Universal Registration Document 2022

 3.8.4 Details on the taxonomy

3.8.4.1 Regulatory framework

On 4 June 2021, the European Commission, pursuant to regulation 2020/852 of 18 June 2020 (known as “Taxonomy regulation”), adopted the Delegated Act to determine the conditions under which economic activities can be considered as contributing substantially to climate objectives. On 6 July 2021, the Delegated Act known as “Article 8” relating to the content and presentation of the information to be communicated was adopted. Finally, on 9  March 2022 the Complementary Delegated Act covering certain activities in the nuclear and gas sectors was adopted.

With a view to contributing to the achievement of carbon neutrality by 2050, the objective of this regulation is to determine which economic activities are considered environmentally sustainable in order to direct capital flows towards them, according to transparent criteria.

In accordance with the Taxonomy regulation and the procedures defined by the “Article 8” Delegated Act, three indicators based on the Group’s consolidated financial statements are presented below: the proportion of turnover, of capital expenditure (“CAPEX”) and of operating expenditure (“OPEX”) associated with economic activities considered, on the one hand, as eligible and, on the other hand, as aligned with the technical criteria of Taxonomy, as detailed in section 3.8.4.2 below.

For the second year, EDF published the proportion of its activities aligned with, eligible for and ineligible for the Taxonomy for the three aforementioned indicators, broken down by activity and by objective.

Due to the sometimes insufficiently precise nature of the European regulatory framework for the classification of activities, the Group has had to adopt assumptions that are described in this document whenever they are material.

3.8.4.2 Definition of eligibility and alignment

The Taxonomy regulation creates a framework and principles for assessing the contribution of economic activities to the following six environmental objectives:

In accordance with the Delegated Act adopted on 4 June 2021, an activity is considered eligible if it is included in the list of activities in Annexes I and II or in the Complementary Delegated Act of 9 March 2022.

An activity can contribute to the climate goals:

• based on its own performance (for example, in the case of the EDF group: the production of electricity from renewable sources); or
• when it directly enables the exercise of other sustainable activities. It is then qualified as an enabling activity (for example, in the case of the EDF group: the electricity transmission activity); or
• if it supports the transition to a climate-neutral economy and there is no technologically and economically feasible low-carbon alternative. It is then qualified as transitional. This is the case for certain activities in the nuclear and gas sectors specified in the Complementary Delegated Act of 9 March 2022.

An eligible activity will be considered “aligned” with the Taxonomy if:

• in addition, it complies with the technical criteria of contributing substantially to one of the six environmental objectives (e.g. in relation to emission thresholds);
• it meets the so-called “Do No Significant Harm” (DNSH) criteria, i.e. it does not significantly harm the other environmental objectives; and
• it is carried out in compliance with the minimum safeguards relating to human rights or fundamental labour rights.

3.8.4.3 Analysis of EDF group activities with regard to texts in force

3.8.4.3.1 Eligibility of Group activities for the Taxonomy

Through its low-carbon power generation activity and as a supplier of energy services, the Group mainly contributes to the climate change mitigation objective. As the proportion of its activities contributing exclusively to the climate change adaptation objective is marginal and to avoid any double counting, the Group’s Taxonomy ratios are therefore presented only with regard to climate change mitigation.

3.8.4.3.1.1 EDF group activities eligible for the taxonomy

Under the previous definition, the following Group activities contribute substantially to mitigating climate change:

• Nuclear energy related activities conducted in countries within the European Union (NACE codes M72, M72.1, D35.11 and F42.22) which cover:

  • safe construction and operation of new nuclear reactors to produce electricity or heat, including to produce hydrogen, using best available technologies (4.27):

  • Projects authorised no later than 2045 by the competent authorities for the construction and safe operation of best available technologies nuclear reactors (covers the production of electricity, heat and hydrogen, as well as the upgrading of these reactors). For the Group, these activities mainly concern the Flamanville 3 power plant, as well as studies conducted in connection with SMR and EPR2 projects in France,
  • producing electricity from nuclear energy at existing facilities (4.28):
  • Projects authorised no later than 2040 by the competent authorities to extend the operating life of existing reactors (4.28). This last activity in France was analysed by taking into account operation and maintenance activities (regulatory controls, maintenance programmes, etc.), modifications,replacements of large components, and operations that comply with the generic ASN notices received (900Mwe series) or to be received by 2040(1,300MWe and 1,450MWe series) and with the technical requirements that allow the French nuclear power plants to continue operating beyond40 years. All activities across the nuclear fleet in operation in France are eligible under activity 4.28.
  • Therefore, pursuant to regulation, eligible activities selected by the Group concern only activities carried out in European Union countries (excluding the United Kingdom) and countries that have chosen to make nuclear energy an energy of the future (excluding Belgium).
  • The exclusion of the United Kingdom from the European taxonomy on nuclear activities affects substantially the taxonomy ratios of the Group,which has particularly made major investments in connection with the HPC project.