The European Commission said it has allowed a continued free allocation of carbon emissions permits for Bulgaria and Romania beyond this year with the condition that the equivalent amount will be invested in power plant upgrades.
"The Commission has taken these decisions under provisions which allow certain Member States exemptions from the general rule that, from 2013 onwards, the power sector must buy all its allowances at auctions or in the market," the commission said in a statement on Friday.
The countries will put in place strict monitoring and enforcement rules to ensure that the economic value of free allowances is at least mirrored, if not exceeded, by a corresponding amount of investments in modernising their electricity generation, the commission said.
Besides the two countries, the commission has also authorised requests from the Czech Republic and earlier this year for Cyprus, Estonia and Lithuania.
"In total, more than 268 million allowances will be allocated for free to power plants in these six countries in the period 2013 to 2019. The number will be reduced each year, reaching zero in 2020," it said.