This chapter puts forward an action plan with specific actions to help implement the future strategy. It also outlines a monitoring framework to measure the progress towards specific strategic objectives and quantitative targets in Hungary’s circular economy transition.
Towards a National Circular Economy Strategy for Hungary
8. Proposed action plan and monitoring framework of the National Circular Economy Strategy
Abstract
8.1. Implementing a circular economy strategy requires several steps
The proposed action plan and monitoring framework of the National Circular Economy Strategy (NCES) fully builds on the preceding chapters of this report and aims to make the policy recommendations more concrete by proposing flagship actions and developing a timeline for their implementation. In a following step, the documents would need to be endorsed by the Hungarian Parliament in order to roll out the proposed actions (Figure 8.1).
Figure 8.1. Developing and rolling out a circular economy strategy requires several steps
The transition to a circular economy is a long-term process that will require efforts and a long-term commitment of many stakeholders. Monitoring progress and steering the concerted efforts in the right direction requires a well-designed governance structure. Actions to set up the governance structure are thus essential and urgent. With the right governance structure, actions can be taken that deal with horizontal aspects or target priority areas with potentially high circular economy impacts. Setting up indicators helps to monitor progress and steer the process towards impactful changes and structural reforms. These elements are outlined in Figure 8.2.
To achieve the vision and strategic objectives of the NCES by 2040, the proposed action plan suggests implementation actions for 45 policy recommendations across the three priority areas, as well as for governance structure and horizontal tools. It also proposes their implementation across three time horizons: short-term actions (to be fully effective by 2024), medium-term actions (to be fully effective by 2028), and long-term actions (to be fully effective by 2040). In order to ensure the timely transition to a circular economy, the actions need to be implemented well ahead of the 2024, 2028 and 2040 milestones. The actions put forward should not be interpreted as a menu from which measures can be cherry-picked. They form a coherent set of measures that have to be implemented together in a policy mix in order to achieve the greatest impact and transform Hungary as it moves towards a circular economy.
Figure 8.2. Proposed elements of the action plan for the implementation of the NCES
8.2. Set up the governance structure
The transition to a circular economy is a shared responsibility of a range of stakeholders. The successful implementation of the NCES requires the timely setting up of a structure for inclusive and effective governance. Proposed actions to improve governance are outlined in Table 8.1.
Table 8.1. Flagship actions to improve governance of the circular economy transition in Hungary
1. Hungary has recently established the Circular Economy Technology Platform (see Box 2.2), which could play an instrumental role in strengthening stakeholder collaboration for circular transition in Hungary.
2. Guidance for developing such a dashboard is provided in the final section of this chapter (” Define key indicators and monitor progress”).
8.3. Design and roll out horizontal tools
Horizontal tools cut across product and materials life cycles and go beyond individual sectors. As these tools help implement specific recommendations of priority areas and can contribute to the economy-wide circular transition, their development and implementation should already be initiated in the short term and continue throughout the implementation of the NCES. The suggested horizontal flagship actions will strengthen education, capacity building and knowledge transfer, provide more financial support for eco-innovation and technological development, better tailor government support for the circular transformation of SMEs, and improve existing data collection and monitoring systems (see Table 8.2).
Table 8.2. Flagship actions to drive Hungary’s economy-wide circular transition
8.4. Focus on biomass and food
The action plan for the circular transition for biomass and food proposed 18 implementation actions (see Table 8.3). Two actions are soon to be implemented. The development and implementation of the 11 medium-term actions should already be initiated in the short term so that they become fully effective by 2028, at the latest. Similarly, the five long-term actions need to be implemented well ahead of the 2040 milestone (i.e. by 2035) so that they become effective in achieving the vision and goals of the NCES.
Table 8.3. Flagship actions to support the transition to a circular bioeconomy in the biomass and food sector in Hungary
8.5. Focus on construction
The action plan for the transition to a circular construction proposes 27 implementation actions (see Table 8.4). Two actions are to be implemented promptly. The development and implementation of the 12 medium-term actions should already be initiated in the short term so that they become fully effective by 2028, at the latest. Similarly, the 13 long-term actions need to be implemented well ahead of the 2040 milestone (i.e. by 2035) so that they become effective in achieving the vision and goals of the NCES.
Table 8.4. Flagship actions for a circular building construction sector in Hungary
8.6. Focus on plastics
The action plan to promote the transition to a circular plastics life cycle suggests 17 implementation actions (see Table 8.5). Two actions are to be implemented immediately. The development and implementation of the 13 medium-term actions should already be initiated in the short term so that they become fully effective by 2028, at the latest. Similarly, the three long-term actions need to be implemented well ahead of the 2040 milestone (i.e. by 203 5) so that they become effective in achieving the vision and goals of the NCES.
Table 8.5. Flagship actions to promote a circular life cycle for plastics in Hungary
1. Hungary’s extended producer responsibility (EPR) system is currently under reform, which will include the detailed rules of the requirements of the SUP Directive.
2. The EU Single-use Plastics Directive requires incorporating 25% of recycled plastic in PET beverage bottles from 2025, and 30% in all plastic beverage bottles from 2030 (see Box A A.2). The medium-term horizon for this action reflects the fact that an initial implementation is necessary by 2025 and that a more robust system should be put in place by 2030.
3. Starting from July 2023, the environmental product fee will be transformed into an environmental tax targeting plastic packaging, but not specifically primary plastics.
4. It is already reflected in the proposal for establishing an EPR scheme for construction products in Table 8.4.
8.7. Define key indicators and monitor progress
A monitoring framework for the circular economy transition is required for understanding and measuring the progress towards specific strategic objectives and quantitative targets set out within the strategy. A set of indicators that allow for the monitoring of key trends and patterns helps policy makers understand how the various elements of the circular economy have developed over time, assess whether sufficient action has been taken, and identify areas for further intervention (European Commission, 2018[1]). Monitoring also provides guidance for setting new long-term priorities, and delivers feedback to strategy and planning development for the different actors in the economy (Alaerts et al., 2019[2]).
As the concept of the circular economy cuts across a variety of sectors, material streams and horizontal tools it is impossible to capture the transition with a single indicator. Circular economy monitoring frameworks therefore comprise a larger set of relevant indicators. Such frameworks can be structured using a multi-tiered approach: from more general to more specific indicators. The indicators can be classified into three levels: i) the macro level (global, national, regional and city level related to resource flows, waste generation, recycling rates, recovery of specific waste streams, secondary materials use, but also jobs related to circular activities); ii) the meso level (penetration of new business models, consumer behaviour, but also industrial symbiosis and activities within eco-industrial parks); and iii) micro level (on company and product levels) (Alaerts et al., 2019[2]). The academic literature strongly suggests going beyond the commonly used macro-level indicators to include indicators that provide direct feedback to policy makers on specific products and services, and that address consumer and business behaviour, as well as societal needs, related to the circular economy (Alaerts et al., 2019[2]; Giljum et al., 2011[3]; Ekins et al., 2019[4]; Potting et al., 2018[5]). There is also a need for additional indicators to properly measure the effects and process of the transition itself, connecting the circular economy to environmental impacts and capturing possible rebound effects (Potting et al., 2018[5]; Alaerts et al., 2019[2]). An overview of circular economy monitoring frameworks for policy makers to support their circular economy strategies is reported in Annex Box 8.A.1.
8.7.1. Three sets of indicators are proposed for Hungary’s monitoring framework
The proposed monitoring framework to support the implementation of the NCES rests on a three-tiered structure of indicators:
First, a set of three key indicators to measure the attainment of strategic objectives formulated in the vision of the NCES. These include resource productivity, circular material use and number of circular jobs. The indicators are listed in Table 8.6.
Second, a specific list of indicators for the three vertical priority areas to monitor the progress of the circular transition within biomass and food, construction and plastics. This set of indicators draws predominantly on indicators proposed within relevant Hungarian plans and strategies, for instance, the Fourth National Environmental Programme (4NEP), the NWMP 2021-2027, the Waste Management Public Services Plan (WMPSP), and the National Environmental Technology Innovation Strategy (NETIS). They also include some of the individual indicators from the EU Circular Economy Monitoring Framework, i.e. food waste, bio-waste recycling, recovery of CDW, and recycling of plastic packaging waste. Finally, the set is complemented by a proposal for a number of aspirational indicators, such as the monitoring of food waste avoided, GPP for construction, and use of non-recyclable plastics. These will require further development of the indicator or additional data collection, either through the waste management system or through ad hoc surveys. The indicators are listed in Table 8.7.
Third, a set of complementary indicators is proposed to monitor the economy-wide circular transition in Hungary. These indicators are grouped into five cross-cutting themes: i) production and consumption; ii) waste management; iii) secondary raw materials; iv) competitiveness; and v) horizontal tools. They build on the EU Circular Economy Monitoring Framework (Eurostat, 2019[6]), the Eco-Innovation Scoreboard (European Commission, 2021[7]), and the indicators listed in relevant Hungarian plans and strategies. Some of the indicators are related to EU targets, for instance, landfilling rate and the separate collection of certain waste streams. The set is complemented by suggested aspirational indicators to measure materials footprint, consumer behaviour and circular business models. The specific indicators are listed in Table 8.8.
Hungary may consider these three sets of indicators during the preparation of the monitoring framework for the implementation of the NCES. In case it is felt that a lower number of indicators is needed, the following criteria could offer guidance (adapted from OECD (2011[8])):
Policy relevance: indicators should provide a balanced coverage of the key aspects covered by the NCES.
Analytical soundness: indicators should be analytically sound and benefit from a consensus on their validity.
Measurability: indicators should be based on available data or that can be made available at a reasonable cost, and that are of known quality and regularly updated.
To promote the implementation of circular economy principles in practice, Hungary should also consider including the indicators within the calls for public funding (concrete funding opportunities for the circular economy transition are discussed in chapter 9). Tenders have so far included indicators related to capacity, sales revenue or an increase in number of employees. In the future, these could target indicators monitoring the intended increase in recycling rate or decrease in the generation of specific waste streams.
Table 8.6. Proposed indicators to measure the strategic objectives of the NCES vision
1. NETIS focuses on a broader indicator: share of employment in the environment industry.
Source: Based on Eurostat (2019[6]), European Commission (2011[9]; 2021[7]) and Ministry of Rural Development (2011[10]).
Table 8.7. Proposed dashboard of specific indicators for three vertical priority areas
Source: Own elaboration based on Eurostat (2019[6]), Ministry of Rural Development (2011[10]), Ministry for Innovation and Technology (2021[11]), Nemzeti Hulladékgazdálkodási Koordináló és Vagyonkezelő (2020[12]), Government of Hungary (2015[13]) and OECD (2021[14]).
Table 8.8. Proposed dashboard of complementary indicators to monitor the economy-wide circular transition in Hungary
1. NETIS focuses specifically on consumption of packaging materials in trade, and export income from environmental industrial activities.
2. NETIS focuses on a broader indicator: environment-related patents and registered certifications.
Source: Own elaboration based on Eurostat (2019[6]), Ministry of Rural Development (2011[10]), Ministry for Innovation and Technology (2021[11]), Government of Hungary (Government of Hungary, 2015[13]), Ministry of Environment of Denmark (2021[15]), Netherlands Environmental Assessment Agency (2018[16]), OECD (OECD, 2021[14]) and Ministry of Ecological Transition (2021[17]).
References
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Annex 8.A. Supplementary information
Annex Box 8.A.1. Circular economy monitoring frameworks
Various circular economy monitoring frameworks have been developed for policy makers to support their circular economy strategies:
The EU Circular Economy Monitoring Framework offers a set of headline indicators consisting of 10 macro-level indicators (in total 23 individual indicators) grouped into four stages and aspects of the circular economy: i) production and consumption; ii) waste management; iii) secondary raw materials; and iv) competitiveness and innovation for the circular economy (European Commission, 2018[1]).
The EU Eco-innovation Scoreboard (Eco-IS) includes 16 indicators within its measurement framework to monitor five aspects of eco-innovation: i) inputs; ii) activities; iii) outputs; iv) socio-economic outcomes; and v) resource-efficiency outcomes. Relevant circular economy indicators include: i) implementation of resource efficiency actions; ii) implementation of sustainable products among SMEs; iii) number of ISO 14001 certificates; iv) material productivity; and v) employment and value added in environmental protection and resource management activities (European Commission, 2021[7]).
At the level of Member States, monitoring frameworks include additional indicators capturing other circular economy aspects. For instance, the Dutch framework for monitoring the progress of the circular economy applies the national set of indicators to its five priority themes (biomass and food, plastics, construction, manufacturing, consumer goods) and also develops specific action indicators for them. Moreover, it proposes indicators for “consumption footprint” and “production footprint”. The Danish Action Plan for Circular Economy includes specific indicators for circular transition for its five focus areas (waste and resource use, recycling, biomass, built environment, plastics) (Ministry of Environment of Denmark, 2021[15]). By contrast, France’s monitoring framework incorporates indicators on “circular business models” (including the number of industrial symbiosis initiatives, and the number of companies and local authorities that have benefited from support mechanisms for circular business models such as product life extension and product as a service), and “consumer behaviour” (such as household spending on product maintenance and repair) (Ministry of Ecological Transition, 2021[17]).
Several ongoing initiatives exist at the international level that aim to further conceptualise and develop circular economy monitoring frameworks for policy makers, including initiatives led by the European Commission, the United Nations Economic Commission for Europe (UNECE), the Platform for Accelerating the Circular Economy (PACE), the European Environment Agency (EEA), and the OECD.