The circular transition – Slovakia in the spotlight
By Balint Horvath, Circular Economy Regional Policy Officer at Embassy of the Kingdom of the Netherlands in Hungary and Slovakia, and Jana Šťastná, Senior Policy Officer at the Embassy of the Kingdom of the Netherlands in Slovakia
The government of the Slovak Republic is drafting its policy framework for the country’s circular transition. The business environment is also becoming favorable to the movement because companies are discovering the emerging opportunities in circularity. Slovakia offers business opportunities for Dutch circular entrepreneurs. However, the scope of national policies is different from the one applied in the Netherlands, and the perception of the circular economy differs too. This article provides an overview of the specifics of the Slovak circular transition and indicates which segments of the market offer entry possibilities for Dutch companies.
Industrial heritage of Slovakia
The Slovak economy has by heritage a robust industrial profile, employing about 30% of the country’s total workforce in the industry. The main industrial sectors include the automotive, electrical, engineering and chemical industries. Nearly half of the country’s total industrial output comes from car manufacturing, making Slovakia the world’s largest producer of passenger cars per thousand inhabitants. On the other hand, the country is almost 100% dependent on imports of energy raw materials (oil, natural gas, uranium), which strengthens the need to be self-sufficient at least in terms of industrial resources. This pattern leads to a major difference between Slovakia’s and the Netherlands’ perception of the circular economy. While the Netherlands’ circular transition is characterized by the dematerialization of consumption (e.g. applying sharing schemes, extending product lifespan), the Slovak perspective is dominated by a focus on waste management and recycling – to feed materials back into production.
Wastemanagement in focus
Slovakia faces considerable challenges in its waste management systems. The recycling rate of municipal waste is one of the lowest and the landfill rate is one of the highest in the EU. Therefore, the long-term environmental policy perspectives of Slovakia highlight the advancement of waste management and recycling as key tools to stimulate the country’s circular transition. In 2022, reform should be carried out focusing on separate collection and the introduction of a mandatory quantitative collection of mixed municipal waste as well as the increase in landfill fees. In 2025, reuse centers should be set up in each district town to prevent the creation of waste. Besides waste prevention, the utilization of secondary raw materials is becoming an emerging trend in the country. Platforms, associations of processors, recyclers, and manufacturers providing virtual space for trading are becoming significant players in the market. Yet, there is no uniform database in Slovakia comparing processing capacities across all classes of materials. Companies are seeking such databases. There is also demand for foreign expertise and innovative waste management solutions for municipalities and manufacturing companies.
Construction and automotive sectors as major players
Apart from waste management and recycling, there are two sectors expected to prevail in Slovakia’s circular transition. The country’s material use is estimated to grow by 50% until 2050, having the automotive and construction industries as major contributors to this tendency. The automotive industry is the driving force of the Slovak economy, and the upcoming e-mobility revolution will bring along a considerable increase in electric car production. The enhanced volumes of battery waste will open new market possibilities for re-use and recycling. Furthermore, the emerging need for charging infrastructure also creates business opportunities for the Netherlands – as the global leader in this market. The other sector of interest, construction, is the largest producer of industrial waste in Slovakia. Meanwhile, the recovery rate of construction and demolition waste is only at 51%. The demand for living space in the country is increasing and the renovation rate of buildings is above the EU average. The government will devote EUR 0.7 billion for renovation purposes under the economic recovery scheme. The policy goals and the current construction market trends create opportunities for new waste disposal sites with advanced recycling solutions.
Embassy and businesses
The Netherlands Embassy is active in thoroughly investigating the highlighted sectors and has full market studies featuring business opportunities for Dutch entrepreneurs. The aim is to connect and provide hands-on information about markets. A summary of Slovakia’s most relevant business characteristics is available on Holland Circular Hotspot’s “Spotlight countries” webpage. For detailed information, feel free to contact the embassy’s Circular Economy Policy Officer, Bálint Horváth (balint.horvath@minbuza.nl) or the Policy Officer for Economy & Environment, Jana Stastna (j.stastna@minbuza.nl).