EDF / 2018 Reference document

FINANCIAL STATEMENTS Cash flows and other information

ENVIRONMENT NOTE 49

49.1

GREENHOUSE GAS EMISSION

evidence of compliance with obligations by surrendering the certificates, or pay a fine to the Treasury. In application of Article 30 of the Law of 17 August 2015 on the energy transition for green growth, a new additional energy savings obligation for 2016-2017 applies from 1 January 2016, for the benefit of households in situation of energy poverty. This new obligation is added to the energy savings obligations for the third period. The annual volume of the obligation is proportional to the annual energy savings obligation. A fourth three-year period of energy savings obligations began on 1 January 2018 (see note 4.6). CERTIFICATES 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. There are two ways for States to meet these targets: incorporating the costs of generating such electricity into the sale price for ■ electricity (this is the approach taken in France); introducing a renewable energy certificate system (as is the case in the United ■ Kingdom and Belgium). The renewable energy certificates system may apply to: non-obligated electricity producers when the obligation applies to energy ■ sales (EDF Renewables); obligated electricity producers when the obligation applies to generation; ■ producers who are also sellers of electricity when the obligation applies to energy ■ sales (EDF Energy, EDF Luminus). 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 2018, a provision of €962 million was booked in connection with the obligation to surrender renewable energy certificates at that date, essentially concerning EDF Energy (United Kingdom) and EDF Luminus (Belgium). A large portion of these obligations is covered by purchases of certificates included in intangible assets. RENEWABLE ENERGY 49.3

RIGHTS In ratifying the Kyoto Protocol Europe made a commitment to reduce its greenhouse gas emissions. EU Directive 2003/87/EC set up a greenhouse gas emission quota system for the European Union which has been in operation since 1 January 2005. This system was incorporated into national laws. Among other things it requires obligated actors, which is the case of EDF, to surrender to the State a number of greenhouse gas emission credits each year, corresponding to their emissions for the year. This Directive came into effect in 2005 for an initial three-year period, followed by a second period from 2008 to 2012, with progressive reduction of the emission rights allocated. One of the main features of the third phase, running from 2013 to 2020, is the discontinuation of free allocation of emission rights in certain countries, including France and United Kingdom. In the EDF group, the entities subject to this Directive are EDF, EDF Energy, Edison, Dalkia, and EDF Luminus. In 2018, the Group surrendered 30 million tonnes in respect of emissions generated in 2017. In 2017, the Group surrendered 38 million tonnes in respect of emissions generated in 2016. The Group’s total emission rights allocation for 2018 recorded in the national registers is 1 million tonnes (3 million tonnes for 2017). The volume of emissions at 31 December 2018 stood at 24 million tonnes (40 million tonnes for 2017). The provision resulting from over-quota emissions amounts to €175 million at 31 December 2018 (€120 million at 31 December 2017). 49.2 In all its subsidiaries, the Group is engaged in a process to control energy consumption through various measures developed by national legislations, in application of European Union Directives. In France, the Law of 13 July 2005 introduced a system of energy savings certificates. Suppliers of energy (electricity, gas, heat, cold, domestic fuel oil and fuel for vehicles) with sales above a certain level are subject to energy savings obligations for a three-year period. They fulfil these obligations by making direct or indirect energy savings rewarded by certificates, or by purchasing energy savings certificates. At the end of the set period, the entities concerned must provide ENERGY SAVINGS CERTIFICATES

6.

SUBSEQUENT EVENTS NOTE 50

No development have occurred since the year-end in addition to those presented in other notes.

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EDF I Reference Document 2018