MNI INTERVIEW2: Europe Needs Cheap Energy -Hungary Official

European industry will continue to fall behind its competitors unless policymakers take measures to cut bureaucracy, boost investment and provide a cheap, readily available alternative to Russian gas and oil, Hungary’s State Secretary for Economic Strategy, Financial Resources, Industry and Macroeconomic Analysis told MNI.

“For Europe to regain momentum – vis-a-vis the United States and other peers – it must tackle high input costs and regulatory drag head-on: ensuring affordable energy, reducing administrative burdens, accelerating permitting, and crowding in private capital. Without such a focus, the risk is that we expend substantial effort in procedural working groups while competitiveness continues to erode,” Mate Loga said in an interview.

Hungary’s status as a land-locked economy with a historical dependence on Russian oil and gas means an abrupt severance is not feasible without creating material risks to security of supply and competitiveness, he said.

“If the European Union wishes to accelerate strategic diversification away from Russian hydrocarbons, the most effective path is to mobilise investment. That means engaging systematically with energy enterprises to identify the capital expenditure required to retool supply chains – across pipelines, storage, refineries, LNG access and related technologies – and then structuring targeted, commercially disciplined financing to deliver it.” (See MNI INTERVIEW: German Chemicals Weigh Fiscal Boost Vs Energy)

CROSS-BORDER ASSETS

Hungary’s current purchases of Russian oil and gas are “modest” in global terms, Loga said. “Nevertheless, we recognise the broader European objective to diminish Russia’s energy revenues over time. Achieving this responsibly requires predictable, non-discriminatory access to regional infrastructure. 

“Where cross-border assets – such as pipeline corridors – are vulnerable to ad hoc political leverage, concerns arise about fair dealing and, ultimately, sovereignty. Workarounds that rely on large-scale trucking from neighbouring refineries are neither efficient nor aligned with ESG commitments. A rules-based, transparent framework for tariff setting, capacity allocation and dispute resolution at EU level is therefore essential.”

Hungary has bet on turning itself into a leading producer of batteries and electric vehicles in recent years, attracting significant investment from South Korean, Japanese and Chinese companies, while Germany’s Mercedes has increased electric vehicle production in the country even as demand has slowed.

Loga conceded that the pace of EV and battery production has moderated, but said that the direction of travel was “clear,” as Asian investors seek closer integration into European supply chains and markets.

“We look forward to the launch of BYD’s new plant and to drawing on market and sales feedback once production ramps up. As a government, we will remain data-led and prepared to adjust policy as needed to safeguard competitiveness and jobs. Our objective is to position Hungary as a leading European hub for automotive electrification, supporting industry through predictable, rules-based frameworks and targeted, technology-neutral investment in skills and infrastructure,” he said.