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Closing the Loop on the Circular Economy

The ongoing Netherlands-Hungarian Chamber of Commerce (Dutcham) conference series about the circular economy aims to spread good examples and create a friendly and effective forum for discussing our whole approach towards how we handle resources and waste.

A huge increase of the proportion of recycled municipal waste (up to 65%), accompanied by a reduction in landfill disposal (to a maximum of 10% of municipal waste) are common EU targets, both due to be implemented by 2030. However, to put our habits onto a more sustainable path, deeper changes are necessary in corporate and consumer mindsets, too. 

At Dutcham’s December conference on the circular economy in agriculture several inspiring examples were introduced. The city of Leeuwarden, for example, heats most of its buildings, including more than 1,000 homes and even a huge skating rink, through biogas obtained from cow manure from local farmers who otherwise would have to carefully – and costly – dispose of the residue.

Local implementation 

Agrofutúra, a Hungarian company offering innovative solutions for redirecting green and animal by-products into the soil, is a good example for local implementation of the global concept. As Tibor Petró, head of the company told the Budapest Business Journal, while the Netherlands benefits from recycling cow dung as biogas, in Hungary, a country that lacks manure and suffers from serious soil degradation, it makes much more sense to turn the manure into compost. In time this enriches the soil and enables bigger crop harvests. Intensive farming destroys six kilos of soil to produce one kilo of food, “an extreme waste we cannot afford here, not even for some energy in exchange”, Petró pointed out.

On a global scale, 75 billion tons of soil disappears annually and the Hungarian Ministry of Agriculture seems to agree that economical sustainability and the reduction of waste must be major aims in Hungary too. At the same time, Deputy State Secretary for Agriculture Dr. Zsolt Feldman suggests a cautious commitment only, saying the “circular economy should not further decrease competitiveness”.

‘Different universe’ 

It seems that in Hungary, the concept of circular economy is treated mainly as a matter of waste management. Máté Kriza, head of Hungary’s Foundation for a Circular Economy, told the BBJ “it is about much more than recycling”, adding that while several EU countries have had comprehensive circular economy strategies for years, here there is still not a single study examining its potential effects on the various sectors or the labor market. The fact that falls under the Ministry of Agriculture – rather than the Ministry for National Economy – also suggests that circular economy is not understood as a complex concept.

However, even from a green point of view, Hungary is not there yet. The costs of unloading the end-products of trash burning was lowered last year, a step experts say heads in a completely different direction from Western trends.

Also, company attitudes are anything but uplifting. According to Kriza, at the previous circular economy conference in May 2016 “it turned out that we live in a different universe”. Apart from a very few local examples, like UTB Envirotec Zrt., which turns sewage sludge into detergents, Bioferet, which makes compost out of food waste, and Zoknicsere (a word that translates to sock exchange), an original initiative turning used socks into isolating materials, Hungarian companies show very little interest in closing the loop.

As Martin van Nieuwenhoven, of the Dutch Ministry of Infrastructure and Environment, told the BBJ, even in the West it is mostly financial benefits, namely state incentives and lower material costs, that push companies towards implementing circular economy principals in their everyday operations. Kriza agrees, suggesting that raw materials should carry heavier tax burdens. At the same time, he also points out that being cost-sensitive might not be enough. Cultural-geographical attributes, like the Netherland’s wider overview on the finite nature of natural resources, are also essential. “A green approach has to meet economic rationality,” Kriza said.

Dismantle, transform, repair 

Eco design is another crucial element of the circular economy. Using recyclable materials is only the first step. The product also has to be capable of being dismantled, must be transformable and, most importantly, must be repairable.

From a regulator’s point of view, while it is easy to see the short-term negative impact on GDP if we repair old things instead of selling new ones, there is an increasingly strong argument that, in the interests of our planet, we have few other options in the long-term.

Even without a strong local will, fans of the circular economy model believe the international mindset will infiltrate into Hungary. The EU directives, and the examples of countries like Sweden, which has recently lowered the VAT on repairing products, or companies such as Caterpillar, which buys back its broken-down vehicles to repair and resell, will sooner or later bring a change in Hungarian regulatory policy, company principals and consuming habits, too.