Transfer of Concession for Waste Management from the Hungarian Government

18 Nov 2021

The Hungarian Government plans to re-implement the "Expanded Producer Responsibility (GÜS)", which it abolished by switching to the tax system 8 years ago in waste management, with a different model. The government decided to transfer the concession to a company that will be responsible for the regulation and provision of waste-related public services, the implementation of extended producer responsibility schemes for waste within the scope of GPP, and the operation of DRS mandatory deposit systems. The government, which published the concession transfer procedure in August 2021, gave a very short time to receive applications and documents. Additionally, even if only a single application was made, the concession period was determined as 35 years. Therefore, this situation is implicitly considered as the inclusion of a monopoly actor with exclusive rights in waste management processes. As previously decided, all GÜS fees determined by the Ministry of Innovation and Technology will be paid to the privileged company by economic enterprises.

According to observers, according to the regulation, as of July 1, 2023, hundreds of companies active in waste management in Hungary will lose their licenses and will be able to continue their services only if they accept the conditions imposed by the concessionaire. Observers report that these conditions are currently extremely uncertain, and therefore there is a risk that many companies operating in the market will be forced to cease their activities and leave the market.

Experts state that the main concerns about the transition to the concession model are related to the unpredictability of SPP principles, the elimination of competition between waste market participants and the virtual exclusion of harmony between the Union and Hungary, which would not be in line with the European Union Waste Framework Directive. In addition, waste collection companies in Hungary will no longer be able to dispose of their waste freely.

Finally, it is stated that concession plans mean a direct violation of the principles of freedom and free movement established by the TFEU (Treaty on the Functioning of the European Union); in particular, it would violate the principles of the free movement of goods (Art. 34-36 TFEU) and the movement of services (Art. 56 TFEU); It is stated that any restriction on the freedom to provide services will inevitably lead to a violation of the freedom of establishment (Art. 49 TFEU).

Source: EXPRA

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