In this first Sustainable Energy Watch (SEW) Report for Hungary, given the limited time and data available, we calculated seven indicators out of eight. 

Generally speaking except the access to electricity indicator Hungary performs quite poorly based on the calculations. The main reasons can be summarised as follows:

After 1989, Hungary went through significant structural changes: from a centrally planned economy and a one party system it became a functioning market economy and a democratic country. But the heritage of the Soviet era, the rapid changes and privatisation of the energy sector let to survive outdated opinions and kept the energy sector's role players driven by old - unsustainable - practice. Foreign investors, owners of the privatised part of the Hungarian energy sector, don't operate necessarily according to the priorities of the weak energy policy. 

Awareness about climate change negotiations and the Kyoto Protocol (KP) is very low in Hungary. Climate change being a complex problem is not on the political agenda at all. The Hungarian Parliament decided to ratify the KP in July 2002. The elaboration of related legislation, policies and measures will likely take place quite slowly. The European Union's requirements and the pressure from business - interested in Joint Implementation and Emission trading - can speed up the process a bit. The Hungarian Energy Office also plays an important role in shaping the legislation.

Legislation planned for the near future that might affect the SEW indicators:

• The market liberalisation by January 2003, from many points of view, but especially if it will result in price increases.

• Elimination of cross subsidies and the elaboration of compensation schemes for vulnerable consumers at least as far as gas is concerned.

• The future of the development plan (Széchényi Plan) that slowly increased the amount of fund available for renewable energy sources (RES) and energy efficiency.

• Legislation of the district heating sector. If it is in favour of energy efficiency in this sector, 25-30 % energy saving could be achieved relatively easily.

• Legislation in favour of RES, and the willingness of foreign RES companies to invest in Hungary.

• The MVM (Hungarian Electricity Works) could be privatised.

• The MOL (Hungarian Oil and Gas Co.) might sell its gas industry to the State.

• Exchange rate changes for EUR and USD as energy trade is counted in USD while GDP is in HUF (Hungarian Forints or EUR).