Европейска схема

4. Technical aspects

4.1. Potential, including technological potential

4.1.1 Has criterion 3 been used to determine only the total quantity of allowances, or also the distribution of allowances between activities covered by the scheme? 4.1.2 Please describe the methodology (including major assumptions made) and any sources used to assess the potential of activities to reduce emissions. How is it ensured that the total quantity of allowances allocated is consistent with the potential? 4.1.3 Please explain the method or formula(e) used to determine the quantity of allowances to allocate at the total level and/or activity level taking the potential of activities to reduce emissions into account.

4.1.1 Criterion 3 requires that the quantity of allowances to be allocated should be consistent with technological and other potential of activities covered by the Directive to reduce their emissions. This criterion is mandatory in relation to the determination of the total national quantity of allowances and optional in relation to the determination of quantities across different activities or sectors.

Criterion 3 has been applied regarding the total quantity of allowances which Bulgaria will allocate in the National Allocation Plan. A specifics of the transition in Bulgaria during the last four or more years is the existence of unused production capacities (referred to as “sleeping installations” in the National Allocation Plan) which, once in operation, shall come under the scope of the GHG emission trading scheme. These installations have outdated equipment, and historical data does not exist for their emissions for the last several years, therefore, an assessment of their technological potential to reduce emissions in order to apply criterion 3 is not possible.

Data from the Second National Action Plan on Climate Change has been used for the application of Criterion 3. The emission reduction potential in 2010 is estimated to 4 mln. tonnes in the energy sector and 0.7 mln. tonnes in the industry.

Due to data constraints on the potential to reduce emissions from different sources, it was not possible to make an assessment of the technological potential of the various groups at sector level.

4.1.2. The approach of Bulgaria in relation to GHG emission levels is to limit, to the extent possible, industrial activities with high carbon intensity.

4.1.3 Because Criterion 3 shall be applied at national level only and not on sector level (see 4.1.1.) and in accordance with the requirements of the EC, the NAP provides for an equal effort of the two groups of emission sources (participants and non-participants), i.e. the equal right and obligation of those two groups to reduce emissions and preserve the ratio of their emissions.

4.1.4. If benchmarking was used as a basis for determining the intended allocation to individual installations, please explain the type of benchmark used, and the formula(e) used to arrive at the intended allocation in relation to the benchmark. What benchmark was chosen, and why is it considered to be the best estimate to incorporate achievable progress? Why is the output forecast used considered to be the most likely development? Please substantiate the answers.

Benchmarking has not been used to decide on the allowances at installation level. A methodology, intended to have a similar effect to benchmarking, has been applied to new entrants. New installations receive allowances based on the lowest emission factor for the type of activity during the basic period. For sleeping installations, the average emission factor is applied for the type of activity during the basic period. This way, new entrants are required to be at least such effective as the most effective existing installation. As for the sleeping installations, they should be more effective than the average effectiveness in the respective sector.

4.2. Early action

4.2.1 If early action has been taken into account in the allocation to individual installations, please describe in which manner it is accommodated. Please list and explain in some detail the measures that were accepted as early action and what the criteria for accepting them were. Please demonstrate that the investments/actions to be accommodated led to a reduction of covered emissions beyond what followed from any Community or national legislation in force at the time the action was taken. 4.2.2 If benchmarks are used, please describe on what basis the grouping of installations to which the benchmarks are applied was made and why the respective benchmarks were chosen. Please also indicate the output values applied and justify why they are considered appropriate.

4.2.1. According to Annex III to the Directive early action may be taken into account. The Commission’s guideline on this criterion states:

“Early action” is to be understood as actions undertaken by an operator of an installation covered by the Directive to reduce emissions before the National Allocation Plan is published and notified to the Commission. In line with criterion 4, only measures that operators undertake beyond requirements arising from Community legislation can qualify as early action. More stringent national legislation, applied to all covered installations or to an activity, will impact the potential to reduce emissions (criterion 3). Therefore, early action is limited to reductions of covered emissions beyond reductions made pursuant to Community or national legislation, or to actions undertaken in the absence of any such legislation.

The guidelines also state that early action, if used, should be applied to determine the quantity of allowances to be allocated to individual installations.

There are two issues to be considered here: first, identifying clear cases of early action, and second, devising a mechanism within the NAP to reward this early action.

In relation to the first of these issues, it is clear from the guidelines of the Commission that the allocation of allowances for early action depends on the motivation behind the emission reduction action. Any action undertaken for involuntary reasons, such as compliance with legislation, is excluded. When a reduction has been achieved accruing a net economic benefit, which would arise even in the absence of future carbon constraints, there would appear to be little justification for rewarding early action.

It should be mentioned that, because of the process of accession of Bulgaria to the ЕU and the foreseeable future measures to reduce greenhouse gas emissions, the objective application of those two criteria to identify early action is difficult.

Instead, the methodology used in the NAP provides for the use of an average sum from a two-year historical period with highest emissions during the period 2000-2004. This approach gives a market regulated bonus to installations which have invested in emission reduction as a form of early action during this period, without need of any additional administrative action. To some extent, this historical approach rewards also the co-generation.

4.2.2. Benchmarking has not been used.