Isra-Mart srl: UN Confirms All-Out Ban on Bulgaria’s Carbon Emissions Trade

Isra-Mart S.R.L.

The United Nations Compliance Committee of the Kyoto Protocol has confirmed a previously expected measure effectively prohibiting Bulgaria from trading with greenhouse gas emission quotas.

Thus, the Kyoto Protocol Committee has upheld its preliminary conclusion from May 12, 2010, about revoking Bulgaria’s accreditation for participating in the Protocol mechanisms including the trade with carbon emission quotas.

The decision is based on a UN report from 2009 under the Framework Convention on Climate Change has exposed “devastating” flaws, in the words of Bulgarian Environment Minister Nona Karadzhova, of Bulgaria’s National System for Evaluation of the Greenhouse Gas Emissions.

The initial report was drafted in April 2009, whereas its findings were confirmed in a subsequent inspection in Bulgaria by the Compliance Committee in September 2009, which also registered the fact that the recommendations made in the report were not followed up by the Bulgarian authorities.

The sitting of the Compliance Committee of the Kyoto Protocol in Bonn, Germany, on June 28, however, has led to mitigating the conditions of the ban in favor of Bulgaria, granting the country a more favorable and faster procedure for restoring its accreditation under the Protocol mechanisms.

Thus, Bulgaria is entitled to provide improved information about its National System for Evaluation of the Greenhouse Gas Emissions, and to request a new inspection on part of the UN at a time that would be convenient for its better performance.

The Compliance Committee is said to have taken into account the fact that the Bulgarian government has expressed readiness and commitment to tackle the existing issues, and the evidence for that are certain measures that it has already started to implement.

According to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC), the respective expert group is going to visit Bulgaria in September-October, and the results from the mission are expected in November 2010.

If this scenario works out with the proper measures on part of the Bulgarian government, Bulgaria’s accreditation for carbon emissions trade could be restored before the end of the year.

The news about the UN banning Bulgaria from trading in carbon quotas was first broken to the public by current Environment Minister Nona Karadzhova after the preliminary decision on May 12. She blamed the problems on the inactivity on part of her predecessor, Dzhevdet Chakarov.

Bulgaria’s government of the GERB party had been aware of the possibility that the country’s accreditation for carbon trading might be revoked when it first received the “devastating” report in September 2009. It has notified the major businesses but the Environment Ministry decided not to make it public until the spring of the following year hoping to be able to fix the issues in the meantime, admitted Minister Karadzhova.

“Even thought the UN has recognized a great improvement of the work of Bulgaria’s new greenhouse emissions system, the decision for revoking the country’s accreditation is based on the report from September, and there is no way it can be avoided,” she said while expressing her hopes that the accreditation could be restored in the fall.

The announcement of the Environment Ministry that Bulgarian will not be able to benefit from carbon trade came a couple of weeks after the European Commission approved the long-delayed and troubled carbon dioxide plan of the country, paving the way for 132 Bulgarian industrial plants to raise cash by selling their quotas.

The Bulgarian government will also be unable to trade with its own quotas, said the Minister. The state has about 200 million tones of carbon emissions, and it was hoping to sell BGN 40 million of those by the end of the year to raise badly needed cash that it planned to put into green and energy efficiency investments.

In the spring of 2010, the sale of carbon quotas was envisaged in a plan of the Bulgarian government to reduce the budget deficit by raising additional revenue. The carbon trade was supposed to bring more than BGN 200 M.