Bulgarian Business States Priorities Ahead of UN Climate Summit

Bulgarian businessmen have been discussing the difficulties and potential benefits to the country's industry, in the light of the forthcoming UN climate summit. Photo by BGNES

Bulgaria fully intends to hold on to its opportunity to deal with its accumulated surplus of emissions under the Kyoto Protocol.

"This should be a priority for our country at the [UN Climate Change] meeting in Copenhagen," explained deputy chairman of the Bulgarian Chamber of Commerce (BCC), Dimitar Brankov.

"Surpluses occur when part of the industry ceases to operate as a result of restructuring and privatization," he commented on Sunday.

At the meeting in Copenhagen, it is expected that the EU will propose a reduction in emissions of 30% by 2020, instead of the currently declared 20%. According to Bulgaria’s Eco-ministry, this commitment must be for at least a 25% reduction compared to the level in 1990.

In the Clean Development Mechanism (CDM), which is one of four ways for businesses to participate in emissions trading, countries without commitments under the Kyoto Protocol are included. One option for the country is its inclusion in the international trade of assigned amounts units.

"The potential of Bulgaria for such transactions would exceed USD 1 B," explained Brankov. "Through it they can obtain their missing quotas and make a profit."

Trading may commence only after the European Union approves the plan for Bulgaria's allocation of quotas. Brussels so far rejected it twice.

Businesses are concerned that investments in reducing emissions will increase their costs and increase the cost of production. According to the calculations of Neochim, the average increase for European businesses in the fertilizer industry would be around EUR 17-20 per ton of ammonia.

"The situation will be exacerbated by higher commodity prices and growing competition from producers in countries which do not abide by the carbon legislation, or join at a very early stage of its implementation," commented Neochim CEO, Dimitar Dimitrov.

Businesses expressed doubt that serious producers would with difficulty benefit from trading with carbon credits, and even if they were to profit from it, they would most probably focus on modernization of production and covering of costs when companies stop working, he stated.

According to the leadership of Neochim, savings on loans can be made only if they introduce technologies in advance to the requirements of the Kyoto Protocol and EU legislation, or if factories stopped work for certain periods.

The UN Climate Change Conference (COP15) will run from Monday December 7 to December 18. It will be attended by political leaders from all over the world. The US and China recently declared a new support for controlling emissions, a factor that boosted international hope for an agreement. There is some pessimism about the possibility of negotiating a full and binding treaty at Copenhagen.

According to UN Climate supreme Yvo de Boer, the four essentials calling for an international agreement in Copenhagen are:

1. How much are the industrialized countries willing to reduce their emissions of greenhouse gases?

2. How much are major developing countries such as China and India willing to do to limit the growth of their emissions?

3. How is the help needed by developing countries to engage in reducing their emissions and adapting to the impacts of climate change going to be financed?

4. How is that money going to be managed?

"If Copenhagen can deliver on those four points I’d be happy," says Yvo de Boer.

He sees a need to get something signed and agreed in Copenhagen, but he thinks it will be very difficult to get every final, small detail of a whole new treaty done. The new climate treaty will be replacing the Kyoto Protocol which was adopted in Kyoto, Japan, in December 1997 and entered into force on 16 February 2005.

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