site.btaUPDATED "Cabinet Adopts Just Transition Plan," Finance Minister Vassilev Says

"The Government adopted the just transition plan today. This plan will be sent to the European Commission tomorrow," Bulgarian Finance Minister Assen Vassilev said at a news briefing here on Friday after an extraordinary Cabinet meeting. He added that this is "literally the deadline" which, if missed, will entail forfeiture of the remaining funding under the plan.

Earlier in the day, Prime Minister Nikolay Denkov spoke along the same lines.

Vassilev recalled that Bulgaria forfeited EU funding last year because of its failure to fulfil the plan.

"Initially, all Member States had until September 30, 2022 to submit these plans. The caretaker cabinets did not send the plans. The regular Cabinet succeeded in holding discussions with the trade unions and with business in the regions within a very short time limit," the Finance Minister commented.

He explained that arrangements for people wishing to quit the coal-fired power plants would were "a missing element" in the plan. The standard severance pay packages are 24 monthly wages, whereas options for up to 36 wages have been considered with parliamentary parties in Bulgaria. "One such package would range from BGN 140,000 to BGN 150,000 per worker," Vassilev pointed out. 

He said that Bulgaria must close down its coal production in 2038. "This target date remains, it has not been changed," the Finance Minister emphasized.

He called attention to the obvious financial problems that coal mines and coal-fired power plants are facing this year because, as he put it, the production cost of the electricity they generate is very high compared to market prices.  

"These problems will be getting worse in future because the prices of greenhouse emission allowances will be going up and the production cost of the electricity they generate will be increasing, too," Vassilev argued, adding that these enterprises will be getting ever less competitive.

"The recovery and just transition plans and national budget co-financing seek to make this transition happen in a way enabling people to keep their income, to prevent anybody from experiencing financial difficulties, to attract sufficient investors to the regions and to complete a programme that will take at least ten years," the Finance Minister commented further. "Under that programme, the whole coal mining region is to be reclaimed so as to make it normal for industrial activity," he added.

"Transition fuel does not address even a single problems of the coal mines," Vassilev argued, specifying that if the coal-fired plants switch to natural gas, the mines will not operate.

"All calls for transition fuel are rather lobbying for interests that who want Bulgaria to become more dependent on [natural] gas and fuel import in one form or another," the Minister argued.

He explained that the social packages and their modus operandi will be discussed with the trade unions.

Asked by a reporter how energy security will be guaranteed and whether electricity prices will be hiked if the coal-fired plants do not operate, Vassilev commented that at this point the electricity that is made from coal is more expensive than the electricity on the energy exchange.

"Electricity production from coal would push the power price up rather than down," he said.

Asked whether potential investors will obtain financing under the territorial just transition plans, the Finance Minister said that the companies on the tentative list are those that have expressed interest in investing in the region. The idea is to forecast the number of jobs that can be created and the investments that could be made in the region and not whether these companies would get financial support. "Whether they will is subject to an additional understanding with the European Commission," Vassilev explained. 

"If there is such aid, it will be like all other EU programmes, following open procedures under which investors can apply. There will be no direct negotiation with companies because this is against EU rules," he specified.