Bulgaria Urges Temporary Suspension of EU Emissions Trading System

Sofia, Bulgaria – On March 18, 2026, the Bulgarian National Assembly unanimously voted to mandate the caretaker government to advocate for a temporary suspension of the European Union Emissions Trading System (EU ETS). The move comes amid growing concerns about the impact of carbon prices on energy costs and industrial competitiveness.

Call for Suspension and Review

The resolution, backed by all parliamentary groups, directs the government to present Bulgaria’s position at the European Council meeting on March 19-20. Bulgaria is seeking a suspension of the EU ETS until a comprehensive review is completed at the EU level and a mechanism for derogation is established. This includes exploring the potential release of allowances from the Market Stability Reserve to address price volatility.

Concerns Over Industrial Impact

Bulgaria is among a group of ten countries – including Austria, Greece, Italy, Poland, and others – that have expressed concerns about the EU ETS’s impact on key industrial sectors. A letter signed by the leaders of these nations describes the current framework as an “existential risk” for many industries [EMI-BG].

Government Mandate and Measures

The Bulgarian government is tasked with implementing urgent measures to limit carbon price volatility and mitigate its effects on electricity prices. The mandate also calls for pushing for coordinated EU measures to support coal energy, businesses, and industry. Proposed tools include operational flexibility for member states during energy security emergencies, mechanisms to cap carbon prices (through the Market Stability Reserve or other stabilization instruments), limiting the direct pass-through of carbon costs to electricity prices, and flexible application of the EU ETS during crises.

Bulgaria’s Emissions Reduction Progress

Despite these concerns, Bulgaria has made significant progress in reducing greenhouse gas emissions. In 2023, the country accounted for approximately 1.2% of the EU’s net GHG emissions and achieved a 22.6% reduction compared to 2005 levels [European Parliament]. Total emissions decreased by 27.4% between 2005 and 2023.

ETS as a Modernization Tool

Minister of Environment and Water Julian Popov has emphasized that the EU ETS is a crucial instrument for modernizing industry, reducing carbon emissions, and providing financial resources for the green transition [Ministry of Environment and Water].

Looking Ahead

The outcome of the European Council meeting on March 19-20 will be critical in determining the future of the EU ETS and its impact on Bulgaria’s energy sector and industrial competitiveness. The Bulgarian government’s push for a temporary suspension and review reflects a broader debate within the EU about balancing climate goals with economic realities.