Other provisions for decommissioning principally concern fossil-fired power plants, installations for the production of nuclear fuel assemblies, and dismantling of wind farms.
The costs of decommissioning fossil-fired power plants are calculated using regularly updated studies based on estimated future costs, measured by reference to the charges recorded on past operations and the most recent estimates for plants still in operation. The provision recorded at 31 December 2022 reflects the most recent known cost estimates and includes rehabilitation costs for generation sites.
Provisions for decommissioning notably include €153 million for Basic nuclear facilities (INB) in France, in the amounts of €110 million for Framatome and €43 million for Cyclife France. Dedicated assets are set aside to cover these provisions as required by the regulations.
The dedicated assets of Framatome and Cyclife France relating to Basic nuclear facilities (INB) in France have realisable values of €92 million in Framatome and €53 million in Cyclife France and the degree of coverage of provisions according to the regulations is 83% for Framatome and 123% for Cyclife France. At Framatome, a plan is currently in preparation to reach at least 100% coverage within 5 years, in accordance with decree 2020-830 of 1 July 2020.
Details of changes in other provisions are as follows:
| Decreases | |||||||
|---|---|---|---|---|---|---|---|
| (in millions of euros) | 31/12/2021 | Increases | Utilisations | Reversals | Changes in scope | Other changes (1) | 31/12/2022 |
| Provisions for contingencies related to subsidiaries and investments | 585 | 315 | (17) | (257) | (9) | (12) | 605 |
| Provisions for tax liabilities (excluding income tax) | 112 | 2 | (56) | (10) | - (1) | 2 | 49 |
| Provisions for litigation | 327 | 89 | (66) | (32) | - | 3 | 321 |
| Provisions for onerous contracts and losses on completion | 1,651 | 117 | (360) | (654) | (3) | (113) | 638 |
| Provisions related to environmental schemes | 1,572 | 2,341 | (1,932) | (2) | - | (53) | 1,926 |
| Other provisions for contingencies and losses | 2,568 | 4,197 | (3,553) | (164) | 1 | (38) | 3,011 |
| TOTAL | 6,815 | 7,061 | (5,984) | (1,119) | (12) | (211) | 6,550 |
(1) Other changes principally concern foreign exchange effects resulting from adjustment of the provisions for onerous contracts concerning Dunkirk LNG, and the rise of the pound sterling against the euro.
Provisions for onerous contracts mainly relate to multi-year agreements for the purchase or sale of energy and services:
Provisions for onerous contracts are mainly attributable to the Group’s LNG activities (long-term LNG purchase contracts and a long-term regasification contract with Dunkerque LNG).
A provision for a liquefied natural gas (LNG) supply contract from the United States was totally recovered at 31 December 2022 following an improvement in medium- term and long-term United States/Europe spreads, in a market that remains very volatile.
A partial reversal of a provision concerning a regasification contract was recognised at 31 December 2022, as a result of better use of European terminals in the new geopolitical context for gas.
The revenues and margin on Framatome’s long-term contracts are recorded under the percentage-of-completion method. When the estimated result upon completion is negative, the loss is immediately recorded in profit and loss, after deducting the loss already recognised under the percentage-of-completion method, and a provision is booked.
Provisions related to environmental schemes include provisions to cover shortfalls in greenhouse gas emission rights, renewable energy certificates and where relevant
energy savings certificates, based on the assigned obligations (see notes 5.5.4, 10.2, 20.1 and 20.2.1).
Through the renewable energy certificates scheme, the EDF group has an obligation to surrender renewable energy certificates, particularly in the United Kingdom and Belgium.
At 31 December 2022, a provision of €1,117 million was booked in connection with the obligation to surrender renewable energy certificates at that date, essentially concerning EDF Energy (United Kingdom) and Luminus (Belgium). A large portion of these obligations is covered by purchases of certificates included in intangible assets (see note 10.2).
One of the main features of the fourth period (2021-2030) of the European Union greenhouse gas emission quota system (SEQE-EU or EU-ETS) is to achieve the emission reduction targets set in the 2030 Climate and Energy framework, and the EU’s contribution to the Paris Climate Agreement adopted in 2015. One key step was accelerating annual quota reductions to 43 million tonnes per year.
In the EDF group, the entities concerned by this European system are EDF, Edison, Dalkia, PEI and Luminus. Free emissions quota allocations for the Group stopped in 2020.
The volume of emissions at 31 December 2022 stood at 18 million tonnes (17 million tonnes for 2021).
Actual greenhouse gas emissions amounted to €799 million at 31 December 2022 (€380 million at 31 December 2021) and are included in provisions in the balance sheet.
In 2022, the Group surrendered 17 million tonnes in respect of emissions generated in 2021 under the EU ETS (in 2021 it surrendered 16 million tonnes in respect of emissions generated in 2020).
Now that Brexit has taken place, the United Kingdom is no longer a member of the European system (EU ETS) and has set up its own system (UK ETS – Emissions Trading Scheme). The UK ETS, which uses a bidding system, covers the same sectors as the EU ETS and operates under generally similar rules, with comparable accounting treatment.
