Financial sustainability of the Municipal waste management system in Bulgaria

Municipal waste management in Bulgaria is undergoing a transition toward a circular economy, seeking a balance between environmental goals and financial sustainability. This study analyzes the relationship between the dynamics of waste generation and the financial mechanisms for its management (2019–2024) to assess the effectiveness of the “polluter pays” principle. The assessment is based on official national statistics, using quantitative and comparative analyses, together with an analysis of operational and fiscal efficiency ratios. It has been established that a 'decoupling' effect is absent at the national level, as income growth and economic expansion continue to drive an increase in waste generation, reaching 496 kg per capita in 2024 – an indicator calculated based on the total volume of generated municipal waste, without differentiation by source of generation (households, commercial entities, or institutions). Simultaneously, a positive technological shift is observed, characterized by a persistent reduction in direct landfilling and expanded pre-treatment practices. Financially, the sector has transitioned from a deficit to full self-sufficiency, achieving over 110% cost coverage due to fee revenues growing faster than management expenditures. Despite the stability achieved at the macro level, the current charging model based on property valuation creates a structural imbalance – it generates fiscal surpluses but fails to provide sufficient economic incentives to reduce waste at the source, which necessitates the accelerated implementation of “pay-as-you-throw” (PAYT) systems. The obtained results outline a dual profile of the system – financially stable and infrastructurally modernizing, but still not fully oriented toward the prevention of waste generation. The current financial stability remains structurally incomplete without a parallel shift toward a consumption-based charging model that actively incentivizes waste reduction at the source.