Environmental Global Market
Insights and Opportunities
Overview: Hungary has tightened environmental performance standards due to European Union accession requirements, creating new opportunities for environmental technology and service providers. EU financial support for environmental infrastructure projects will spur growth in this sector in coming years, possibly as much as 15% annually.
In 2007, investment in the environmental sector was $932 million. According to Hungary’s Central Statistical Office, wastewater treatment now accounts for 47% of all environmental spending, waste treatment for 12%, air quality about 23%, soil and groundwater quality 8%, protection of landscape and nature for 6%, and noise pollution 1%.
The environmental sector has about 2,000 firms, mostly SMEs and micro-sized companies, employing roughly 20,000 people. The Ministry of Environment expects employment to increase to 40,000-50,000 by 2010, although these estimates may be revised downward in the short term to reflect current macroeconomic trends and realities.
U.S. firms are active in the Hungarian pollution control market, primarily in project management and consulting. Stiff competition exists in this sector from Hungarian, as well as German, French, Italian, Japanese and Scandinavian firms.
The EU is set to provide 22.4 billion Euros ($30.7 billion) to Hungary, from 2007-13, to finance infrastructure upgrades, as part of the New Hungary Development Plan. The NHDP is broken down into 15 Operational Programs approved by the government. Pollution control projects are part of the Environment and Energy Operational Program ($6.7 billion) and regional programs.
Selling to the public sector requires participation in public bids. The Government Procurement Agreement (GPA) allows U.S.-based firms to bid on certain EU contracts above established thresholds. U.S. firms legally established in a Member State of the EU are accountable as a European company. Those firms may bid on EU public procurement contracts advertised just as any other European firm. However, U.S. companies interested in the Hungarian market should strongly consider partnering with a local firm. The local partner will be able to provide information on local business practices, pertaining rules & regulations, the decision making process and provide technical assistance.
Best Products/Services: Waste management (prevention, re-use and recycling, and environmentally friendly treatment); Wastewater treatment; Protection of groundwater (main source of drinking water in Hungary); and Improvement of drinking water quality (building out water treatment technology, switching to other water bases, switching to other water supply systems).