Bulgaria will join the European Union in 2007 and after this date strict EU environmental standards will be in effect in the country. Bulgarian legislation has been completely harmonized with the EU requirements in the field of recycling activities, according to the closing of the Chapter Environment during the negotiation process. The adopted regulatory Acts set up the annual achievement of progressive targets in the waste recycling and re-use in order to facilitate the full transition to the European standards.

Prior to the beginning of the implementation of the EU legislation recycling was not among the priorities of the waste management activities. The Bulgarian Government has made significant progress so far but the accomplishments are still far from the European regulations. In spite of the efforts in transposing the EU legislation, Bulgaria has not built yet an effective recycling system and the share of the recycled waste is relatively low.

The market for recycling equipment and services is still developing and the number of companies active in this field is limited.

Market demand

There are favourable prospects for exporters of recycling equipment, technologies and know-how. The share of recycled waste in the different categories must be increased every year with accordance to the adopted legislation, and this is a good precondition for the growth of the import of equipment. In addition, an increase is observed in the amount of the generated recyclable waste (including packaging, electronic equipment, end- of-life vehicles, etc.) and the launch of new recycling sites is necessary.

According to the estimations of the Ministry of Environment and Water, the generated household waste per capita in Bulgaria is around 501 kg of waste per year, of which around 25% is recyclable. The municipal solid waste for 2004 consists of 3.900 thousand tons. Food and the garden waste represent 39,6% of the total, plastics account for 12%, the share of paper and paper products is 10%. The portion of glass and metals is unimportant – 5% and 3%, respectively.

These data show that now is the right time for foreign companies, offering services, technology and know-how, to enter the local market. The separate waste collection will be introduced in more regions of the country and in this way the recycling of different waste will become possible. The strategy of the government foresees to implement the waste separation for 56% of the population by 2012. In the next 5 years, new systems will be located in cities with more than 10.000 inhabitants. This share is much below the European average. In addition, the responsiveness of the population to the separate collection is very low.

Bulgaria has complied its legislation with the European regulations regarding the different types of waste.

Packaging waste

Bulgaria adopted the Ordinance on packaging waste in 2004. According to the Ordinance, the producers of packaging waste should either pay a product tax to the budget, and more specifically to the state-owned Enterprise for the Management Enterprise Protection Activities, or pay recovery fees to the one of the five existing recovery associations, which are responsible for the recycling of the packaging waste.

The recovery fee paid to these non-profit joint stock companies is significantly lower than the so-called product tax. The five recovery organizations have initiated projects for separate collection in some areas and they will be the main partner of the Ministry of Environment and Water in meeting the targets, set up by the Ordinance:

• in 2006 32% as a minimum of packaging waste shall be recovered

  
  

• in 2007 39% as a minimum of packaging waste shall be recovered, of which at least 25% shall be recycled, including 15% as a minimum by weight by each material and 12% from the plastics

  
  

• after 2011 at least 50% of the packaging waste is to be recovered, of which at least 45% shall be recycled, including a minimum of 15% of each packaging material

From 2007, the recycling organizations will be obliged for the first time to recycle a certain percentage of the waste. In this way, the Waste Management Act, adopted in 2004, reveals very favourable prospects for exporters of recycling equipment and services. The total quantity of packaging waste per year is increasing with 9-10 thousand tons annually.

There are good prospects for plastic recycling, and specifically for PET. Currently, there is only one PET recycling installation (for extraction of re-granulate) operating in Bulgaria, and it was built in the last few years. At present, there is an increased interest in the construction of recycling installations.

WEEE (Waste Electrical and Electronic Equipment)

The foundations in this area have been laid by Ordinance on WEEE, which will be effective from September 2006 and completely transposes the European requirements in this area. The implementation of this Directive (2002/96/EC) reveals new market opportunities for exporters. At present, no recovery organizations have been set up to handle electrical and electronic waste and the local companies do not have any experience in this area.

The establishment of such recovery organizations is imperative in order to be able to cope with the recovery targets, set by the Ordinance. Due to this necessity, the demand for recycling and shredding equipment, waste recovery technologies, know-how and consultancy services will be growing, following the trend of an increase in the quantity of the generated electronic waste and the progressive annual targets for recycling.

According to the Ordinance, after 2008 the producers and importers of household appliances have the obligation to take back from the population at least 4 kg of electrical and electronic waste annually by 2008.

WEEE collection centers have not been established yet, but according to the legislation by the end of 2008 around 750 centers should be operating in the whole country. The Ordinance determines ambitious objectives in terms of recovery, reuse and recycling of WEEE, which are different for the 10 categories of electrical and electronic equipment.

End-of-life Vehicles

Bulgaria has one of the oldest automotive parks in Europe and the average age of the automobiles is 13,6 years, while the average for the EU is 7,4 years. The sales of new vehicles are experiencing a steady increase, although their share is still unimportant and the quantity of end-of-life vehicles will be substantially growing every year.

According to the data of the Ministry of Environment and Water 60,000 vehicles reach their end of life and 150,000 vehicles are registered every year. The European legislation has been transposed since January 1st, 2005. According to the Ordinance on the requirements for treatment of end-of-life vehicles, the importers are responsible for the recycling of the products they put on the market. The targets for recovery and recycling that must be gradually achieved until 2015 are 95% (out of which 85% must be recycled) for the vehicles manufactured after January 1st, 1980 and 75% for vehicles manufactured before January 1st, 1980.

The end-of-life vehicles recovery organization has been established in 2005 by the importers of new and used vehicles and for the first year of its activity the organization fulfilled its obligations in terms of recovery and recycling. Currently, there are only 2 out of 120 disassemble centers for de-registered vehicles in line with the standards, the rest resemble scrap yards. The EMEPA will be constructing other 2 disassembling stations for end-of-life vehicles.

The lack of a network of such installations is due to the high construction costs that the importers cannot afford in spite of the fact that recovery fees are paid by the owners of newly imported automobiles. The purchase of special equipment is necessary in order to fulfill the EU requirements.

Waste oils

The Ordinance on the requirements for treatment and transportation of waste oils and waste oil products entered into force in January 2006. After 2008 the producers and importers will be obliged to recover at least 40% of the oils, which they place on the market. All the industrial oils must be collected and the producers and the importers have to establish take-back centers.

Currently, there is only one installation recycling waste oil in Bulgaria and it is located in Ruse. Its annual capacity of 5,000 tons is insufficient for the recycling of all the waste oils. Recovery organizations do not exist and all the oil products on the market are subject to a product tax.

Used tires

The challenge, which will be faced in this area, is the lack of a collecting system and the unwillingness of the population to give back the used tires. Two installations for recycling of used tires have been constructed so far but the insufficiency of products to be recycled is a very serious issue for them in spite of the fact that the annual quantity of the used tires is estimated to be between 40,000 and 60,000 tons.

Batteries

The Bulgarian legislation in this area is transposing the European Directive 98/101/EC. After 2010, the producers and importers of batteries shall collect 20 grams of spent batteries per capita, 140 tons in total. The target set for the recycling of the Nickel-Cadmium batteries is 70%, the targets for the first years of implementation of the Directive in Bulgaria are much lower. According to the Ordinance, 65% of the lead-acid batteries and accumulators shall be recycled and 95% of the lead has to be extracted. Thirty-five percent of all the other collected batteries and accumulators must be recycled after 2010. New take-back centers for portable batteries and automotive accumulators must be established by the end of 2007.

The recovery organization Ecobat was established in 2004 and now it is expecting to obtain a license by the Ministry of Environment and Water. There are no battery recycling plants in Bulgaria and a new facility is very unlikely to be built due to the lack of funds. The only solution for the recovery organization is to export the spent batteries and accumulators abroad for recycling.

Best prospects

Exporters can take advantage from the favourable market opportunities in Bulgaria for the following groups of commodities:

• plastics recycling equipment

  
  

• technologies and recycling equipment for WEEE,

  
  

• shredders for automobiles

  
  

• waste oil draining and recycling equipment

  
  

• nickel-cadmium batteries recycling equipment

  
  

• shredders for end-of-life vehicles

  
  

• sorting systems

  
  

• waste recycling installations

  
  

• sorting and analysis tools

Prospective buyers

The potential end-users for recycling equipment and services are the 5 packaging waste recovery organizations, which are obliged to organize separate collection of household solid waste for 6 mln inhabitants until 2007 and to meet the increasing targets for recycling of the packaging waste. Some municipalities and the Enterprise for Management of the Environmental Protection activities have specific projects for the implementation of separating installations and the recovery organizations are going to be the main executives in fulfilling the EU obligations.

Market entry

It is recommended that exporters enter the local market through a local partner. This is the easiest method for companies and the most cost-effective way to sell their products and services in Bulgaria. The local companies have access to up-to-date information about all the current projects and the existing tenders in the country, have a better knowledge of the legislation and experience with participation in procurement procedures. A representative is more familiar with the market situation in this area, has a more thorough understanding of the end-users and their needs and is able to provide technical assistance and servicing to the customers. In addition, a local representative is well acquainted with the business customs.

All imports to Bulgaria are subject to a value added tax of 20%. The customs duties that apply to exporters are the Most Favored Nation (MFN) duties, which are levied to commodities coming from countries, which are members of the World Trade Organization. The detailed tariffs for different commodities imported in Bulgaria are available at the web site of Bulgaria’s Customs Agency: http://www.en.customs.bg/index_en.html. After the Bulgarian accession to the EU, expected to be effective from 2007, the external EU tariffs for import from third countries will be applied.

Excerpts from “BULGARIA: Recycling equipment and services market Industry Overview Outline”, US Commercial Service, 2006.