A vision for the Bulgarian waste sector National Waste Work Shop Plovdiv, 24 November 2008 Carsten Rasmussen Deputy Head of Unit European Commission DG Regional Policy

Content Requirements to a functional waste sector Caracteristics of EU waste systems Waste techniques  Incineration  Mechanical Biological Treatment  Refuse Derived Fuel  Landfilling State of play of the Bulgarian waste sector  Techniques  Waste organisation  Financing Conclusions and recommendations

Conformity with the acquis Sustainability Financial viability Timely implementability

Waste Techniques Choice of technique depends on financing and availability of potential land fill site Cost trend: Incineration Most costly  Costs Incineration Landfill and MBT Landfill

Caracteristics of EU Waste Systems  Waste reduction needed, preferably upstream  Variety of techniques available for waste treatment  Incineration  Mechanical Biological Treatment  Refuse Direved Fuel  Land filling  Systems partly revenue generating  Tariff financed (in Bulgaria: tax like)

Techniques: Incineration  Incineration most expensive, but attractive in densely populated areas  Energy recovery, yes, but high costs for environmental compatibility  Negative incentives to waste reduction

Techniques: Mechanical Biological Treatment  Attractive, as it allows to increase recycling and reduce land filling  But attention to workers’ health  Expensive, but modulable: Does everybody need a Rolls Royce?

Techniques: Refuse Derived Fuel  Attractive to avoid land filling  Linked to MBT  But expensive and dependant on incineration capacity (cement factories etc)

Waste techniques Landfilling  Least expensive  Limited investments up front  Should be combined with some form of MBT

Bulgaria: State of Play  Conformity required as from accession  Waste regions  7 conform  7 en route  7 to be prepared  Beyond Sofia, large part of the country de facto facing infringement procedure  Financing available: 363 million €, plus national co-financing

Bulgaria:Waste Organisation  Waste is municipal competence  Economies of scale available, hence trend towards multi- municipal co-operation  Need to avoid the Hungarian Cheese

The Hungarian Cheese

Bulgaria: Waste Organisation (continued)  Based on our experience, we recommend a minimum of top down incentives:  Legal obligation to co-operate  Or, financial incentive, e.g. financing exclusively available to regional projects  For regional systems, need for sound cooperation organisation  E.g. holding company, owning assets  Need to protect co-operation structure from break up  financial commitment from municipalities to common organisation  Need to careful organisation of operations – private operators, public operating company  Great potential (and some risks) linked to Public Private Partnership models

Bulgaria: Financing  Need for sustainable system  Hence tariff setting must include operation and replacement  The EU financing is only available once  Don’t come back with new requests in 7 years!  Please note: No EU co-financing ever made in this sector in Slovakia  EU plus state financing not sufficient in this period  Scope for municipal co-financing  EIB and/or EBRD loans could be available

Bulgaria: Financing (continued)  Need to consider total financing needs up front  Recommend budgetary allocation to each waste region, depending on needs  7,7,7  Need for fair and transparent model  Note: Article 55 of the regulation cannot serve as a method to establish a fair and transparent national grant system

Bulgaria: Financing (continued)  Recommend model with some local financing  Co-financing could be modulated according to:  Density (natural economy of scale) and GDP (affordability)

Bulgaria Techniques Considering: costs limited funding relatively low density of population Landfills with limited, but upgradable MBT seem the obvious choice

Conclusions and recommendations to Bulgaria  Projects elaborated based on regional budget allocations  Financing only available for regional projects  Land fill with source separation, limited but upgradable MBT realistic  EU, State, Municipal (EIB-EBRD loan financed)  Tariffs including operations, replacement (amortisation)