Changes to the Climate Change Act introduce a new model for the European Emissions Trading Scheme in Bulgaria. This change is regarding the increase in the linear coefficient to reduce the total quantity of allowances in the European Union.
The National Assembly approved the amendments to the bill proposed by the Council of Ministers at first reading without debate in plenary. They were adopted with 103 votes in favor, no against and 23 abstentions, reported Focus News Agency.
The bill introduces Modernization Fund, which receives revenues from 2% of the total quantity of allowances in the European Union and in which Bulgaria has a share of 5.84%.
Industrial consumers in Bulgaria, whose competitiveness is at risk due to the impact of the price for carbon emissions, could receive aid in the form of offsetting indirect CO2 costs. The option is foreseen in a European directive, which is now being introduced into Bulgarian legislation with changes to the Law on Climate Change. Compensation amounts may be calculated using a special methodology, providing for up to 25% of the revenues from the sale of allowances. Developing a compensation mechanism and designating an administrator for this aid are the next steps in the procedure.
EU reform affecting the emission trading scheme (ETS) is reviewing the rules for free CO2 emissions for European businesses. However, the sectors most at risk of relocating production outside the EU will benefit from complete provision of allowances free of charge. In total, they will be 30% of all emissions, but after 2026, the free quotas will be phased out. An exception will be the companies in the district heating sector.
The EU Emissions Trading Scheme sets the maximum amount of CO2 emissions that can be emitted by the industry and power plants. The total volume of allowances is apportioned to companies in the form of tradable permits. According to the changes, emission allowances will be reduced by up to 2.2% annually. The number of allowances allocated to the market stability reserve will be doubled temporarily until the end of 2023. A new mechanism will then be put in place to limit the period of validity of allowances in the reserve.
Source: Investor.bg