EC urges Bulgaria to speed up energy diversification, grow renewables share

The European Commission said that it recommends to Bulgaria to accelerate the diversification of its gas supply routes and sources away from Russia, reduce its dependence on fossil fuels and boost the share of renewables in the energy mix.

In the context of the strain caused by the war in Ukraine on the energy sector, Bulgaria should prioritise energy efficiency to lower demand whilst increasing investments, in line with its recovery and resilience plan (RRP), that are needed to improve interconnection and gas storage projects with neighbouring EU member states, the Commission said in its country-specific recommendations, published on Monday as part of the European Semester 2023 Spring Package.

"Bulgaria is the most energy and emissions intensive member state in the EU, with its energy mix still very much reliant on fossil fuels," the Commission said, adding that coal and lignite extraction and fossil fuel-based electricity generation are declining sectors of the Bulgarian economy.

Bulgaria should also focus on the pressing needs of its public and private building stock as well as on energy efficiency in industrial sectors.

"Acceleration of the deep energy renovation of public and residential buildings and support for the installation of solar heating systems and heat pumps for own use can lead to further energy consumption savings, benefiting both citizens and companies alike. In addition, efforts could be made to increase the energy efficiency in industry, as it remains a large gas consumer with a share of 40% in 2019," the Commission recommended.

As a means to wean itself off Russian gas, the country ought to pursue its ambitious Recovery and Resilience Plan (RRP) targets, which allow for 37% of RRP investments to be aimed at the energy sector and foresee strong further decarbonisation and renewables installation, according to the EC's recommendation. However, more needs to be done to put in place a circular economy programme and to tackle waste management challenges.

Bulgaria is also advised to improve the effectiveness of its healthcare system and of access to it, with high out-of-pocket payments and gaps in health insurance coverage remaining unaddressed. Other recommendations include strengthening the integration of employment and social services and the provision of active labour market policies, especially to deal with the challenges of vulnerable and disadvantaged communities, including Roma.

In terms of fiscal sustainability, the large deficit, the projected increase in government debt and the high uncertainty pose a medium-term risk for Bulgaria, the Commission said, adding that "to stabilise debt over the long term, it will be necessary to address budgetary pressures stemming from population ageing, especially related to public pension expenditure."

In April, the Commission gave the green light to Bulgaria's 13.5 billion levs ($7.4 billion/6.9 billion euro) national plan for economic recovery from the coronavirus pandemic, commending its emphasis on the green and digital transition.

(1 euro = 1.95583 levs)

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