At the beginning of autumn, a number of plants from the energy-intensive industry were surprised with notifications from the director of the Executive Agency for Environmental Protection. With a series of letters, the companies are presented with the fait accompli that, due to old obligations, they will not receive the free emission quotas they are entitled to, granted by the European Union. The letters date from September of this year. - immediately before the expiration of the legal deadline of September 30 for the transfer of emission allowances to the national register maintained by the Executive Agency for the Environment.
This was revealed by BNT.
What are the facts of the case?
It is the duty of every operator with a permit to emit greenhouse gases (cement plants, woodworking, ceramic, glass enterprises, etc.) to verify the amount of gases they have released into the atmosphere and to account for a certain number of quotas. For this purpose, the European Commission also grants free emission quotas to enterprises every year. In this way, it promotes their modernization and the reduction of the amount of greenhouse gases polluting the environment.
Bulgarian participants in this European emissions trading model are listed by name in a national table, valid for a 5-year period, prepared by the Minister of Environment and Water and sent to the European Commission. In the table, each operator is included with the number of free quotas due to him, which should be allocated to him. Based on this allocation, each enterprise predicts how many allowances it will need to purchase on the exchange market to supplement the required amount for transmission to the registry. Thus, the business predicts the costs and regulates its behavior when and from whom to buy the allowances in order to achieve optimal prices.
It is not by chance that predictability has been raised as a basic principle of regulating the administration's relations with citizens and organizations (Article 13 of the Administrative Procedure Code). And in this case, the change described above was taken at the last moment without being properly communicated and explained. Not even the websites of the competent authorities were used for this purpose.
What's going on?
The case arose when in September of this year, shortly before the deadline for the transfer of quotas to the national register, enterprises received letters informing them that due to old obligations (some dating back to 2012) they would be deprived of their free allowances. So far, these obligations have not been an obstacle to the distribution of quotas, and in many cases the enterprises are not even aware of their existence. Although a solid part of these debts have been repaid by statute of limitations, the state surprisingly decided to activate them and block the receipt of quotas.
Administrative inconsistency and lack of predictability violate basic principles of relations between business and administration. The letters that businesses receive are not accompanied by an opportunity to object or explain. This radical change in the rules takes place in a roundabout way – via “notifications“ – which makes it difficult to exercise their right to defence. It turns out that with these letters of half a page, the state takes away the free quotas allocated by the EU from the native enterprises, which are the backbone of our economy and the main source of revenue for the treasury. As a result, the Bulgarian industry is forced to buy quotas on the stock market at current prices, leading to huge financial losses. In addition, if the factories fail to provide the necessary quotas, they face fines of BGN 200 per ton of carbon dioxide. In other words, the financial penalty would amount to millions (in some cases tens).
The de facto problem again stems from the inaction of the state administration.
In the last 10 years, these old obligations have not been an obstacle to the allocation of quotas, but suddenly they turn into grounds for refusal. This creates a risk of legal disputes with the European Commission, as Bulgaria risks losing the free quotas not only for 2024, but also for the entire period until 2030. – while all other European businesses continue to receive them.
This situation represents a serious threat to the Bulgarian industry, left without support in the competitive environment of the European market. The actions of the Environmental Protection Executive Agency can lead to major and irreparable damage to both enterprises and the state budget, if it leads to the payment of substantial damages for illegal actions (from cases under the State Liability Act). The risk of suffering colossal damages from the companies is real – bankruptcies, layoffs, failure to realize significant investments and new jobs. In addition, once again distrust is created among business operators that the state is committed to creating stable and predictable conditions for business development in Bulgaria.
And the question arises – which imposes in “in the dark“ and in 12 without 5
for the state to consider obligations with a long-expired statute of limitations, given that their existence until now in the past years has never been an obstacle to the allocation of the described free quotas. One more question needs to be asked – is this how we will tie up the state budget in the weeks immediately before its public presentation. Did the Ministry of Internal Affairs and Communications and its dependent businesses turn out to be the last pillars for the implementation of the revenue part in the state treasury? And the last rhetorical question coming from itself – so that we don't have to burn a rug because of a flea? Which, according to an old Bulgarian custom, we have done many times.
Unfortunately, once again the doubt arises that the state, instead of a mother, is often a stepmother to its business. The one on whom depend not only the salaries of his employees, but also the pensions of our parents, social payments for our fellow citizens in a disadvantaged position, treatment in native hospitals and education in Bulgarian schools.
Author: Daniel Petrov/BNT