The transition to a circular economy appears to be a very significant challenge. How do you see where we are at this point in time?
One part and element of the sustainable development revolution is the transition to a circular economy. This is not because it is a good economic concept, but because the current way of organizing production will certainly not be sustainable within 15-20 years.
We are currently at the point where, in terms of about eight or nine critical resources, within 15-20 years there will be no supply of raw materials to the extent that we are currently using.
Another problem is that, according to the logic of the current linear economy, we count on an infinite amount of raw materials, energy, labor and time, and within this, the faster we move forward, the greater the profit will be. We already know that time is not infinite. What is necessary for a transition is getting narrower and narrower. And one of the biggest problems is that the end product of the linear economy is waste. Waste not only poses a problem that there is nowhere to do it, because currently, for example, what is happening in the oceans is equivalent to the destruction of the oceans, but we are also changing the conditions of life by disposing of the huge mass of unsuitable materials in an unorganized, unorganized and unregulated manner. we put it out. This is also true for climate change, because we are currently using the atmosphere as a free air sewer.
If we look at the basic parameters, then this production structure and logic is not sustainable. The material circulation loop must be closed. As much as possible, the material of products that are no longer in use must be recycled so that they can be used as raw materials in the same or another sector. The other thing we have to solve is that the products we manufacture are already designed in such a way that it is easier to improve and improve them. I will give you a very simple example, which we have been using for a long time, but it has not yet made it to civilian industry. Many people are talking about the role modern F-16s could play in the war in Ukraine. Very few people realize that the F16s were developed in the early 1970s. How is it that they want to win a modern war with sixty or seventy year old planes? So that the F-16 used today is extremely different from what it was seventy years ago. We design a complicated, expensive device in such a way that all its elements, or at least its key elements, can be further developed, and certain raw materials that we have built into it can be used for as long as possible. Reusability, repairability and recyclability in its material are unavoidable. In the case of countries that, moreover, are poor in raw materials, especially in terms of critical raw materials, like Hungary, we will not be able to buy, for example, the rare earth metals, gold, silver, and copper contained in electronic products, and then throw them away.
We will also not be able to continue for a long time what is currently going on, where we selectively collect our electronic products, take them to be broken down, send the valuable part of the electronic waste to another country, where it is processed and comes back in the form of a new electronic product or even in the form of a new critical raw material for electronic products to the country. In this case, we create a large amount of waste in Hungary, which no one needs. And the valuable part is given to someone else and then bought again. Economically, this is a shot in the arm, so it is certain that this needs to be changed.
If only because, for example, if we look at mobile phones or other similarly complicated electronic products, they contain an extremely large number of rare earth metals and precious metals that are necessary for their production. If we specialize in the production of these, one ton of rock must be produced, from which 1-2 grams or less of the target material can be produced. The same is present at a density of 30-40 times higher in discarded electronic products.
The fact that critical raw materials are running out and the need to transform the economy are already widely accepted facts. However, if we look at China or the other major polluting countries, we do not yet see the clear will that would allow us to complete this turnaround in the foreseeable future.
I would not underestimate China’s efforts, if only because if we look at energy greening, which is one part of the transition, for example, 80 percent of the technologies there are already produced by China. I would not underestimate China’s performance in terms of how well they understand the logic of the circular economy or the sustainable development revolution. I am in regular contact with the big data processing center of the Chinese Academy of Sciences, and I think we would be making a mistake to underestimate China’s performance. The Chinese also understand another thing that many people do not yet.
In addition to the administrative means, all kinds of developments must also have an economic and social logic, because if there is no economic interpretation, then we can make any provision, it will not really take off. The Chinese have understood that in order to succeed, they must occupy a significant part of the market for the technologies necessary for a sustainable development turnaround. That’s what they set out to do, and they’re making huge profits out of it.
My question for Hungary is what role do we intend to play in this turn of events? A role where others tell you what the new rules will be, or who is an active player in creating the rules? Who is told what the new technologies are that must be purchased, and we, as honest customers, will always buy this, or do we want to be players who can be trendsetters at least in partial market niches? Because from then on, the turn itself brings us business success. If there is none, then the turnover will be a business burden.
As a member state of the European Union, we must adapt to the regulations adopted there. How do you see the importance of the circular economy being recognized in the EU, just like in China?
I have good news and bad news. The good news is that when you look at the whole sustainability revolution, including climate protection, water management, biodiversity and so much more, the most progressive ideas are here. If you like, the European Union is the trend leader. This can also be seen in the ongoing international negotiations on goal setting, when the European Union is among the actors with the greatest ambitions, so in this sense there is no big problem.
This is interesting if only because this is the area where the European Union can strategically position itself to be a global player. This is not true in a military sense, less and less true in a financial sense, and not true in a political sense either, where it can act more as a regional actor. The EU is clearly the most progressive center of power in the world when it comes to issues of the sustainability revolution, outlining the trend and some related regulations.
The bad news, on the other hand, is that the European Union operates in such a way that the result of the lobbying activities of its members, companies and other decision-making centers in the member states, is the result of the position it can eventually occupy. An old, horrifying example of this was when a rule had to be made on the curvature of cucumbers, because at that time there was an agricultural lobbying activity on the part of one of the countries, or that is why the carrot was classified as a fruit. That is why it is still conceivable that the big sustainability trend is the most progressive, but within these things appear that are quite anachronistic, which as a result of the lobbying activities of certain companies or countries are incorporated into common thinking as a rule, even though this would not really be the best rule for the whole community .
Business Talks ’24
The focus of the conference was on the now reopening EU funds and the difficult question that arises at least once in the life of every business, the generational change. You can read the minute-by-minute coverage of the conference on this link.
