Bulgaria's road to Accession
5 Sectoral Integration Issues and their Relevance to EU Accession
| 5.1 | Energy |
| 5.2 | Industry |
| 5.3 | Agriculture |
| 5.4 | Transport |
The integration of environmental considerations into other policy areas, especially
economically important sectors such as energy, industry and agriculture, is a legal
obligation under the Treaty of Amsterdam (Article 6). The obligation stems from the
recognition of the inadequacy of environmental policy for tackling the underlying causes
of environmental deterioration.
Like most other Member States and Candidate Countries, Bulgaria still has much to do to take environmental concerns into account in developing policies in the energy, transport and agricultural sectors. Though the National Strategy for the Environment and Action Plan 2000-2006 addresses sectoral integration issues, it is a challenge of a different order to get decision-makers in other sectors to take environmental aspects into account in their policies and programmes. The 2002 Regular Report notes that some progress has been made in areas such as agriculture and transport, but generally the use of sustainable development approaches remains limited in other areas of economic interest.
5.1 Energy
The European Union is the largest importer and the second largest consumer of energy in the world. Thus energy is a key focus in the pre-accession preparations of the candidate countries. The EU’s energy policies recognise the importance of a competitive and sustainable energy market. Priorities for integration of environmental considerations into this sector are therefore the improvement of energy efficiency, promotion of the use of renewable energy, and internalisation of environmental and other external costs. DANCEE has supported the introduction of biomass-fuelled district heating schemes as a demonstration project.
Bulgaria is also dependent on imports for its energy supplies. With virtually no supplies of oil and only small reserves of gas, Bulgaria has had to pay for energy in hard currency at world market prices, resulting in less reliable supplies. Bulgaria has historically followed a very energy-intensive development policy. The emphasis during the socialist period was on development of heavy industries with the energy for these industries largely imported at favourable prices from the former Soviet Union.
Today, energy use in support of the Bulgarian GDP is still significantly higher than for a comparable market economy. Energy intensity measured in terms of tonnes of oil equivalent (t.o.e.) per USD 1000 was 1.57 for Bulgaria in 1999, compared to 0.74 for Czech Republic, 0.49 for Hungary, and 0.15 for the European Union as a whole. The consumption of electricity by a Bulgarian household is three times higher than that of a household in Romania, Slovakia and Lithuania.
The March 2002 Energy Strategy of Bulgaria notes the importance of reversing Bulgaria’s overly high consumption of energy. It proposes to eliminate all subsidies currently paid by taxpayers to energy production by 2004, and to introduce differential pricing aimed at full cost pricing for those who can afford it but with special pricing packages for low-income households. This rollback of subsidies is likely to have a significant effect on reducing wasteful use of energy, along with the proposal to encourage introduction of energy metering at household level. But the energy strategy incorporates other environmental aspects only in a limited and inconsistent way, indicating that Bulgaria still has much to do to integrate environmental considerations into its plans for this sector.
The Energy Efficiency Agency under the Ministry of Energy and Energy Resources is working on an Energy Efficiency Strategy for Bulgaria, which is scheduled for release in 2003. A new Energy Efficiency Law is also planned to set in place a package of energy conservation measures, including financial mechanisms. Of these, a proposed National Energy Efficiency Fund deserves special management. The current plan is for this proposed fund to be used to guarantee loans for investments, and to be replenished partly by fees imposed on generators using fossil fuels.
Another major environmental concern with respect to energy is nuclear safely. Bulgaria has been a focus of EU attention in this respect because of its nuclear power facility, Kozloduy, located 200 km to the north of Sofia on the Danube River. Four of Kozloduy’s six reactors were commissioned in the 1970s and early 1980s, and are considered to have inherently unsafe designs. Concern about the facility’s safety record has led to calls for complete closure.
The country currently depends on nuclear power for 44 - 46 per cent of the total average annual generation of electricity, as well as on the export earnings it currently receives from the sale of some 15 per cent of electricity generated. In an understanding signed with the European Commission in November 1999, the Bulgarian Government agreed to early closure of Kozloduy’s units 1 – 4. The deadline for closure of units 1 and 2 is the end of 2002. Towards that end, a special project management unit has been established in the Kozloduy nuclear power plant (NPP) for the purpose of overseeing the process of closing units 1 and 2, and then decommissioning them. The government is thus preparing to shut down the two reactors, though it has reportedly expressed a wish to wait until the end of the 2002-03 winter season before final closure so that proper fuel cycle management will ensure the avoidance of extra costs related to unused fuel. In 1999 the Bulgarian government also made a commitment to close units 3 and 4 by 2006, but there are still discussions about waiting until the end of the reactors’ design life before closure, i.e., 2008 for unit 3 and 2010 for unit 4. The EU summit in Copenhagen reiterated the commitment to close Kozloduy reactor 1 – 4 and indicated that substantial financial assistance has already been granted for that purpose.
Bulgaria views its exports of energy as important for its economic future, and its nuclear power facility is part of its generation capacity. In recent years it has invested millions of Euro of donor and own funds in safety modifications. The modifications to units 3 and 4 were recently reviewed by an expert group from the International Atomic Energy Agency (IAEA) and declared safe. In support of continued operation, the government cites a marked improvement in safety at Kozloduy due to training, the new investment, and an increase in employee morale.
The EU considers the closure commitments made in 1999 to be non-negotiable. The closure of the four older reactors would reduce the overall proportion of Bulgaria’s nuclear-generated power by half, but would not eliminate Bulgaria’s capacity to export electricity, particularly if Bulgaria reduces its internal needs for electricity through energy efficiency measures.
A special Peer Review on nuclear safety carried out under the auspices of the European Council led to a June 2002 Status Report which concluded that Bulgaria had accepted all recommendations contained in a June 2001 Report on Nuclear Safety in the Context of Enlargement. It recommended that the new Law on the Safe Use of Nuclear Energy would be implemented as soon as possible and that special attention be given to the funding of a radioactive waste storage programme. It reaffirmed the importance of Bulgaria’s commitment to close Units 1 – 4 of the Kozloduy NPP at the earliest possible date.
In June 2002 Bulgaria adopted the law on the Safe Use of Nuclear Energy, which transforms the Committee for the Use of Atomic Energy for Peaceful Purposes (CUAEPP) into a Nuclear Regulatory Agency. This step is expected to improve Bulgaria’s nuclear regulatory capacity. The NRA is to have its own budget supported via an annual contribution from the State budget and also from the licensing of nuclear energy activities. In order for the law to have full effect in the coming years, 22 related regulations still need to be developed and implemented. A May 2002 decree provides for an increase of staff from 80 to 102 people. However, salaries of Bulgarian officials are low, and it is difficult to find and retain competent officials for the NRA at the current levels of compensation.
The EU has agreed to assist Bulgaria, both technically and financially, in the early closure of units 1 - 4. Additional Phare funding of 200 MEUR has been committed over the period 2000-2006 for the Kozloduy International Decommissioning Support Fund, managed by the EBRD. The EU has also granted an Euratom loan for the modernisation and safety upgrading of units 5 and 6, which may come to at least 540.0 MEUR. However, the EU has made further assistance to the later nuclear plants, including the Euratom loan, conditional upon the closure of the older units. The EU has also granted support for projects designed to support efficiency measures in the energy sector in Bulgaria, including the rehabilitation of the Sofia District Heating network - a project in which other international institutions also participate.
The Bulgarian Government is asking for additional funds from the EU and other donors (The Danish Ministry of Environment has contributed 1.5 MEUR) to cover closure and decommissioning costs, in addition to the 135 MEUR set aside from national funds. The European Commission cites the availability of cost-effective methods of nuclear power plant decommissioning, e.g. a method known as "safe enclosure". This consists of postponing the "Regulatory Control" from NRA, reaching a "safe storage configuration", waiting 5 years to unload the core, and then waiting for another 30/40 years before further steps to dismantle the contaminated part of the plant. However, there is not much experience to date in Europe or elsewhere from which to draw best practices or reliable information on costs related to NPP decommissioning.
Major Challenges
Major challenges for Bulgaria’s energy sector include, therefore, building the institutional capacity of the Nuclear Regulatory Agency inter alia by increasing its funding, including for officials’ salaries, perhaps through self-financing mechanisms, so that it can serve as a strong independent regulatory agency.
Another challenge will be how to meet the commitments made in 1999 to close units 1 and 2 by the end of 2002, and units 3 and 4 by 2006, and to carry out cost-effective decommissioning after the closures take place.
Finally, there is still much to do to integrate environmental considerations into Bulgaria’s energy sector. The development of a separate Energy Efficiency Strategy for Bulgaria is an important step, but in addition, energy efficiency goals and concrete measures for achieving the targets should become an explicit part of the National Energy Strategy.
5.2 IndustryIn order to cope with market forces within the EU upon accession, the CEE Candidate Countries all need to put in place policies to enable their industries to achieve a certain level of competitiveness by the time of accession. At the same time, CEE industries must take the measures necessary to comply with the EU standards regarding environmental protection.
Bulgaria’s transition to a market economy has taken its toll on many Bulgarian
industries, but this has been to the benefit of the environment. Overall pollution from
industries has been reduced since 1989 as a result of the: Restructuring of the national economy, with a concomitant
decrease in industry’s share in the structure of the economy; Decrease in the share of industries that pollute the environment in the
total volume of industrial production; Measures undertaken to improve the environment (replacement of
technologies, introduction of treatment installations). The decline in industrial output has played the largest role in reducing pollution
levels, but the procedure to carry out environmental assessment of enterprises introduced
into Bulgaria’s privatisation process has also contributed to this pollution
reduction trend. On the basis of these pre-privatisation environmental assessments, carried out since
1995, the MOEW has required new private owners to take specific measures to achieve
compliance with Bulgaria’s environmental standards, as a condition for continuing
their operations. The MOEW then co-ordinates with Bulgaria’s privatisation agency to
draft programmes for bringing ongoing enterprise operations into compliance with national
environmental standards into the privatisation contract. The state takes over
responsibility for financing actions to clean up past environmental damages. Today the privatisation process is almost complete for large enterprises in most
industrial sectors. Despite this progress, pollution from industry remains unacceptably
high in some areas. While some branches of heavy industry have succeeded in achieving
renewed viability, delays in privatisation of other branches have slowed industrial
restructuring. Some problems remain with post-privatisation control (e.g. non-compliance
with contractual obligations by new owners) and the viability of several
management-buy-out companies. Good housekeeping and low-cost investments are widely regarded as the most practical
and cost-effective means of reducing industrial pollution levels, considering the severe
financial problems that many Bulgarian enterprises face. The Clean Industry Centre at the
Bulgarian Industrial Association is an important source of information and technical
support for Bulgarian industries wishing to learn more about how to reduce the impact of
their activities on the environment. Pilot programmes supported especially by bilateral
donors such as USAID and The Danish Ministry of Environment have demonstrated the
effectiveness of, and potential economic returns from, a cleaner production approach.
Bulgaria’s efforts to set in place the framework for the EU’s voluntary
environmental management and audit scheme (EMAS) should also support this trend. Major Challenges As in many Western European countries, industrial policies largely ignore environmental
considerations, and there is much that remains to be done to integrate environmental
concerns into Bulgaria’s industrial restructuring. Major challenges ahead for
Bulgaria if it is to succeed in achieving integration of environmental considerations into
its industrial activities include: The agricultural sector is important for the Bulgarian economy accounting for 13.8
per cent of the GNP in 2000. The sector is even more vital when measured against
employment as agriculture accounts for 26.7 per cent of total employment.10 However some aspects of ‘hidden
unemployment’ should be taken into account when comparing the weight against other
sectors. The latest EU Regular Report (2002) concludes; " Bulgaria has made considerable
progress in adopting the legislation and steady efforts to organise its administrative
structures (…) Substantial efforts will be necessary to develop the administrative,
inspection and control mechanisms". The process of restitution of ownership of agricultural land has been completed, while
about 90 per cent of woodlands and forests have been restituted. The preparation of a
national cadastre and property register is in progress. Cadastral maps have been prepared
for 90 per cent of the territory in connection with restoration of private ownership.
However the property register does not yet provide the necessary legal certainty. The government has prepared a draft national strategy for development of the
agricultural sector and rural development. The overall aim is to achieve a level of
production and development that will facilitate integration into the European Union. Three
priorities relate to preparation for the common market: i) efficient management of land
and forest resources and development of market structures, ii) enhancement of the
competitiveness of the farming and processing sector and creating conditions for export
oriented agriculture and iii) preparation for meeting the general conditions for receiving
EU subsidies as laid down in the Common Agricultural Policy. In addition, two main
priorities relate to the integration of social and environmental protection interests into
the agricultural policy. These are: i) sustainable development of rural areas and
improvement of the living conditions for employees in agriculture and forestry and ii)
environment-friendly sustainable management of forest and hunting resources and protected
wilderness tracts. A law has been adopted on organic farming aiming at implementing the acquis on
production, marketing, labelling, inspection and import of organic products. A Commission
on Organic Farming has been put in place and a department on agro-environment is formed in
MOAF with four persons. While the de facto area of land farmed under organic principles at
present is substantial, the land certified as organic farming is very small, probably only
amounting to 500 hectare. MOAF is partly accredited to operate the SAPAARD programme according to the principles
of extended decentralisation implementation system (EDIS), and a full accreditation is
expected within a year. At that time the ministry will be authorised to manage the
environmental component. As discussed later in the report the SAPARD allocation to
specific agro-environment purposes is quite small. All farms applying for SAPARD support will in future have to adhere to the codes of
good agricultural practices including restricted distribution of fertiliser etc. Also the
programme may allow for providing additional support to farms located in vulnerable zones
or territories of special environmental interests. Co-ordination has already been
established with MOEW. Such initiative may be of particular importance when management
plans for Special Areas of Conservation under the law on biodiversity are to be developed.
With regards to forestry, MOAF and the Ministry of the Interior have just signed a
memorandum laying down the principles of the most urgent measures for forest fire
prevention. During the recent years severe forest fires have hit Bulgaria and the
memorandum is a step in the direction of preparing for better prevention and protection
against forest fires. Animal waste is a particular problem where significant further efforts are needed.
Systems for collection of animal waste need to be expanded to cover the whole territory.
The waste management system should be modernised by separating collection for the
processing of risk materials, and there is a severe shortage in processing plants. Further Challenges The engagement of MOAF in setting up the regulation for environment- friendly farming
and forestry practices is at a high level compared to agricultural ministries of many
other accession countries. By establishing a dedicated unit for agro-environment and by
being able to implement decentralised management of the SAPARD programme the ministry
holds most of the instruments for implementing cross cutting environmental concerns. The
ministry has also benefited form substantial international assistance. A general challenge lays in implementing environment-friendly farming and forestry
practices by setting up demonstration projects and training the extension officers
situated in the extensive network across the country. More significant the farming practices for ecological vulnerable zones need to be
strengthened and this should be co-ordinated with the efforts to register and protect
special areas for conservation under the biodiversity act. Imposing legal binding
restriction of land use for such zones in combination with compensation schemes and
development of management plans are likely to form main instruments. The transport sector is a main contributor to air pollution and road construction
may conflict with the conservation of nature values. The implementation of EU fuel quality
and car emission standards are expected to achieve a significant reduction of the
pollution load from the transport sector. In the short run though the pollution pressure
is likely to increase as more second-hand cars are imported to the country. The public
transport systems, which have been quite well developed, are showing signs of
deterioration. The tram systems in the bigger towns lack modernisation and the
restructuring of the railway company BDZ is progressing at a slow level. However, the conclusions of the last EU regular report says: " Bulgaria has made
steady overall progress, in particular in the fields of road and railway transport…
Bulgaria has also gradually started to reinforce its administrative structures". The main efforts are presently concentrated in developing the transnational road and
railway network. An ambitious Euro 4.2 billion programme has been drafted for the period
2003 – 2005. The ISPA programme is planned to be a main contributor providing half
its allocation to the transport sector. The priority projects are linked to the EU
programme on developing a Trans-European Transport Network where the national
transportation network is connected and transactional transportation corridors are
strengthened. All transport infrastructure projects are already subject to Environmental Impact
Assessments. These are not expected to cause problems, as most projects would be based on
existing traces. However, practical experience indicates that environmental impacts can be
significant and that the current practices of incorporating environmental impact
assessment in technical feasibility studies need to be upgraded. The EU regular report
concludes: "More attention should be given to ensuring that feasibility studies for
construction work comply with EU environmental rules, notably the preparation of sound and
complete Environmental Impact Assessments, a necessary condition for any Community funding
for a construction project". Further Challenges While the air emissions are dealt with in a comprehensive manner by the air quality
directives, there is a need for preparing overall transport development plans that promote
resource efficient mechanisms through strengthening of public transport. There is also a need to integrate more effectively the strategic environmental impact
assessments in the plans for the transport sector. Further efforts are needed for applying
environmental impact assessment to concrete infrastructure development projects.
5.3 Agriculture
Development of
programmes in "hot spot" areas involving enterprises, local government and the
public aimed at improving local environmental conditions.
Ensuring
sufficient support for promoting good housekeeping in industrial management, including
environmental audits to identify low-cost solutions for environmental improvement;
Training to
improve capacity on the part of both government and enterprises for environmental auditing
and environmental management;
Improved
co-ordination between the MOEW and the relevant ministries involved in industrial policy
formation, including those governing privatisation and economic development programmes, to
promote "win-win" strategies such as cleaner production.
10
Eurostat figures