Companies affected by the Carbon Border Adjustment Mechanism (CBAM) will have a nine-month grace period after January 1, 2026, to continue importing goods from third countries until they obtain “approved declarant” status. Meanwhile, the European Commission is preparing a full review of the CBAM by December with new legislative proposals to clarify the rules on electricity, exports, and the prevention of abuse.

This became clear during the international forum iN Sofia 2025, organized by Economic.bg, which took place on October 31, 2025, at the Hilton Hotel.

The mechanism is becoming a key EU tool for preventing “carbon leakage” and maintaining the competitiveness of energy-intensive industries, but it remains a challenge for both business and administration.

We would like to remind you that the Mechanism will come into effect on January 1, 2026, and will cover companies that import iron, steel, aluminum, cement, fertilizers, electricity, and hydrogen from third countries into the EU. The actual purchase of certificates will start in 2027, but next year companies must have obtained “approved declarant” status in order to be able to import.

Business relief

The Executive Environment Agency (EEA) was designated as the competent authority for CBAM in 2024. “We had very little time to prepare, but we succeeded. We built capacity, created our own internal procedures, and maintain up-to-date and practical information on the agency’s website,” said Vesselina Roshleva, deputy executive director of the EAEA.

To date, around 200 applications have been submitted for “approved declarant” status, with 140 companies expected to receive approval within weeks.

This will allow importers to continue their activities without interruption after January 1,” Roshleva said.

She added that the new regulation to simplify CBAM, published on October 17, provides for real relief.

We will now have a single threshold based on weight – 50 tons per shipment. This means that importers whose goods do not exceed this volume will not need to have “approved declarant” status, she explained.

The previous threshold was extremely low – only €150 per shipment, which in practice included almost all small deliveries within the scope of the mechanism. This effectively gives small businesses some breathing space.

The second key relief, she said, concerns the approval deadlines and introduces a nine-month grace period after the CBAM officially enters into force on January 1, 2026. All importers, even if they have not obtained the status of an approved declarant, will be able to continue importing goods within the scope of the CBAM. This will initially apply until March 31, and if they apply for approval in the meantime, they will have another six months.

In other words, importers will be given a period of around nine months during which they will be able to continue importing such goods without being – roughly speaking – stopped at the border.

The transitional regime introduced in this way aims to ensure a smooth start to the mechanism and avoid disruptions in supply chains. This will give businesses enough time to bring their processes into line with the new requirements and the administration to complete the approval procedures and stabilize the system.

Roshleva acknowledged that questions about electricity remain open. The agency is awaiting additional guidance and methodologies for the application of CBAM to electricity transit. Roshleva also shared the most frequently asked question:

What happens to companies that transit electricity from a country outside the European Union, through an EU country, and then to a country outside the EU? This is an extremely complex question, and at the moment we really don’t have an answer.

The European framework

We are working intensively on the rules and guidelines for the introduction of the mechanism from January 1, 2026,” said Jan Dusik, Deputy Director-General of DG Climate at the European Commission.

He pointed out that a full review of the CBAM will be published at the end of the year, accompanied by legislative proposals in several areas – electricity, exports and the prevention of circumvention of the rules.

We want to ensure that CBAM is not undermined by resource transfers or value chain manipulation. Our goal is for it to be successful – as part of the broader framework of the European Emissions Trading System (ETS),” Dusik emphasized.

On the path to decarbonization

Despite these positive steps, large energy-intensive companies continue to insist on harmonizing regulations with the “physics” of real business in order to remain competitive in the context of decarbonization. Aurubis Bulgaria is among the companies that are already implementing decarbonization programs combining green energy and energy efficiency.

Ivaylo Georgiev, Head of Sustainable Development and Public Relations, emphasized that the company has a “well-developed, feasible, and implemented decarbonization policy” that has long since moved beyond the theoretical essay phase and is focused on the real challenges of the industry.

Since a large part of Aurubis’ production processes are already electrified, the company is shifting its focus to its “indirect footprint.” This means efforts to produce its own energy from renewable sources and achieve savings through energy efficiency programs. At the corporate level, investments are also being made in future technologies, albeit at a “very early stage,” such as carbon capture and storage systems, as well as the use of hydrogen as a fuel for the sector.

Georgiev categorically stated that the company’s approach is based on pragmatism, taking into account financial realities:

The closest reading we have ahead of us is the annual financial report.”

He emphasized the philosophy that “decarbonization is a strategy, not a collection of projects.” . “What we are trying to do is to read the regulations and financial reports in combination in the smartest way possible, as far as reality allows,” he concluded, stating the position of “real business” in the complex dialogue between “regulation and reality.”

The new “matrix” for competitiveness is based on speed, adaptability, and the possibility for continuous innovation. In this context, Bulgaria must focus on the quality of economic growth, not just on quantitative indicators, especially in the context of the upcoming introduction of the euro on January 1.

This was stated by Deputy Minister of Innovation and Growth Martin Danovsky during the international forum iN Sofia 2025, organized by Economic.bg.

Percentages are not the most important thing. There is a difference between growth of one and a half percent and two and a half percent, there is a difference between three and a half percent and five percent. But we need to pay more attention to the quality of growth,” Danovsky emphasized.

According to him, growth must be based on innovative and technological advantages that create different added value in a digital environment, with an emphasis on technological sovereignty, critical materials, and new technologies.

Martin Danovsky stressed that the introduction of the European currency on January 1 is a significant new challenge that “gives us the opportunity to get a clearer answer to the questions: What kind of growth do we want to achieve, what quality of growth do we want to achieve?”

He believes that any new system for increasing regional or national competitiveness must meet at least two of the three characteristics: speed, adaptability, and the ability to continuously update.

The Deputy Minister emphasized the importance of companies from countries catching up with Central European economies having an accessible, clear, and predictable path to the bigger stage, where all players not only have equal conditions but also have the opportunity to compete freely and create consortia and partnerships.

Modernization of existing industry

Danovsky insisted that Bulgaria should not only pursue the future of industry, but also invest in the modernization of existing businesses.

We must pay serious attention to existing industry, which, even with a fundamental accelerator such as digitization and a focus on technological renewal plus research and development, could achieve a much higher level of results,” he said.

He pointed to Bulgaria’s Digitalization 2030 program as a key tool, with a particular focus on two areas: strengthening research and innovation capacity and unlocking data potential.

We are critically lagging behind on a national scale in terms of accumulating high-quality, timely, and well-managed data on which to grow,” he warned.

New sectors and artificial intelligence

In this context, he pointed out that new structures have been created in recent months, such as the Center for Defense Innovation and the Center for Excellence in Kazanlak.

We cannot remain indifferent to how a strong software industry and a strong automotive industry, which we have here with great engineers, cooperate with the defense sector,” he said.

According to him, the greatest opportunity for Bulgaria is the applicability of artificial intelligence. “It’s no longer rocket science. It’s just here, and we have to use what we’re creating as infrastructure,” he said, adding that institutes such as INSAIT and GATE are a chance to “improve our reputation, talents, and sovereignty.”

Translated with DeepL.

Europe cannot view decarbonization in isolation, but must take a sensible approach. This process must go hand in hand with competitiveness. This was stated by Jan Dusik, Deputy Director-General of the European Commission’s Directorate-General for Climate Action (DG CLIMA), during the international forum iN Sofia 2025, organized by Economic.bg.

This is already laid down in the Clean Industrial Deal. We are currently implementing a program that covers a number of areas and strategies,” Dusik said.

He explained that the first direction is to ensure affordable clean energy for Europe. According to him, the continent must secure sufficient clean energy to enable citizens and businesses to continue with decarbonization, which is not only a matter of economics but also of security and sustainability.

We know that energy is the lifeblood of the economy,” he added.

In his words, a possible solution is for Europe to become better at producing its own energy and to diversify its imports of raw materials.

Climate change is already happening, companies must prepare to operate in a world that will be at least 1.5°C hotter,” he said.

In the case of Europe, this will mean temperatures 3°C higher.

Source of funding

However, in order for the Old Continent to face the new reality, funding is needed, and according to Dusik, the European Emissions Trading System (ETS) provides just that.

It is a huge source of revenue. The system finances the Modernisation and Innovation Fund,” Dusik added.

Separately, the new EU budget proposed by the EC for the next seven years allocates 35% of its funds to climate and environmental investments.

The focus of the Clean Industrial Deal

Dusik also touched on the topic of the Clean Industrial Deal, mentioning that it focuses on two main sectors:

• Energy-intensive industry;
• The sustainable technologies sector.

One area is energy-intensive industries and the question of how we can help them adapt and decarbonize – to switch to electrification where possible, to find new energy sources such as green hydrogen, to develop solutions for carbon capture, storage, and utilization, as well as for the application of renewable energies and carbon removal technologies,” he said.

As for the sustainable technologies sector, the Deputy Director-General saw “great potential and many opportunities” in Bulgaria. He shared his conversation with Bulgarian industry, which discussed opportunities related to the circular economy, higher efficiency, and better cooperation across value chains.

According to Dusik, the Green Deal is already yielding results, with 20 years of experience with the European Emissions Trading System having reduced carbon emissions in the affected sectors by 50%, while the economy has continued to grow.

We can see that decoupling economic growth from carbon emissions is working. The system is being expanded – it will soon cover households and the transport sector, and already covers around 70% of the European economy. It is actually reducing emissions and gives us confidence that we will achieve the target of a 55% reduction by 2030 and climate neutrality by 2050. We are currently discussing the target for 2040,” he summarized.

Translated with DeepL.

Europe has every opportunity to be a global leader in economic transformation and the AI revolution, but the fiercest battle right now is to attract and retain talent. This was stated by European Commissioner for Innovation Ekaterina Zaharieva at the international forum iN Sofia 2025, organized by Economic.bg.

She emphasized that instead of complaining, we must work to create the best conditions for innovation. The continent has the finances, computing power, human and energy potential to meet the needs of AI.

The green transition: between ambition and pragmatism

Against the backdrop of polarised opinions on the green transition – ranging from criticism that it is ideological and does not take into account the practical needs of business to insistence on continuing along the same path without change – Zaharieva drew attention to some telling figures that emphasise that a balance can be achieved.

In 2023, 4% of employment growth in the EU will be due to clean technologies, and investments in clean energy have grown by 111% over the last decade. In 2024, they reached €335 billion and provided jobs for 1.8 million people in the Union,” she said.

Simplification of regulations

The European Commission has already tabled seven legislative proposals, known as “omnibus,” which aim to simplify the business environment, especially for small and medium-sized enterprises. An eighth digital package, focused on artificial intelligence, is also in the pipeline.

Artificial intelligence is here. It will change everything,” Zaharieva said, calling for us to embrace the opportunities that technology offers instead of fearing it.

She defended the European Artificial Intelligence Act, noting that the alternative would have been 27 different national regulations, which would have created chaos for businesses.

The battle for talent

The fiercest competition, the biggest battle is for talent,” Zaharieva emphasized.

She explained that the competition is no longer so much about finance as it is about attracting and retaining talented specialists in Europe. According to her, Bulgaria has much to be proud of in this regard. An example of this is INSAIT, which attracts scientists from Europe and around the world.

The European campaign “EU for Talent” is already showing good results. Interest in working in the field of science and innovation in Europe has increased fivefold, Zaharieva emphasized. A record 17,058 applications have been submitted under the program, which pays salaries to young scientists.

European investment in science is also visible through the Horizon Europe program, which is the world’s largest program for science and innovation, with a budget of nearly €100 billion. For the next programming period, the Commission is proposing a separate program with €185 billion. In addition, the first ever EU strategy for start-ups and growing companies is being developed to support start-ups. A new regime is to be introduced – a single registration scheme that will enable companies to do business quickly, digitally and cheaply throughout the EU.

The European Innovation Act will include preferences in public procurement for technologies developed in Europe – a little European patriotism,” Zaharieva commented.

Translated with DeepL.

A visionary for whom technology and education are an integral cause, a man who builds bridges between business, science, and the future of young people – Ognian Trajanov is the owner and CEO of TechnoLogica, one of the first private IT companies in Bulgaria. His role extends far beyond corporate leadership.

Ognian Trayanov works actively to promote sustainable development and support youth initiatives and has been contributing to the development of the IT sector for years. He has served two terms as chairman of the UN BMGD and two terms as head of the Bulgarian Association for Information Technologies (BAIT). He is currently chairman of the BAIT Supervisory Board.

We spoke with him on the eve of the international conference iN Sofia 2025, which will be held on October 31 at the Hilton Hotel in Sofia. During the event, Ognian Trajanov will participate in a visionary conversation with Georgi Georgiev (Simobotics).

Don’t miss out on registering for the visionary panel at the iN Sofia 2025 international conference. The full program of the event can be viewed here.

Mr. Trajanov, Technologica was founded at the dawn of the transition, and you have witnessed the evolution of the Bulgarian IT industry from its early stages to the present day. How has the nature of technological entrepreneurship changed over the years?

The Bulgarian IT industry began long before the changes. The changes provided an exceptional opportunity for IT entrepreneurship, opening up not just niches, but a vast field. Most of us IT entrepreneurs were previously research assistants. We left the institutes with knowledge, but we had no experience, no funding, and there was even no demand. We had to prove the benefits of information technology. We started with hardware, partnerships with foreign manufacturers, and some of the big brands brought management know-how.

Different types of entrepreneurs can be distinguished – opportunists, replicators/copiers, innovators, and entrepreneurs with a cause. During this period – the beginning of the transition – most entrepreneurs were forced into it, and most of them remained at that level – trading in hardware. An entrepreneur with a cause is not just a business owner, but a person who has an idea that they are fighting for and has staked everything on realizing it. We, the entrepreneurs with a cause, wanted to realize our dreams for our own products and solutions. We created a market and gained trust, proving that the dedication of Bulgarian IT entrepreneurs to the success of the project in Bulgaria provides a greater guarantee than the respected international brand.

We opened the doors for the next generation of entrepreneurs. And again, among them there were those whose main goal was the easier way to make money with little added value, and others who wanted to realize their ideas in a business with high added value, knowing that it would take more time and effort. The former rushed into the outsourcing business to sell the labor of IT specialists to foreign companies, while the latter, whose typical representatives we will meet at the iN Sofia event, focused on creating their own products and solutions.

The time has come for a new generation of IT entrepreneurs. They have the chance to embark on their journey in a much more favorable environment with interested investors, entrepreneurs who are ready to help, and the state’s awareness of the need to support start-ups.

Artificial intelligence is no longer science fiction. From the perspective of someone who has been building software solutions for decades, is this an evolution or a revolution? How does it change the rules of the game?

From the perspective of someone who has been working in the field of artificial intelligence since the 1980s, I would say that its development illustrates Hegel’s idea that “quantitative accumulations lead to qualitative changes.” Neural networks and machine learning are terms from the middle of the last century. Today, the necessary conditions are in place for the realization of something that has long been theoretically mapped out, namely computing power and oceans of data in digital form. It is understandable that artificial intelligence is shaking up the world. It is significant how free access to ChatGPT has gained the attention, respect, and interest of billions in artificial intelligence, after years of each of them using it in their daily lives and even having a device with artificial intelligence in some form in their pocket.

Like any generally transformative technology or innovation, AI inspires both enthusiasm and fear. The challenges are many: copyright in the various arts, the accessibility of deepfakes of famous people, which is also observed in Bulgaria, and the rapid generation of changing, hard-to-recognize malicious program code, and the reliability of autonomous weapons, etc.

But gradually, regulations and solutions are being found. The risk of generated, plausible, and well-received fictional content being multiplied in a chain by subsequent search engines and AI, turning it into “popular truth,” is addressed by labeling it “generated by AI.” The simplest example is AI that helps check whether homework assignments have been generated by AI.

Every industrial revolution has been associated with fears of job losses. But in fact, it has always been about freeing people from hard and unproductive work and helping them to realize their potential in a lighter and more creative way. And the displacement of white-collar workers from their jobs by AI is not the first encroachment on them – software robots for automating work processes (RPA) have been doing this successfully for years. What is new is that through AI, humanity will not only have assistants to relieve it of routine work, but also a partner for creativity and scientific research. Years ago, I wrote on my LinkedIn homepage: “We should not be afraid of new technologies. The shortcomings of new technologies will be eliminated by newer technologies. AI and robots are not oppressors, they are our liberators.”

AI and 3D modeling: How do you see the synergy between artificial intelligence and 3D design? Do you expect AI to take over a large part of routine engineering design, freeing up human resources for creativity and innovation?

This is already a reality. Since the beginning of the century, the engineering design and manufacturing systems we use to support Bulgarian engineers have implemented something I dreamed of and was the subject of my dissertation – “Application of A methods for recognizing the technological characteristics of machine-building parts.” This is an important element for the relationship between designers and technologists, unification, and optimization. Designers can use built-in AI to solve more complex tasks related to the optimization of the products and parts they design. An easy-to-understand example is suggesting the optimal number and type of spokes for a designed wheel based on the requirements for it.

Your DiTra center works directly with Bulgarian industry. Which sectors in Bulgaria are the fastest to adopt 3D printing, scanning, and reverse engineering technologies, and where do you see the greatest potential for radically increasing competitiveness through these activities?

Many sectors, and not only in industry. Even in medicine and art.

Rapid prototyping was the first area in which we started using 3D printing back in 1997. Various tasks, such as testing how comfortable to hold and resistant to sand on the beach newly designed bottles are. Or to produce extremely quickly the box of a new cash register that is going to an exhibition. Since then, we and our customers have come a long way in the development of these technologies. Repair, restoration, or modernization after scanning is an approach that ranges from replacing a part of a personal item or detail to replacing the furnishings of a train car. Today, the new wave in 3D printing is the production of parts for drones.

The great potential lies in personalization – a key feature of the Fourth Industrial Revolution. The transition from manufacturing for an anonymous customer to meeting the specific requirements of a particular customer. Additive manufacturing (3D printing) eliminates the need for preparatory processes and their material support, enabling simultaneous printing of assembled units, speed, and flexibility. Personalization is already being used, expected, and demanded.

Young entrepreneurs today are growing up in a world of venture capital, unicorns, and exit strategies. You built an extremely successful company in a different era. What from your approach would you recommend to today’s generation, and what would you warn them to be careful about?

In the world you describe, customers are impersonal investors who put money in and want money back. This provides resources but does not provide freedom.

I am an entrepreneur who takes moderate risks and focuses on stability and the team, not on scale, and I would warn them: don’t invest all your resources to the end and don’t take full advantage of the temptations offered by the market in good times by achieving rapid quantitative growth that only corresponds to a booming economic environment. Don’t put all your eggs in one basket; ensure diversification.

It is natural to seek success in competition with your peers. But it is primitive to judge how successful a person is by their wealth. Even in a developed market economy, where remuneration and profit show how useful you have been to customers with your work and creativity, this cannot be a decisive criterion. And in times when, under the pretext of dealing with pandemics and military threats, debts are being accumulated for future generations, money has an increasingly virtual value.

On the path to maturity, you understand that success is objectified through the assessment of those who understand the subject matter (experts, colleagues, competitors, customers) and are not subjective (they are not dependent on you, they are not flatterers).

Success is the achievement of a lofty goal that was a challenge for you, and the reward is the motivation and resources for the next higher goal. But when you reach maturity, having achieved a number of goals, set new ones, and thus come a long way in pursuing goals, you have grown as a person, you realize that the meaning of your existence is what you have created and left behind. These are the deeds with which you have made the world a little better, the next generations in which you have invested and which will continue to change it for the better.

Profit and money are recognition, but they also bring expectations of you and commitments to society. Profit and the financial resources it generates are incentives from society to raise your gaze and move towards new, higher goals and causes, investing the resources you manage to achieve them.

Do you see a fundamental change in how value is created in the economy? How can we raise the level of added value generated in Bulgaria?

Creating high added value is linked to innovation. We need to build an ecosystem for innovation. A significant obstacle to achieving this is the lack of an innovation market – an environment for buying, selling, or finding co-investors for finished and packaged products from the intermediate phases of the innovation process (ideas, technical solutions, patents, prototypes, project documentation, etc.). Innovation goes through different phases. In Bulgaria, it is very difficult for it to be pushed forward independently from the person who generated the idea to its market realization. For 14 years now, I have been sharing my concept for this important element of building an ecosystem for innovation and looking for like-minded people. I am not giving up; for me, this is a cause. I have realized one of my causes – the first STEM center, TechnoMagicLand.

Other necessary measures:

• Intelligent specialization without blurring dozens of priority areas within it. It should not be unfocused and isolated – unknown, without sufficient discussion, without consensus and unity of society around it. One aspect of specialisation should be the training of human resources, a “task” for the education system;
• Amendments to the Public Procurement Act and the announcement of tenders for products and services with great potential that do not yet exist on the market;
• Freeing pension companies from restrictions on investing in shares of Bulgarian companies;
• Change in the regulatory framework for accounting for investments in innovation development.

If you had to advise the young Ognyan Trayanov, who is starting his entrepreneurial journey today, in which direction would you guide him? Which sectors, technologies, or business models hold the greatest potential for the next 20 years?
I managed to spark his interest in IT, AI, broad-spectrum engineering education, psychology and philosophy courses, and subsequent specialization in a emerging field with a wide scope for innovation when he was still a teenager.

As areas with great potential for the next 20 years, I would point to: bionics, human sensory enhancers, human-computer interaction, quantum computing, and communications.

In the nearer future, I would focus on: replaceable batteries for vehicles instead of long charging times, AI for monitoring and controlling AI, a new stage in the development of Knowledge Representation and Reasoning, and, as a sector, healthy living.

Translated with DeepL.

Ivaylo Naydenov holds a master’s degree in Nuclear Energy and a doctorate in Nuclear Energy Installations and Equipment from the Technical University of Sofia. From 2014 to 2019, he held the academic positions of assistant and senior assistant in the Department of Thermal and Nuclear Energy at the Faculty of Power Engineering of the Technical University of Sofia.

He has completed short-term specializations in the field of energy security (NATO School in Antalya, Turkey, 2015, and Masaryk University School, Brno, Czech Republic, 2016) and critical raw materials (COST Action, Higher Technical Institute, Lisbon, Portugal, 2017), and has completed numerous training courses in the field of energy management, energy markets, and energy diplomacy. He won first place in the Bulgarian Nuclear Society’s competition for best young scientist in 2017. He is an honorary lecturer at the University of National and World Economy (2018 – 2024) and at Sofia University St. Kliment Ohridski (since 2021). He has been the executive director of BFIEC since October 2019.

Mr. Naydenov, we are gathering on the stage of iN Sofia 2025 at a time when the world is literally redrawing the map of industry and energy – in a race that may prove to be the most decisive for our generation. While countries are fighting for factories, data, megawatts, and brains, where is Bulgaria in this sprint? Are we running shoulder to shoulder with the others, or are we still looking around at the starting line?

The most important task in Bulgaria from an industrial perspective is to preserve existing production in energy-intensive and other manufacturing industries. This will preserve the existing foundation on which new high value-added production facilities can be developed, including components, systems, and aggregates for zero-emission industries. Preserving energy-intensive industries will also have a positive impact on the retention and development of engineering personnel, who will undoubtedly be needed. Investments are also being made and innovations introduced in existing industries, many of which are related to decarbonisation and the introduction of artificial intelligence. These industries are also the foundation of the circular economy, as many of them are recycling industries.

When it comes to sprinting, we need to be clear about the goal we are sprinting towards and what we can realistically achieve, so that we don’t end up like those likeable, exotic athletes who drop out in the qualifying rounds.

We should not approach the attraction of data centers haphazardly, just because it is fashionable and everyone is doing it. There must be a strategic approach in line with the country’s capabilities. These computing “factories” are large consumers of electricity, and when attracting them, an analysis should be made of how their consumption will affect supply and prices for other consumers. A flexible approach, which is also the most realistic at the moment, is for these centers to build their own power generation facilities for their own needs. Given the construction time and the required production profile, gas-fired power plants would be the most suitable option.

In summary , we should preserve existing industries, create conditions to encourage investment and innovation, use the existing infrastructure to attract high value-added manufacturing, and, with regard to data centers, attract investment in an orderly and strategically thought-out manner.

Bulgaria really wants to attract energy-intensive investments, such as smart factories, data centers, and AI hubs, but is our current system and electricity grid ready to take on such a load?

Data centers in Bulgaria at the moment are like the old folk tale about the unborn Petko – more hypotheses are being built and grandiose scenarios are being drawn up, something we are not seeing for the first time in our country. Again, we should approach such investments in a more cool-headed and thoughtful manner. We should neither deny them nor imagine ourselves as the “computing center of the universe.” Only after seeing the amount of consumption and the potential location of the sites can we comment on the need for investments in the transmission infrastructure, including the provision of backup power. The picture is similar with the construction of other new production facilities.

In my opinion, the potential addition of gigawatts of basic consumption would require additional investment in the electricity system. However, if potential investors in data centers build their own power sources, this would reduce the need for additional capital investment in the electricity transmission infrastructure, which, ultimately, is paid for by everyone. If such power plants are gas-fired, I believe that there is sufficient transmission capacity in the country’s gas transmission system to provide fuel.

Adding new base or near-base consumption would also have positive effects because it would smooth out to some extent the relatively large differences that exist between maximum and minimum consumption in the country.

Assuming that energy is one of the main magnets for such investments, can we attract them?

From the point of view of the electricity balance, Bulgaria currently has sufficient available capacity, if we take into account the coal-fired power plants in the Maritsa basin, which operate at low capacity. Again, I emphasize that we do not know, at least publicly, what consumer capacity we are talking about, and are only building hypotheses. Bulgaria is well positioned in terms of connectivity and the degree of development of its electricity infrastructure, but the emergence of gigawatt consumption would change the picture, namely the addition of hundreds of megawatts or gigawatts of new capacity, there is a real risk of shortages, especially during annual repairs at the Kozloduy Nuclear Power Plant and during the winter months.

The key issue is the price of electricity. Information has emerged that potential investors in data centers would consider building such facilities at long-term electricity prices of around EUR 65/MWh. This would also require a long-term supply of electricity. Existing industries, including the Bulgarian Federation of Industrial Energy Consumers (BFIEK), have long sought similar conditions. To put it more diplomatically, if we create conditions for preserving existing industries, new ones will come.

The reality is that data centers need electricity now, not in 10 to 15 years. However, discussions about them are running parallel to ambitions to build new nuclear power plants. In your opinion, is this just a convenient political flirtation that sounds good to investors, or is it a realistic plan with a horizon that business can rely on?

The horizon for investments in nuclear power plants is long. This applies not only to large reactors, but also to small ones. If we know how we want to develop consumption—industry, data centers, hydrogen, etc. – and this vision is sustainable over time, we will be able to plan and develop nuclear projects. This is where the symbiosis between two other chimeras comes in—energy and industrial strategies.

If potential investments in computing power are made in the next 3 to 5 years, there are two realistic options. The first is to consume energy from existing generation – coal-fired power plants or the Kozloduy NPP. However, drawing energy from the Kozloduy NPP from one or two large consumers would have a devastating price effect on the market, both for industry and households. The second option is for the investor to build their own energy source in parallel. In my opinion, the most realistic option would be a gas-fired power plant that operates according to the consumer schedule. This has been the approach for years in the construction of data centers in Ireland, and the trend is similar in the US.

In the context of energy-intensive sectors, where BFIEK is directly involved, what specific risks and gaps do you see in relation to the Carbon Border Adjustment Mechanism (CBAM) and the requirements for reporting emissions? Which sectors will be most affected and should we expect price increases?

We risk the CBAM turning from an attempt to protect EU industry into yet another burden. The products covered are steel, aluminum, nitrogen fertilizers and ammonia, cement, hydrogen, and electricity. These are very different products with different characteristics, but overall it can be said that there are too many opportunities to circumvent the CBAM. For example, to fully protect the cement industry, laboratory tests of imported cement are required at all EU external borders – something that cannot currently be done in Bulgaria, and the regulation comes into full force on January 1. However, this approach is not applicable to metals. There are other specifics affecting metallurgy and fertilizers.

Insofar as some of these products are sold at stock exchange prices, in cases where raw materials covered by the SVA are imported, or an effective way to circumvent it by importers is found, there is a risk of a decline in local production. In other cases, prices may rise when imports of a final product are taxed if it has a significant share of the end-user market. The mechanism will have a specific impact on each individual product covered, so it is difficult to determine all the effects in advance.

Add to this the lack of preparedness of the responsible institutions in Bulgaria and the fact that the Bulgarian-Turkish border is perhaps the busiest external border of the EU, and the risks only multiply.

The electricity sector remains the most “unclear” in terms of the methodology for calculating emissions. When can we expect more clarity?

It is expected by the end of the year, which is far from sufficient, because the payment of ETS certificates will inevitably affect the final price of electricity. This will also have a negative impact on the price of electricity for industry.

In your analysis of the decarbonisation of energy-intensive industry, you say that the path to success lies in creating a roadmap that can also be used in a subsequent industrial strategy – however, such a roadmap is already being prepared and is scheduled to be ready next year. Can there be an industrial strategy without a decarbonization plan?

The reality is that the plan for decarbonizing industry should be an integral part of the national industrial strategy. Let’s hope that the strategy will provide an answer to how the state sees the development of industry and how it intends to support it. Without support and partnership from the institutions, decarbonization, which must go hand in hand with maintaining competitiveness, would be impossible.

The Ministry of Energy is discussing a new mechanism to compensate businesses for their electricity bills for a period of three years. In your opinion, how sustainable and fair is this approach to industrial consumers and network operators?
The new mechanism follows the guidelines of the State Aid Framework under the Clean Industry Support Agreement Framework (CISAF), which allows potential beneficiaries from specific industries. It reflects the focus on maintaining the competitiveness of energy-intensive industries in the EU, in line with the recommendations of the Draghi Report.

It is important to note that this mechanism is not automatic and will require application and approval. In addition, at least 50% of the funds should be invested in decarbonization and energy efficiency.

Bulgaria is the first country in the EU to implement the provisions of CISAF and will set the tone for other member states. At BFIEC, we see this as a sign of support and recognition of the problems faced by energy-intensive industries. We believe this is a step in the right direction, as energy-intensive industries are recognized as key. It is worth noting that it accounts for more than 20% of GDP and about 25% of the country’s exports. With regard to other consumers, the Council of Ministers adopted a new compensation program that will remain in force until the end of June 2026.

We are wandering between mappings, strategies, and plans, always speaking in the future tense. What does the industry need today and now to remain competitive?

While the smart ones are thinking, the crazy ones will go crazy. The immediate need is to ensure competitive electricity prices. The compensation mechanism will play its part in this, but I believe that the market also needs to be reorganized to encourage the supply of long-term products, especially for low-carbon energy. Another important thing is to take a common position with the countries of Southeast Europe, especially Greece, Romania, and Hungary, and to exert pressure to take action to improve the physical connectivity between Central and Southeast Europe.

With regard to the administrative burden, the EU must stop “hammering out” additional regulations. In Bulgaria, we should work together with the institutions to create a “one-stop shop” for the administrative servicing of investments in decarbonization technologies.

We see positive signals both in Commissioner Jorgensen’s letter to member states dated October 21 and in the letter from the leaders of 19 member states to Antonio Costa dated October 20.

However, the message from industry is clear: let’s stop with the letters and start with action.

Translated with DeepL.

Assoc. Prof. Milena Angelova has been Secretary General of the Association of Industrial Capital in Bulgaria (AICB) since 2002 and Vice-President of the European social partner representing service providers of general interest, SGI Europe, since 2011. Since 2007, she has been a member of the European Economic and Social Committee. She has been a member of the Economic and Social Council of the Republic of Bulgaria since 2006 and is an active participant in the processes of improving the socio-economic environment in the country. Since June 2022, Dr. Angelova has been the Ambassador for Small and Medium-sized Enterprises of the Republic of Bulgaria.

She has twenty-five years of successful experience in representing and defending the interests of the business community at European and national level, including on topics such as sustainable development and corporate social responsibility, promoting the development of small and medium-sized enterprises, innovation, knowledge and skills transfer, the future of jobs, etc. Associate Professor of Marketing and Sustainable Development at the Institute for Economic Research at the Bulgarian Academy of Sciences.

Assoc. Prof. Milena Angelova will participate in the international conference iN Sofia 2025 as a moderator and participant in “Panel 2: Regulations and Competitiveness.” The panel will focus on how businesses can adapt to the green transition and new European regulations while maintaining their economic sustainability and secure access to raw materials, with the support of European financial instruments.

Assoc. Prof. Angelova, you have repeatedly emphasized that “the green transition must be economically viable, not just imposed by regulations.” What are the most urgent regulatory burdens that need to be removed or simplified so that Bulgarian and European industry can make this transition without losing economic sustainability?

The savings for European companies if the stated intentions to simplify European legislation are realized are estimated at €37 billion. Such a significant resource could restore Europe’s lost competitive position. The Competitiveness Compass initiatives and the series of Omnibus-type simplification proposals offer hope for this. However, the concrete benefits for business are yet to be seen, possibly after the proposals are adopted.

For too long, Europe has been held hostage by excessive legal and regulatory obligations. The EU adopts one piece of legislation for every working hour – over 2,500 per year. Of course, simplification is a step in the right direction, but it is not enough on its own. The disproportionate administrative burden and excessive costs of complying with legal requirements must be eliminated.

To be effective, the process of simplification and reduction of requirements must extend beyond the CSRD-CSDDD-Taxonomy triad to the Regulation on deforestation and forest degradation, the Directive on industrial emissions, the Packaging and Packaging Waste Regulation, the Right to Repair Directive, and the Emissions Trading Directive, as a start.

The list could also include acts regulating the digital economy and cybersecurity (NIS2, CER Directive, CRA, GDPR), the Artificial Intelligence Act, and the Radio Equipment Directive. Some of the most burdensome regulations relate to employment and social policy, which also need to be reviewed with a view to easier and clearer implementation, such as the Works Councils Directive, the Directives on platform work, on pay transparency, and on traineeships. This is extremely important, as the savings made in complying with legislation not only have the potential to significantly improve competitiveness, but also to increase productivity, business sustainability, and long-term economic stability.

As a long-standing secretary general of the AICB, you argue that “a stable industry is the backbone of any successful economy.” Access to raw materials is a critical factor for this stability. What are the three biggest challenges facing Bulgarian industry at the moment and what is your vision for Bulgaria’s industrial policy to ensure a secure supply of raw materials in the new European industrial era?

Bulgarian industry faces many challenges. The reorientation of supply chains – both in terms of the supply of raw materials and the sale of finished products – is exerting serious pressure: geo-economic changes are leading to a significant increase in the cost of raw materials, and necessitate their delivery from more distant sources, while the prevailing average location in the supply chains for the sale of finished products severely limits the possibilities for increasing the prices of finished products and reduces the opportunities for making a profit or even covering costs. Excessively high electricity prices are also a limiting factor, the effect of which is exacerbated by the pressure exerted by the minimum wage, calculated as 50% of the average minimum wage, which is rising in an upward spiral, already outpacing labour productivity growth by more than 10 times.

At the same time, Bulgaria has serious potential in the real manufacturing sector, but in order to realize it, a clear and ambitious policy for reindustrialization is needed in the following areas:

• An education policy closely linked to the needs of industry, implemented through an admission plan, the promotion of protected specialties, and the encouragement of flexible professional qualification and retraining;
• A policy to fill the approximately 200,000 vacancies in the labor market by simplifying and facilitating procedures for third-country nationals to access it;
• Stimulating investment – through the intelligent use of opportunities provided by EU funds and by defending the position of Bulgarian industry in the negotiations on the Multiannual Financial Framework 2028–2034;
• Simplifying and easing administrative and legal barriers;
• Restoring the image of Bulgarian industry as an attractive place for career development through broad information campaigns.

During the Sofia 2025 event, the Carbon Border Adjustment Mechanism (CBAM) will also be discussed, which will inevitably increase costs for many companies. What measures can be taken at European and national level to ensure that Bulgarian industry does not lose its competitiveness when this mechanism is implemented?

The reduced competitiveness of European manufacturers compared to importers of goods produced outside the European Union (EU) is a real and serious economic problem. In recent years, the EU economy has lagged behind that of the US and China. The EU’s share of the global economy has fallen from 25.8% in 2004 to 17.6% in 2024. Over the same period, the EU’s share of global exports has fallen from 18.9% to 14%. The decline is most pronounced in heavy industries such as metallurgy, cement production, and the chemical industry. Emissions in the EU in these sectors have fallen by around 50% since 2005, but a significant part of this decline is due to lower production rather than technological improvements.

The EU’s ambitious climate policies, which lead to higher production costs, have had a significant impact on this process. While the EU reports absolute reductions in carbon emissions, production in China and India, for example, is based on carbon intensity. Their total CO₂ emissions are increasing due to the introduction of new coal-fired power plants. This creates overcapacity, leading to crises and the closure of key power plants in Europe. This trend leads to the risk of production being shifted outside Europe, with the associated loss of jobs. One of the main risks associated with the rising cost of production in the Union is so-called climate dumping. This occurs when third countries, either by choice or due to a lack of capacity, lag behind in the implementation of environmental standards and thus maintain lower production costs and more competitive prices.

In this context, it is important for the Bulgarian state to closely monitor the implementation of CBAM and to develop mechanisms for assessing its impact on the national economy, with a view to providing informed feedback to the EC. Given the start of the operational phase of the CBAM in 2026, the timely development of regulatory infrastructure and secondary national legislation is particularly important for the smooth and reliable functioning of the mechanism. In Bulgaria, there is currently no clear distribution of responsibilities regarding the application of the CBAM. According to the Climate Change Mitigation Act, the competent authority is the Executive Environment Agency (EEA), but physical imports and border controls are carried out by the Customs Agency (CA). It is imperative to formally define and distinguish the responsibilities of the CA from those of the EEA.

The transition period (2023–2025) is intended for training all stakeholders—importers, manufacturers, and control authorities. Comprehensible and systematic training in Bulgarian is required, as well as support for importers falling within the scope of CBAM. Currently, the CBAM Declarant’s Guide is only available in English and is 106 pages long. The “Frequently Asked Questions” section on the topic, to which the IAOS website refers, is also in English and is 57 pages long. National authorities must provide understandable information materials, webinars, checklists, and technical assistance to help businesses adapt to the new requirements.

It is imperative to adopt a process for verifying the accuracy of the content of declarations, including sampling and testing in laboratories of imported goods falling within the scope of CBAM. National customs authorities must adapt their procedures to integrate CBAM requirements, possibly through changes to customs declarations. Customs officials must be trained on CBAM provisions and procedures in order to effectively process CBAM-related import declarations.

Above all, it is necessary to ensure traceability of the economic impact of the Mechanism’s implementation, including its impact on the final market prices of the goods concerned, by ensuring effective and timely feedback at EU level.

In its preliminary draft opinion on the European Competitiveness Fund (ECF) Regulation, you recommend that it be renamed the “Competitiveness and Security Fund” and note that opening it up to third countries requires “particular caution.” Do you think that the Fund can successfully balance competitiveness and security, and what specific safeguards should be put in place to ensure that funding does not lead to the leakage of critical technologies?

The proposed renaming of the Fund is intended to clearly reflect the fact that, in fact, support is provided in greater proportion to security, in addition to competitiveness. However, these two priorities are neither contradictory nor mutually exclusive. Investing in technologies applicable in the field of security would also have a clear positive effect on competitiveness, especially with regard to dual-use technologies.

As for opening up funding to third countries, this is an existing technique brought in from the Horizon program. However, the condition is that these countries must be involved through partnership agreements and with the financing of the Fund – my recommendation is that this should be more clearly stated as a requirement in the Regulation.

The success of the EIF depends on attracting private capital, and in your report you talk about the need to support physical infrastructure, especially outside the major centers. How can the state encourage businesses to invest their own capital and use the Fund’s resources to develop infrastructure and logistics in order to attract more investment outside Sofia?

The Fund’s resources will be invested in projects that have a proven positive effect on improving European competitiveness. Of course, the question arises as to how such an effect, which will manifest itself in the future, will be assessed and measured. From this point of view, successful projects would be more international than national or regional in nature. This, of course, does not exclude the possibility of such international projects being implemented in the regions of Bulgaria. Similar opportunities are also provided by the increased attention to the Black Sea region, as highlighted in the EC’s communication published earlier this year, “A Strategic Approach to the Black Sea Region: Secure, Prosperous and Sustainable.”

In your opinion on the EFC, you insist that social partners be included in the management, and the principle of the Fund is to promote cooperation between small and large companies. What specific role should the social partners play in the management of the EFC and how can we actually build a working network for cooperation between SMEs, large businesses and research centres in Bulgaria?

Indeed, the management and decision-making mechanisms under the new EIF proposal are innovative in nature, in that they are not only intended to be established at European level, but also to work on the periodic preparation of work programs that will specify the priorities for investing EIF funds, in line with the development of external challenges. This raises the reasonable question of how the views and interests of Member States, regions, social partners, and potential beneficiaries at national, regional, and sectoral level will be taken into account. There is no easy answer. The main options under discussion relate to the use of existing structures within the EU, such as the European Network of SME Envoys, and the involvement of the European Investment Bank.

The main options under discussion are related to the use of existing EU structures, such as the European Network of SME Envoys, as well as the inclusion of special coordination and consultation mechanisms within the European Semester. The relevant ministries in Bulgaria should also play an active role here, actively stating these needs and defending them in the intensive negotiations that are currently underway.

We expect greater clarity on the subject in the second half of November, when the EC is expected to present a “Coordination Instrument for Competitiveness,” which should propose precisely the mechanisms for coordination, decision-making, and corrective action when necessary.

With regard to informing businesses, and SMEs in particular, there are plans to set up a “Europe for Business” support network, the idea being to build on the existing European Enterprise Network.

You point out that the Fund is based on old, not fully implemented policies and that “the Single Market is still not functioning effectively.” At the same time, the EFC brings together 14 programs under a single framework. How will the inefficient functioning of the Single Market affect the success of the EFC, and how can we ensure that bringing together so many programs will actually facilitate business rather than burden it with new administrative rules?

The inefficient functioning of the single market is an obstacle to the active inclusion of Bulgarian SMEs in supply chains. In the EU, there are still too many differences between Member States in terms of rules for doing business, access to national markets, and specific requirements related to this.

In your report, you warn of the risk of “picking winners” and suggest that the evaluation process should be “more flexible, interactive, and open” to ensure a level playing field. What do you think should be the three most important indicators for evaluating projects in order to avoid “picking winners” and ensure that funds also reach small businesses and more remote regions?

Firstly, it is good to have an indicator that ensures the inclusion of projects from all Member States. Furthermore, in order to encourage the inclusion of enterprises from Member States that are further away from the chain leader in value chains, it is important to have a positive incentive proportional to the scope of the chain in order to also encourage the reorientation of value chains within the EU. Furthermore, SME support schemes should be administered at national level in order to facilitate and simplify the process.

At the iN Sofia 2025 event, you will moderate a key panel on regulation and competitiveness, together with MEPs and deputy ministers. What is the most important message you would like to send to Bulgarian businesses striving to be competitive in the new European industrial era?

Be active, connected, open to new opportunities and proposals, seek information and ask questions. Bulgaria has a well-established network for providing information and advice—through employer organizations at the national, regional, and sectoral levels and through the information and advisory services set up by the institutions. In Europe, alliances of interested parties are already forming to establish future partnerships and collaborations that will apply for access to EFC funds. Examples include:

• The Clean Battle Consortium, together with the EBRD, which aims to support the development, construction, and financing of electricity storage technologies and projects to accelerate the transition to clean energy;
• The Commvault Storage Accelerator, which focuses on technical software to improve data replication and storage in cloud libraries;
• The European Battery Alliance

Translated with DeepL

Artificial intelligence is a hot topic for discussion, a strategic field for business, and a fierce arena for geopolitical competition. AI technologies are developing at an unprecedented pace, raising the question of the need for so-called artificial intelligence gigafactories. The giants will pour hundreds of billions into such facilities over the next few years, and Bulgaria may find itself with a chance to attract such investment – if the state plays its cards right. For now, at least, it is signaling that it is sitting at the table.

Why is attracting an AI gigafactory an opportunity to transform the entire economy? What are the chances of attracting such an investor, and how is it doing so far in this race? Why is energy so important? We discuss these and other questions with Dobroslav Dimitrov, a technology entrepreneur and member of the Advisory Councils of BRAIT and BASSCOM.

The topic of energy, resources, and their key importance for the transforming economy will be the focus of the upcoming event of Economic.bg – IN Sofia – on October 31.

Mr. Dimitrov, a few days ago, news broke that the government is in official negotiations with IBM for investment in an AI gigafactory. How is the state actually doing in its attempts to attract such an investor, especially against the backdrop of Romania, which seems more ready?

It seems cheerfully optimistic. Since August, there has been an interdepartmental working group in the Council of Ministers that has been working purposefully to prepare a proposal to investors with land, information about them, infrastructure security, and all the requirements that must be met in order to implement such a large project. The state has committed significant resources and is working in a focused manner.

I would not say that Romania is ahead. It simply responded before us to the invitation from the European Union. According to the information available, none of the participants who initially expressed interest have a good project, as there has been little time. Here, we need to divide things into two parts: one is the European funding line, and the other is attracting the so-called Hyperscalers (American companies making large billion-dollar investments), which are the only ones that can actually implement such a project in the real sense of the word. What is the role of the state in attracting such an investor?

What is the role of the state in attracting such an investor?

Such a project cannot be implemented by the state. Bulgaria must provide the conditions, infrastructure, licensing regimes, security guarantees, electricity – everything that the state provides to an investor to build their factory. The role of the state is to help and provide all the administrative tools for the rapid implementation of the project.

How can we stand out in the eyes of such a high-tech hyperscaler?

We can save them time. Many places around the world, west of us, are very attractive – Germany, for example, has announced that OpenAI will eventually build Stargate Europe there. However, Germany does not have the necessary electricity and power grid. Germany will eventually have them, but it will take time to build them, while we have all these things available here, right now. When it comes to competition in artificial intelligence technologies, saving someone a few years of time becomes a huge competitive advantage.

 

Bulgaria has this advantage—we have an available power grid and substations with a lot of free capacity. There are two reasons for this: one is that we once had a very energy-intensive industry, which we no longer have, and the other is that we are a transit country and have actually continued to invest in these transmission networks.

How much free capacity does the electricity transmission network have?

According to information from the Ministry of Energy, Bulgaria’s electricity transmission network can carry around 20 gigawatts, and at peak times we use 6. We have a lot of free capacity.

The Netherlands and Ireland currently have a moratorium on the construction of new data centers because all such centers have been built there over the last 35 years and there is literally no more room for them in the electricity transmission network.

We, on the other hand, have substations in several places where they could be located. We have nuclear energy, which is the only green energy that can be relied on 24/7 in huge quantities. We have all these things available today.

Is energy the big question in the equation?

Yes, definitely. If you look at the news that OpenAI has signed a contract to purchase 6 gigawatts of computing power—the company is already saying, “We will buy 6 gigawatts of servers”—it doesn’t say how many calculations they are doing, but how much electricity they are using.

Apart from us, France has the capacity and also seems like a more attractive destination.

France is already working on such a project with the United Arab Emirates. Macron announced it even before the announcement of European funding for gigafactories. This is a 50 billion project with investments from the United Arab Emirates with Nvidia, Oracle, and Mistral. And yes, this is thanks to the availability of nuclear energy and a lot of free capacity. France is currently the only country in Europe that can be said to be very advanced in this respect.

Romania also has nuclear energy, though…

Yes, but here’s the key: Bulgaria is better positioned because we are a balancer on the Balkan Peninsula. We can rely on the Romanian nuclear power plant, Turkey to the south of us is also building nuclear power plants, we can provide electricity from all these places. In the long term, at some point, we will also be able to supply electricity from Ukraine, as it was always an exporter before the war. We are connected to all these energy centers, which again gives us an advantage.

You mentioned fast procedures and cooperation from the state, but political uncertainty in Bulgaria is a time bomb. What is the danger of this derailing such a potential project?

For something like that to happen, everyone has to be on board and work as one – the executive, the legislature, local authorities, the presidential institution. If there is confusion, it eliminates our chance entirely.

Speaking of Romania and specifically of European funding for an AI gigafactory, is there any reason to assume that two such facilities could be built in such close geographical proximity?

In principle, it is possible. But in reality, these four… I’m trying to be positive, but in reality, this is such a small and unambitious plan by the EU that it’s sad. What four gigafactories for €20 billion? Right now, OpenAI is making a $100 billion investment in Texas alone, which it plans to increase to $500 billion. And that’s just one company. Separately, we have Elon Musk’s xAI, separately we have Google, separately we have Facebook. And Nvidia produces chips measured in electricity for one gigawatt every month. What Nvidia produces is connected to the power grid and uses one gigawatt every month. But we will make four on the entire continent, and that will be after some time, who knows when.

What is the situation with personnel, and do we have enough qualified people—on the one hand, those who would work in an AI gigafactory, and on the other, those who would build such a high-tech facility?

Bulgaria is an IT leader in Southeast Europe, so we have an extremely strong technological ecosystem. In terms of whether we can optimize, whether there are people to work, whether there are people to help – we have the people for that. Such an investment would create a huge ecosystem of other companies that would come and actually transform the entire economy of Bulgaria.

We certainly do not have the expertise to build something like this. The good-bad news is that nowhere else has this expertise to a large extent. There are no gigafactories in Europe. There are data centers, but for an effort like this, as with the new reactors at the Kozloduy Nuclear Power Plant, we will simply bring in specialists from all over the world.

To quote the founder of Nvidia, “a project like this is an engineering feat.” That is why I have had discussions with the Construction Chamber, because the people involved in this need to realize the necessity of such skills. We are all starting from scratch, but those who are more adaptable and capable usually do better than those who rely on previous knowledge.

What kind of specialists would work in the gigafactory and how many jobs are we talking about?

That’s not the most important thing. Data centers don’t have many employees—the same kind of employees that work in data centers would work in the AI factory, just in greater numbers. But again, we are not talking about a huge number.

What is more important is this: one gigawatt of server power is worth about $20-30 billion. If Google, Amazon, or Facebook trust Bulgaria with $30 billion worth of servers, that settles the question of whether Bulgaria is a good destination for business once and for all. Second, it puts us on a very short list of countries that have something like this, which in the tech world again propels Bulgaria to the forefront—where technology happens. Third, such infrastructure will inevitably begin to attract an ecosystem of users, as distance matters for communication speed. This would attract many other investments that would completely transform the paradigm of the Bulgarian economy – literally putting it on a different vector of development.

How will an AI gigafactory build on what already exists here: the INSAIT and GATE institutes, along with the Discoverer supercomputer and the future small AI factory in Sofia Tech Park?

This is a fundamentally different project. It is good that we have attracted the AI factory and the supercomputer to Tech Park, as we are putting ourselves on the European map. But, note that they are located in one building. The gigafactory covers an area of one to two square kilometers – it is a mini city. There is no basis for comparison in terms of scope and scale.

What is in Tech Park can be very useful for the local ecosystem and for training small models, for small developments in institutes and universities. The gigafactory is what trains the next generation of technology.

What are the economic benefits for Bulgaria and what will we lose if we do not attract such investment?

What will we lose? We will remain in the 18th century while others are in the 22nd. The entire global economy is growing exponentially as a result of artificial intelligence. If we don’t participate, it means we are falling behind exponentially.

This is an existential threat. All countries that missed the industrial revolution did not fare very well afterwards. The future is currently at exactly such a watershed – between pre- and post-industrial society. Which side of the fence you will be on depends solely on how quickly you act. Incidentally, this also applies on a personal level. If you don’t jump over this barrier, you will simply remain in a different time. This is the big threat. And the possibilities are endless. There are currently bets in Silicon Valley on when the first billion-dollar company with one employee will appear – the founder, with all other positions filled by AI agents.

What are your observations regarding the perception of AI by Bulgarian businesses?

In the software sector in Bulgaria, things are really happening, processes are being transformed on a massive scale, and the companies themselves are undergoing fundamental changes. BASSCOM has also played a major role as a conduit and link for sharing information between companies. So software companies are extremely well positioned and are applying these tools. Companies that have missed the boat will not be companies for much longer. For other businesses, a lot depends on what they do, but the process will continue to spread rapidly.

How has the software industry and processes changed over the last two to three years since the emergence of ChatGPT?

The first very unpleasant thing is the disappearance of junior positions, which is quite short-sighted on the part of companies, because where will the next senior employees come from if you don’t hire juniors? But this is a global trend and a direct consequence of the advent of AI. Currently, you can actually do a really big project with a very small team of people. This will start to have a very serious impact on outsourcing companies.

If we broaden the scope, the whole world is currently revolving around this. Geopolitics revolves around this—it is literally dictated by who has access to the chips, who will build the factories, who will own the technology. China and the United States have announced their doctrines for global domination in artificial intelligence: the Americans with their action plan for AI global domination and projects such as Stargate, the Chinese through open models with which they will try to impose a standard on the rest of the world.

Speaking of geopolitics, how does the ongoing war in Ukraine, which is only a few hundred kilometers away, affect investor interest?

Is it part of the equation? Yes, of course, but also—think about it—there aren’t that many places in the world where there isn’t a war a few hundred kilometers away. Israel, for example, is not a destination that investors have shunned, even though there is constant war 20 km away. And whether it is a few hundred or 1,000 km away, it does not really matter. Furthermore, an attack on such infrastructure does not necessarily have to be physical, and in reality there are no safe places.

Rather, the arguments should be in favor of decentralization—there should be gigafactories in Western Europe, Central Europe, and Eastern Europe—to prevent total destruction in the event of an incident.

And what happens to technology in the context of war?

If we look specifically at the war in Ukraine – two years ago there were some drones, but now the war is entirely drone-based. And they are becoming increasingly autonomous. By the end of this year, Ukraine alone will have produced 6-8 million drones. Three simultaneous breakthroughs are being made in each vertical. The increasing autonomy of these drones, their entire logistics system, and all these things are happening at a crazy pace.

Military technologies are currently far behind civilian ones due to the long absence of this topic from the focus of top engineers and companies. It is time to rearrange our priorities. The high-tech industry must find bridges with the established defense industry so that we can start producing a new generation of defense. The Center for Defense Innovation is a step in the right direction. This topic must become central and key for technology companies.

Translated with DeepL.

Tsvetelina Penkova is a Member of the European Parliament from the Progressive Alliance of Socialists and Democrats (S&D), elected on a mandate from the Bulgarian Socialist Party. She was born in Sofia and educated at some of Europe’s most prestigious universities, holding a master’s degree in financial economics from Oxford and a bachelor’s degree in international economics and finance from Bocconi University and Central European University.

Before entering politics, Tsvetelina Penkova gained experience in the banking and financial sector, working in London for institutions such as the Royal Bank of Scotland and the investment company Hayfin Capital Management. She has been a Member of the European Parliament since 2019 and Vice-Chair of the Committee on Industry, Research and Energy (ITRE) in the European Parliament since 2024. Her work focuses on policies in the field of energy transition, innovation, and Europe’s strategic autonomy.

Ms. Penkova, one year after Draghi’s report, the European Union has written and discussed thousands, tens, hundreds, let’s say, pages of measures and ambitions on how to make the bloc more competitive. In your opinion, will these measures remain on paper or are they actually being worked on, and what does this new Clean Industrial Deal actually tell us?

It should be noted that the Clean Industrial Deal is actually a continuation, or a second stage, of everything we have been doing in connection with the now negatively connoted Green Deal.

The Green Deal focused on renewable energy and energy efficiency, i.e., not only what we produce and how we transport it, but also how we consume the energy we produce and how we store it.

In other words, these were the foundations or infrastructure that now allow us to talk about building a competitive European economy. We are talking about new production, about high technology across the European Union.

At this stage, to answer briefly, the infrastructure has been created and the legal framework is now being established.

During the previous term, we also adopted two key pieces of legislation. One was on critical raw materials, i.e., to determine which raw materials are truly critical for the European Union, which are at the heart of manufacturing based on our expertise or traditions.

The second key regulation we adopted was on the so-called net-zero emissions industry, or the Reindustrialization Act, in which we defined 18 strategic technologies for the Union. Strategic means that they can be financially supported, i.e., they can apply for European funding and should benefit from relatively tangible administrative simplifications, i.e., any type of permits and documents that are issued must be subject to a faster procedure.

In other words, these two laws, together with the entire energy-related infrastructure—renewable sources, investments in energy efficiency technologies, and storage technologies – have laid the foundations that now allow us to really start investing strategically and building production in Europe.

Draghi’s report said it very clearly: we have outsourced a large part of our production and a large part of our expertise for economic reasons, whether it be cheaper labor, cheaper electricity, or cheaper raw materials, to countries outside the EU.

But Covid, the war, and the energy crisis have shown that we cannot be completely dependent on external suppliers for everything.

But it seems that things are still on paper? Businesses say that things have been laid out, but we are not yet seeing the results of what has been laid out.

Exactly. Industry and industry organizations were actively involved in drafting the legislation, as the provisions are largely technical and require professional knowledge in order for us to set a legal framework that works in their favor.

We are aware of the feedback that not everything is being implemented yet, but this really depends to a large extent on the regional authorities and the national authorities. In other words, it has taken some time, but I believe that once the wheel starts turning, things will move quite quickly.

The European market is still fragmented, governed at both European and national level, and Member States often create problems for themselves. How is the European Union dealing with this?

Creating competition between countries is a key issue. It is no coincidence that all the documents, reports, and opinions cited over the past year and a half now talk about European competitiveness, European industry, and European technologies.

However, in my opinion, the first problem we need to solve before we can really build a path in this direction is energy.

It is very difficult to talk about the competitiveness of European companies when electricity in Bulgaria and in Central and Eastern Europe as a whole is 10 times more expensive than in Northern Europe.

That is why, in my opinion, the first and most important piece of legislation in the Clean Industrial Deal, which we expect the European Commission to present in the fall of this year, is the so-called electricity transmission network regulation.

In other words, we need to build an interconnected electricity transmission network to ensure that the electricity produced from sources in Southern and Eastern Europe is shared with Northern and Western Europe, thereby equalizing electricity prices.

Because if we have a common price, we will have a real basis for talking about building common competitiveness, rather than allowing production in Romania to compete with production in Denmark, given that the price of the main raw material, which is electricity, differs many times over. We cannot expect products to be competitive.

At the moment, there is serious opposition from some Member States that do not want this interconnection to happen because it would increase the price of electricity. The main opponents at the moment are Sweden and some regions of northern Germany.

But if we are talking about pan-European security in energy and industry, some compromises and concessions must be made by these countries, as Bulgaria has done many times when it comes to common European policies. These countries will also have to realize that when we talk about a stable electricity transmission network and energy infrastructure, basic energy capacities are fundamental.

Our region, which currently pays higher prices, is the pillar that guarantees that the European Union’s electricity supply will have sufficient energy produced from basic energy sources – here we are clearly talking mainly about nuclear energy.

I hope that what happened in Spain and Portugal, where the power supply was cut off for 19–20 hours, has sobered thinking in this direction.

It is precisely the cost of electricity that is the biggest headache for energy-intensive industries, and in June changes were adopted to partially subsidize their electricity. However, are these amendments sufficient to make life easier for businesses?

They are completely insufficient. Energy-intensive industries include the chemical industry, metallurgy, and cement – these are the backbone of the European economy and, to a large extent, have not been singled out as requiring subsidies or support.

After we emphasized that they cannot implement the necessary changes in their production so quickly in order to meet certain requirements regarding carbon separation, etc., which are quite excessive, exceptions are now being made for them.

The first such proposal was adopted in June in plenary, and I am convinced that this will be the focus from now on in the work on all other regulations under consideration. Energy-intensive industries will be separated as a segment that needs more time, longer deadlines, more serious support, and more serious administrative relief, because we cannot afford to destroy these industries.

The carbon adjustment mechanism, which had a two-year transition period, will also come into force on January 1. What is the business community saying after this transition period, and is it ready for its introduction?

This is going to be looked at pretty closely by experts over the next six months because it’s a hot topic, but we haven’t gotten all the feedback from the industry yet. Since the beginning of the September session, the so-called CBAM mechanism – the carbon tax – has been under consideration.

Its aim was really to protect European production against products imported from third countries at lower prices that do not meet our environmental standards. In other words, the aim was really to protect the European economy and European manufacturing, as it turned out that a large proportion of the raw materials used by our manufacturers are imported from third countries, which can have a negative effect and increase the prices of end products manufactured in the European Union. So a much more in-depth analysis needs to be carried out to see how and in what way this mechanism will be implemented, especially for our strategic partners and the countries from which we import key raw materials.

These are the countries of the Western Balkans, including candidate countries, which is also a factor that should not be overlooked, as well as Turkey and China.

How will the mechanism affect Bulgarian importers? You mentioned price increases for cement, iron, steel, aluminum, and fertilizers. Is this what we should expect after January 1?

Again, let’s do the analysis to see how and with what exceptions the mechanism itself will be introduced, since many of the components you listed are part of energy-intensive industries, which we have currently prioritized to protect, not further hinder.

Should we expect any changes to the mechanism?

We certainly should not expect that everything will be implemented as planned. Many of these mechanisms, objectives, and deadlines were set in a situation where we had not faced such serious crises as Covid, because the disruption of the supply chain was still noticeable even two years after it subsided. The energy crisis resulting from the war between the Russian Federation and Ukraine, as well as geopolitical dynamics and instability, are also contributing to higher prices for all kinds of goods, services, and products imported from third countries.

For this reason, I would say that some of the regulations, deadlines, and mechanisms may be reviewed in light of the new realities we are living in.

It is no coincidence that the so-called Omnibus package

or the simplification of some European legislation, has also become a priority for all European institutions, so that they work for the benefit of people and industry, rather than being restrictive, given the truly new dynamics that could not have been foreseen when this legislation was drafted.

I can give an example of an important directive that also concerns energy efficiency—the energy performance of buildings. As soon as we received the first opinion from the European Commission, we started working with fellow MEPs from other parliamentary groups and spent two years amending the texts, because that was when Covid started.

The war also started, and it became clear that the deadlines for major renovations of buildings and the funds that needed to be allocated would not be available because of more pressing issues that had to be addressed.

And the text that we actually adopted after two years of negotiations and amendments is quite different from what was originally proposed.

Speaking of deadlines, at the end of July, the European Parliament proposed extending the deadline for projects under the Recovery Plan by a year and a half…

On June 18, the European Parliament actually adopted this proposal and we are now awaiting the opinion of the European Commission and the Council with a view to extending it until February 2027, i.e. by another 18 months from the current deadline, which is now mid-2026.

The aim is to enable countries to take advantage of the funds available, because as of May this year, only 52% of them had been invested, which is grossly insufficient given the serious needs and difficulties faced by every country in the Union. This was again a proposal by the Socialists in the European Parliament.

The idea behind this extension is to give smaller countries and smaller economies, which due to technical difficulties or very serious administrative requirements have not been able to implement the relevant reforms so quickly, the opportunity to access the funds.

In other words, to give the countries most in need a real opportunity to receive these funds.

What is the mood? Is a final decision possible, and when can we expect it?

Unfortunately, I cannot answer that question. However, as this is a relatively urgent matter, I hope that there will be progress in this direction in the early autumn.

So far, no country has raised any serious objections to this extension.

The concern that unites most countries is that if the deadlines for absorbing these funds are not extended, they may be redirected to other European policies, which in principle means that they will not be lost.

It was in the regulation on net-zero industry that I personally included a provision stating that all funds under the plans that have not been absorbed must go to these 18 strategic technologies, which again are nuclear energy, energy efficiency, i.e. technologies that are important for industry.

But now there is growing concern that, despite the legal framework we have put in place and despite the protection of funds, there may be an attempt to redirect them to the defense industry, given that there are still sufficient funds increased compared to the previous long-term budget of the European Union for defense.

Of course, it also has production parameters, but there is a separate item and there is no need to overemphasize and direct everything in one direction. There are also quite a few countries in the European Union that do not prioritize them to such an extent, and it is not right to serve only the interests of larger countries.

Bulgaria is not lagging behind in any way—we have a strong military-industrial complex that will be maintained, but we believe that the funds currently allocated in the EU’s long-term budget would be sufficient at this stage.

Speaking of the Clean Industry Deal and critical raw materials, where does Bulgaria stand in this new picture?

We can position ourselves very well on this map because we have a fairly serious metallurgy industry, for example. The cement and chemical industries should not be overlooked either.

I started with metallurgy because, if you look at the data, we are the sixth largest exporter of non-ferrous metals to the European Union. This means that we have the critical raw materials, we have the expertise, we have the relevant production facilities that can supply the European Union, and why not invest in production that can use these raw materials and the expertise we have.

So, especially with regard to energy-intensive industries, which are key to the European economy, we are one of the leading countries that could benefit from any kind of financial support and gain a slightly more strategic position in terms of production taking place here in Bulgaria, rather than exporting raw materials and finishing high value-added products in other European countries.

This is also one of the goals of the Clean Industrial Deal – to really see where it makes sense to invest in strategic production again, based on what the country has in terms of raw materials and experts, and Bulgaria has a lot to offer in this regard.

Secondly, one of the key aspects is energy infrastructure, because without it, we cannot talk about a Clean Industrial Deal, which is why it has been included.

Due to its geographical location, Bulgaria has two key advantages. Firstly, when we talk about energy infrastructure, we are talking about the transmission of energy resources – we are geographically located at the gateway that allows energy resources to be imported from third countries, because it would be naive to think that Europe can achieve complete energy autonomy. No, on the contrary, it will be necessary to import some of them from outside. So that is our first advantage.

The second is that when we talk about connecting the electricity transmission network, we are also at the beginning of this interconnected electricity transmission network. First, we are the geographical starting point from which the construction of this network can begin along the south-north and east-west axes. Second, we have quite significant electricity production and a balanced energy mix.

That is precisely why the construction of new nuclear power plants must become a national, strategic, and key priority in the short term.

We see that networks are part of the new EU budget and that considerable funds have been allocated to them…

The package we are expecting specifically for the networks should indeed be published in October or November.

Incidentally, when we talk about building networks, we should not overlook the materials that are needed and available in our country.

The relaxation of European Union rules on state aid allows countries to subsidize their local industries. Could this boost to competitiveness undermine the single market by putting companies that do not receive such subsidies at a disadvantage?

We have always been very careful in European legislation when it comes to state aid, because the aim is not for rich countries to be able to afford to support their industries at the expense of smaller ones. That is why more European funds will be allocated to support industries, rather than relying so much on state aid. These are changes that we have made more than once in regulations when, under pressure from large countries, these lighter regimes and the possibility of state aid have been introduced.

But the common European position has always been that this should not be encouraged because it creates the conditions for a two-speed Europe, which is not in the interests of Bulgaria and many other countries.

Part of the debate on how to increase the competitiveness of the European Union also concerns how to encourage the creation of European champions. Can such champions emerge in Europe, and have the US and China overtaken us?

Certainly, if we did not believe they could, we would not be allocating such serious funding and efforts in legislation.

Almost always, serious scientific research has started in Europe, and major scientific discoveries are made within Europe, not even within the EU, but then, under the influence of market mechanisms and additional support, access to financial markets, they are realized, for example, in the United States.

In other words, in order to achieve these successes, serious attention must certainly be paid to the creation of functioning capital markets within the European Union and access to private financing.

We cannot build a strong and competitive economy if we rely solely on budgetary or European funds without the presence of private investors.

And in Europe, there is a significant amount of funds that simply need to be put to use. Unfortunately, after the departure of the UK, this poses a serious problem and a serious challenge for us, because a large part of the capital transactions and the capital market of the European Union was actually in London, and efforts must now be made to build it here.

You mentioned Draghi’s report, and there was also a report by Letta (Enrico Letta, former Prime Minister of Italy, who presented a report on capital markets in the EU – ed. note). I had the opportunity a month ago to talk to him personally and discuss precisely this issue – capital markets and access to finance, which is fundamental to having competitive industries that can compete on the global stage.

There are sufficient funds available in European budgets to provide an initial boost. Access to European funds for the relevant industries should be seen as a guarantee that they are being supported at the European level, but we cannot rely on this alone.

However, other claims have been made that Europe is actually trying to say in a few pages that it does not have much money to fulfill its ambitions. Does Europe really have the funds for everything it is talking about?

In my opinion, the way we spend it is the main problem in Europe. It is not a matter of interpretation. When we look at the Recovery and Resilience Facility, which provides huge amounts of money at a time of huge crises, and these funds have been available for three years now, and we have used only half of them, it means that we are not able to invest the available financial resources effectively.

If they had been exhausted and a new mechanism was being sought to continue financing and supporting European economies, I might agree that there are not enough funds. But given that there are so many financial resources available that have not been used, this leads me to believe that, on the one hand, there are serious bureaucratic obstacles and, on the other, there are serious administrative obstacles that are slowing down investment, and efforts need to be made in this direction.

The problem is not a lack of funding at this stage.

Translated with DeepL.

Калоян Георгиев е мениджър на Kalatech и член на Борда на PARAi – Професионална асоциация за роботика, автоматизация и иновации. Той ще бъде един от ИНоваторите на бизнес форума на Economic.bg – ALL IN – на 19 септември. Като експерт в дигитализацията, IoT, автоматизацията и енергийния мениджмънт той излиза на сцената в специален разговор с Доброслав Димитров, в който двамата ще засегнат някои от най-горещите и актуални въпроси за трансформацията на икономиката под знака на AI, промените на пазара на труда и необходимостта от добре подготвени кадри. 

Г-н Георгиев, представете си, че Илон Мъск е направил големия пробив за човечеството и тръгвате на едногодишно пътуване до Марс. С кои трима известни личности (живи или мъртви) бихте искали да го прекарате?

С Илон Мъск, Браян Кокс, Ричард Файнман.

Имате право на един работен ден с изпълнителен директор на компания (жив или мъртъв). Кого бихте избрали и защо?

Бил Гейтс, заради концепцията му за тайм мениджмънт.

Представете си, че сте корабокрушенец на самотен остров, но всичките ви основни човешки нужди – като храна, вода, подслон – са задоволени. Кои други две неща бихте искали да имате със себе си и защо?

Соларен панел и лаптоп с интернет, защото в основата на новата версия на пирамидата на Маслоу е WiFi.

Ако можехте да подарявате една-единствена книга до края на живота си, коя би била тя?

Българска история – твърде малко хора я помнят.

Вие сте пътешественик във времето. Имате възможност да се придвижите напред в бъдещето или да се върнете назад в миналото. До кой момент искате да пътувате и защо?

В бъдещето, когато няма държави и живеем като междупланетна напреднала цивилизация без политика и престъпност.

Получавате възможност да се сдобиете със суперсила (всякакъв вид умение, за което се сещате), но само за ден. Коя ще бъде тя и защо?

Да мога да излекувам всички болни хора.

Посочете най-голямата заплаха/предизвикателство за вашата компания през следващите пет години.

Появата на твърде много неподготвени конкуренти, които уронват представата за дигитализация.

Коя е сферата, в която България има най-голям потенциал да се превърне в лидер на европейската карта?

Както до момента – аутсорсинг и R&D.

За AI се говори много, но кой е най-неглижираният въпрос, който е важно да се обсъжда?

Че AI е инструмент, който не е панацея. Синергията между него и останалите технологии трябва да се използва за пълноценни резултати, сам по себе си не е решение.

Кое свое задължение/дейност на работа никога не бихте искали да прехвърлите на робот?

Срещите с партньори и нетуъркинг събитията.

Кое е по-важно: Талантът или усърдната работа?

Както се пее в песента „Remember the Name” – “This is ten percent luck, twenty percent skill. Fifteen percent concentrated power of will. Five percent pleasure, fifty percent pain”. Само “pain” бих заменил с „усърдна работа“.

Кое е по-важно: Образованието или опитът?

Добиването на опит в определени сфери без необходимите базови знания е трудно и неефективно. Образованието без опит е непълно. Имайки образование, има основа, над която да се гради опит. Модерните течения, в които е важно само какво си правил, а не какво си учил, са леко прекалени и водят до тунелно мислене.

Кои са трите неща, без които успехът не е възможен?

Усърдна работа, добър екип, ментор.

Какво Ви очарова в днешно време?

Мислещи и можещи хора.

Кой е най-добрият съвет, който някога сте получавали?

Да се науча кога да казвам „Не“.

Кой е най-трудно наученият урок?

Че времето, прекарано със семейството, е най-важно и незаменимо.

Най-голямото предизвикателство, което сте преодолели?

Животозастрашаващо състояние поради бърнаут.

Кога за последно си казахте: Това е най-страхотният ми ден на работа? Какъв беше поводът?

Когато успяхме да реализираме най-голямата сделка в живота ми.

Коя е най-голямата ви страст – нещо, в което сте ALL IN?

Дигитализация и ефективност.