Georgi Stefanov: Due to permanent political crisis, Bulgaria just cannot deliver the green transition reforms
The expert on green transition discusses with Found in Transition about the Bulgarian political (and not only) crises that make the country a laggard in the implementation of the just transition plan, the national recovery and resilience plan and the overall economic modernization policies
We really need a clear direction and a clear commitment. We need to know what is going to be done year by year. Only this way the measures applied within the just transition framework would be properly aligned with everything else. And then nobody will be left behind in the process of decarbonising the coal region. Instead, we see right-wing populist parties using the issue of just transition to make a political scandal. They are stopping the process and we are nowhere in the process of reviewing and changing the just transition plans, indicators and milestones – says Georgi Stefanov, one of the most recognized Bulgarian experts on European policies and objectives in the field of Climate and Energy policies.
Interview by Małgorzata Kulbaczewska-Figat and Vladimir Mitev.
The interview took place on 27 November 2024.
Georgi Stefanov has been leading European and transnational projects in the field of climate change, environmental protection and energy for more than 15 years, with over 20 years of experience in implementing some of the most innovative NGO projects in the country.
Between 2008 and 2021, he led and developed the climate and energy programme in the Bulgarian office of the international conservation organisation WWF (World Wide Fund for Nature), working very actively in the Central and Eastern Europe region. He was head of the Political Office of the Deputy Prime Minister for Climate Policies at the Council of Ministers in the government of Kiril Petkov. Over the last few years, he has been active in the area of equitable energy transition of coal regions, developing opportunities for new sustainable jobs and transition of coal regions to a modern economy. He is also the founder of the Climate Coalition Bulgaria: an informal alliance of citizens, NGOs, business, media and academia to address the challenges of climate change in Bulgaria.
Georgi Stefanov is also one of the most recognized experts on European policies and objectives in the field of Climate and Energy policies as part of the European Green Pact, as well as on the Recovery and Sustainability Mechanism and the development of National Recovery and Sustainability Plans, focusing actively on the promotion and implementation of these two instruments in recent years. He has also been active on topics related to the green economy, especially the development of a biobased economy, the Common Agricultural Policy, regional development and the European taxonomy for sustainable finance.
Malgorzata Kulbaczewska-Figat: You co-authored a document called Mission Energy Transition, in which you listed many potential challenges and problems for a just transition in Bulgaria – from the national roadmap to a number of issues at the local level. One year after the publication, what are your thoughts? Which of the challenges have been solved or are on a good way to be solved. What has changed for the better and what has not changed at all?
That’s a very difficult question, because we are in a permanent political crisis. This has also affected the institutional and political ambitions of the transformation of the coal regions in Bulgaria. Unfortunately, after the transformation process started about four or five years ago, we are not really moving forward at the moment.
We have an agreement with the European Commission that they will only approve the Bulgarian transition plans if we manage to implement the reforms under the national Resilience and Recovery Plan, which are linked to decarbonisation of the whole Bulgarian economy. But we also have a very large amount of EU public funds from different sources involved in the decarbonisation process. Apart from the national Resilience and Recovery Plan, these are operational programmes and modernisation funds. In total, we have more than seven billion euros for this process for the current program period and the coming years.
However, last year we failed three times to adopt the so-called climate roadmap, the key reform under the Resilience and Recovery Plan. So far, the European Commission has not said anything about Bulgaria’s just transition plans. Given the aforementioned failure, I am afraid that they would not allow Bulgaria to open up the measures related to investments.
Only two parts of the Just Transition plan are currently operational. The first is the mapping of the skills of workers who would be affected by the transformation of the coal sector. In this part, money is going indirectly and directly to the trade unions to map the skills and wishes of workers, particularly in the coal regions. The other measures are the energy efficiency measures and the renovation of buildings. All the other measures, which were to create new jobs and new economic activity, are not in operation, but we expect some new measures to start in the spring of 2025. Especially important are those that create new jobs. A few weeks ago the management committee of the regional development programme, which is basically responsible for the implementation of all the cohesion funds or the regional development plus the Just Transition Fund here in Bulgaria, started again to change the objectives and milestones of the Just Transition Fund, as well as the timing of transition-related activities.
As a result, workers and the entire local communities, especially in Pernik and Bobov Dol – our two smaller coal regions – are suffering a lot. They have been relying on the potential funds and programmes for their regions. And while the just transition funds go directly to the coal regions and might be used to fund dedicated activities, the municipalities cannot use them, because the National Assembly has not adopted the climate roadmap. In September 2024, the government tried again to adopt the climate roadmap through the National Assembly – but they failed again.
We really need a clear direction and a clear commitment. We need to know what is going to be done year by year. Only this way the measures applied within the just transition framework would be properly aligned with everything else. And then nobody will be left behind in the process of decarbonising the coal region. Instead, we see right-wing populist parties using the issue of just transition to make a political scandal. They are stopping the process and we are nowhere in the process of reviewing and changing the just transition plans, indicators and milestones. They should be proposed by Bulgaria. So far this process has only taken the opinion of stakeholders. I’m 90% sure that they haven’t finished it and sent it to the Commission.
Is there no pressure from the European Commission on Bulgaria to meet its commitments?
This may change as soon as in January 2025 – because we are talking about losing money. The Just Transition Fund is structured separately from modernisation or Cohesion Fund. We may lose money again, because we have a specific budget for each year for all the coal regions, not just for Bulgaria. This is how this money is structured. And what is Bulgaria doing? There is not even a chance of forming a government after the last elections we held, not to mention any political ambitions.
If there is an unwillingness on the part of politicians to move forward, is there any kind of pressure from below, for instance from the private or from the civil society? After all, the private sector involved in coal regions must be aware that change is imminent?
Not really. The only progressive and ambitious representatives of the various stakeholders are the environmental NGOs. But they are not powerful enough. At the same time, the trade unions are playing quite irrational games, trying to create a kind of scandal that the European Green Deal is dead. They say we don’t need to phase out coal, that climate change is a global conspiracy. They put a kind of spice on the story from all sides. And in the end it seems that they only want to have the money – I’m talking about 150 million leva from the JTF.
Is no one interested in reskilling the workers in the coal regions so that their potential is not lost? These are educated people with a technical background. Alternative branches of industry could have been developed instead of coal-related activities. This is one of the essential moments of the just transition concept…
So far, in order to shut the trade unions up, the Ministry of Regional Development has tasked the trade unions with reskilling the workers and also granted them direct funding to accomplish the task. The trade union structures are to do it – and we are talking about thousands of interviews with people to be potentially reskilled – of course with external support.
However, the biggest power of the trade unions in Bulgaria is in their membership, especially in the Stara Zagora region. And if we count how many members they have and how much they get per year from their membership fees, we see that the Ministry of Regional Government has given the trade unions the equivalent of membership fees for the next 10 years.
In fact, the trade unions have also failed the people. They failed many times to help unemployed people to get jobs. They have spent hundreds of millions in recent years building training centres in regions with high unemployment. These efforts did not bring about a substantial change and, based on these experiences and previous results, I claim they are going to fail at the reskilling task, too. I am involved in a number of Facebook groups, where miners and trade union people are also present, and I discover there is a lot of propaganda and populism there. At the COVID-19 times, these groups grew a lot. Many times I saw people there laughing at the risk-taking and roadmapping of the skills of miners.
This will mean that Bulgaria will lose 5% of the total amount of just transition funding. That is what I expect.
Vladimir Mitev: Aren’t the trade unions different in their positions? Podkrepa is usually seen as more conservative and eurosceptic, if you like, but KNSB seems to be more open to the transition.
They changed their position after they received the 150 million leva for mapping the skills of the workers.
I was also a trade union leader for three years in my previous job. In Bulgaria trade unions and the Church are the two structures that are not required to fill in financial reports. They cannot be responsible under the financial law, so they are independent from the state – a state in the state. Nobody can keep track of what happens with the funding they received. And while KNSB claims to do their best in reskilling, they have never seriously tried to explain to their members that climate change is real and that we all had to act because there is a threat to people and nature, like the European, and also global, unions explain and trying to protect their members from the biggest crisis – climate change.
Instead, conspiracy theories about climate change not being real flourish in Bulgaria. And the politicians do not want to touch it, because they are afraid of being attacked by right-wing populist parties. Nobody puts climate change on the agenda. Nobody even wants to say that the commitment for the ETS sector for 2030 is minus 62%.
If this was said to the people in a clear way, they would have understood the situation. I am sure of that – based on my experience. I have been working for 18 years on climate change issues and almost 10 years on just transition issues. I have explained the reform process aimed at cutting 40% of CO2 emissions, being at that time the head of the political cabinet of the deputy prime minister for climate policy in Bulgaria. All the ambitious reforms included in The National Resilience and Recovery Plan of Bulgaria, which should modernise Bulgaria’s economy and decarbonise the carbon-intensive sectors, has passed through my hands. In May 2022, when Ursula von der Leyen came to Bulgaria, she said that Bulgaria’s National Resilience and Recovery Plan was the most ambitious and the greenest – in the whole of Europe.
Which is no longer the case...
Of course. After the changes in the plan, it is no more the most ambitious and the greenest. And the ambitious changes are still left to be done. 56% of the money from the National Resilience and Recovery Plan should be spent in different sectors of the economy to help the decarbonisation processes. The coal story is just the core, the main problem in terms of emissions levels, but definitely not the difficult part.
It should be said at this moment that Bulgarian coal mines are low energy valued, with low energy production capacity. It is quite a technical miracle that any energy is produced from them! And still, I do not think that dealing with the coal sector is the hardest task that we will face. The hardest part will come when the government starts to deal with the so-called Social Climate Fund, which basically means reducing CO2 emissions from cars and buildings and supporting poor people. That will affect close to half of the Bulgarian population.
How easy is it for ordinary people to build their own home solar systems and connect them to the grid?
We are very far from that. At the EU level, there are major legislative changes called energy reform packages. Each package is a set of directives and regulations that will transform the energy and industrial sectors in Europe.
The 1st liberalisation package was adopted in the distant year 1998 and it aimed to break up the monopolies of the energy producers. At that time, all over Europe, there existed big energy companies, big state-owned companies, and everything was big energy infrastructure. The first liberalisation package actually provided for the breaking up of this state monopoly and the creation of the possibility to have independent suppliers and producers. Then in 2005-2007 there came the second phase, accepted by Bulgaria. It was the introduction of an emissions trading system. The third phase included the setting of green transition targets for the first time. Then comes the fourth phase, which is actually a clean energy package that was included during the Bulgarian presidency of the EU in 2018.
And now, with the Green Deal and the Fit for 55 targets, we are in the 5th phase. A lot of money, a lot of pressure, a change in the conceptual model. Meanwhile in Bulgaria, we have not even done the things related to the 1st liberalisation package.
What, specifically, has been neglected?
Bulgaria has not allowed the market into this sector. The energy monopolies have not been broken. This means that there are no energy producers, no opportunities to develop investments in the sectors and no investors who would be market participants. Instead, the state offers generous subsidies to the coal mining sectors. The state is transferring billions to a lost sector of the economy.
If we do not apply the 1st liberalisation package which is nearly 30 years old, we will be stuck. The energy supply will probably be good, but only the big energy companies will be doing big projects, with no one thinking about the social aspects, no space for new business creation, no start-ups, no decarbonisation. Everything will remain as it is now – everyone plays a role and the state gives billions in subsidies, hidden or public.
Even if the Bulgarian government tried to apply the 5th liberalisation package, especially the targets for 2030, things cannot happen, because the foundations have not been laid. Metaphorically speaking, the car cannot move because there are no tyres.
Do you remember the first government of Boyko Borisov and why it fell back in 2013?
Yes, the winter energy protests.
Yes. People started to get upset, because Boyko Borisov wanted to break this liberalisation package. He announced it, he planned it, the Russian proxies and the unemployed came out, and then he put this issue aside.
The Energy Union Regulation, which is the basis for the energy transformation and the goals for 2030, was adopted in Sofia on 18 June 2018, during the Bulgarian presidency. Nevertheless, Boyko Borisov came out two years later and said that he was not going to do the reforms. The regulatory reforms still have not been implemented.
This is a political root of the problem, which concerns the economic growth, poverty of many people and the continuing deficit in the state. The state does not earn the money it could have gained. In the last 2-3 years,due to the energy crisis and the war in Ukraine, there were exorbitant revenues from the high cost of emissions. Since this year this is no longer the case. It is clear that it is more convenient for us to import cheap green energy from our neighbours than to operate the power stations. And yet Borisov hid all these issues during his three mandates.
The people will get the blame, as the Bulgarian proverb goes. All of us, as consumers, will have to pay, especially the people in the southern regions, whose power stations will be closed. How much will the state pay for compensation mechanisms or artificial subsidies that the European Commission will not even approve in the end? And in the context of what is still missing – let us not forget the new financial instrument, the Social Climate Fund and the social climate plans that need to be developed and ready. Again, nothing has been done in this aspect in Bulgaria.
The social climate plans are related to the new emissions trading scheme, which includes the emissions from the transport sector, from all our drivers, and the emissions from buildings and energy shortages. There are 2,6 billion euros there and Bulgaria could have gotten a large percentage, based on GDP and population indications. What must be done is to plan how this Social Climate Fund will define energy scarcity and how it will be a financial instrument to help the decarbonisation process become socially acceptable.
What will happen if nothing is done in the end, and the most acute question arises for several million Bulgarians and several million old and energy inefficient buildings? There will be more than a scandal – there will be a revolution. This is a much greater problem than the Just Transition Fund and the closure of the inefficient coal power plants.
If you compare how the process of just transition is progressing in Romania and Bulgaria, what can be learned from the Romanian approach?
That if there is a political will, there are opportunities to deliver things. In Romania there is a will to use the available financial instruments to modernise and create new jobs, including in the rural areas.
I may also bring here a positive example from Poland – another country which treats the just transition challenge in a serious manner. Poland has been developing geothermal technology – not a new thing, but a technology that miners understand very well. Something underground that brings heat and steam and produces electricity and heat – when you talk to the miners about this, they just feel it is in their blood, in their DNA as workers. If you tell the miners that they could become programmers, agronomists or interpreters, they will not believe. They were trained to work with machines and energy. They need to see solutions they can see as feasible, solutions they could implement with their own work. If such solutions are not offered in the course of the transition process, the whole thing will fail.
Coming back to Romania – unlike there, in Bulgaria the ecological problems are of highest gravity. We have the biggest pollutants with serine dioxide, pollutants that emit half of the Mendeleev table. Bulgaria has not been implementing the best available technologies and practices in the field of cleaning during the combustion of coal. There is no social, nor ecological thought in Bulgarian politics. And everyone will suffer from it.
This interview has been prepared with the support of Journalismfund, within the scope of a broader project concerning just transition in Bulgaria, Romania, Poland and Czechia in a comparative perspective.
Photo: Georgi Stefanov (source: Green Movement)
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