Eco-innovationinHungary

EIOCountryProfile

2014-2015

Eco-InnovationObservatory

TheEco-InnovationObservatoryfunctionsasaplatformforthestructuredcollectionandanalysis

ofanextensiverangeofeco-innovationinformation,gatheredfromacrosstheEuropeanUnionandkeyeconomic regionsaround theglobe,providingamuch-needed integrated informationsourceoneco-innovationforcompaniesandinnovationserviceproviders,aswellasprovidingasoliddecision-makingbasisforpolicydevelopment.

TheObservatoryapproacheseco-innovationasapersuasivephenomenonpresentinalleconomicsectorsandthereforerelevantforalltypesofinnovation,definingeco-innovationas:

“Eco-innovation isany innovationthatreducestheuseofnaturalresourcesanddecreasesthereleaseofharmfulsubstancesacrossthewholelife-cycle”.

Tofindoutmore,visitwww.eco-innovation.euandec.europa.eu/environment/ecoap

Any views or opinions expressed in this report are solely those of the authors and do notnecessarilyreflectthepositionoftheEuropeanCommission.

Eco-InnovationObservatoryCountryProfile2014-2015:Hungary

Author:AnnamáriaVirágdr

Coordinatoroftheworkpackage:TechnopolisGroupBelgium

AcknowledgmentsThedocumenthasbeenpreparedwiththekindsupportofthefollowingexperts:

MsÁgnesCzibók,AssociationofEnvironmentalEnterprises

MrGergelyTóth,KEXPORTCluster

MrMiklósGyalai-Korpos,PannonProInnovationsLtd.

Mr Balázs Mezősi, Hungarian Innovation and Efficiency Nonprofit Ltd., Virtual Power PlantProgram

MrMátéKriza,FoundationforCircularEconomy

AnotetoReaders

Any views or opinions expressed in this report are solely those of the authors and do notnecessarilyreflectthepositionoftheEuropeanUnion.Anumberofcompaniesarepresentedasillustrativeexamplesofeco-innovationinthisreport.TheEIOdoesnotendorsethesecompaniesandisnotanexhaustivesourceofinformationoninnovationatthecompanylevel.

This brief is available for download fromhttps://ec.europa.eu/environment/ecoap/hungary

Tableofcontents

Summary.........................................................................................................................1

Introduction....................................................................................................................2

1 |Eco-innovationperformance..........................................................................3

2 |Selectedcirculareconomyandeco-innovationareasandnewtrends............6

3 |Barriersanddriverstocirculareconomyandeco-innovationinHungary.....10

4 |Policylandscape:towardscirculareconomyinHungary...............................12

ANNEX:Policymeasuresaddressingcirculareconomyandeco-innovationsinHungary.19

1

Summary

AccordingtotheCommission’s2015CountryReportHungaryexitedfromrecessioninearly2013andisonabalanced,albeitstillrelativelymoderate,growthpath.HungarianGDPisstillabout1%belowits2008level,whilefiguresinbothPolandandSlovakiafarexceedpre-crisislevels.Theincreaseingrowthwasdrivenbytemporarymeasuresandfactors,suchasincreasedabsorptionofEUfunds,subsidisedloanschemes,aswellasregulatedutilitypricecuts.

In 2014 businesses spent 34% more in real terms on environmental investment in the form ofpollutionprevention,reductionorremediationcomparedto2013,accordingtoHungarianStatisticOfficedata(2015/93StatisztikaiTükör,KSH).Hungary,however,didnottakeanyfurtherstepswithregardtorenewableenergyinvestments,withtheratioofrenewableenergysourceswithinenergyproductionremainingatthesamelevel.Limitedprogresshasbeenmadeinpreparingandadoptingthelegislationnecessarytoincreaseenergyefficiency.Noprogresshasbeenmadeintermsoftheeconomic incentives to reduce energy use. Major changes were introduced to environmentaladministration through the assimilationof environmental agencies (so-called ‘inspectorates’) intodepartmentsofregionalpublicadministrationbodies.EUR430millionwasspentinenergy-efficiencyretrofittingprojectswithintheframeworkofthe“WarmatHome”programme.

HungarianMeteorologicalService’sNationalInventoryReportshowsthatin2013totalemissionsofgreenhousegasesinHungarystoodat57.4milliontonnesofcarbondioxideequivalents(excludingtheLandUseandLandUseChangeandForestrysectors),whichisthelowestvalueeversince1985.Hungarianemissionsataround6tonnespercapitaarebelowtheEuropeanaverage.Environmentalproduct fees were introduced and increased on a set of products and extended to includephotovoltaicpanels,insuchawaythatwouldseemquestionableinviewofgreeneconomygoalsandwhich has therefore resulted in much public debate. Despite certain recent increases inenvironmentaltaxation,therehasbeenlimitedprogressinshiftingthetaxburdentoenvironmentaltaxes. The innovation capacity of SMEshasnot improved, despite the implementationof severalsupport schemes. Some positive signs are linked to the approval of the National Research andDevelopment and Innovation Strategy (2013-2020), which sets out measures explicitly targetinginnovativeSMEs.HungaryadopteditsNationalEnergyEfficiencyActionPlanin2015.Withregardtosmartgrowth(oneoftheprioritizedgoalsoftheEU2020Strategy)andcreatingaknowledge-andinnovation-basedeconomy,thegoalofHungaryistoincreaseR&Dspendingto1.8%ofGDPby2020in correspondence with the 2013 National Reform Programme. The fragmented governance ofenvironmentaltopics,withresponsibilitiesassumedbythreedifferentministries,mayfurtherreducetheeffectivenessofthemeasuresthough.Asforthepolicybackground,thenecessarypoliciesexistinordertoaffordalegalframeworkforbusinessesandprovidestrategiesfordecisionmakers.Thesepolicies,however,sometimesdonotseemtobeefficient,andneithercoherentnorpredictable.

Withatotalscoreof81ontheoverallEco-InnovationScoreboard2015,Hungaryisranked18thonthelistofEUcountries,betweenEstoniaandRomania,andstillamongthosecountrieslaggingbehindtheEUaverage.

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Introduction

Theregionaleffectsofglobalclimatechangecanbeclearlyevidenced inHungarianobservations.Annualaveragetemperatures inHungaryhavebeenfollowingthewell-knownglobaltemperaturewaveverycloselysincethebeginningofthe20thcentury.ThemostimportantgreenhousegasisCO2,accountingfor76.4%oftotalGHGemissionsaftertheNationalInventoryReportUNFCCC.Itsmainsource is theburningof fossil fuels forenergypurposes, including transport.Methanerepresents13.6% in theGHG inventory. It is generatedmainlyatwastedisposal sitesandanimal farms,butfugitiveemissionsofnaturalgasarealsoimportantsources.Thesectorresponsibleforthebiggestemissions by far was the energy sector, contributing 71.6% to total GHG emissions in 2013.Agriculturewasthesecondlargestcontributingsector,whileemissionsfromindustrialprocessesandproduct use accounted for 9.8%. Emissions in thewaste sector have been increasing since 1985(+14.3%).

Hungary has reached the interim 2011/2012 renewable energy target towards the 2020 target,according to EC Europe 2020 Targets report(http://ec.europa.eu/europe2020/pdf/themes/16_energy_and_ghg.pdf). The share of renewableenergysources(RES)in2013was10%,withthetargetsetat13%by2020.

In its target-based approachHungary has adopted 17 targets to be achieved by 2020. These areexpressed in percentage terms against current levels. Reductions inmaterials, energy andwaterintensityperunitofGDParetargetedat80%ofcurrentlevels,whileariseof275%intheshareofrenewables in electricity generation, a fall of 30% in municipal solid waste generation and thedoublingof employment in environmental industries are also targeted. ThreeorganisationswereawardedEMAScertificationin2014andafurthertwoin2015.

Thelegalframeworkofthenationalfeed-intariffsystem,METÁR,hasstillnotbeensetup,althoughthegovernmenthasstartedthepublicconsultationprocessandinitialdraftswerepreparedinlate2015.Regardingprogress inreachingnationaltargetsundertheEurope2020Strategy,Hungary isperforming well in reducing greenhouse gases, while more effort is needed to increase R&Dexpenditure.EuropeanCommission’scountryreport2015statesthatresourcesdevotedtoscienceand technology are comparatively low. In addition, there is a lack of spill-over effects frommultinationalcompanies.Financingofnewinnovativecompaniesthroughventure/seedcapitalandnewerinitiativessuchascrowdfundingremainmarginal.

AccordingtotheCommission’scountryreportthehighadministrativeandtaxburden,aswellasentrybarrierstotheretailsector,hamperinvestment. Energy(oilandgas)exposureontheotherhandisrelatively large.Hungary is amajor beneficiary of the European Structural and Investment Funds(ESIF)andcanreceiveuptoEUR25billionfortheperiod2014-2020.Thisisequivalentto3.1%ofGDPannually.Hungary'sESIFallocationisconcentratedonkeyissues,suchasenhancinginnovationandcompetitivenessofbusinesses,supportingICTdevelopment,supportingtheshifttowardsa low-carbon economy, contributing to the development of the labourmarket, improvingworkforceskills,improvingtheefficiencyofpublicadministration,contributingtothereductionandpreventionofpoverty,supportingequalaccesstomainstreameducationandincreasingtertiaryattainment.

Frequent and unpredictable regulatory changes are worsening investor perceptions. This isexacerbatedby the fact that the quality of legislative processes suffers from, inter alia, a lack ofproperexante impactassessmentsandshorttransitionperiodsforstakeholders.Country-specificRecommendations for Hungary concerned public finances and taxation, the financial sector, thelabourmarket,education,businessenvironmentandnetworkindustries.

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1 |Eco-innovationperformance

Theanalysis in this section is basedon the EU-28Eco-innovation scoreboard (Eco-IS) for the year2015.ViaitscompositeEco-innovationindex,producedbytheEco-InnovationObservatory(EIO),Eco-ISdemonstrates theeco-innovationperformanceofacountrycomparedwith theEUaverageandwiththeEUtopperformers.Eco-ISisbasedon16indicators,aggregatedintofivecomponents:eco-innovationinputs,activitiesandoutputs,environmentalandsocio-economicoutcomes.

Figure1EU27Eco-innovationscoreboard2015,compositeindex

Source:EIO,2016

Hungaryisranked18thontheEco-innovationscoreboardbetweenEstoniaandRomania,stillbelowtheEUaverage,butevidencingasignificantstepforwardfromthe23rdpositionitoccupiedin2013.This alsomeans that Hungary has overtaken countries likeMalta, Croatia, Greece, Lithuania andEstonia. Countries across the Central- and Eastern European region are placed similarly on thescoreboard,allbelowtheEUaverage.Thecompositeindexwas70in2010and83in2011,reachedonly60in2013butclawedbackto78.8and81in2014and2015respectively.

WhatdoesthisresultmeaninthecontextofHungary’seco-innovationdevelopment?

The most eye-catching feature of the following diagram is that Hungary’s performance variesconsiderably in relation to EU averages for the different components, evidencing significantweaknesses ineco-innovationoutputsand inputs,whileapproaching theEUaverage in resource-efficiencyoutcomes,equatingwiththeEUaverageintermsoftheeco-innovationactivitiesindexandexceedingitinsocio-economicoutcomes.

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Figure2Componentsoftheeco-innovationcompositeindexforHungary2015

Eco-innovationinputscomprises‘government’senvironmentalandenergyR&Dappropriationsandoutlays’, ‘totalR&Dpersonnelandresearchers’and‘totalvalueofgreenearlystageinvestments’.Eurostat data shows that the first category of indicator (environmental and energy R&Dappropriationsandoutlays)sawaslightdecreasefrom1.2in2013to0.9in2014,datanotyetbeingavailablefor2015.TheindexfortheindicatordescribingR&Dpersonnelwas36in2013and36.3in2014(againnodatafor2015).ThetotalvalueofgreenearlystageinvestmentreachedUSD30.79minthe2012-2015period.

Eco-innovationactivitiesaremeasuredby3 indicators,ofwhichonlytheoneshowing ISO14001registeredcompanieshasbeenupdatedsince2008.Thisdataindicatesthelevelofenvironmentalawareness and management capability of business. 2231 businesses were awarded ISO 14001certificationin2014,500morethanthenumberofcompaniescertifiedin2012(1718).Thetwootherindicators(‘Firmshavingimplementedinnovationactivitiesaimingatareductionofmaterialinputperunitoutput’and‘Firmshavingimplementedinnovationactivitiesaimingatareductionofenergyinputperunitoutput’)werenotupdatedfortheexaminedyears,andweshouldpointoutthatthe2008 data source was used, which reflects a very different pre-economic crisis situation andinnovationappetiteinHungarianbusinesses.Itispresumedthatthisindicatorwouldbemuchlowerfor2014.Hungary’seco-innovationactivitiesindexremainsjust2pointsbelowtheEUaverage.

Eco-innovation outputs index includes eco-innovation related patents, publications and mediacoverage.Amongthe5componentsoftheeco-innovationcompositeindexthisistheoneinwhichHungary performed the worst, lagging furthest behind the EU average (27/100). Eco-innovationrelatedpatentsincludepatentsinenvironmentally-relatedtechnologies,suchasenergygenerationfrom renewable and non-fossil sources, combustion technologies with mitigation potential,emissions abatement and fuel efficiency in transportation, and energy efficiency in buildings andlighting.Thenumberofpatentsdroppedandthenumberofpublicationsincreasedsignificantly(from38in2012to87in2014).Asformediacoveragenosignificantmovementwasevidenced,annualhitsin2013equallingthosein2015.AhugevariationcanbeseenacrossMemberStatesinthisrespect,

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withthenumberofelectronicmediasourcesrangingfrom130(Malta)to23,482(UK).Hungaryhas555 and occupies a position between Greece and Bulgaria. The amount spent on research anddevelopmentdecreasedin2014comparedto2013;similarlythoseemployedintheR&Dsectorfellfrom0.98%to0.91%ofthetotalworkforce.

Resource-efficiencyoutcomes indexwentby thenameof ‘environmentaloutcomes’ index in the2013report.Thematerialproductivityindicator(ratioofGDP/DomesticMaterialConsumption),theenergyproductivityindicator(ratioofGDP/grossinlandenergyconsumption)andtheGHGemissionsintensityindicator(CO2e/GDP)wereupdated,butthewaterproductivityindicatorremainedtheonethatwasused in2013, showingdatacreatedona1996-2005 timescale. ‘Materialproductivity’ isbasedon2013EUROSTATdata,whichshowsaslightchangefrom2013to2014.Thisisindicatedbydomestic material consumption, which increased from 23,420.246 thousand tons to 25,536.335thousand tons in 2014 (estimated figure). The index is 88, the EU average being 100. Thewaterproductivityindexat36/100issubstantiallylowerthantheEUaverage.EnergyproductivityillustratestheGDPgeneratedbydomesticenergyuseandhasdemonstratedacontinuousdeclinesince2005,postingthelowestfiguresin2013(20.8millionTOE–tonsofoilequivalent)and2014(20.7millionTOE). At a level of 98/100, this index almost equates with the EU average. The GHG emissionsintensityindicatorillustratestheamountsofGHGemissionsgeneratedperunitofGDP,whichcanbecharacterizedbyacontinuousdecrease.InHungaryemissionshavedecreasedby39.1%since1990andby4.3%between2012and2013accordingtoEuropeanEnvironmentAgencydata.ThisclearlyshowsthatHungaryisalowGHGemittercountry.

Socio-economicoutcomes:Hungarianeco-industryexportsshowapromisingpictureandexceedtheEUaverage,postingafigureof113(EUaverage100).Thesourceoftwoindicatorshasbeenmodifiedsincethe2013reportanditisimportanttoconsiderthatthischangeincountryrankingsislikelynotaresultofchanges inactualcountryperformance,butratheraresultofswitchingtheunderlyingdatabasetocalculatethesetwoindicators.Comparabilitywith2013fortheseindicatorsisthereforeverylimited.Employmentineco-industriesandcirculareconomyandtherevenueineco-industriesandcirculareconomyarebasedonOrbisdata,andwilllikelybecomparablewithcomingyears’data,butnotsuitableforactualcomparison.

Figure3ComparativechartofmemberstatesEco-innovationperformance,

Source:EIO

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Afterthesignificantlossinpositionin2013,whenHungarywasranked23rdamongMemberStates,2014and2015haveseenHungarymakeupthelostground(17thin2010and16thin2011)andagainapproach the EU average. The remarkable spending of EU funding at the end of the 2007-2013planningperiodandtheswitchofunderlyingdatabasehasfavouredHungary’sscoreboardranking.

2 |Selectedcirculareconomyandeco-innovationareasandnewtrends

Theprimaryeco-innovationprioritiesarelistedintheNationalEnvironmentalTechnologyInnovationStrategy (NETIS),which is part of theHungarianNational ReformProgramme. TheGovernment'svisionistofosterenvironmentalindustriesandtechnology,tofocusonenvironmentalinnovation,toreduceprimarymaterialuseandencouragereuseandrecycling,andtoensureaparadigmshiftfroman‘end-of-pipe’approachtoenvironmentalissuestopreventionofproblems.NETIShasclustereditstargetsanddevelopmentareasaroundthefollowingeighttopics:

• waste• water• air• noiseandvibration• agricultureandsoilprotection• remediation• renewableenergy• constructionindustry

All these priority groups share a common feature, namely, great growth potential and scope forimprovementofthecurrentstate(levelofenvironmentalimpact)throughdifferentmeans.Hungaryhas adopted17 targets tobeachievedby2020, (expressed inpercentage termsagainstcurrentlevels)suchasmaterials,energyandwaterintensityperunitofGDPtobereducedto80%ofcurrentlevels;theshareofrenewablesinelectricitygenerationtobeincreasedby275%;municipalsolidwastegenerationtodecreaseby30%,andemploymentinenvironmentalindustriestoincreasetotwicethecurrentlevel.Tofinancethesemeasures,theHungariangovernmentislookingatarangeof funding possibilities, including European Union research funds; agricultural, cohesion andstructural funds, and the Norwegian Financial Mechanism, which is available through Norway'smembership of the European Economic Area (EEA) and which includes increasing the uptake ofenvironmentally-friendlytechnologiesamongitsprioritiesforHungary.

Hungaryaimstoreducematerialandenergyintensity(domesticmaterialconsumption/GDP,tonnesofoilequivalent/GDPrespectively)by20%by2020(baseyear2007).NETISintendstobethecatalystfor smart solutions and aims to reach those ambitious targets by providing overarching policysupport.

Onamacroscaleamajorchangeisexpectedtoinfluencethewastemanagementsector.Duetothepresentstructureandproprietaryassetsofthesector,significantimprovementsorinnovationsarenot likelytobe introduced(thesector issufferingfromunderfinancingandanunstableeconomicposition).

In 2014 businesses spent EUR 564million on environmental investment in the form of pollutionprevention, reduction or remediation, 34% more in real terms compared to 2013. Directenvironmentalinvestments,whichdonotmodifymanufacturingprocesses,represented82%ofthat

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amount, while integrated investments incorporated into manufacturing processes made up theremaining18%.Thevalueofcurrentexpendituretoreduceenvironmentalloadwithinorganisationswas1.3%higher(EUR774million)in2014thanin2013.51%ofthemoneyspentcomprisescurrentexpenditureonwastewater,withafurther39%spentonwastetreatmentand2.3%onprotectingnature.BusinessespaidEUR461million,10%morein2014thanin2013,toexternalenvironmentalserviceproviders,ofwhich61%waspaidforwaste,34%forwastewatertreatment.Environmentalproducersandbusinessesprovidingenvironmentalservicesemployed17,500peopletodelivertheseactivities. The volume of direct environmental investments increased by 23%, while integratedenvironmentalinvestmentssawanincreaseof120%on2013.ThissignificantrisemaybeexplainedprimarilybyagreateruseofEUfundsbypublicadministration(EUR258million,62%morethanin2013). The value of cleantech early stage investments increased significantly. Since 2011 half ofclimatequotaincomeneedstobespentongreeninvestments.Theamountofthisexpenditure(EUR177millionfortheperiod2008-2015)showsaconsiderableincreasebetween2013(EUR7.9million)and 2014 (EUR 9.4 million), and 2015 when it totalled some EUR 33 million (Warm at Homeprogramme). Net sales of the environmental industry operating in air, water and soil damagemeasurement,preventionandminimizationwasEUR1438million,18%ofwhichrepresentedforeignsales.From37nationalpatentapplicationsfiledintheenvironmentalfieldin2014,10werelicenced.Althoughthenumberofapplicationsroseto42in2015,thenumberofissuedlicencesdroppedto7thatyear.

Inkeepingwith international trends, circulareconomybusinessmodelshavebegun tooperate inHungary (e.g.: reuse centre for electronic devices operated by E-Reuse Ltd., lease-based printingservices by Lexmark). New, innovative and sustainable business models with ‘repair focus’ and‘productasaservice’(e.g.Grofie)havestartedtogainground.

Theuseofbiomassforenergypurposes,basedonthecountry’sfavourableagro-ecologicalconditionsand taking into account sustainability criteria (especially the protection of biodiversity and soilquality)maycontributebothtotheretentionofagriculturaljobsandtothecreationofnewones.The use of organic matter from animal husbandry (biogas) for energy purposes could enableproductive waste management and increase the competitiveness of the sector. The use of by-products and other solidwastes from agriculture and forestry (e.g. by-products from crop-lands,cuttings from orchards and vineyards) for local energy purposes and their conversion into end-productsmaygenerateadditionalrevenueforfarmersandproducers,andcouldsignificantlyreducecommunities’needforfossilenergysources.Therationaluseofrenewableenergysources,closelyco-ordinatedwithenergyconservationandenergy-efficiencyprogrammes,mayconstitutethebasisforthecreationofanew(green)sectoroftheeconomy.Sinceinmostareastheuseofrenewableenergy sources ismore advantageous in termsof operational costs than the use of fossil energysources,thecompetitivenessofmarketactorsinvestinginthisfieldisalsoexpectedtoimproveinthelongterm.

AccordingtoOECD’sScience,TechnologyandInnovationreportHungaryhasaveryopeneconomywithquitealargemanufacturingsector,muchofwhichisforeign-owned.Muchdomesticallyownedindustrycarriesout little innovation. Industry-science linkagesaresound,withtheshareofpublicresearchfundedbyindustryabovetheOECDmedian.Integrationwithglobalnetworksisalsogood,with48%ofscientificarticlesand32%ofPCTpatentapplicationsbeingproducedwithinternationalcollaboration.Hungaryhasarevealedtechnologyadvantage inenvironment-relatedtechnologies,whileICTandbio-andnanotechnologiesareclosetotheOECDmedian.

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VirtualEnergyPowerPlantProgramme200mW capacity virtual power plant built with individual company energy-efficiency (EE)commitments

HungarianInnovationandEfficiencyNonprofitLtd.startedtobuilda200mWenergypowerplantin2011.Theprojectaimstoreplacethatamountofenergywithindividualcompanycommitmentsby2020throughaprogrammecalledtheHungarianVirtualPowerPlant.VPPwaschosenasoneoftheTop3fromamong153energy-efficiencyprogrammessubmittedtothejuryoftheEU’sSustainableEnergyWeekin2015.

Thegeneralaimoftheprogrammeisto:• collectexperienceandthebestenergy-efficiencypracticescompanieshaverealised• transform these into transferable knowledge to be forwarded to Hungarian companies,

particularlySMEs,whodonothavein-houseenergymanagers• encourageandmotivatemanagementofSMEstoinvesttimeandenergyinEE• acknowledgebestcompanies’resultsandusetheseasarolemodelfortheothers• cooperatewith relevant authorities to create a legislative framework to support energy

efficiency.TheVirtualPowerPlantProgramme is the largestcompanyEEmovement in theregion. In2015120,000SMEswerecontacted,20,000weresurveyed,1,500interviewedandvisited,withsome300companiesbeingEEaudited.The200mWenergyisbeingsavedthroughprovenenergysavings.Buildingthe‘virtualpowerplant’startswithassessingexistingenergy-efficiencyprojects. Theenergy saving resultsof a companyinvestmentareverifiedbyexpertsfromparticipatinguniversitiesandconvertedintothesavedfossilprimerenergyofanactualpowerplant.Thesavingsinfossilenergyandelectricity,uptoa6000hmaximum capacity,will be registered on the accounts of any company participating in theVPPProgrammeinanannualbreakdown.TheProgramme,whichhasalso initiatedtheAwardofExcellence inEnergyEfficiency,urgestheGovernmenttohelpthereturnonEEinvestmentsbycreatingamotivatingregulatoryenvironmentand through grants from the European Structural Funds. The Award of Excellence in EnergyEfficiencywaslaunchedon2011.Thegovernment-supportedprogrammeaimstofostercompanies’energyawareness.Thethreeawards’categoriesforcompaniesare:

• ‘Energy-ConsciousCompany’designationforthosewhoevaluatetheirEnergyManagementSystem, through the Programme’s proprietary assessment questionnaire, and make avoluntarycommitmenttoimprovethisandinvestinEEprojects

• ‘Energy-EfficientCompany’awardforthosewhoindicatepastinvestments• ‘Role Model Company’ award for those who actively promote the Programme in their

supply chain;AudiHungary, E.OnHungary,MAVIRHungarian IndependentTransmissionOperatorCompanyLtd.areamongthosewhohave been awarded ‘role model company’status.Between2011-2016theenergysavedthroughthe VPP Programme amounted to 115mW.VPPreceivedtheEU2015SustainableEnergyAwardfromEASME.

Moreinformation:http://virtualiseromu.hu/enKeywords:energy-efficiency,virtualpowerplant,powerplantContact:balazs.mezosi@mi6.hu

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Goodpractice:MicroalgaeBioRefinery

BudapestSewageWorksPte.Ltd.(BSW)participatesintheClimate-KICco-fundedMicroalgaeBiorefinery2.0projectthataimstodemonstratetheintegrationofalgaeproductionintowastewatertreatment,therebyenhancingwaterquality,buildinggreenimageandimprovingeconomics.

TheroleofBSWas industrialpartner istosupplythe necessary feedstock and comments from anindustrialperspective,aswellastohostthedemoat the North Budapest Waste Water TreatmentPlant. The solution turns certain waste watertreatmenteffluentintoadded-valuealgaebiomassbyrecoveringnutrientsandcapturingCO2biogasplant.

Theprojectwillresultinacommercialofferlinkingthewastewatersectorwithalgaeprocessors.

TheprojectbuildsonthecomplementaryexpertiseofitspartnersfromfourEUcountries,whichisthekeytodeliveringtheexpectedoutcomesandbusinessimpact.

Picture:algaeglasshouseatNorthBudapestWasteWaterTreatmentPlant

Keywords:wastewatertreatment,sewage,algae

Website:http://algaerefinery.eu/

Contact:MiklósGyalai-Korpos,miklos.gyalai@ppis.hu

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Goodpractice:SolarplantsinHungary(PGP)

Photovoltaic (PV) electricity has the potential to contribute significantly to low-carbon powergenerationinthefuture.PANNONGreenPowerLtd.(PGP)establishescommercialscalePVsmallsolarpowerplants (0.5MWe+)whichcanbecompetitiveagainstgrid-purchasedelectricityonastrictlymarketbasis.

ThemaindifferencebetweenPGPanditscompetitorsisitsmoreefficientServiceModel(includingtechnology selection,efficientO&Mprocessand financingmodel), therebyallowingcommercialunits to effect a transition toPV-generatedelectricity supply anddeliveringbotheconomic andclimateimpacts.

The region of focus is Central- and Eastern Europe, which provides an ideal testing ground forpotentiallycommerciallycompetitivePV,givenontheonehanditsrelativelyinefficientandcostlyelectricitygridsandpolicyuncertaintyovertheavailabilityoffeed-intariffsubsidies,whilstontheotherhandthelowriskprofileattributedtoscalablePVinstallations,andtheincreasinglocalmarketdemandforsustainableenergysolutions.

Thisconceptwillprovideacriticalramp-upphaseforthemuchwiderdeploymentofcarbon-freePV-generatedelectricitywithintheregion,usingtechnologiesandinstallationmethodswhichwillensurePVcancompeteoncommercialterms,andthereforewithoutundueburdenongovernmentfiscal expenditure. Significant penetration of PV systems may play a key role in reducingtransmission losses due to local power generation and addressing balancing challenges of localTransmissionSystemOperatorsinspecificcases.

ThefirstpowerplantswillbefinishedinZalacountyinlate2016with8-10MWeoverallcapacity.

Keywords:PV,smallsolarpowerplants

Website:http://pannongreenpower.hu

Contact:IstvánPócs,info@pannongreenpower.hu

3 |Barriersanddriverstocirculareconomyandeco-innovationinHungary

Aslongasglobaltemperaturesarerisingby2°C,theimpactofbeinglocatedintheCarpathianbasinmeans a 3-5 °C rise for Hungary. The 2014 IPCC report states that low-lying areas within theCarpathianbasinwill suffer fromgreaterandmore frequent floods, fluctuatingyieldsandserioushealthrisks,suchasheatwaves.Thiscanbeoneofthemostsignificantdriversforeco-innovationinHungary.

TheconsolidationoftheHungarianresearchandinnovationsystemisstillanon-goingprocess.Thisis due to the annual reorganisation of major innovation policy-making bodies and the research,developmentandinnovationfundingstructure.TheDigitalEconomyperformsbelowtheEUaverage,particularly in terms of enterprises using digital technologies. Hungary does not fully exploit theeconomicinstrumentsavailabletopromotereuseandrecycling,andtoimproveresourceefficiency.Commission’scountryreportassessespublicR&DintensityinHungary,whichhasdecreasedoverrecentyearsfrom0.46%ofGDPin2007to0.41%in2013;thislevelisnotonlywellbelowtheEUaverage(0.72%)butalsolowerthanthatinmostotherCentral-andEasternEuropeancountries.This

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tendency threatens to undermine the already weak supply of human resources for science andtechnology,andthequalityofthesciencebase,andofcoursecontributestothebraindraineffect.While the adoption of the Smart specialisation strategy in November 2014 and of the 'Highereducationconcept' in2015couldhelptobringaboutamoreeffectivepublic fundingsystem,thesuccessful implementation of bothwill also dependwhether the decreasing trend in public R&Dintensityandinstitutionalfundingcanbereversed.OneoftheweaknessesoftheHungarianresearchsectoristhatonlyasmallpercentage(13%)ofSMEsengagesininnovationactivity.Oneofthebiggestobstacles facing R&D sector development is limited capacity, both in terms of the number ofresearchersandinfrastructuralbackground,andinco-operation.

In January2015aunifiedNationalResearch,Developmentand InnovationFund (NRDIFund)wasestablished,toprovidestatesupportforresearch,developmentandinnovation.TheNRDIFundisaseparate state fund, succeeding the former Research and Technology Innovation Fund, and theHungarian Scientific Research Fund. The organisation handling the NRDI Fund is the NationalResearch,DevelopmentandInnovationOffice.In2015,acoherentportfolioofcompetitivecallswasinitiatedbytheNRDIOfficetofacilitatethepurpose-orientedandvalue-creatinguseofRDIfundsfromEuropeansourcesandtheNRDIFund.Theco-ordinatedcallsoftheportfolio,which isbeingextendedthrough2016,equallysupportscientificresearchprojects,corporatedevelopmentandtherealisation of innovative ideas. The Government has already decided upon the 2016 ProgrammeStrategyoftheNRDIFundofEUR260million.

Between2009and2014NorwegianGrantsmadealmostEUR2millionavailablefortheHungarianeconomy,undertheGreenIndustrialInnovationProgramme,byfunding32projects.

In the framework of Horizon 2020 program 235 Hungarian organisations received fundings, theoverall funding reachedEUR64.81million.EUR24millionwasallocatedwithin theResearchandInnovationActions,andEUR5millioninInnovationActions.

TheratioofenvironmentaltaxescomparedtoGDPhasremainedrelativelyconstant(approximately2.7-2.8%)inrecentyears.Theproportionofenvironmentaltaxescomparedtothetotaltaxrevenuein2011was6.81%(HungarianStatisticalOffice).Thisfigureisinthemid-rangeofEUMemberStates(6.17%EU-27averagein2011).Asubstantialpartofenvironmentaltaxrevenuesisderivedfromtaxesonenergy(especiallyexcisedutiesonfuel),withalowerpartcomingfromtransport-relatedtaxes,chargesonpollutionand resourcecontributions.The shareofenergy taxeswithinenvironmentaltaxes is increasing. It does,however, remainaproblem that inmany cases income realized fromenvironmental taxes is not spent for thepurposeof environmental impact reductionor resourceefficiency.InaccordancewithOECDandEUrecommendationsadditionaleffortsareneededintheinterestsofgreeningthetaxsystem.

AspartoftheenergyandclimatetargetsoftheEurope2020strategy, in2010Hungaryagreedtoraisetheproportionofrenewableenergysourcesto14.65%inordertoachievea10%overallenergysaving and to increase its greenhouse gas emissions in sectors outside the EU Emission TradingSchemebynomorethan10%(comparedwiththe2005level)by2020.Hungaryhasmodifiedthesavingtargetforenergyuseto18%comparedtotheBAU(Business-As-Usual)scenariopresentedintheNationalEnergyStrategy2030document.

TheMinistryofAgricultureorganisedthefirstConferenceonEco-innovationon15October2015withtheobjectiveofsupportingeco-innovation,asakeyelementofsustainabledevelopmentandthecircular economy, and supporting Hungarian businesseswith innovative technologies to improvetheirabilitytogrowindomesticandinternationalmarkets.Thisevent,whichalsoofferednetworkingopportunities,waslinkedtotheannualinternationalEco-industryconference,Ökoindusztria.

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In2014theHungarianInnovationAssociation’sannualawardintheenvironmentalcategorywenttoMOLplc. foraprojectrealised inpartnershipwithPannonUniversityandStrabagLtd.tousetyrewastegranulatesinroadconstruction.Aprototypemanufacturingplantwasbuilt in2012,uponapatent licenced in2009, toensurea longer lifecycle,30% lowermaintenancecosts, lowerenergyconsumptionduringuseandlowerCO2emissions.

The main drivers in Central Hungary regional performance are high-value knowledge intensiveservices.Thebiggestchallengejeopardizingbothregionaleconomicperformanceandtheshifttoinnovation-driven growth is the unfavourable turn in Hungary’s fiscal and regulatoryenvironment.Drasticcutsinthepublicfundingofeducation,science,technologyandculture,healthcare,publictransportandotherpublicservicesalsolimittheopportunitiesofinnovation-intensive sectors and reduce the attractiveness of theregionbothtoscienceandtechnologyrelatedbusinessandtoculturalandcreativeindustries.

TheGreennovationawardhasbeenpresentedtoinnovativeprojectsandinitiativessince2011,andisbecomingmoreandmorewidespreadamongHungarianbusinessesandmunicipalities.Themainfocusoftheprojectsisenergyefficiencyandwastemanagement.

There is no Hungarian verified technology in the Environmental Technology Verification system(http://iet.jrc.ec.europa.eu/etv/) yet. This is in line with the statement contained in the EUCommission’s country report (http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:52015SC0036R%2801%29&from=ES) that “there are shortagesofskilledprofessionalsinscienceandengineeringandoftheSME’sinnovativecapacitiesinHungary”.

The innovation capacity of SMEs has not improved despite the implementation of a number ofsupportschemes.IncreaseinbusinessR&Dinvestmenthasbeendrivenbyforeigndirectinvestment.ThepresenceofmultinationalcompaniesinHungaryisinsufficientlyutilised,andtheemergenceofanationalresearchandinnovationecosystemwithinnovativeSMEscouldbefostered.SomepositivesignsarelinkedtotheapprovaloftheNationalResearchandDevelopmentandInnovationStrategy(2013-2020)whichsetsoutmeasuresexplicitlytargetinginnovativeSMEs.

4 |Policylandscape:towardscirculareconomyinHungary

TheNational Research, Development and Innovation Office (NRDI Office) started operating on 1January2015onthebasisoftheHungarianAct2014/XLLVIonscientificresearch,developmentandinnovation. The NRDI Office is a national strategic and funding agency for scientific research,developmentandinnovation.ItisalsotheprimarysourceofadviceonRDIpolicyfortheHungarianGovernment and the main RDI funding agency. The NRDI Office handles the National Research,DevelopmentandInnovationFund(NRDIFund),whichintegratestheHungarianScientificResearchFund(OTKA)andtheResearchandTechnologicalInnovationFund(KTIA).TheHungariangovernmentadopted theNational Environmental Technology Innovation Strategy (NETIS) at the end of 2011,whichprovidesaframeworkforeco-innovationwithintheHungarianNationalReformProgramme.ThisNationalReformProgrammeisHungary'scontributiontoEurope2020–theEuropeanUnion'soverarchingprogrammeforsmart,sustainableandinclusiveeconomicgrowth.

The National Research, Innovation and Science Policy Council (NKITT in Hungarian) is theGovernment’s highest-level co-ordination and decision-making body in the field of science,

13

technology and innovation (STI) policies. This Council provides the Government with long-termstrategicadvice.Fourministries(NationalEconomy,NationalDevelopment,NationalResources,andPublicAdministrationandJustice)arerepresentedinNKITT.ThemainresponsibilityoftheResearchandTechnologicalInnovationCouncil(KTIT)istomakestrategicdecisionsontheuseoftheResearchandTechnologicalInnovationFund,whilealsohavingtherightofapprovalconcerningitsutilisationplan, strategy, definition of priorities, decision-making and evaluation procedures, and decision-makingwithrespecttotheprovisionoffinancialsupport.

The Ministry of Environment and Water was abolished following theelectionsinthespringof2010anditsworkwasassumedbytheMinistryofRuralDevelopment.Thestructureanddutiesoftheministrieschangedagainsomewhataftertheelectionsin2014andtheMinistryofRuralDevelopmentturnedtotheMinistryofAgriculturewhichneverthelesshasthesameresponsibilitiesregardingenvironmentalmatters.ThedesignatedsinglenationalentityisthereforenowtheMinistryofAgriculture.

TheNationalEnvironmentalProgrammeIII(2009-2014)(NEPIII)listsanumberofsectorlevelpoliciesthataredirectlyrelatedtothemanagementofnaturalresourcesandprotectionofnaturalvalues,aswellasprotectionagainstpollution.TheseincludetheEnergyPolicyConcept,theNationalForestryProgramme,theNationalStrategyfortheDevelopmentofTourismandtheCountrywideProgrammefor Environmental Damage Prevention and Mitigation, the National Programme for ImprovingDrinkingWaterQuality and theNational Programme for LocalWastewaterManagement.NEP IV(2015-2020) is thenewstrategicdocumentencompassingmanydifferentstrategies, includingtheStrategy for the Countryside, the National Forest Programme and Strategy, the National EnergyEfficiency Action Plan, the National Renewable Energy Action Plan, the National Climate ChangeStrategy,theNationalTransportStrategyandalsotheNationalConceptofDevelopmentandSpatialPlanning.Theexistenceofallthesedocumentsdoesnotmeanthatthemessageisinanywaycommunicated,not to mention communicated clearly, to the wider public. Even if they designate the desireddirectionsoftheHungarianeconomyandsociety,theperceptionisthatdecisionsarenotmadeinharmonywiththeprinciplesarticulatedwithinthestrategies.Consumerbehaviourisnotinfluencedmuchatallandthereisagenerallackofcommunicationandawareness-raisingtakingplacewithinthefieldsofenvironmentandclimatechange.

Hungarydoesnotfullyexploiteconomicinstrumentstopromotepreventionofwastegeneration,toavoidincineratingandlandfillingreusableand/orrecyclablewaste,whilemakingreuseandrecyclingmoreeconomicallyattractive.Suchinstrumentscouldstimulatethecirculareconomy,andimprovetheresourceefficiency.

The fragmented governance of environmental topics among the various ministries may furtherreducetheeffectivenessof themeasures.ThismaybeparticularlyevidencedbythefactthattheMinistryforNationalEconomybearsresponsibilityfortheimplementationofthecirculareconomypackage; the Ministry of National Development for environmental technologies and energyefficiency;theMinistryofAgricultureforwastemanagement,andtheMinistryofInteriorforwatermanagement.Thispatternbearsinherentlygreaterrisk.

Hungarian energy plans openly contradict the content of the major national legal and planningdocuments.Specifically,theideaofthegreeneconomy,energyefficiencyandthegrowingrateofrenewable energy sources are not unequivocally supported by Hungary’s energy plans. In fact,preciselytheoppositeistrue.Theoverwhelmingplantotriplenuclearenergyproduction(evenafterphasingouttheoldblocksatthePaksNuclearPowerPlant)willdepriveanydevelopmentsinthefield

14

ofrenewableenergyofresources.Furthermore,coalminingandcoal-basedenergyproductionhavereappearedintheenergyplans,whichalsoclasheswiththemainclimatetargets.

The2013RIS3strategyforCentralHungary(CH)isthekeypolicydocumentforregionaldevelopmentinthe2014-2020budgetaryperiod.Itsummarisestheregion’sdevelopmentprioritiesonthebasisof the results of CH’s SWOT analysis. Four sectors (technologies) that are bound to become theengines of regional innovation-based growth were identified, namely ICT, health industry(technologies),environmentaltechnologiesandcreativeindustries.Thehorizontalobjectivesofthestrategyincludedthegreeningofboththeeconomyandinnovation,theenhancementofinnovationcollaborations and awareness-raising. The RIS3 strategy alsomentions the need for the targeteddevelopmentoftheR&Dsector,placingparticularemphasisonbionicsandtheprovisionofgreenindustrysolutions.

Under the Economic Development and InnovationOperational Programme (EDIOP), amentoringprogrammewill provideadvice forenterprisesonoptimisingenergy consumptionand renewableenergies. In addition, methods of improving the efficiency of district heating systems are beingexamined by the relevant ministry and the Government expects that the Ányos Jedlik Plan, acomprehensiveelectro-mobilityblueprint,willsaveenergyandimproveenergyefficiencyonpublicroads.TheGovernmentannouncedtheÁnyosJedlikPlan inMarch2014withtheaimofnotonlyfulfilling EUobjectives, but also supportingHungarian innovationworkshops, developing suppliernetworksandcreatingnewjobs.TheÁnyosJedlikClusterhasbeenformedunderthesupervisionoftheMinistryforNationalEconomyandtheNationalInnovationOfficeintheinterestsoftheearliestpossiblerealisationoftheÁnyosJedlikPlan,whichaimstopromotetheuseofelectricvehicles. TheGovernmentprimarilyplanstopromoteelectro-mobilitythroughchangesinlegislationandindirectincentives. Among these incentives ‘green number plates’ for electric vehicles has already beenintroduced,followedbybenefitssuchasfreeparkingeverywhere,theuseoftaxiandbuslanes,andalsoa0%VATrateforsuchvehiclesandrelatedinfrastructure.

Recently there have been a number of tax increases in the field of environmental taxation.Specifically, excise duties on certain fuel products were increased as of 2015. Moreover,environmentalproductfeeswereraisedonanumberofproducts.Atthesametime,thescopeofthatfeewasextendedtoincludeproducts,suchasphotovoltaicpanels,whichiswhollyquestionablein view of green economy goals. The Hungarian tax system is still characterised by someenvironmentally harmful subsidies, including the favourable tax treatment of personal use ofcompany cars. While the company car tax favours the renewal of the vehicle fleet, it does notcompensatefortheincentivetotravelgreaterdistancesresultinginincreasedemissions,congestionandsocialcosts.

TheunstableregulatoryframeworkremainsoneofthebiggestchallengesforHungaryintermsofimprovingitsbusinessenvironment.Frequentandunpredictableregulatorychanges,oftenatshortnoticeandwithoutallowingthepartiesconcernedasufficienttransitionperiod;newentrybarriersincertainsectors,andtheintroductionorincreaseofsector-specifictaxesallcontinuedtoweighonthe business environment and on competition in 2014. Legislative processes continued to becharacterisedbyalackoftransparencyandthenotableabsenceofsystematicconsultationswiththerelevantparties. Corruption affectingpublic decisionmaking andpublic procurement remainedacauseofconcern.The2014EUAnti-corruptionReportpointstoconcernsregardinginformalrelationsbetween businesses and political actors at local level. The overall effectiveness of publicadministrationremainsachallengeovertheshort-andmediumterm.Furthersimplificationandcost-cuttingwithin public administration are plannedpursuant to a recent proposal that foresees theintegrationofspecialisedauthorities(suchastheenvironmentalauthorities,miningauthoritiesand

15

national park directorates) into Government Offices under the supervision of GovernmentCommissioners.

Asof1January2013bothelectricityandretailpricesforhouseholdconsumersundertheUniversalServiceProvisionwerecutby10%,whichwasfollowedbyafurthercutof11.1%asof1November2013.InApril2014theretailpriceofnaturalgaswasreducedby6.5%,whileinSeptember2014retailelectricitypriceswerecutby5.7%andasofOctoberdistrictheatingtariffsby3.3%.

European-andinternationalenvironmentlegislationsawtwomainissuesin2015,theCommission’sCircularEconomyPackageandtheCOP21ParisAgreement.AlthoughtherearestillnoperceptiblesignsofthecirculareconomyconceptinHungarianpolicies,dialoguesandconsultationhavestartedmainly involving thewastemanagement sector and thepublic sector. The incentives required toacceleratetheexpansionofcirculareconomymodelsarestillmissing.The Parliament accepted the ratification of the Paris Agreement. The nationally determinedcontributionsarebeingarticulated,andcommitmentsfrom84companiesand13citieshavealreadybeenregisteredtoNAZCAclimateactions.

ActCLXXXVI. (2015)onthemodificationto legislationpertainingtothereductionofredtape inpublicadministration

TheGovernmenthasintroducedaraftofmeasuresaimedatmakingpublicadministrationproceduresinHungarysimpler, fasterandcheaper.Thetwo-stepprogrammefirst lookstoreviseandsimplifyregulationspertainingtogeneralprocedures,tosignificantlyreducethenumberofactivitiesrequiringlicencesandtoreducethetimerequiredforprocessing.

Thesecondphaseaimstoreducebureaucracyaffectingtheentrepreneurialsector.

Thenewlegislationrequiressome108relatedActstobemodified.

Besidestheintentiontoestablishafast,client-friendly,service-orientedpublicadministrationandtoreducetheadministrativeburdenonthegeneralpublicandbusinessesalike,stepswerealsotakentoensurefasterpaymentstothewinningconsortiainoperationalprogrammes.

Followinglowgrantdisbursement(finalpayment)inthreeoperationalprogrammesinautumn2014,theGovernmentstartedtointroducespecificmeasurestospeeduplicensingandalladministrativeproceduresrelatingtothesupportedprojectswhichhadbeenparticularlyaffected.Theseincludedoperationalprogrammeswithinthefieldofenvironmentalprotectionandenergyefficiency,whereanumber of government decrees established shorter processing times and simpler administration.(Thesethreeprogrammeswereconsidered‘underspent’withonly60%ofthetotalfundinghavingbeenpaidoutasthepaymentperiodwasdrawingtoacloseattheendof2015.

Keywords:legislativeburden,publicadministration,administrativeburden,redtape

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Hungarianelectromobility–JedlikÁnyosActionPlan

The European Union has set Hungary the target of obtaining at least 13% of its gross energyconsumption from renewable sources by 2020 and Hungary, in turn, has made an increasedcommitment to raise theuseof renewableenergy in the transport sectors toabove11%of totalenergyconsumptionby2020.

The Hungarian Government supports the domestic promotion of electromobility. This isdemonstrated by its initial step of accepting the Jedlik Action Plan,with theMinister ofNationalEconomybeingappointedtoco-ordinateandmonitortheimplementationofthePlan.

ThegovernmenthasannouncedthemeasuresitexpectstointroducewithrespecttotheJedlikActionPlan.

• introducingdistinctivelicenceplatesforavarietyofplug-inhybridandelectriccars

• reducingVATsubstantiallyonsuchvehiclesandinstallationofnecessaryinfrastructure

• definingandintroducingparking-andtolldiscountsforelectriccars

• allowingelectricvehiclestousebuslanes

• enablingchargingequipmentoperatorstoselltheirelectricity(thiswould,however,requiretheElectricityActtobeamended)

• improvingadministrativeproceduresrelatingtoinstallationofchargingpoints

• developinggovernmentandlocalgovernment(publicbodies)vehiclefleetswiththeintroductionofplug-inhybridandelectric-poweredvehicles.

Withgovernmentdecree369/2015.(XII.2.)theGovernment has given priority to all publicadministrative procedures relating toinvestments to be executed under the JedlikPlan,whichcentreonthepromotionofelectricmobilityandareessentialfortheinstallationofthecharginginfrastructureforelectricvehicles.

Keywords:electricmobility,electromobility,electricvehicles,publicadministrationtools

Contact:JedlikÁnyosCluster,E-mail:info@jedlikanyosklaszter.hu

Website:http://jedlikanyosklaszter.hu

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References

IPCC,2014,ClimateChange2014,Impacts,AdaptationandVulnerability,WorkingGroupIIAvailableat:http://ipcc-wg2.gov/AR5/images/uploads/WG2AR5_SPM_FINAL.pdf

Europe 2020 in Hungary, Available at: http://ec.europa.eu/europe2020/europe-2020-in-your-country/magyarorszag/country-specific-recommendations/index_en.htm

NationalEnvironmentalTechnologyInnovationStrategy,Availableat:http://kornyezettechnologia.kormany.hu/admin/download/b/4f/50000/NETIS_English.pdf

OECD, 2012, OECD Science Technology and Industry Outlook 2012, Available at:http://www.oecd.org/hungary/sti-outlook-2012-hungary.pdf

Hungarian Green Investment Scheme, Planned GIS Sub-programs, Available at:http://zbr.kormany.hu/planned-gis-sub-programs

NationalSmartSpecialisationStrategyforHungary,Availableat:http://www.s3magyarorszag.hu/documents/224092/253257/national_smart_specialisation_strategy_en.pdf

ResearchInfrastructuresinHungary,Availableat:http://www.s3magyarorszag.hu/documents/224092/253257/research_infrastructures_en.pdf

Council Recommendation on the 2015National Reform Programme of Hungary and Delivering aCouncil opinion on the 2015 Convergence Programme of Hungary, Available at:http://ec.europa.eu/europe2020/pdf/csr2015/csr2015_council_hungary_en.pdf

EuropeanCommission,2016,EuropeanCommissionStaffWorkingDocument,CountryReportHungary2016,Availableat:http://ec.europa.eu/europe2020/pdf/csr2016/cr2016_hungary_en.pdf

EuropeanCommission’sEnvironmentEco-InnovationActionPlan,Availableat:https://ec.europa.eu/environment/ecoap/about-action-plan/union-funding-programmes_en

NationalEnergyEfficiencyActionPlan,Availableat:http://www.kormany.hu/download/1/25/80000/IIINemzeti%20Energiahat%C3%A9konys%C3%A1gi%20Cselekv%C3%A9si%20Terv_HU.PDF

EMAScertificatesdatabase,Availableat:http://emas.kvvm.hu/company.php?l=

EUROSTAT,Availableat:http://appsso.eurostat.ec.europa.eu/nui/show.do

NationalInventorySubmissionstoUNAvailableat:http://unfccc.int/national_reports/annex_i_ghg_inventories/national_inventories_submissions/items/8812.php

MinistryofNationalEconomy,2014,Reductionoflegislativeburdenintheentrepreneurialsector,Presentationoftheproject

NationalOfficeforResearch,DevelopmentandInnovation,DepartmentofInternationalrelations,2015,HungarianresultsandopportunitiesinHorizon2020,HealthInformationDaypresentation

EuropeanCommission,Employment,SocialAffairsandInclusion,EuropeanSocialFund,OperationalProgrammes,Availableat:http://ec.europa.eu/esf/main.jsp?catId=576&langId=en

EuropeanEnvironmentalAgency,Shareofrenewableenergyingrossfinalenergyconsumption,Availableat:http://www.eea.europa.eu/data-and-maps/indicators/renewable-gross-final-energy-consumption-4/assessment

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CoherenceproblemsintheHungarianEnergyPolicy,ananalysisofrelevantpolicypapersbyEMLAHungaryincooperationwithUfU(DE)andEnergiaklubPublicPolicyInstitute,2015,Availableat:http://www.emla.hu/sites/default/files/B%C3%B6ll%20Energy%20Study%20full%20final%20web%20corr.pdf

NationalReformProgrammeofHungary,2014,Availableat:http://ec.europa.eu/europe2020/pdf/csr2014/nrp2014_hungary_en.pdf

GovernmentDecisionNo.1307/2011.(IX.6.)onHungary’sfirstNationalEnvironmentalTechnologyInnovationStrategy(NETIS)

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ANNEX:Policymeasuresaddressingcirculareconomyandeco-innovationsinHungary

Groupofpolicymeasures Typeofpolicymeasure

Specificmeasure

Pleaseprovidereferencetoorbriefsummaryofspecificmeasures(national,regional)

addcellsifnecessary

Focusofpolicymeasure(tickifrelevant)

Circulareconomy

Genericfocusoneco-

innovation

Resourceefficiencyimproveme

nt

Energyefficiencyimprovement

Reductionofemissionsincl.CO2

Otherrelevantareas(e.g.renewableenergy,etc)

SUPP

LYSIDEFO

CUS

Equity/businesssupport

Publiclyco-fundedventurecapitalfunds

JEREMIE:JointEuropeanResourcesforMicrotoMediumEnterprises

Innostart National Business and Innovation Centre: Public utilityorganisation.Purpose:DisseminationofBICmethodologyandcountrywideknow-how. Main task: identification of the most promising innovativeprojects,tobacktheirachievementandmarketexploitation.

SmallBusinessDevelopmentCompanyLtd.(www.kvfp.hu)

× × ×

Publicguaranteefunds

New Széchenyi Plan Environment and Energy Operative ProgrammeSpecifically dedicated for the funding of environmental projects, but themainbeneficiariesarelocalauthoritiesratherthancompanies.Companies(SMEsonly)areeligibleforsupportunderoneheadlinewhichisaimedatimprovingtheenergyefficiencyofbuildings

National Research, Development and Innovation Fund (NRDI Fund)detailedbelow

× ×

R&Dfunding

Researcherinitiatedprojects:NRDIFundin2015HUF5.98Bnwasannounced

20

SupportforR&Dinpublicsectorandindustry

Post-doctoralprojects:NRDIFundin2015HUF1.57Bnwasannounced

Collaborativegrants

Supportofparticipationinjoint-financedinitiatives, NRDIFund,HUF1.38Bnannouncedin2015ERA-NETInfect-ERAJointTransnationalCall HUF41millionannouncedin2015ERA-NETE-Rare-3JointTransnationalCall HUF47millionannouncedin2015ERA-NETM-Era.NETJointTransnationalCall HUF94millionannouncedin2015NRDIFund HUF2.1Bnannouncedintotal

R&Dinfrastructure

Fiscalmeasures

TaxincentivesforR&Dandstart-ups

TaxincentivesforR&Dpersonnel

Education,trainingandmobility

Tailoredtrainingcoursesforcompanies,entrepreneurs

Advise/consultingforstart-ups,companies,entrepreneurs

MyCoAccelerationandIncubationProgramforenvironmentalstart-upsin4 thematic areas (Alternative energy; Organic materials; Wastemanagement;Sustainableagriculture)http://myco.hu/en/news/

× × × × ×

21

Placementschemesforstudents

SupportforR&Dworkersrecruitments

HungarianAcademyofSciences’scholarshipsforpost-doctoralresearchers(http://palyazatok.org/mta-posztdoktori-kutatoi-program-2015/)

Networksandpartnerships

Competencecentres,clusters,science-technology

parks

KEXPORTEnvironmentalIndustryExportCluster(http://kexport.eu/en/)

ArchEnergCluster: International InnovativeCluster forRenewableEnergyandBuildingTrade

× × × × × ×

× × × × × ×

Technologyplatformsandinnovationnetworks

HigherEducationandIndustryCooperativeCentre–researchinfrastructuredevelopment,in2015HUF25BnwasannouncedinGINOP

Strengtheningresearchinfrastructures-internationalisation,networkinginHUF20BnwasannouncedinGINOP

MobilityportalforHungarianResearchers(http://www.euraxess.hu/en/)

Foresightandcommonvisionbuilding

Magnet Hungarian Community Bank:Mentor community deposits: Helpinstitutions to get soft financing. Sphere community deposits: promotewhole spheres such as green energy, environmental protection, jobcreation, research and development, health and social care, culture,educationororganicfarming.(http://www.magnetbank.hu/)

× ×

Marketintelligenceandotherformsofinformation

sharing

Moneybackthroughthewindow:Common-sensemeasuresinenterprisesoftenbringenvironmentalandfinancialbenefitsatthesametime.Industrycan save more money through easy measures, than environmentalinnovation costs. Target group: companies of any size

× × ×

22

(http://www.kovet.hu/en/tools-for-businesses/consideration/environmental-savings)

DEMAN

DSIDE

FOCU

S

Regulationsandstandards

Regulations,targets,cap&tradeschemes

MSZEN(HungarianStandard)16231:2013Energyefficiencybenchmarkingmethodology

MSZEN (Hungarian Standard) 16212:2013 Energy Efficiency and SavingsCalculation,Top-downandBottom-upMethods

×

×

Performancestandards,labeling,certification

NationalEco-labellingsystem

Energyefficiencycertificateforbuildings

Energyclassificationforconsumerproducts

Organicproductslabelling(BiokontrollHungaria)

Publicprocurement

“Green“publicprocurementofgoodsandservices

Advisory support formunicipalities about green public procurement byEnergiaklub(http://energiaklub.hu/onkormanyzati-kepzesek/fenntarthato-beszerzesek-zold-kozbeszerzes?gclid=CjwKEAjwlq24BRDMjdK7g8mD6BASJABBl8n3I1aVpvcU-3XhkmHDJ7TWAWrah0WwTsqWA87KWH6sVRoCQCHw_wcB)

× × × ×

R&Dprocurement

Pre-commercialprocurement

23

TechnologyTransfer

Advisorysupportfortechnologyadopters

Financialorfiscalsupportfortechnologyadopters

(e.g.grantsforpurchasingnewtechnology)

Contribution to innovation regulated in Act on scientific research,developmentandinnovation(ActLXXVI/2014.)

Supportofprivatedemand

Taxincentivesforconsumers(e.g.forpurchasing

environmentallyefficientproducts)

Taxreductionsforproductsandservices(e.g.VAT

reductions)

TaxreductionsareplannedtobeintroducedtoelectriccarsinÁnyosJedlikPlan(stillnotineffect)

Demandsubsidies(e.g.eco-vouchers,consumer

subsidies)

Awarenessraisingandinformationprovision

MeettheScientist:launchedbytheHungarianAssociationforInnovation,theHungarianFulbrightAssociationandtheEmbassyoftheUnitedStatesofAmericainBudapest.Thegoaloftheprogramistopromoteengineeringand natural sciences along with education.(http://www.meetthescientist.hu/index_en.php?name=en_1)

NationalWasteManagementDirectorate (OKTFNHI)publisheda call in2015forawarenessraisingprojectsinthefieldofwastemanagement.TotalsumwasHUF200million.

EWWR:attheEuropeanWeekforWasteReduction85Hungarianprojectsregisteredin2015.

×

AbouttheEco-InnovationObservatory(EIO)

TheEco-InnovationObservatory(EIO)istheinitiativefinancedbytheEuropeanCommission’sDirectorate-GeneralfortheEnvironment.TheObservatoryisdevelopinganintegratedinformationsourceandaseriesofanalysesoneco-innovationtrendsandmarkets,targetingbusiness,innovationserviceproviders,policymakersaswellasresearchersandanalysts.

VisitEIOandDGENVEco-innovationActionPlan(EcoAP)websiteandregistertogetaccesstomoreinformationandtoaccessallEIOreports,briefsanddatabases.

www.eco-innovation.euec.europa.eu/environment/ecoap