![[Capital] The business call for a new transparent recycling licensing model](https://www.bpva.org/img/articles/202603111414.jpeg)
The system for collecting product fees in Bulgaria for a range of recyclable goods is conceptually compromised. According to an article by Capital, a lack of transparency in the issuance of licenses has allowed "shadowy structures" to enter the sector, creating a breeding ground for corrupt practices. There are significant gaps and ambiguities in the methodology used to determine these fees, as well as in the regulations governing their payment. Furthermore, the state fails to monitor whether recycling companies are actually meeting waste recovery targets, leading to serious doubts as to whether they truly recycle the volumes they report. The problem is further exacerbated by the Waste Management Directorate within the Ministry of Environment, which business representatives claim is non-functional.
These were just some of the issues outlined by representatives of 16 associations representing a diverse range of industries - from the food sector and car importers to electronics distributors and investors in photovoltaic parks and batteries.
On Tuesday, they gathered for a meeting organized by the Bulgarian Industrial Association (BIA) to discuss collective action to reform the current product fee system, commonly known to consumers as the "eco-tax."
A Mountain of Problems for Everyone
Business representatives noted that these issues have been raised repeatedly with various Ministers of Environment from different political backgrounds over the years, yet none have been resolved. In fact, the situation has worsened.
Last year, product fees for some of these businesses increased several-fold, significantly driving up the cost of appliances, solar panels, and batteries for PV parks. Furthermore, the state—via the Ministry of Environment—attempted (unsuccessfully so far) to monopolize the deposit system for plastic bottles instead of entrusting the activity to the retailers themselves.
Meanwhile, consumers remain largely unaware of how the product fee mechanism works. Many mistakenly believe these funds are paid to the EU, unaware that the money often flows into the pockets of specific private entities. Consequently, businesses are blamed for price hikes that are actually driven by these fee increases.
Planned Steps for Reform
While each sector has its own specifics, the core problems are shared and can only be addressed through collective effort. The associations have agreed on several immediate steps:
In the longer term, the groups are pushing for legislative changes. Representatives of the 16 associations agreed that with the recent change in government, there is a "brief window of opportunity" to be heard and to begin a step-by-step resolution of these issues.
Revising Regulations and Methodology
According to Hristo Hristov of the Association of Car Importers, the product fee paid during vehicle registration with the Traffic Police (KAT) contradicts both Bulgarian and European law. "Our situation is absurd because this fee is often already paid in another EU country. Many vehicles, especially heavy-duty ones, are eventually sold to the Arab world. It is unclear where this money goes, because it does not stay with the state," Hristov said.
Nikola Gazdov from the Association for Production, Storage, and Trading of Electricity (APSTE) compared the fees in Bulgaria for solar panels and batteries to those in other European countries. "The state enterprise PUDOOS has set prices 5 to 11 times higher than in other EU member states. In Bulgaria, the product fee for solar panels is 11 times higher than in the Netherlands, and the fee for batteries is eight times higher than in Denmark," Gazdov noted. He calculated that this inflates investment costs for solar panels by 30% and for PV batteries by 20%.
Furthermore, Gazdov highlighted that panels and batteries imported today will only need recycling in two decades, yet there are no guarantees that the recovery organizations collecting the fees today will still exist then. "The fact that someone has taken the money today does not mean they will fulfill their obligations. We need a guarantee mechanism," he added, noting that high fees also artificially inflate electricity prices.
Meglena Rusenova of the Bulgarian Photovoltaic Association argued for a moratorium and the creation of a working group to revise the methodology. She pointed out that solar panels are currently lumped into the same category as televisions, while lithium-ion batteries for renewable energy parks are grouped with standard car batteries. "These products are grouped together without accounting for the potential revenue from recycling. Recycled solar panels may actually yield more revenue than cost due to the rare metals they contain," Rusenova said. Her association has already notified DG Competition, requesting intervention to level the playing field between Bulgaria and other EU states.
Liberalizing Recycling Licenses
The associations agreed that the "criminalization" of the sector can only be ended by liberalizing the licensing regime. Increased competition among recovery organizations would naturally lead to lower fees. For years, the market has been dominated by a few businessmen whose firms collect fees for vehicles, electronics, batteries, and tires. Last year, a company linked to Christoforos "Taki" Amanatidis also entered the business. "Currently, there is no way for a new player to obtain a license. We have been trying to get a permit for recycling end-of-life vehicles through a specific firm for years, but without success," said Hristo Hristov.
Zhana Velichkova from the Association of Soft Drink Producers emphasized that producers should be responsible for managing packaging waste, yet they currently have no say in the model. "As an industry, we tried to create a deposit system similar to those in Europe, and suddenly the state decided it should be the one to manage it," she said.
Nikolay Vulkanov of the Modern Trade Association proposed that licensing should involve multiple institutions rather than just the Ministry of Environment. Ivana Radomirova from the Brewers Union recalled that, years ago, licenses were issued by an inter-institutional commission including representatives from four ministries and the business community. "Back then, it was impossible for a problematic firm to slip through with a license application. But following changes to the Waste Management Act, that changed," she concluded.
Source: Capital
