Issue No. 5 /31.01.2024
BEFORE
AKAD. NIKOLAI DENKOV
PRIME MINISTER
OF THE REPUBLIC OF BULGARIA
COPY TO:
MRS MARIA GABRIEL
DEPUTY MINISTER-PRESIDENT
OF THE REPUBLIC OF BULGARIA
MRS MILENA STOYCHEVA
MINISTER OF INNOVATION AND GROWTH
OF THE REPUBLIC OF BULGARIA
MR BOGDAN BOGDANOV
MINISTER OF ECONOMY AND INDUSTRY
OF THE REPUBLIC OF BULGARIA
ABOUT: Regarding restrictive conditions for access to funds from the economic transformation program to the National Recovery and Resilience Plan (NRSP)
DEAR MINISTER-PRESIDENT,
With this letter, we would like to draw attention to the presence of restrictive conditions for access to funds from the economic transformation program to the National Recovery and Resilience Plan (NRSP). Enterprises covered by the European Emissions Trading System (ETS) do not have access to the funds (Growth and Innovation Fund and Green Transition and Circular Economy Fund) from the Economic Transformation Program. According to Application Annex P8, the funds are available to SMEs, and there is the condition: "none of the funds of the program shall support: installations included in the greenhouse gas emission allowance trading register".
In this way, important sectors of the processing industry (chemistry, metallurgy, cement, glass, etc.) are deprived of the opportunity to apply for financing. These are the sectors that most need support for the implementation of the decarbonization goals, while at the same time they are the basis for the implementation of the Green Deal, the circular economy and the increase in the efficiency of the use of raw materials and energy.
The stated reasons for including this limitation are in the application of the principle of do no significant harm. This principle, however, is only applied to assess the eligibility of specific project proposals to be funded, and does not serve as a pre-established barrier to entire industries.
These unjustified restrictions create a disparity for these key industries by subjecting them to ever more stringent requirements related to environmental protection, without providing them with access to the means necessary to meet these requirements.
After inquiries with European industry associations made as early as 2021, data was obtained that similar restrictions are not foreseen in the recovery and sustainability plans of the other member countries. Moreover, when checking the provisions of Regulation (EU) 2021/241 on the establishment of a Recovery and Resilience Mechanism, the EC Guidelines for the development of NAPs (SWD(2021) 12 final) and the specific recommendations to Bulgaria from 2020 (COM (2020) 502 final), no such restrictive requirements were found. All documents encourage the acceleration of decarbonisation, in order to meet the high climate targets of the European Union.
This topic has been repeatedly put before all governments and line ministries since 2021 by various industry and employer organizations, including the AOBR. In the past year alone, the issue has been raised many times in writing and within the framework of various meetings before the ministries of energy, economy and industry and innovation and growth. The last time this topic was brought to the attention of the executive power was on 20.12.2023 with a letter from the Bulgarian Federation of Industrial Energy Consumers to the Minister of Innovation and Growth.
To our great regret, a solution to this problem has not yet been found. Enterprises covered by the European Emissions Trading System are the industries that should make the biggest commitments in the decarbonization of the industry. As many of the technologies required for decarbonisation are not yet commercially mature, denying businesses access to finance will both make it harder to achieve carbon neutrality and have a negative impact on competitiveness.
At the same time, these industries are structurally determining for the country's economy, they have a significant contribution to the formation of the gross added value, exports, employment, the development of the circular economy and recycling. In the conditions of declining industrial production in our country and with our main trading partners, it is extremely important that the industry has equal access to European funding. The calendar-adjusted index of industrial production in the country for November 2023 marked a decrease of 10,9% compared to November 2022, with the index having negative values since the beginning of 2023. The decrease in the extractive industry compared to November 2022 was 12,3 %, and in the processing - 7,9%.
The removal of restrictions on access to financing of the industry from the NPVU will equalize the conditions in our country with those in the other EU member states and will support the transition to a carbon-neutral economy.
Therefore, we demand the immediate removal of the aforementioned restrictive conditions, expressing our willingness to engage in talks with the government to find a solution to this long-standing problem.
With respect:
Kiril Domuschiev
Chairman of the Board of KRIB
and 2024 AOBR rotating chair,
by order of AIKB, BSK, BTPP and KRIB
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