EU regions in the transformation towards a climate-neutral future
3.6. Case 5: Climate-neutral economic zone in Plovdiv (Bulgaria)
3.6.1. Regional profile
Region: Plovdiv (NUTS code: BG421), Bulgaria
Size: 5,961 km² (2016), 666,801 inhabitants (2020), 113 inhabi-tants per km² (2019)
Economy: (a) GDP: EUR 13,100 per capita (2018), 6.7% nominal annual growth since 2010;
(b) Main sectors: Industry (35% of employment in 2018), retail (20%) and education and health (13%)
GHG emissions: Bulgaria: 6.8 t CO2-e per capita (2019), 47.1 million t CO2-e (2019), 1.1% decrease since 2010 (EEA, 2021).
3.6.2. Regional characteristics and governance competences
Trakia Economic Zone (TEZ) is one of the largest indus-trial zones in Eastern Europe. It covers 10.7 km² and hosts companies with investments exceeding EUR 3 bil-lion (Trakia Economic Zone, n.d.). TEZ includes six major industrial zones in several rural as well as urban areas around Plovdiv – Maritsa Industrial Zone, Rakovski In-dustrial Zone, Kuklen Industrial Zone, Industrial Park Plovdiv, High- Tech Innovation Park Plovdiv and Agro Park Kaloyanovo. More than 200 Bulgarian and multina-tional companies operate in TEZ (Trakia Economic Zone, n.d.).
TEZ is a public-private partnership project (Investment Destination Plovdiv, 2021). During the interview, the business development manager rated autonomy when implementing climate initiatives high and did not sin-gle out any limitations, except such, connected to the private nature of TEZ. The implementation of projects is usually initiated and funded by the investors in TEZ, however support from external stakeholders, such as the municipalities where the industrial zones are located, is also necessary – for example in the provision of infrastructure and permits.
3.6.3. Rationale and objectives of the initiative
Climate neutrality began to crystallise as a goal even before the introduction of the European Green Deal, although initiatives, such as Farm to Fork, have been determinative for the management of TEZ. As existent as well as aspiring investors pushed for modernisation in the direction of green energy and reduced greenhouse gas (GHG) emissions, TEZ launched an initiative towards becoming first an eco-industrial park, and second a climate neutral zone. “Climate neutrality is a continuation of the service we provide,” said the interview partner. 
The main objectives of this initiative are: (1) to increase competitiveness, create an appealing invest-ment environment for companies with zero emission policies and maintain investors’ interest, (2) to create an attractive working and living environment for employees and their families – to improve quality of life, (3) to reduce GHG emissions.
Source: Velten et al. (2021), own editing
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TEZ set up a 12-point plan, entitled “Carbon Neutral Industrial Park Strategy” (CNIP Strategy) in Sep-tember 2021 to illustrate the aim of the industrial park to become climate neutral (Trakia Economic Zone, 2021). The strategy addresses the topics of enabling technologies (green hydrogen), moving without emissions (electromobility), net-zero industrial transformation and zero-carbon energy. The plan also contains quantitative targets for TEZ until 2040. These include powering 40% of Maritza, Ra-kovski and Kuklen industrial zones with renewable energy by 2025, 60% by 2030 and 100% by 2040. In addition, TEZ also aims to improve energy efficiency when new buildings are constructed and plans on using rainwater as a water source for industrial purposes, as opposed to drinking water.
Due to a lack of know-how and experts, the starting point of the initiative has not yet been recorded sufficiently. Currently, TEZ is gathering estimates of the amounts of electricity used by each company, as a basis to develop demand-tailored photovoltaic (PV) installations on-site.
3.6.4. Achievements and impacts
At TEZ, most climate neutrality related ideas, plans and processes are currently ongoing and thus results (i.e., quantitative measures of reduced GHG emissions) are to be expected in the future. Nevertheless, with the launch of the CNIP Strategy, TEZ has taken upon concrete actions towards climate neutrality.
To start with, TEZ has set up the “Zero Carbon Industrial Parks (ZCIP) Consortium – Strategic Intent” with the support of five Bulgarian municipalities: Plovdiv, Haskovo, Burgas, Gabrovo and Ruse. The con-sortium foresees the construction of a complete technological system including renewable energy generation (hydrogen production and storage, biogas, solar energy, wind energy), energy storage and end-user energy distribution. In Haskovo, a “Trakia Economic Zone-South” project is planned. As part of the project, as well as TEZ’s CNIP Strategy, Germany-based renewable energy company AE Solar, in a joint venture with Water and Energy Savings AD and TEZ is set to invest EUR 150 million in the con-struction of a solar panel factory with a 1 GW capacity in 2022 (Petrova, 2021; personal communication). An R&D centre to develop technologies for the production of heating, cooling and electricity using solar radiation, as well as for training engineers and designers will also be established in early 2022. Other plans for the site include a solar panel recycling and reuse factory, the production of energy stor-age systems and the production and development of hydrogen technologies. A 100 MW green hydro-gen plant is also planned in the Haskovo park.
In Rakovski Industrial Zone, a 20 MW photovoltaic plant will be built in 2022, covering 80% of the elec-tricity needs of the zone. These measures will allow companies to produce and use electricity on site. Currently, most investors buy electricity on the free market (i.e., wind energy at the Black Sea coast), where transmission causes significant losses.
Moreover, a partnership between Austrian motorcycle and electric bicycle manufacturer Pierer Group and Bulgarian bicycle manufacturer Maxcom will produce electric bicycles and other two-wheeled electric vehicles at TEZ worth 1 billion BGN by 2027. The investment is expected to provide 1,000 new jobs to the region of Plovdiv.
Among recent investors is also Milara International – a Bulgarian EV manufacturer. At TEZ, the company produces small electric trucks for logistics, which are not only exported abroad, but also used by several Bulgarian municipalities for utility services.
The new investors are regarded as an achievement for TEZ. According to the business development manager, they are amongst a growing number of companies, actively seeking climate neutrality ori-ented industrial parks and would thus not have chosen TEZ as their factories’ location had it not been for the ecological benefits that TEZ offers as well as its carbon neutrality goal.
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Other impacts of TEZ’s aim to become climate neutral are the evolving social benefits at the zone. These include Farm to Fork catering solutions involving local farmers and the possibility to tend a small pri-vate garden on site for workers to grow their own produce.
3.6.5. Obstacles and challenges
The interview partner explicitly stated that there have been no negative side effects since TEZ started implementing its green ambitions. On the contrary, with the introduction of new green measures, in-vestments and accordingly the number of jobs have increased. TEZ would rather lose investors if there was no climate transformation goal, as companies would have to examine and construct green solu-tions themselves instead of focusing on their production processes.
The biggest challenge that TEZ has encountered so far has been the lack of know-how and experts. Since the business profile of TEZ is not climate-related, the park would benefit from experts in all fields of ecology, i.e., from measuring GHG emissions and monitoring progress towards climate neutrality to electromobility and hydrogen.
3.6.6. Funding and policy support (national/EU/other)
Funding for the initiatives of TEZ has been mostly private. National support has also been present in matters of infrastructure. EU funding has so far been utilised the least. However, with support from Operational Programme “Innovation and Competitiveness” 2014-2020, co-financed by the EU through the European Regional Development Fund and the national budget of Bulgaria, a Vocational Training Centre has been opened in the Rakovski zone. In the training centre, not only workers are qualified and retrained, but also students from five vocational schools in the district are taught practical classes with the latest equipment and technologies.
So far, experiences with EU funding have been positive, funding for green practices is always welcome and applying for EU support is not complicated. Funding could nevertheless be improved if more EU projects aimed directly at industrial parks are offered.
Moreover, as mentioned in Section 3.6.5, the lack of experts is the largest setback for TEZ. The recom-mendation of the business development manager for improving EU-level funds to better support re-gions in the transformation towards climate neutrality is to provide more funds for consultants to mon-itor the availability of funding opportunities (i.e., programmes) which TEZ and other similar industrial parks could apply for. Since funding is mostly private, initiatives at TEZ would still exist without external financing, but “not in this scale”.
3.6.7. Monitoring, improvements and outlook
No monitoring processes are currently in place, as TEZ management does not have the capacities to monitor and there is a lack of experts. Feedback by investors has been positive and expressed during the Advisory Board “TEZ-Carbon neutral industrial parks” meetings.
As the biggest hurdle for TEZ is the lack of know-how, the integration of partners who are experts in different points of carbon neutrality is vital for the success of TEZ’s initiatives. Future improvements foreseen include the hiring of consultants to monitor the availability of programmes for funding on EU and national levels for TEZ to apply for.
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3.6.8. Lessons learned: key success factors and recommendations
The three key success factors mentioned by the interviewee are: (1) management (mainly in terms of setting goals, upgrading them and following them up), (2) know-how and (3) resources, both financial and human. The main recommendation to other regions for launching similar initiatives is to look for municipalities with already established structures for investors, i.e., human capital or infrastructure for factories.
According to the interview partner, EU-level policy makers could better support regions in transfor-mation by interlinking them and supporting training initiatives. For example, as coal regions in Bulgaria must transform their economies, their workers could be re-qualified in climate neutrality practices and employed at eco-industrial parks such as TEZ.
You can read the full Report on the link below: EU regions in the transformation towards a climate-neutral future | Highlights | Supporting analyses | Committees | European Parliament (europa.eu)
