AAU Assigned Amount Unit
AEAF Agency for Economic Analysis and Forecasting
BNAP Bulgaria’s National Allocation Plan
BETS Bulgarian Emission Trading Scheme
CER Certified emission reduction units
СО2 Carbon dioxide
CP Combustion Plant
EC European Commission
ЕЕ Energy efficiency
EEA Executive Environment Agency
EPA Environmental Protection Act
EPER European Pollutant Emission Register
ERU Emission reduction unit
ЕU European Union
EU ETS European Union’s Emissions Trading Scheme
First stage First stage of the implementation of the Directive - 2007.
GVA Gross Value Added
GDP Gross Domestic Product
GHG Greenhouse gases
IPCC Intergovernmental Panel on Climate Change
IPPC Integrated Pollution Prevention and Control
JI Joint Implementation
KP Kyoto Protocol
KPD Known planned development of new installations
MEE Ministry of Economy and Energy
MOEW Ministry of Environment and Waters
MRDPW Ministry of Regional Development and Public Works
NAP National Allocation Plan
NAPCC National Action Plan on Climate Change
NEK National Electrical Company
NGO Non-governmental organization
NIMH National Institute of Meteorology and Hydrology
NSI National Statistical Institute
RES Renewable energy sources
RIEW Regional Inspectorate of Environment and Water
RNE Reserve for new entrants
Second stage Second stage of the implementation of the Directive- from 2008 to 2012.
SEWRC State Energy and Water Regulatory Commission
The Directive Directive 2003/87/ЕС establishing the European emission trading scheme within the Community
The Scheme European Scheme for a emission trading scheme
TPP Thermal Power Plant
UNFCCC United Nations Framework Convention on Climate Change
WG or IMWGDBNAP Inter-ministerial working group on the development of Bulgaria’s National Allocation Plan
Introduction
Climate change is a reality that leads to negative consequences all over the world and also in Bulgaria. Large scale floods, stormsand drought happen worldwide and in Bulgaria. This fact clearly shows the society’s dependence on extreme natural phenomena and the price it should pay for human, economic and environmental damages.
Bulgaria’s concern and willingness to joint the international community’s efforts for climate change mitigation are demonstrated by the acts of signing and ratifying the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol.
The Emission trading scheme is the main EU instrument for the implementation of the Community’s commitment under the Kyoto Protocol. Directive 2003/87/ЕС establishes a European emission trading scheme within the Community. From 1 January 2005, installations in Member States covered by this Directive reduce their emissions of carbon dioxide (СО2) to certain limits for the two periods 2005-2007 and 2008-2012. For Bulgaria the implementation of the Directive begins with the act of accession of the country to the EU on 01 January, 2007. In case of postponed accession, Bulgaria has the opportunity to joint the emission trading scheme on January 1st, 2007, by a decision of the Bulgarian Government and after signing a special agreement for this purpose with the EU. The emission trading provides flexibility to operators owning installations to achieve targets for reduction of greenhouse gas emissions in the most efficient way, according to their own development strategies.
The main components of the Scheme are:
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Allocation of allowances through the National Allocation Plan;
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Issuing an emission trading permit to each installation;
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Monitoring, verification and reporting of emissions;
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Greenhouse gas emission allowances transaction register;
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Compliance control and penalties.
According to the Directive, from January 1st, 2007, the Bulgarian installations covered by the Directive under Annex І, will only be allowed to emit carbon dioxide if they hold a valid permit. Installations holding a permit will monitor their emissions of carbon dioxide and will report on an annual basis. Provisions in the permit will require that at the end of each calendar year, operators surrender a quantity of allowances for emissions of carbon dioxide, equal to the quantity of carbon dioxide emitted during the year.
Before the start of the Emission trading scheme, the State will determine the allowances for the installations through the National Allocation Plan. The allocation will be based on objective and transparent criteria consistent with the criteria listed in Annex ІІІ of the Directive.
For Bulgaria, the First stage of the European emission trading scheme begins on January 1st, 2007. Before this date, operators of installations listed in Annex І to the Directive and Art. 131b of the Environmental Protection Act should have obtained a valid permit for emissions of carbon dioxide. The Government will determine allowances to the operators for participating in the Scheme. The operators shall fulfil specific monitoring and reporting obligations as part of the permit, as specified in the guidelines of the EC.
The development of the National Allocation Plan is coordinated by an inter-ministerial working group. The members of the working group include representatives of Ministry of Environment and Waters, Ministry of Economy and Energy, Ministry of Regional Development and Public Works, Ministry of Finance, National Statistical Institute, and representatives of non-governmental organizations: Bulgarian Industrial Association and branch organizations of branches covered by the Scheme – Bulgarian Association of the Cement Industry, Bulgarian Branch Chamber of Power Engineers, Branch Chamber of Cellulose and Paper Industries, Glass manufacturers, Branch Chamber of Ferrous and Non-ferrous Industries, Bulgarian Chamber of Chemical Industry, Bulgarian Union of Ceramists (Order RD-186/06.04.2005). The working group is assisted by Bulgarian and Dutch consultants through the Programme PSO of the Dutch Government. The development of the NAP started on 5 January 2005.
In developing Bulgaria’s NAP the following resources have been used:
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Directives, Decisions and Guidelines, and comments of the European Union;
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Law on amending the Environmental Protection Act regarding the introduction of the Scheme;
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Approved and rejected NAPs of EU Member States;
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Results of discussing the introduction of the Scheme during seminars and workshops with representatives of firms, NGOs, ministries and agencies;
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Results from peer review of the EC on the implementation of the EU ETS in Bulgaria;
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Experience of countries whose NAPs were approved, including Netherlands, Great Britain, Ireland, Czech Republic and Poland.
In developing the format of this draft, the guidelines of the EC have been taken into account; therefore the NAP is presented in a tabular format and follows the guidelines to answer specific questions.
Each Member State submits its NAP to the European Commission for assessment and approval. The Commission involves the other Member States in the assessment of the respective NAP. The Commission may turn down the plan or some parts of it based on noncompliance with the criteria set in the Directive. This will result in introducing changes in the NAP. Bulgaria should submit the BNAP for the period 2007 in April 2006, and for the period 2008-2012 – in June 2006. After the European Commission approves Bulgaria’s NAP, the total quantity of allowances will be allocated to the individual installations by means of adoption of the NAP by the Council of Ministers. Each installation will receive its allowances through a National Greenhouse Gas Emission Allowance Trading Register.
The Government and the businesses face many challenges regarding the implementation of the Directive. Important decisions have to be taken before the submission of Bulgaria’s National Allocation Plan (NAP) to the EC in April 2006.
The MOEW publishes information for each stage of the development of the draft NAP on its web-page - www.moew.government.bg
The current paper represents the Government’s proposed draft NAP. It includes the methodology for allocation of allowances for the first and the second trading period of the Directive; macroeconomic forecasts for the two periods and allocation of allowances by sectors and installations for the First period only, as approved by the WG. The allocation of allowances for the Second period will be published and presented for comments in May 2006 at the web-page of the MOEW. All comments will be considered by the WG.
The publishing of the draft BNAP provides opportunities to all stakeholders to send their comments until 27 March, 2006, to e-mail: k.gocheva@moew.government.bg
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