Since Brexit, the United Kingdom 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.
The volume of emissions by EDF Energy in 2022 stood at 0.1 million tonnes (2 million tonnes for 2021). Actual impacts of greenhouse gas emissions amounted to €9 million (€36 million in 2021) and are included in provisions.
In 2022, EDF Energy surrendered 2 million tonnes in respect of emissions generated in 2021 (in 2021 it surrendered 3 million tonnes in respect of emissions generated in 2020).
Emission rights held to comply with the regulatory requirements on greenhouse gas emissions are recorded in intangible assets as “Greenhouse gas emission rights – green certificates” at acquisition cost when they are purchased on the market.
At the year-end a provision corresponding to the emissions is established, equal to the acquisition cost up to the amount of rights acquired on the spot or forward markets, and to market prices for the balance. This provision is cancelled when the rights are surrendered to the State.
In application of EU Directive 2009/28/EC on the promotion of the use of energy from renewable sources, every EU member state has set national targets for consumption of electricity from renewable sources. The United Kingdom has its own equivalent system.
Guarantee of Origin certificates prove the renewable origins of this electricity, which transits through the grid. They are sold by operators of renewable energy plants and bought by customers who want to use renewable-source electricity.
There are two systems for States to meet their targets:
The renewable energy certificate system may apply to:
A provision of €1,117 million was recognised, essentially by EDF Energy (United Kingdom) and Luminus (Belgium), at 31 December 2022 (€1,156 million in 2021) concerning the obligations for renewable energy certificates to be surrendered at that date. A large portion of these obligations is covered by purchased certificates recorded in intangible assets.
For the entities that produce and sell electricity:
A provision is also established to reflect the obligation to surrender certificates. It is based on the cost of certificates earned (with nil value) and purchased (on the spot or forward market), the market price of the certificates still to be purchased, and where relevant the market price or penalty price for the balance. This provision is cancelled when the certificates are surrendered to the State.
In all its subsidiaries, the Group is engaged in a process to control its energy consumption through various legislative measures in application of European Union Directives and national laws.
In France, the Law of 13 July 2005 introduced a system of energy savings certificates, imposing energy savings obligations on suppliers of energy (electricity, gas, heat, cold, domestic fuel oil and fuel for vehicles) with sales above a certain level. At the end of the period concerned, obligated actors are required to present energy savings certificates that correspond to their obligatory energy savings, otherwise sanctions apply. These certificates are obtained in return for energy savings operations conducted directly or indirectly, or purchased from other obligated or “eligible” economic actors.
After meeting its energy savings obligation for the fourth period of the scheme (2018-2021), EDF has entered its fifth period, which began on 1 January 2022 and will end on 31 December 2025. The obligation is significantly higher in this fifth period.
To meet this obligation, three sources are available to the EDF group: supporting consumers in energy efficiency operations (in 2022, for example, 192,000 renovation projects were completed), funding State-approved energy savings programmes, and purchasing certificates from eligible actors.
In the United Kingdom, EDF Energy voluntarily helps companies explore and develop solutions by enabling them to save energy, carbon and costs, particularly through its Powershift flexibility platform.
Expenses incurred for energy savings certificates are recorded in expenses of the year concerned, in “Other operating income and expenses”. Expenses in excess of the accumulated obligation at the year-end are included in inventories and the stocks of energy savings certificates may be used to cover the obligation in later years.
A provision is recognised if the volume of certificates earned is lower than the accumulated energy savings obligation at the year-end. The amount of the provision is equal to the cost of actions still to be taken to extinguish the obligations related to the energy sales made.
Most of these provisions are provisions related to nuclear generation, which comprise provisions for back-end nuclear cycle expenses (management of spent fuel and radioactive waste), provisions for plant decommissioning and provisions for last cores. Obligations can vary noticeably depending on each country’s legislation and regulations, and the technologies and industrial scenarios involved. Details of these provisions are provided in note 15 concerning EDF and EDF Energy.
They also include provisions for environmental schemes including provisions for greenhouse gas emission rights, renewable energy certificates and energy savings certificates. At 31 December 2022, these provisions totalled €1,926 million (€1,572 million in 2021, see note 17.2).
Contingent liabilities also exist in connection with environmental litigation, described in note 17.3.5, such as the litigation following the sale of Ausimont (the Bussi site) to Solvay 3 by Edison in 2002.
