Hungary’s Circular Economy Transition through Law, Innovation, and Global Cooperation

Hungary’s Circular Economy Transition through Law, Innovation, and Global Cooperation Presented by: Dr. Raisz Date: April 27, 2025 Circular Economy - The circular economy aims to keep products, raw materials, and resources in use for as long as possible, minimizing waste generation. - A systemic transformation requires tools across the value chain: from product design to reuse, recycling, and end-of-life management. - Circularity offers opportunities to increase competitiveness, create jobs, and foster innovation, while reducing dependence on raw materials. - By maximizing resource efficiency, the circular economy can align economic growth with environmental sustainability. Global Cooperation - Transitioning to a circular economy requires systemic approaches across all sectors and levels of society. - Coordination between economic growth and environmental sustainability is crucial for long-term success. - This transition involves cooperation across governments industries and civil society to ensure sustainable production and consumption. - Global partnerships and a horizontal approach across sectors are necessary to foster circularity and reduce dependence on external resources. - Key areas such as sustainable transport, waste and water management, and clean energy production must be addressed together to promote circularity. Boosting Circularity - To accelerate the transition, a supportive framework of incentives is essential for industries, service providers and consumers. - Economic incentives, such as tax breaks and subsidies can encourage the adoption of circular practices like repair, reuse, and recycling. - Non-financial incentives, including recognition schemes and certifications, help promote circularity at all levels. - Investing in green technologies and aligning investment strategies with environmental goals will drive innovation and foster long-term sustainability. - Public procurement policies that prioritize circular products can significantly boost the market for sustainable goods and services. - Supporting research and development in sustainable technologies is key to fostering innovation and reducing resource dependency. Secondary Raw Materials - Secondary raw materials (SRM) are recycled materials that can be used in manufacturing processes instead of or alongside virgin raw materials. - By 2030, meeting human demands for natural resources will require more than the resources of two planet Earths. - The construction sector is the largest consumer of raw materials in the world and contributes 25-40% of global carbon emissions. - Additionally, this sector generates 25% of all solid waste produced worldwide. - There is an urgent need to improve construction practices, making it crucial to reduce the consumption of primary materials. Robust Secondary Raw Material Market - The use of SRM presents a number of advantages: increased security of supply, reduced material and energy use, reduced impacts on the climate and the environment, and reduced manufacturing costs. - SRM markets are key to delivering a circular economy. - These markets can ensure the timely circulation of good-quality recycled materials, which minimizes the need to extract natural resources as a result. - It is important to promote various types of projects, as a significant portion of valuable SRMs can be recovered, reused, and recycled. - By investing in such projects, we can generally reduce the consumption of raw materials, pollution, and energy usage. Circular Economy Commitments In Waste Management - Our primary goal is to strengthen the economic role of the domestic waste management sector and support the achievement of sustainability goals in addition to the transition to a circular economy. - We must strive to reduce the consumption of raw materials and significantly increase the rate of circular material consumption in the next decade - By stimulating innovation and developing a new system of quality waste collection and processing, we can support the growth of Hungary's competitiveness and also • Reducing the amount of waste in the environment • Elimination of illegal waste in the country • Take measures for sustainability, wider use of renewable energy, climate protection Waste Management Measures Helping To Achieve The Objectives Of The Circular Economy - Elimination and prevention of illegal waste dumping - The marketing of certain single-use plastic products and products made of oxodegradable plastic is prohibited. - Transformation of the waste management sector with the introduction of the concession system from July 1, 2023. - Implementation of the EPR provisions under the EU Waste Framework Directive in previous years. - Introduction of a deposit-return system (DRS) from January 1, 2024 for glass and plastic bottles, metal cans. - Separate collection of biodegradable waste has begun in Hungary as of January 2024 - The EEEOP's waste management developments made it possible to create nearly 150,000 tons of new separated collection capacity and nearly as much sorting capacity by the end of 2023. Extended Producer Responsibility (EPR) - The detailed rules of the extended producer responsibility scheme are in Government Decree no. 80/2023. (III. 14.) on the detailed rules for the operation of the extended producer responsibility system - EPR holds producers accountable for the full product lifecycle, including design, import, sale, take-back, recycling, and disposal. - Product categories covered by EPR: packaging, some single-use plastic products, electrical and electronic equipment, batteries, vehicles, tires, office paper, advertising paper, cooking oil and grease, textile products, wooden furniture) - The concession company's tasks in order to meet the recovery and recycling targets: collecting, transport, pre-treatment and handing over waste for treatment, financial coordination and accounting, operation of a reporting system, communication (awareness raising) - The EPR fee is determined in a decree by the minister responsible for waste management based on the proposal of the Hungarian Energy and Public Utility Regulatory Authority. - The task of the waste management authority is to monitor the fulfilment of obligations and apply the legal consequences. Deposit refund system of beverage packaging (DRS) - Single-use and refillable - Mandatory and voluntary collection points - Take-back with RVMs or manually - Direct payback of deposit fees to bank account - Aim: To increase the collection rate from 30-40% of the current single-use beverage packaging of around 200 000 tones to over 90%. • Operated by the concession company with the participation of producers and retailers • Starting 1 January 2024 (with a transitional period until 1 July 2024) • Product scope: plastic, metal, glass, bottles or cans between 0.1 and 3 liters of beverage products (except dairy products) - Mandatory take-back: • Food retailer with a sales area of more than 400 m², • Municipalities with a population of more than 1000 inhabitants. - Voluntary take-back: carried out by the concessionaire through a tendering procedure - Possibility of refunding the deposit fee to bank account in case of redemption with reverse vending machines Waste Management Development Areas Planned In Order To Achieve The EU Targets In order to prevent the generation of waste: • Developments for the preparation for reuse of certain fractions of municipal waste, • - Dissemination of attitude formation (conscious education) Development of the capacity of the existing waste recovery infrastructure is planned in the frame of EEEOP Plus - Planned investments of the concession company within the first 10 years of the concession: • New waste sorting plants, waste yards, and transfer stations will be established • The collection infrastructure will be developed • Improvements related to the deposit-return (DRS) system • Incineration investment for the energetic recovery of waste Circular Economy Systems And Sustainability - The circular economy-related objective is an important topic of the OP. - Its aim is to pave the way for a circular transition through small-scale investments targeting mainly SMEs. - - The funding focuses on: • Service provision; • Promoting decoupling of raw material consumption and GDP growth; • Building value chains/value circles; and • Developing new business sectors and business models. It targets a diverse range of projects, translating circular economy principles into practice (from both upstream and downstream perspectives), as well as awarenessraising activities and small demonstration/pilot projects. Eco-design for Sustainable Products Regulation (ESPR) - Reduction of raw materials - Use of recycled materials and renewable resources - More efficient and long- lasting goods and services - Lower energy consumption, especially in production and transport - Promotion of reuse and recycling - Reduction of CO2 emissions - Less impact on environment, health and biodiversity - A more sustainable planet - ESPR aims to improve the environmental performance of products by setting requirements that reduce their overall environmental impact. - It mandates that products sold in the EU must meet specific criteria related to energy efficiency, material use, and waste reduction. - The regulation promotes the design of products that are durable, repairable, and recyclable, extending their lifecycle. - It supports the EU's goals of reducing carbon emissions and promoting a circular economy. - Ultimately, the Eco-design Regulation encourages manufacturers to innovate in ways that reduce resource consumption and environmental harm. Digital Product Passport (DPP) - The potential "threats" associated with the DPP: • Trade secrets: The data disclosed by the Digital Product Passport can have a significant impact on the development of competition in the market, and the disclosure of sensitive business information can create a concrete competitive disadvantage. • Market competition: The market for digital product passports is competitive and other companies or services can quickly enter the market, which can lead to competition. • Administrative burden: It (may) impose an administrative (and therefore potentially financial) burden on businesses. [It should be noted that the manner in which the data will be provided and the entity that will collect, store and manage the data has not yet been defined, so the quality and quantity of the additional burden cannot yet be accurately quantified.] • Regulatory environment: Complying with strict data protection and data security regulations and adapting to possible changes can be a challenge for digital product passport providers. • International regulation: Harmonization of national, EU and global regulations can cause disruption to product supply and difficulties for service providers. Industrial Symbiosis - Industrial symbiosis is a great concept focused on fostering sustainable and efficient use of resources by promoting collaboration between different industries. • Resource efficiency: reuse of waste or by-products from one company as inputs for another reduces raw material consumption and minimizes waste. • Collaborative networks: depends on strong cooperation between industries, • often requiring new communication channels, trust, and sometimes policy incentives to foster partnerships. • Economic benefits: cost savings for businesses, both by reducing waste disposal costs and by lowering the price of materials when by-products replace traditional raw resources. • Innovation and competitiveness: innovation in processes and products, • potentially giving industries a competitive advantage through sustainability initiatives. - Energy efficiency, environmental awareness and sustainability are among the most important issues of the present and the future, which is why we are working on economic policy measures that connect economic development with ecological development. - Our goal is to create the internal motivation to act, i.e. to help more and more people think long-term, from a systems perspective, and make responsible, environmentally conscious decisions.