NATIONAL ALLOCATION PLAN FOR PARTICIPATION OF BULGARIA IN THE EUROPEAN COMMUNITY SCHEME FOR GREENHOUSE GAS EMISSION ALLOWANCE TRADING For the period 2008 - 2012 Sofia, 2007. TABLE OF CONTENTS: DEFINITION...................................................................................ERROR! BOOKMARK NOT DEFINED. ABBREVIATIONS .........................................................................ERROR! BOOKMARK NOT DEFINED. INTRODUCTION...........................................................................ERROR! BOOKMARK NOT DEFINED. CATEGORIES OF ACTIVITIES COVERED BY THE DIRECTIVE. CRITERIA FOR NATIONAL ALLOCATION PLANS...................................................................................................................................9 CATEGORIES OF ACTIVITIES REFERRED TO IN ARTICLE 2(1), 3, 4, 14 (1), 28 AND 30 OF THE DIRECTIVE ..................................................................................................................... ERROR! BOOKMARK NOT DEFINED. CRITERIA FOR NATIONAL ALLOCATION PLANS REFERRED TO IN ARTICLES 9, 22 AND 30 OF THE DIRECTIVE 2003/87/ЕС ............................................................................. ERROR! BOOKMARK NOT DEFINED. SUMMARY OF MAIN ALLOCATION PRINCIPLES.............ERROR! BOOKMARK NOT DEFINED. 1. TOTAL QUANTITY OF ALLOWANCES FOR ALLOCATION .......................................................12 1.1 BULGARIA’S COMMITMENTS UNDER THE KYOTO PROTOCOL......... ERROR! BOOKMARK NOT DEFINED. FEASIBILITY OF BULGARIA’S KP COMMITMENT. CALCULATION OF TOTAL EMISSIONS................ERROR! BOOKMARK NOT DEFINED. 1.2 PRINCIPLES, ASSUMPTIONS AND DATA TO ESTIMATE THE CONTRIBUTION OF SECTORS COVERED BY THE DIRECTIVE........................................................................................... ERROR! BOOKMARK NOT DEFINED. TOTAL QUANTITY OF ALLOWANCES FOR ALLOCATION ........................ ERROR! BOOKMARK NOT DEFINED. 1.3 TOTAL QUANTITY OF ALLOWANCES FOR ALLOCATION................... ERROR! BOOKMARK NOT DEFINED. MACROECONOMIC PROJECTION OF GHG EMISSIONS FOR THE 2005–2012 PERIOD BASED ON “BUSINESS AS USUAL” .................................................................................................. ERROR! BOOKMARK NOT DEFINED. ADJUSTMENTS OF THE “BUSINESS AS USUAL” MACROECONOMIC PROJECTION FOR COMPULSORY MEASURES RESULTING IN EMISSION INCREASES AND FOR JI PROJECT CREDITS ....... ERROR! BOOKMARK NOT DEFINED. 1.4. EMISSION REDUCTION MEASURES OUTSIDE THE SCHEME. ENERGY POLICY ERROR! BOOKMARK NOT DEFINED. ENERGY .................................................................................................... ERROR! BOOKMARK NOT DEFINED. MANUFACTURING AND CONSTRUCTION .................................................. ERROR! BOOKMARK NOT DEFINED. HOUSEHOLDS AND SERVICES ................................................................... ERROR! BOOKMARK NOT DEFINED. TRANSPORT .............................................................................................. ERROR! BOOKMARK NOT DEFINED. PROTOCOL OF KYOTO MECHANISMS ....................................................... ERROR! BOOKMARK NOT DEFINED. 1.5 NATIONAL ENERGY POLICY................................................................ ERROR! BOOKMARK NOT DEFINED. 1.6 ENSURING COMPLIANCE WITH THE CRITERIA UNDER ANNEX III OF THE DIRECTIVE ..............ERROR! BOOKMARK NOT DEFINED. 1.7. – 1.9 ACCOUNT TAKEN OF EMISSIONS REDUCTION POTENTIAL AND OF EU LEGISLATION. WAIVER OF ALLOCATION BY AUCTION. .................................................................. ERROR! BOOKMARK NOT DEFINED. 2. ALLOWANCES FOR ALLOCATION AT SECTOR LEVEL.................ERROR! BOOKMARK NOT DEFINED. ALLOCATION OF ALLOWANCES BY SECTOR ............................................ ERROR! BOOKMARK NOT DEFINED. Interministerial working group for elaboration of National Allocation Plan for participation of Bulgari a in the EU ETS in compliance with the 1 regulations of Directive 2003/87/EC. BOTTOM-UP EMISSION PROJECTIONS OF REGISTERED PARTICIPATING INSTALLATIONS BY SECTOR .. ..................................................................................................................... ERROR! BOOKMARK NOT DEFINED. RECONCILIATION OF EMISSION ALLOWANCE QUANTITIES BY SECTORERROR! BOOKMARK NOT DEFINED. 3. ALLOWANCES FOR ALLOCATION AT INSTALLATION LEVEL...ERROR! BOOKMARK NOT DEFINED. 4. TECHNICAL ASPECTS............................................................ERROR! BOOKMARK NOT DEFINED. 4.1. POTENTIAL, INCLUDING THE TECHNOLOGICAL POTENTIAL .......... ERROR! BOOKMARK NOT DEFINED. 4.2. EARLY ACTION.................................................................................... ERROR! BOOKMARK NOT DEFINED. 4.3. CLEAN TECHNOLOGIES (IF APPLICABLE).......................................... ERROR! BOOKMARK NOT DEFINED. 5. COMMUNITY LEGISLATIVE AND POLICY INSTRUMENTS...........ERROR! BOOKMARK NOT DEFINED. 5.1. COMPETITION POLICY........................................................................ ERROR! BOOKMARK NOT DEFINED. 5.2 INTERNAL MARKET POLICY (ARTICLE 43 OF THE TREATY)............ ERROR! BOOKMARK NOT DEFINED. TRANSFER OF ALLOWANCES BETWEEN OPERATORS ............................... ERROR! BOOKMARK NOT DEFINED. DECOMMISSIONING OF INSTALLATIONS................................................... ERROR! BOOKMARK NOT DEFINED. V LATE INSTALLATIONS RESERVE ( res2003 ) ........................................... ERROR! BOOKMARK NOT DEFINED. V j PLANNING RESERVE FOR COMPULSORY MEASURES ( RP )................ ERROR! BOOKMARK NOT DEFINED. NEW ENTRANTS RESERVE (OTHER THAN COGENERATORS)..................... ERROR! BOOKMARK NOT DEFINED. NEW COGENERATORS RESERVE............................................................... ERROR! BOOKMARK NOT DEFINED. ALLOWANCES SET ASIDE FOR CANCELLATION IN RESPECT OF ERUS FROM JI PROJECTS TRANSFERABLE TO OTHER COUNTRIES...........................................................................................................................................49 PLANNING RESERVE FOR DISTRICT HEATING COMPANIES IN RESPECT OF DAY-DEGREES STANDARDISATION (RDHCOLD).............................................................................................. ERROR! BOOKMARK NOT DEFINED. COLD RESERVE.................................................................................................................................................51 ANNUAL VERIFICATION OF THE AMOUNTS OF ALLOWANCES AT PARTICULAR INSTALLATION LEVEL.. ERROR! BOOKMARK NOT DEFINED. ALLOCATION AND ISSUANCE OF ALLOWANCES TO LATE INSTALLATIONS AND KNOWN AND UNKNOWN NEW ENTRANTS .......................................................................................... ERROR! BOOKMARK NOT DEFINED. 5.3. OTHER LEGISLATIVE AND POLITICAL INSTRUMENTS ..................... ERROR! BOOKMARK NOT DEFINED. 6. PUBLIC CONSULTATION ......................................................ERROR! BOOKMARK NOT DEFINED. 7. CRITERIA OTHER THAN THOSE UNDER ANNEX III OF THE DIRECTIVE................. ERROR! BOOKMARK NOT DEFINED. LIST OF INSTALLATIONS COVERED BY DIRECTIVE 2003/87/ЕС AND PROPOSED ALLOCATION OF ALLOWANCES FOR THE PERIOD 2008-2012 ........ERROR! BOOKMARK NOT DEFINED. SUMMARY......................................................................................ERROR! BOOKMARK NOT DEFINED. Interministerial working group for elaboration of National Allocation Plan for participation of Bulgari a in the EU ETS in compliance with the 2 regulations of Directive 2003/87/EC. Definitions Allowance: an allowance to emit one tone of carbon dioxide equivalent during a specified period, which is valid only for the purposes of the greenhouse gas emissions trading scheme. Business as usual: projection approach that accounts only for the measures that are official governmental policy. Certified emission reduction unit: equal to a reduction of one tone of carbon dioxide equivalent as a result of a joint implementation project under Article 12 of the Kyoto Protocol. Combustion installation: any installation which includes one or more piece of stationary technical apparatus in which a combustion process takes place and that togheter on the same site and under the responsibility of the same operator has a rated thermal power exceeding 20 MW. Degree day: A unit for assessment of the energy supplied for space heating. It is determined as product of the difference between the standard temperature in the heated space and the average monthly outside temperature and the number of days in the month. Direct double counting effect: can occur where the carbon dioxide emissions from one or more precisely defined installations included in the greenhouse gas emissions trading scheme are reduced or limited by a certain joint implementation project. The project may be implemented at: (a) the affected installation participating in the scheme; or (b) another installation participating in the scheme; or (c) an installation not participating in the scheme. The situation where a joint implementation project reduces the emissions from several clearly distinguished installations participating in the scheme is also a case of direct double counting of emission reductions. Early credits: emission reductions verified in the framework of JI projects before the start of the first period of fulfilment of the commitment (2008). Bulgaria must transfer such emission reductions to the country with which it has concluded a bilateral cooperative agreement under the JI mechanism. Emission reductions are transferred in the form of assigned amount units pursuant to Article 17