Under the protection of the institutions: coal plants linked to consultant Hristo Kovachki have saved at least €74 million with inaccurate carbon dioxide emission reports
Five power plants associated with the consultant Hristo Kovachki, have saved at least €74 691 047 in five years by significantly reducing in their reports the data on greenhouse gases emitted into the atmosphere. ‘District Heating – Pernik’, ‘District Heating – Sliven’, TPP ‘Bobov dol’, TPP ‘Brikel’ and TPP ‘Maritsa 3’ have hidden a total of 1 957 682 tonnes of CO2 with various technical means under the nose of the responsible institutions. These are the conclusions of an expert report, commissioned by Environmental Association Za Zemiata (Friends of the Earth Bulgaria).
The report is published only a day after the European Public Prosecutor’s Office announced that it is conducting a major investigation into fraud involving millions of euros in undeclared greenhouse gas emissions.
The report covers the years between 2017 and 2021 and uses only publicly available data on the quantities of fuel used, the emission factors and the GHG emissions of the installations. Serious discrepancies are noted which might lead us to believe that there is institutional protection over the plant owners. The report will be used by EA Za Zemiata as a signal to the institutions – the Executive Environment Agency and the Bulgarian Accreditation Service.
The power plants declare different data to the different authorities and that leaves the impression that there is a lack of communication between them, even between the departments within the same institution – the Executive Environment Agency. In the greenhouse gas emission reports, submitted to the Agency, the power plants declare reduced quantities of fuels used and CO2 emissions, which reduces their carbon allowance costs – a prerequisite for operating polluting industries, such as the coal-fired power plants. A significantly higher amount of fuel is present in the data submitted to the Energy and Water Regulatory Commission, which is the body responsible for electricity pricing.
Another way to ‘lower’ the emissions is to report emission factors which are too low in comparison to other sites in Bulgaria and also compared to internationally recognised factors for this particular type of fuel. There have been cases of reported fuel and heat production data with plant efficiency factors higher than 100%. This is not technically feasible and also leads to declaring lower emissions than the actual ones. For example, assuming that the amount of biomass used by District Heating – Sliven is correct for the purposes of the annual environmental report in 2021, it would appear that the efficiency of the boilers is 337%.
‘We asked the responsible institutions whether there have been any discrepancies in the reports of these plants and they informed us that there have been episodic fines of several thousand leva. Considering the results of the report, which has been conducted on the basis of the information verified by these institutions, this indicated a very serious form of inaction’ said layer Regina Stoilova.
The saving of some of the missions in the data submitted by the TPPs would be impossible without the support of emission verification companies. In this case these are GREEN AND FAIR JSC – responsible for the reports until 2018 and GMI Verifier Ltd – from 2018 onwards. The traces of the true owners of GREEN AND FAIR are lost as the company is registered with bearer shares – i.e. the true owner is unknown. Despite this, the Bulgarian Accreditation Service, which monitors the independence of verification companies, has issued and maintained for over 10 years an accreditation certificate for a company with an unknown owner. GREEN AND FAIR seized to be the plants’ verification company in the very year it changes its registration type – 2019.
Coal-fired power plants from the ‘Kovachki’ ring are known for their systematic violations as they exceed or burn fuels for which they have no permits – biomass and RDF. For example, in District Heating – Sliven in 2021 the amount of biomass reported in the GHG report was 203 times higher than allowed. The plants are fined for this but the ‘profits’ from these violations are higher, since plants continue to systematically violate their permits.
While the report shows significant discrepancies in the declared emissions, one of the power plants cited in it – TPP Bobov dol – insists in the public sphere that it has started its green transition and has even established the platform From Brown to Green. But their top place in the underreporting of greenhouse gas emissions and carbon allowances suggests a very different intention.
Briefing: The hidden picture of carbon dioxide pollution: how data discrepancies benefit the power plants in the ‘Kovachki’ ring
The report has been commissioned by Za Zemiata (Friends of the Earth Bulgaria) and prepared by an independent energy expert, based on publicly available information from annual emissions reports for the period 2017 – 2021
Sofia, February 2023
The report ‘The hidden picture of carbon dioxide pollution: how data discrepancies benefit the power plants in the ‘Kovachki’ ring’ analyses the reported greenhouse gas emissions under the European Union Emissions Trading System for the following power plants, associated with the energy consultant Hristo Kovachki: ‘District Heating – Pernik’, Pernik, TPP ‘Republika’, ‘District Heating – Sliven’, TPP ‘Bobov dol’, TPP ‘ Brikel’ and TPP Maritsa 3’. The period covered is 2018 – 2022, with the data for the previous year published each year. A comparison is made between all publicly available data submitted by the power plants to the Executive Environment Agency, the regional environmental inspectorates and the Energy and Water Regulatory Commission.
Calculations show that between 2017 and 2021 the financial savings from carbon allowances amount to almost €75 mln as a result from the actions and inactions of the power plants, laboratories, verification bodies, the Executive Environment Agency, the Bulgarian Accreditation Service, regional environment and water inspectorate, the Energy and Water Regulatory Commission and the Ministry of Energy.
The estimates presented are conservative as it is not possible to make a sufficiently precise calculation of the quantities of the unreported emissions with the data available. For the plants which are morally and technically obsolete, efficiency factors in excess of 100%, even 300% have been submitted, although normally such plants do not exceed 90%. The result once again is the underreporting of actual emissions.
The use of unrealistically low emission factors for different types of coal is widely reported which again results in lower CO2 emissions being reported. The Bulgarian National Greenhouse Gas Inventory does not include the unrealistically low emission factors of these plants and they are excluded from the national emission factor figures. It remains unclear why the discrepancies have not caused any consequences for the verification bodies and the installations.
The public data used in the analysis are the greenhouse gas reports, the environmental reports for the integrated permit and to the European Pollutant Release and Transfer Register which are submitted to the Executive Environment Agency. It is the responsibility of the Regional Inspectorate of Environment and Water to verify the completeness, consistency and accuracy of the data submitted to the European Pollutant Release and Transfer Register. Often in the three different reports there are drastic discrepancies with a tendency for the quantities of fuels reported in the environmental report to significantly exceed those reported in the greenhouse gas report. As a result, the power plants buy allowances for significantly less greenhouse gas emissions.
The bulk of the power plants’ reports are submitted to the EEA, in the same directorate – the Permit Regimes Directorate. These reports are subject to checks by EEA and RIEW, as competent authorities, and it is expected that they will contain the same data on emissions, fuels and raw materials used and energy produced and if there are any discrepancies, these will be corrected and the reports fixed before their formal approval. The greenhouse gas emissions report is considered as formally approved as after verification by the EEA and the issuance of a final opinion.
On the basis of the data reported to the state regulator – the EWRC, the energy prices are determined. The Regulatory commission also does not check whether the information submitted to them corresponds to the information presented in the greenhouse gas reports, even though the pricing also takes into account data on the required emission allowances, the cost of which is a significant part of the energy cost.
In 2021 for the first time there has been no discrepancy between the IP report and the GHG reports submitted by District Heating – Pernik, but the EWRC report was submitted with confidential data and hidden quantities therefore it has not been possible to compare and verify the reliability of the data.
Conclusions on verification bodies, laboratories and their accreditation
The GHG emission reports must be checked and verified by an independent verifier – a verification body accredited by the Bulgarian Accreditation Service (BAS). The main task of BAS is to ensure that verification bodies are independent of the operators and that the reports verified by them contain accurate and correct data. The BSA must carry out an annual review of the verifiers’ activities. It compares whether there are large deviations in the unit emissions, emission factors and fuel calorific values in the last 10 years of a given combustion plant. If irregularities are found, it should restrict or withdraw the body’s accreditation.
In this case the verification bodies are GREEN AND FAIR JSC – for the reports until 2018 and GMI Verify Ltd – from 2018 onwards. In 2022, TPP Bobov dol’s report was again verified by GREEN AND FAIR JSC.
Until 2019, GREEN AND FAIR JSC was registered as a company with bearer shares (as seen in the commercial register), which means that the owner of the shares is unknown which is why a lack of affiliation with the inspected installation and the independence of the verification body is not guaranteed. The Bulgarian Accreditation Service, which is obliged to monitor the independence of hte verifying bodies, has issued and maintained for more than 10 years an accreditation certificate for a joint stock company with an unclear owner. GREEN AND FAIR ceased to be an installation verifier in the very year it changed its registration type – 2019.
A check of the BAS register shows that on 15.03.2022, BAS hsa amended the accreditation order of GMI Verify Ltd by extending the scope instead of limiting it. BAS has not taken into account the gross violations of the reporting under REGULATION 2018/2067, even though the issue with the power plants was already brought to public attention.
Conclusions on underestimated emissions and financial savings
The five plants ‘District Heating – Pernik’, ‘District Heating – Sliven’, TPP ‘Bobov dol’, TPP ‘Brikel’ and TPP ‘Maritsa 3’ have significantly reduced in their reports the data on greenhouse gases emitted into the atmosphere. A total of 1 957 682 tonnes of CO2 remain unreported which resulted in savings of at least EUR 74 691 047 over five years.
The underestimated emissions and the financial savings resulting from the actions and inactions of the installations, laboratories, Verification Bodies, EEA, Bulgarian Accreditation Service, Regional Inspectorate of Environment and Water, EWRC and ME are presented in the table below:
|“District Heating – Pernik” JSC||“District Heating – Sliven” LTD||TPP “Bobov dol” LTD||“Brikel” LTD||TTP “Maritsa 3” LTD||TOTAL|
|t CO2||2017||180 110||32 842||21 850||234 802|
|2018||88 064||41 511||206 545||93 845||429 965|
|2019||120 765||27 009||262 029||71 154||480 957|
|2020||311 567||18 225||227 290||54 239||611 321|
|2021||6 370||95 879||51 306||42 137||4 945||200 638|
|2017-2021||706 876||215 466||747 170||283 225||4 945||1 957 682|
|EUR||2017||3 062 113||558 357||371 474||3 991 944|
|2018||2 255 496||1 063 181||5 290 068||2 403 574||11 012 319|
|2019||3 029 831||677 618||6 573 962||1 785 152||12 066 563|
|2020||15 578 328||911 244||11 364 485||2 711 970||30 566 027|
|2021||541 482||8 149 730||4 361 013||3 581 616||420 353||17 054 194|
|2017-2021||24 467 250||11 360 130||27 589 528||10 853 787||420 353||74 691 047|
For the period 2017-2021, the financial savings from carbon allowances amount to almost €75 million.