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Eco-innovation struggles to gain a foothold in Hungary

28/07/2011

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Low interest in environmental issues from citizens and business lies behind a lack of political will and a fragmented approach to green technologies hampering eco-innovation in Hungary.

Eco-innovation has suffered in Hungary because of low awareness and interest in environmental issues, according to a profile of the country by the European Eco-Innovation Observatory (EIO). With little demand for eco- innovation from consumers or businesses, policymakers have seen little point in funding or supporting it.

As a result, Hungary’s eco-innovation index is about 30% below the EU average. Business innovation is “exceptionally low” and the country’s total research and development (R&D) spend hovers around 1% of gross domestic product (GDP), nearly half that for the EU-27. Environmental R&D makes up just 5% of the total.

As in the majority of European countries, there has been no umbrella strategy to promote eco-innovation. EU structural funds have gone to the development of a basic environmental infrastructure rather than eco-innovation.

Perhaps surprisingly, the eco-innovation indicator on which Hungary scores best is that of environmental outcomes: material productivity was only slightly below the EU average in 2007, while water productivity was 20% above it. The results most probably reflect a shift to a service-based economy.

Nonetheless, the country can boast some eco-innovations that have delivered substantial cuts in energy and material use. They address the environmental problems typical of countries encroaching on the path of environmental modernisation: poor water quality, waste disposal and energy inefficiency.

The Panel Programme, for example. has invested in refurbishment of apartment blocks made from panels to make them more energy-efficient. Manure, sewage sludge and landfill waste are increasingly turned into biogas. Researchers are investigating bioplastics and bioremediation of contaminated soil, while the Hungarian company Organica’s wastewater treatment plants clean water using living organisms.

One booming eco-innovation sector in Hungary is sustainable construction materials. There are several promising patents including the straw house – a wooden frame is stuffed with straw bales, yielding a highly energy efficient structure and only biodegradable waste – and Vekla, an entirely new, highly insulating building material that can be produced from metal, plastic, textile, glass, organic or construction and demolition waste.

Policy support is set to become more coordinated this year with the arrival of an Environmental Technology and Innovation Strategy. Eco-innovation has also started to garner greater emphasis in other policies, including the Government’s new economic development strategy – the New Széchenyi Plan launched in January 2011. Energy efficiency and innovation are priorities.

Businesses are beginning to be enticed by targeted Government funds promising reduced costs and new profit opportunities. The Fund for Environmental Technological Development for example, created in 2010 and fed by EU structural funds, offers businesses help to reduce their environmental footprint.

The difficulty of securing investment to see an innovative idea through from research to market has been one of the main barriers to eco-innovation in Hungary. Fresh funds backed by a more coherent policy framework can address this issue. But, according to the EIO report, raising environmental awareness will be crucial to really create a market for eco-innovations.

Related information on the EcoAP Website