Bulgaria to prepare a priority Social Climate Fund, from 2024 we will pay for emissions from buildings and transport

Raya Lecheva

Bulgaria's lag in the use of EU funds for the period 2014-2020 for the environment, climate adaptation, energy and transport connectivity has a major impact on citizens. Why and how Bulgaria fits into the new climate - lagging behind in the use of EU funds and lack of policies for citizens, it became clear at the event "Green Deal in the new climate".

Bulgaria uses 40% of EU funds for the environment or 680m euros.

On the other hand, 55% have been used so far for climate adaptation, or about 38m euros.

At the same time, only half or 54% is the absorption for energy and transport connectivity or 845 million euros. This is shown by the EU data on the absorption of the European Structural and Investment Funds.

Achieving the goals of the Green Deal, high electricity prices, the country's vulnerability to imports of energy raw materials and products. These are three problems that find common solutions. Bulgaria is not making optimal use of European mechanisms to prepare for climate challenges and to provide energy and transport infrastructure for the transition, said Dr. Maria Trifonova, a lecturer in the Department of Economics and Management at Sofia University. Delays in planning regional and national plans for green transformation and development significantly reduce the window of action and jeopardize the implementation of project proposals.

The new emissions trading scheme will have a direct effect on citizens

Decentralized solutions and the active participation of citizens remain underestimated, and they bring flexibility and solutions to energy poverty, she explained. And one of the most important changes is that the new design of the Emissions Trading Scheme will have a direct effect on citizens. The scheme will cover emissions from buildings and those in the transport sector

It is expected to start in 2025, but with recommendations for a test period and start a year earlier. According to the plans, the Social Climate Fund should be launched in 2024. According to Apostol Dyankov, Head of Climate and Energy at WWF Bulgaria, it should be prepared as a matter of priority by the Bulgarian government, because it will have a direct effect on end users as opposed to energy production and consumption, for which citizens still fall into the regulated market segment.

There is a risk of double burden for low-income people and those who heat with solid fuels

There is a risk of uneven distribution of the burden (double burden for citizens who heat with solid fuels and have low incomes, also more affected will be residents living outside the big city and no alternative transport, said Maria Trifonova. According to experts, the problem are the low levels of awareness of the population and business environment, as well as no training.

There will be more serious reporting and monitoring. Member States need to report regularly on the state of energy and transport poverty and how the measures included in their social climate plans are being implemented and contribute to tackling this challenge. Detailed instructions will be published before the entry into force of the instrument.

Consumer emissions will need to be reported. An adequate definition of energy and transport poverty is needed, and Bulgaria is just beginning to discuss such a definition.

Energy costs in Bulgaria represent more than 10% of the consumer basket, and 28% of the population is not adequately heated due to impossibility. The most vulnerable groups are most dependent on the use of coal with limited access to financial assistance to switch to an alternative. We need to set goals for climate neutrality and adapt national policy documents.

It is obligatory to put in the first place the preparation of the Social Climate Fund

That is why integration with the Social Climate Fund, which the countries must create, is mandatory. Proceeds from the new Emissions Trading Scheme will be used to finance the fund and co-finance measures planned by Member States in their social climate plans. Support for vulnerable groups, households and businesses, as well as people who cannot cover their transport costs, should be a priority. Two types of measures are needed - investment in alternative solutions to decarbonise these two sectors plus temporary aid for those most affected.

The commitment to climate neutrality is a condition for access to the funds for compensations from the Social Climate Fund, the specialists pointed out. It is doubtful whether the funds from the Fund will be enough to cover compensations and investment measures, Trifonova added.

Delay in the Renewable Energy Directive

Bulgaria has greater energy poverty, but we have great potential for energy efficiency in buildings, acceleration in energy renovation of buildings, deep renovation, experts say. That is why the European directive on renewable energy, which creates energy communities and cooperatives, must be implemented and adopted in our country as soon as possible. Informally, they still exist with homeowners' associations, but they need to be given clear rights so that people can be encouraged to find easy financing for investment in their own homes.

We need to expand our knowledge about the possibilities of solar heating and geothermal energy in thermal power plants, construction of heat pumps for individual buildings. Let's just remember that according to experts, 40-45% can be saved by electricity consumption in buildings. It is recommended to have photovoltaics on the roofs together with the renovation, to use solar heating, to build a storage battery, a heat pump, said Apostol Dyankov. In Greece alone, 409 cooperatives have been established a year after the adoption of the legislation on energy cooperatives. Depending on the way the legislation is implemented, this can happen in our country as well.

But it is important that all mechanisms work in sync and be used as efficiently as possible.

Criticisms of the Recovery Plan and territorial plans for the transition from coal to RES

The National Plan for Recovery and Sustainability was to be adopted by April 30, 2021, and now, after so many adjustments, it is expected to be finally approved by the EC on April 15, 2022. According to experts, it focuses on mega projects.

Makes a change in the assumptions for estimating investment costs. The problems are also related to short deadlines for project implementation and the implementation of the principle of competitive project implementation. It does not offer solutions for large industrial users, there is a limited range of projects

Territorial plans for a fair transition should have been ready by the end of 2021. But they are now awaiting approval of the National Recovery and Sustainability Plan. There are no ready-made project fiches, there is uncertainty about the date for the closure of the coal-fired power plants and the public's shared vision for the development of the coal regions of Stara Zagora, Kyustendil and Pernik.