Transitioning to a circular economy is one of the leading business opportunities of our era. Although the core concept is not yet thoroughly understood or followed by most economic actors, the use of this model can increase the resilience of the world economy and facilitate the achievement of the Paris Climate Change Agreement and the United Nations Sustainable Development Goals. Experts estimate that circular economy could generate business opportunities worth USD 4.5 billion worldwide by 2030.
A survey undertaken by the Circular Economy Platform Hungary showed that most companies still identify circular economy with waste management. Respondents themselves confirmed that collaboration, knowledge sharing and government incentives are needed to start changing the current economic model and make up for lost ground.
The Platform, which was established as an initiative of the Business Council for Sustainable Development in Hungary (BCSDH), the Embassy of the Kingdom of the Netherlands, and the Hungarian Ministry of Innovation and Technology a year ago, took it upon itself to facilitate the disseminate knowledge and highlight good practices and business solutions for gradually turning the country’s economy circular.
“In the Netherlands, every self-respecting municipality is working on their respective circular economy strategy. They organize sessions where SMEs, knowledge institutes and (local) government come together and are stimulated to collaborate and take action on circular economy with a business approach. Still, we are very much at the beginning of what we would like to achieve in terms of the reduce, reuse, repair, refurbish, re-manufacture and recycle model. Countless start-ups and front-running multinationals like Philips and DSM are showcasing that there is a lot of momentum and potential for business in this approach. The first movers have the biggest market potential,” Freek van Eijk, Director of the Holland Circular Hotspot said at the first Circular Economy Summit in Budapest. He is convinced that the Dutch will get close to their moonshot ambition of being fully circular in 2050.
The Hungarian Circular Economy Platform and the Holland Circular Hotspot signed a declaration of cooperation during the Summit to propagate the best international examples of circular economy initiatives, related knowledge and tools, share domestic experiences and foster the work of governments. Along with the ceremonial signatories, 80 companies and organizations have already joined the Hungarian Circular Economy Platform.
“I am proud that through cooperation with the Holland Circular Hotspot, we are gaining access to leading international know-how, which will help put the circular economy on a more dynamic path in our country. With the involvement of business, governmental and scientific as well as professional and social organizations, we can achieve our goal: a sustainable economy,” the President of BCSDH, Attila Chikán Jr. said at the opening of the Summit.
Combining economy and ecology
The Dutch learnt to combine the economy and ecology early on because the country is densely populated and heavily industrialized, Freek van Eijk told Diplomacy&Trade on the sidelines of the conference. The origins of his organization lie in the history of the Netherlands. “We shaped our country and our country shaped us. Our country formed our mentality because we have had to work together since the Middle Ages to keep our feet dry. Without human intervention, 50% of our country would now be flooded, so we learnt to be collaborative very early on.” In addition, the Netherlands is an agricultural superpower, the executive pointed out, “we have a population of over 17 million people, we have 100 million chickens, 4 million cows and 13 million pigs – all of this means a lot of environmental pressure. We have learnt to cope with environmental stress, keep our place livable but also economically viable.” These circumstances essentially called for the adoption of the circular economy model to keep their scarce resources in a loop.
Closing the material loop
The Dutch Ambassador to Hungary, René van Hell pointed out that ‘’if we want to provide clean water, food and shelter, decent work and well-being for nine billion citizens, as enshrined in the UN Sustainable Development Goals, then we need to act now by transitioning to a circular and sustainable economy to ensure that we are not too late. Our embassy, as one of the founding members of the Hungarian Circular Economy Platform, supports the goals laid down in the Memorandum of Understanding that includes, among others, sharing knowledge and best practices for closing the material loop.’’
The director of the Holland Circular Hotspot emphasized that “we have always been traders; we are very much internationally connected. In the Netherlands, we are pioneering solutions to global challenges. Maybe other countries have even better engineers than the Dutch but we are very good in system thinking. We inspire and help other countries to adapt and implement our solutions locally – we can help companies grow and be successful in Hungary, too – and maybe, we get some of the business."
CIRCULAR VS. LINEAR ECONOMY
According to the current linear economic model, the bulk of the technical and biological components extracted from nature are transformed and then disposed of without recycling. In contrast, under the circular economic model processes are carried out in a closed circle, waste is almost fully recycled, and biological and technological components are returned to the cycle with minimum loss of quality. Tibor Bodor, Country Manager at ING Bank N.V. Hungary Branch highlighted at the conference that “the circular economy is about rethinking how we use our raw materials and resources to create a sustainable economy free of waste and emissions. It means shifting from the current linear model of take, make, waste to an economy where we reduce, reuse, recycle materials.”