BULGARIAN STATE TO AUCTION GREENHOUSE QUOTAS WORTH € 3.5 BN

ulgaria will receive about €3.5 bn from the sale of greenhouse quotas which the power plants will have to purchase at organised auctions, announced yesterday Ivanka Dilovska, Chairwoman of the Governing Board of the Energy Management Institute. Yesterday, the Bulgarian Industrial Association (BIA) also held discussions on this topic. Currently, there is no clarity for what the funds earned from the tender will be spent. According to BIA's Vice Chair Dimitar Brankov, the projects for which these funds will be allocated must compensate for the hike in the electricity prices and should be aimed at limiting the harmful emissions.

According to Dilovska, the electricity price is unlikely to increase many-fold, while the growth will be around 20%. Other experts commented that the rise may be higher if the companies have failed to announce the actual details on their harmful emissions. The other companies involved into the EU Emissions Trading Scheme (ETS) will be allocated free greenhouse gas allowances, which will be gradually reduced. Once the free quotas are apportioned, the state will auction the rest ones to TPPs (Thermo-electric Power Plant) and external companies. Ultimately, the revenue will be infused into the budget.

In 2013, they will receive 80% of the allowances, calculated under the new schemes, free of charge. Afterwards, the amount of free quotas will begin to decline and in 2020 it will reach 30%. In 2027, the free allocation of allowances for them will be over. After this date, all companies will have to purchase their quotas and will bid in the auctions. Their allocation will comply to the same general rules valid across the EU, specified the Ministry of Environment and Water.

As of 2013, TPPs have to pay for their harmful emissions and will have to purchase the insufficient allowances at auctions. Our country has the opportunity to request a postponement (derogation), but the decision is not yet clear. Even if Bulgaria requests a delay, the companies must invest the same amount of funds that they would spend on the purchase of investment quotas. Therefore, most likely the state will abandon its claim for postponement period for the TPPs, said Ivanka Dilovska.

By the end of July, all companies have to declare their emissions for the period January 2005 - December 2008 or January 2009 - December 2010 according to the new methods.

The decision of the EC (European Commission) has been deferred four months, which will also lead to a delay of the information, which all EU member states have to provide. By mid-July, all companies have to submit data on their emissions, while the state should mail it to the EC until September. Most probably, Bulgaria will send the information a month or two later, announced earlier for Klassa daily Head of the Climate Change Policy Directorate with the Environment Ministry Milya Dimitrova.