MOL group wins waste contract for Hungary

The MOL Group, an international, integrated oil, gas, petrochemicals and consumer retail company, headquartered in Budapest, has been awarded the Hungarian state concession tender covering municipal waste management services.

The concession agreement covers 35 years and began on July 1, 2023. According to the agreement, MOL, via a newly established concession company, will be responsible for the collection, pre-treatment and management of about five million tons of residential and institutional, corporate, mixed, and separated waste each year.  

To address the county’s fragmented waste strategy the Hungarian Government issued a waste management concession tender in August 2021. In Hungary, there are currently 26 public municipal waste management service providers financed through an organization called National Waste Management Coordinating and Asset Management. However, the system needed reform to meet public expectations and EU regulations.

The new waste management system will be a fully integrated and transparent method that aligns the country with the European Union. The development of a centralized management solution will increase the efficiency of collection and, supported by significant investment, will improve the management of waste and its recycling. However, because of the restructuring and investment required, it is expected to take at least five years for the new system to affect positively.  

As part of the integrated future system, MOL will purchase services from several market players. MOL’s waste management activities will be managed via the 100% owned concession company which will contract with facility operators, subcontractors, or even directly with the owners.

Over the coming year, MOL will establish the framework for the system with the existing stakeholders. MOL views this subcontractor system as a long-term solution, so it will be maintained if it functions effectively. From 2023, the new investments will begin to increase waste management efficiency, which will be realized in the first 10 years of the concession period. 

As part of the new system, MOL will be responsible for developing the extended producer responsibility (EPR) systems.

Currently, Hungary sends 51% of its waste to landfill, with 14% being converted to energy via waste-to-energy facilities and 32% recycled or composted. Considerable investment will be required to develop new processes and facilities to improve these figures, estimated to be more than $1.15 billion in the first decade alone. Part of this investment will be a waste-to-energy facility capable of handling at least 100,000 tons of municipal solid waste annually. 

MOL is also planning to implement sorting plants. The goal is to take selectively collected waste from every Hungarian household, but with greater emphasis on increasing the number of waste yards, waste islands, and collection points. Other innovative options, such as the automated redemption system for beverage packaging, are also being implemented.