and allocation criteria are not made public. Similarly, although the principles for setting water tariffs and the annual tariffs themselves (including fixed and variable costs) are disclosed, the methodology for tariff calculation and MEKH tariff recommendations are not. In 2023, the MEKH declined to disclose its tariff recommendations following a public interest data request by the municipality of Budapest. Despite the court ruling in favour of disclosure, subsequent legislative amendments introduced new national security considerations into the 2011 Act on the Right to Informational Self-Determination and Freedom of Information, effectively restricting access to some data for periods of up to 30 years. Data controllers are granted discretionary authority to assess and determine the feasibility of data disclosure based on national security considerations.
Similarly, although strong legal provisions for public participation exist, especially in the water sector, stakeholder engagement and citizen participation in water, climate and environmental decision-making are not systematic. This reflects broader trends in policymaking in Hungary, where civil society organisations report declining opportunities for public participation over the past three decades, alongside weakening legal protections and support mechanisms (EMLA, 2021[39]). The centralisation reforms of the 2010s combined with a traditionally top-down governance culture have further reduced opportunities for engagement, which may affect levels of public trust (Csizmadia et al., 2022 in (OECD, 2023[23])). Good practices for stakeholder engagement exist in the water sector, notably the existence of Water Management Councils at sub-catchment and sub-basin levels, and the public consultations conducted as part of each new six-year cycle of RBMPs, in line with WFD requirements. Nevertheless, when it comes to broader environmental decision-making, little progress was made between 2008 and 2018 on promoting citizen participation (OECD, 2018[2]), and Hungary scores below the OECD average on stakeholder engagement in the development of primary and subordinate legislation (OECD, 2025[40]). Furthermore, the role of Hungary’s multi-stakeholder consultative body for environmental laws, the National Environmental Protection Council (Országos Környezetvédelmi Tanács, OKT), seems to have become marginal in recent years, with its last meeting held in 2021. Similarly, there is no publicly available decree establishing Hungary’s Water Science Council (Vízügyi Tudományos Tanács, VzTT), nor an active dedicated website allowing to follow its activities.
The growing use of exemptions restricts opportunities for public consultation and stakeholder engagement, undermining trust in government decision-making. Notably, the national “priority investment” mechanism under the 2023 Act on Hungarian Architecture limits opportunities for public consultation. Projects declared as priority investments for the national economy benefit from shortened deadlines for permitting decisions and exemptions from standard planning procedures, which effectively bypass local participation requirements. Despite the potential environmental and water-related impacts of such large-scale developments, this fast-track approach restricts input from affected municipalities and civil society. Without meaningful opportunities for local communities to voice their concerns, such approaches can undermine public trust in new developments. For example, a Samsung battery production plant in Göd was designated as a national priority investment in 2016 and moved forward under this accelerated framework, which gave rise to local concerns and opposition to the project (EJ Atlas, 2025[41]). Similarly, the expansion of the Paks nuclear power plant was subject to reduced public consultation through a special law adopted in 2015, raising concerns about restrictions on public participation (OECD, 2018[2]). Hungary’s Ombudsman for Future Generations has repeatedly raised concerns about the lack of regulation of wells and groundwater abstraction. These trends are compounded by the absence of an independent environmental authority, following the elimination of environmental inspectorates, which has reduced the autonomy of environmental oversight, posing challenges for effective implementation of the law.
There are numerous setbacks and delays in the implementation of water and climate policies, undermining the legitimacy of plans, strategies and regulations. For instance, there have been significant delays in the three-year Climate Change Action Plans operationalising the Second National Climate Change Strategy. The consultation process for the second action plan has stalled, while the preparation of the third has yet to start. Similar implementation gaps are observed in the RBMP, where legally binding measures, as enshrined in the WFD and Decree 221/2004. (VII. 21.), have not been implemented. As a result, most measures from RBMP 2 have been carried forward into the next cycle with limited additions (European Commission, 2025[38]). There are inconsistencies between RBMP targets and national regulations (State Audit Office, 2023[42]), and only 5 of 48 regulatory measures from the second RBMP had been enacted by the third cycle (OVF, 2022[11]).
Monitoring frameworks and strategies for water and climate policies and plans are limited, affecting implementation and accountability. Although some policies define a monitoring framework, follow-through is not systematic. For example, although the National Water Strategy included a monitoring framework for measures planned for 2017-2020, no public reporting9 on implementation was conducted and no further measures were defined beyond 2020 (State Audit Office, 2024[13]). Similarly, no comprehensive governmental assessment has been undertaken to evaluate progress towards the strategy’s objectives, with no mid-term review or adjustment of priorities and measures following the first implementation period (2017-2020). Other policies and plans do not clearly define a monitoring framework. The Flood Risk Management Plan lacks clarity as to how new flood mitigation projects will be monitored and fails to establish indicators to assess progress towards objectives (European Commission, 2025[15]). Beyond policies, strategies or plans, monitoring gaps also extend to the project level. For instance, the Ministry of Agriculture has not established reporting or monitoring requirements to assess the performance of the Irrigation and Water Management Research Centre, despite allocating HUF 500 million (EUR 13 000) to the initiative aiming to establish a national irrigation training centre (State Audit Office, 2025[7]).
Recommendations
Strengthen transparency and access to information in water, climate and environmental policy to build public trust, improve accountability and support evidence-based decision-making. As highlighted by the OECD (2025[43]), Hungary would benefit from improving transparency at all stages of the policy cycle, from planning and decision-making to implementation and monitoring. Key actions could include:
Establishing a one-stop shop for water, climate, and environmental information. This online platform could facilitate free and timely access to key data and information for all stakeholders, including citizens, businesses, NGOs, and researchers, and cover topics such as water availability, quality, abstraction levels, climate risks, and policy targets. It could also serve to inform the public on decisions such as changes to tariffs and charges.
Ensuring the publication of key advisory outputs, such as recommendations from the MEKH, the OKT, the VzTT and other relevant bodies, to foster transparency and strengthen the knowledge base for public debates.
Engage stakeholders across society to inform decisions and improve public acceptance of water and climate policies. Hungary’s environmental democracy and stakeholder engagement framework is anchored in constitutional rights, legislation such as the 2010 Act on Public Participation in the Preparation of Legislation, and international commitments such as the Aarhus Convention. However, the systematic implementation of these obligations is limited (OECD, 2018[2]). The OECD (2018[44]; 2025[43]) has urged Hungary to ensure that environmental democracy practices comply with its constitutional requirements and international commitments and that stakeholders are effectively engaged throughout the policy cycle, particularly during earlier stages. Stakeholders should be given adequate opportunities and reasonable timeframes to provide feedback on policies, plans, permits and legislative proposals, and their views should be taken into account even when normal processes are fast-tracked. For example, Hungary could consider refining the parameters of the priority national investment mechanism and ensuring that meaningful stakeholder input remains possible through alternative or parallel channels. Ensuring transparent criteria and maintaining a dialogue would strengthen public trust and the legitimacy of major development projects, reducing the risk of delays arising from opposition or legal challenges. The OECD Council Recommendation on Public Integrity suggests encouraging transparency and stakeholder engagement at all stages of the political process and policy cycle to promote accountability and public interest, amongst other recommendations (Box 3.9). When it comes to water, Hungary could:
Introduce independent “climate-proofing” mechanisms for legislation and policies with an impact on water resources. New legislative proposals could be screened for their alignment with climate adaptation objectives by an independent panel of experts. This could involve reinstating and strengthening the OKT to provide opinions on draft legislation and policies, and introducing accountability mechanisms to ensure that government responses to OKT recommendations are transparent. The OKT’s multidisciplinary composition, including representatives from environmental NGOs, the Hungarian Academy of Sciences, and the Confederation of Hungarian Employers and Industrialists, make it well-positioned to provide cross-sectoral and evidence-based advice.
Broaden stakeholder engagement to include traditionally under-represented actors in water and climate decision-making whose actions have significant implications for water management. This includes property developers and landowners, whose decisions influence land use and water retention capacities; the insurance sector, which plays a critical role in incentivising risk reduction measures; and the Hungarian Central Bank, which has a mandate to ensure price stability and, since 2021, a green mandate conferred by the National Assembly to integrate environmental and climate-related considerations into its operations. Strengthening dialogue with these actors within established platforms, such as Water Management Councils, or as part of consultations for the development of legislation, strategies and programmes, can foster synergies across economic and environmental objectives. Decision-makers should clearly communicate how stakeholder inputs are considered and reflected in final decisions to encourage meaningful participation.
1. Build a coherent and comprehensive public integrity system
Demonstrate commitment at the highest political and management levels within the public sector to enhance public integrity and reduce corruption.
Clarify institutional responsibilities across the public sector to strengthen the effectiveness of the public integrity system.
Develop a strategic approach for the public sector that is based on evidence and aimed at mitigating public integrity risks.
Set high standards of conduct for public officials.
2. Cultivate a culture of public integrity
Promote a whole-of-society culture of public integrity, partnering with the private sector, civil society, and individuals.
Invest in integrity leadership to demonstrate a public sector organisation’s commitment to integrity.
Promote a merit-based, professional, public sector dedicated to public-service values and good governance.
Provide sufficient information, training, guidance and timely advice for public officials to apply public integrity standards in the workplace.
Support an open organisational culture within the public sector responsive to integrity concerns.
3. Enable effective accountability
Apply an internal control and risk management framework to safeguard integrity in public sector organisations.
Ensure that enforcement mechanisms provide appropriate responses to all suspected violations of public integrity standards by public officials and all others involved in the violations.
Reinforce the role of external oversight and control within the public integrity system.
Encourage transparency and stakeholders’ engagement at all stages of the political process and policy cycle to promote accountability and the public interest.
The latter recommendation can be achieved through:
promoting transparency and an open government, including ensuring access to information and open data, along with timely responses to requests for information;
granting all stakeholders – including the private sector, civil society and individuals – access in the development and implementation of public policies;
averting the capture of public policies by narrow interest groups through managing conflict-of-interest situations, and instilling transparency in lobbying activities and in the financing of political parties and election campaigns; and
encouraging a society that includes “watchdog” organisations, citizens groups, labour unions and independent media.
Source: (OECD, 2017[45])
Raise public awareness and promote behavioural change towards climate-resilient water management. the government could work further with public, private and civil society stakeholders across levels and sectors to foster a better understanding of the growing risks of floods and droughts and build public acceptance and ownership of adaptation measures such as nature-based solutions and water retention practices. Awareness-raising activities could focus on both short-term crisis prevention and long-term water demand reduction, targeting specific population groups including schoolchildren, farmers, energy and industry businesses, as well as the general public. National institutions could provide strategic direction and frameworks, while implementation could rely on partnerships with regional and local actors.
The Ministry of Energy could engage with:
Relevant ministries to promote nationwide awareness campaigns, including participation in national events (e.g. Blue Planet Foundation’s annual film festival, World Water Day and International Danube Day) and national communication platforms to share information on the state of water resources.
The Ministry of Interior, which is responsible for public education at primary and secondary levels, to integrate water-sensitive behaviour into primary and secondary school curricula, building on initiatives such as the LIFE LOGOS project’s work with secondary school students and the Blue Planet Foundation’s educational programmes.
The Ministry of Agriculture to promote soil cultivation practices that facilitate water infiltration, the introduction and scaling up of drought-tolerant crop varieties, the use of landscape features that act as sponges, and support to agricultural investments aimed at water protection.
The Ministry of Public Administration and Regional Development could engage with municipalities to promote citizen and business acceptance and ownership of water-saving and retention measures. This could include encouraging the adoption of measures such as rainwater harvesting and removing drainage gutters to enhance rainwater infiltration, shifting public perception of water from a risk to a valuable resource.
Other relevant stakeholders to engage with could include:
The Chamber of Commerce and Industry to promote water-efficient technologies in production processes and for operational sites (e.g. rainwater harvesting) in industry, notably in the energy and manufacturing sectors.
The Chamber of Agriculture to raise farmers' awareness of the benefits of on-farm water retention, efficient irrigation techniques (e.g. irrigating outside of the hottest hours) and technologies (e.g. drip irrigation), as well as funding schemes and measures in Hungary’s CAP Strategic Plan that favour water retention.
VIZIGs to scale up existing co-operation with landowners and farmers in implementing land-based water retention measures, including controlled flooding and landscape interventions to enhance water storage.
Higher education institutions, to share useful experience from research projects (e.g. on water retention, nature-based solutions, water reuse, etc.).
Strengthen monitoring and evaluation frameworks to track the implementation of existing plans, policies and projects and adjust them where needed. Monitoring and evaluating policies are essential for fostering trust in governmental institutions. Measuring the results of government policies, evaluating the effectiveness and efficiency of the resources needed to implement them, and communicating results in a transparent way, support accountability. In particular, Hungary could:
Systematically establish monitoring frameworks for policies, strategies, and action plans, specifying measurable indicators, designated responsible institutions, clear timelines, and mechanisms for public reporting, such as regular reports to Parliament and accessible online platforms.
Identify and address barriers to the effective application of existing monitoring systems, including by developing targeted action plans, to ensure that data is collected, analysed, and used for policy improvement.
Foster a culture of evaluation within the national administration, including through capacity-building initiatives, internal guidelines for policy evaluation, and the appointment of a monitoring and evaluation “champion” responsible for promoting good practices and ensuring follow-up on evaluation findings.
Involve and engage with relevant stakeholders, such as Water Management Councils, to collect data and information from the subnational level.
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← 1. The Corruption Perceptions Index (CPI) scores and ranks countries by their perceived levels of public sector corruption, as assessed by experts and business executives.
← 2. The control of corruption index captures perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests. It is based on an aggregation of existing indices and sources. The percentile rank indicates the country's rank among all countries covered by the aggregate indicator, with 0 corresponding to the lowest rank (low perception of corruption) and 100 to highest rank (high perception of corruption).
← 3. As recognised by Constitutional Court decision no. 13/2018 (4. IX.).
← 4. For later years, no comprehensive English-language statistics appear to have been published. Publicly accessible data on post-2015 trends in environmental inspections and violations remain limited.
← 5. Hungary has transposed the provisions of Regulation (EU) 2020/741 of the European Parliament and of the Council of 25 May 2020 on minimum requirements for water reuse that fall within its domestic jurisdiction. Prior to this, Hungarian regulations were in force, including Government Decree 50/2001. Natural wastewater treatment is covered by Hungarian legislation, including Government Decree 147/2010. Nature-based wastewater treatment is covered by domestic legislation, such as Government Decree 147/2010, which contains the definition, and Decree 28/2004 of the Ministry of Environment and Water Management, which sets out the general requirements to be met.
← 6. Out of a total public water management staff of 4 865, of which 4 621 employed in VIZIGs and the remaining 244 employed by the OVF, 3 162 employees are aged 50 or over.
← 7. Government Resolution 1175/2025. (V. 29.) on the water management developments necessary to replenish the water supply of the Homokhátság.
← 8. With an average 32.3 municipalities per 100 000 inhabitants, Hungary has the fourth-highest level of municipal fragmentation among unitary OECD countries, similar to the Czech Republic and the Slovak Republic.
← 9. Reporting on the National Water Strategy, which the lead ministry for water policy is responsible for, is based on internal annual progress reports prepared by the OVF. Two additional evaluations of the strategy, including an economic and environmental analysis, were to be carried out by 2017 and 2021 respectively. Although an evaluation plan was drafted in 2020, it was never implemented. Overall, a comprehensive government assessment of the National Water Strategy has not been prepared.