On July 1 2023, radical changes entered into force in Hungary’s waste management field. This is when the Extended Producer Responsibility (EPR) scheme started to operate, imposing a new fee and a significant administrative burden on stakeholders for so-called circular products.
In December 2022, the Hungarian parliament adopted amendments to the law to comply with the European Union’s waste management directives. The detailed rules for implementation were published in the form of a government decree in March 2023.
The new legislation is part of the EU’s measures to promote a green transition and a circular economy. The government’s priority was to ensure that this process was completed as quickly as possible in Hungary and that the national economy switched to an operating model in which fewer products became waste. The aim is to reuse the greatest possible proportion of waste as raw materials.
At the heart of the concept is the notion of extended producer responsibility, which means that the responsibility and cost of waste management (collection, recycling, disposal) for the life cycle of so-called circular products falls on producers or, in the case of foreign production, on their first domestic distributors. Circular products include, among others, packaging, single-use plastic products, electrical and electronic equipment, batteries and accumulators, motor vehicles, tires, office and promotional papers, some textiles, wooden furniture, cooking oils and fats. This overlaps significantly with products subject to environmental product charges, but the overlap is not 100%.
The EPR scheme entered into force on July 1, 2023. At the same time, the concession company for the reception, collection, transport, pre-treatment, trade, and transfer for treatment of waste products started its operational activities. This role will be performed by a newly formed subsidiary of the national oil and gas giant MOL, MOHU MOL Hulladékgazdálkodási Zrt., which, in this sense, is responsible for the operation of the EPR system.
Under the scheme, there are three primary obligations for the economic operators concerned. The first is that they must apply for registration with the national waste management authority (government offices) and MOHU before starting their activities with circular products.
The second obligation is that businesses must keep a continuous and detailed record of their EPR activities (product codes, product movements, volumes etc.), which must be done site-by-site. This, together with quarterly reporting, represents a significant additional administrative burden for them, mainly because the EPR sístem introduced a brand new coding system of circular products, these are the so-called KF codes. In many cases, it required reorganizing their internal information and record-keeping systems.
The third obligation is the so-called EPR fee, which is the basis for financing the scheme. According to the ministerial decree published, the level of this fee is many times higher than the environmental product charge for most product groups. Producers are required to submit quarterly data to the waste authority and pay the EPR fee based on the invoice of MOHU.
From 2025, the environmental product charge will be phased out for product groups that are covered by the EPR scheme.