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CONSULTATIVE PAPER

ON

THE BULGARIAN NATIONAL ALLOCATION PLAN

FOR PARTICIPATION IN THE EUROPEAN EMISSION TRADING SCHEME

for the periods 2007 and 2008-2012

Sofia, March, 2006

Interministerial Working Group on the development of the National Allocation Plan for greenhouse gas emission trading in compliance with Directive 2003/87/EC of the European Parliament and the Council

TABLE OF CONTENTS:


Definitions of used terms 4

List of Abbreviations 6

Introduction 8

Categories of activities covered by the Directive and criteria for allocation of allowances 10

Categories of activities, referred to in Articles 2(1), 3, 4, 14 (1), 28 and 30 of the Directive 10

Criteria for the national allocation plan, referred to in Articles 9, 22 and 30 of Directive 2003/87/EC 11

Summary of main principles on which basis allocations will be made 12

1. Determination of the total quantity of allowances 13

1.1 Obligation of Bulgaria under the Kyoto Protocol 13

1.2 Principles, assumptions and data applied to determine the contribution of installations covered by the Directive 15

Determination of the total quantity of allowances to be allocated 15

1.3 Determination of the total quantity of allowances to be allocated 22

Corrections of the macroeconomic projection “business as usual” for compulsory measures that increase emissions and for reporting the amount of emission reductions under JI projects 26



1.4. Measures to reduce emissions applied to sources not covered by the Scheme, energy policy 28

Energy 28

Industry 29

Households and services 29

Transport 29

Kyoto Protocol Mechanisms 29



1.5 Taking into account the national energy policy 30

1.6 Application of the criteria of Annex ІІІ to the Directive 31

1.7. – 1.9 Taking into account the potential to reduce emissions and the Community legislation. No provision to auction allowances. 32

2. Determination of the quantity of allowances at sector level 32

Allocation of emission allowances by sectors 34

Bottom-up” projections for emissions of registered installations by sectors 34



Reconciliation of the quantity of emission allowances by sectors 37

3. Determination of the quantity of allowances at installation level 41

4. Technical aspects 43

4.1. Potential, including technological potential 43

4.2. Early action 44

4.3. Clean Technology (if applicable) 45

5. Community Legislation and Policies 45

5.1. Competition policy 45

5.2 Internal market policy (Art. 43 of the Treaty) 46

Reserve for delayed installations () 47

Calculative reserve for compulsory measures () 48

Reserve for new entrants (except for cogeneration) 49

Reserves for new cogeneration 50

Allowances set aside for compensation of ERUs transferred to other countries under JI projects 51



5.3. Other legislation or policy instruments 54

6. Public consultations 55

7. Other criteria than those listed in Annex ІІІ to the Directive 56

List of Installations covered by Directive 2003/87/ЕС and proposed allocation of allowances to them for 2007 57

Definitions of used terms


  • Allowance - the permission to emit one tonne of carbon dioxide equivalent during a specified period, which shall be valid only for the purposes of meeting the requirements of the emission trading scheme

  • Calculative reserve – allowances set aside to be distributed between installations in the process of the development of the Allocation plan. Those reserves are not allocated to installations after the notification to the European Commission.

  • Certified emission reduction unit is equal to one tonne equivalent of carbon dioxide, achieved as a result of a “clean development” project under Art.12 of the Kyoto Protocol.

  • Delayed installation – an installation which has been operating for at least one year in the period 2002–2004 and for which no sufficient data has been submitted for determination of emissions and allocation of allowances before 30 November 2005.

  • Early credits –– Emission reductions that have been verified in “Joint Implementation” projects before the beginning of the First commitment period (2008). These emission reductions should be transferred by Bulgaria to the respective country with which a bilateral cooperation agreement on Joint Implementation projects was concluded. The amounts of reduction units are transferred ain the form of Emission Reduction Units (ERU) pursuant to Article 17 of the Kyoto Protocol in the framework of the First Commitment period (2008-2012)..

  • Direct double counting may occur when CO2 emissions from one or more installation(s) specifically defined and included in the Scheme are reduced or limited as a result of the implementation of a “joint implementation” project. The project may be implemented in: a) the installation whose emissions are influenced and which participates in the Scheme; b) another installation participating in the Scheme, or c) another installation notparticipating in the Scheme. Situations when a “joint implementation” project reduces the emissions from several clearly distinguishable installations participating in the Scheme is considered an example of direct double counting of emission reductions.

  • Emissions reduction unit is equal to one tonne carbon dioxide equivalent, achieved as a result of a “joint implementation” project under Art.6 of the Kyoto Protocol.

  • Final list of installationsa list of the registered installations supplemented with delayed installations which have succeeded to submit required data for determination of their emissions and allocation of allowances before 28 February 2006.

  • Emission trading permit – a permit granted under Art. 131в of the Environmental Protection Act.

  • Indirect double counting of emissions reductions may appear when a “joint implementation” project influences the CO2 emissions from installations covered by the Scheme within a specific sector, but it is not possible to determine which installations reduce their emissions. In such cases, the joint implementation project could be implemented for an installation participating in the Scheme, as well as for a not participting installation.

  • Installation - a stationary technical unit constructed to perform one or more of the activities covered by the Scheme as well as all other activities in a direct relation to them that have a technical connection to the activities performed in this unit and may influence the emissions or pollution.

  • New entrant – any installation carrying out one or more of the activities covered by the emission trading scheme which has obtained an emission trading permit or an update of its permit due to a change in the nature or functioning or an extension of the installation, after January 1st, 2007. New entrant is also an installation constructed before 2004 which has not operated with more than 50% of its production capacity for at least one calendar year in the period 2002-2004. New entrant is also an installation constructed after January 1st, 2004, or where changes have been introduced in the nature or functioning due to an extension of the installation after this date. Delayed installations are not considered new entrants. Four groups of new entrants are defined:

      • installations newly constructed after 1st January 2004;

      • installations participating in the scheme, in case of change in nature or functioning or an extension of the installation after 1st January 2004;

      • installations for which a permit is refused before January 1st, 2007;

      • “sleeping” installations – installations constructed before 2004 which have not operated with more than 50% of their production capacity for at least one calendar year in the period 2002–2004.

  • Operator – any person who operates or controls an installation or to whom decisive economic power over the technical functioning of the installation has been delegated.

  • Preliminary list of installations – a list of registered installations

  • Registered installation – an installation for with sufficient data has been submitted for determining their emissions and allocation of allowances before 30 November, 2005.

  • Reserve – the quantity of allowances to be distributed between the installations during the emission trading periods – 2007 or 2008-2012.



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