EDF / 2018 Reference document

PRESENTATION OF EDF GROUP Legislative and regulatory environment

Protection of facilities that house nuclear materials The purpose of the regulations on the protection and control of nuclear material governed by Article L. 1333-1 of the French Defence Code is to detect and prevent the loss, theft or misappropriation of nuclear material that is stored at facilities or being transported, or any attempts to alter, damage or disperse such material. These regulations were completely recast by Decree no. 2009-1120 of 17 September 2009 on the protection and control of nuclear material, its facilities and its transportation, as set forth in the French Defence Code. The main purpose of this Decree was to extend the protection of nuclear material to the facilities where it is stored. Several orders published in 2011 detail operators’ obligations. For nuclear power plants, the Order of 10 June 2011 on the physical protection of facilities that house nuclear materials, which can only be held with an authorisation, is based on in-depth defence of targets, namely the nuclear material, equipment or functions, which, in the event of default or damage by a malicious act, are liable to have radiological consequences. Accordingly, the operator must set up several lines of protection in the form of six zones (e.g. access control areas, a vital area, an internal area, etc.). Following an amendment by an Order of 15 September 2015, the Order of 10 June 2011 now makes it possible to set up safety devices in dangerous areas if the assessment of the contents of the safety study provided for in Article R. 1333-4 of the French Defence Code reveal that the means implemented to meet the safety objectives appear to be insufficient. The Order of 9 June 2011 organises the system for physically monitoring nuclear material, as well as the accounting conditions for nuclear material and operator obligations. Accordingly, operators must ensure that the physical monitoring and accounting are protected against the malicious actions identified when the authorisation is issued. Law no. 2015-588 of 2 June 2015 on the Improvement of the Protection of Civilian Facilities That House Nuclear Materials, which is now incorporated into the French Defence Code, created a specific criminal misdemeanour of trespassing in these facilities. For the implementation of these rules, Decree no. 2015-1255 of 8 October 2015 created restricted access nuclear areas (ZNAR) that must be delineated within each facility. Trespassing in a ZNAR constitutes a criminal misdemeanour that carries a one-year prison sentence and a €15,000 fine. These penalties are increased in the event of aggravating circumstances (to a three-year prison sentence and a €45,000 fine, in particular when the offence is committed in a group, and to a seven-year prison sentence and a €100,000 fine, in particular if the offence is committed with the use or threat of a weapon). All of the orders that define the ZNAR for each nuclear power plant have been published. Brexit's impact on the Euratom Treaty The UK is scheduled to leave the European Union on 29 March 2019 after which it will no longer be a party to the Euratom Treaty. The consequences of this situation and the measures taken to deal with it are described in section 1.4.5.1.1 “United Kingdom – Strategy”. Regulations applicable to fossil fuel-fired 1.5.6.2.3 energy generation The EDF group’s fossil fuel-fired energy generation business is subject in France to the regulations that are applicable to ICPEs (see section 1.5.6.2.1 “Regulations applicable to facilities classified for the protection of the environment (ICPEs)”). EDF’s fossil fuel-fired facilities must also comply with specific regulations on air quality, adopted mainly as a result of European Directive no. 2001/81/EC of 23 October 2001 on National Emission Ceilings for Certain Atmospheric Pollutants (the NEC Directive), and Directive no. 2001/80/EC of 23 October 2001 on the Limitation of Emissions of Certain Pollutants into the Air from Large Combustion Plants (the LCP Directive), which, since 1 January 2016, has been repealed and replaced by Directive no. 2010/75/EU of 24 November 2010 on Industrial Emissions (the IED Directive). These Directives were transposed into French law by several orders, in particular the Order of 30 July 2003 on boilers that are present in existing combustion facilities with a power rating of more than 20MWth, which on 1 January 2016 was repealed and replaced by the Order of 26 August 2013 (itself repealed on 20 December 2018) on combustion facilities with a power rating of 20MW or more, which as type 2910 and 2931 plants must be approved. Decree no. 2018-704 of 3 August 2018 amended the designations of type 2910 (Combustion) and 2770 & 2771 (Incineration) plants and lowered the approval and application thresholds from 2MW to 1MW. It modifies the application requirements for combustion facilities. From 20 December 2018, type 2781-1, 2910, 2931 & 3110 combustion plants will fall under the relevant stipulations set by the five Orders of 3 August 2018.

Directive no. 2013/59/Euratom of 5 December 2013, which laid down “basic safety standards”, repealed Directive no. 96/29 of 13 May 1996. It was transposed into French law by the above-mentioned Order no. 2016-128 of 10 February 2016, by Decree no. 2018-434 of 4 June 2018 amending the regulatory sections of the French Public Health Code, French Environment Code and French Defence Code and by Decree no. 2018-437 of the same date doing likewise for the French Labour

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Code. Implementation orders will specify the provisions. Civil liability of nuclear facility operators

Several international conventions govern the civil liability of nuclear facility operators, in particular the Paris Convention of 29 July 1960 on Third-Party Liability in the Field of Nuclear Energy and the Brussels Convention of 31 January 1963, which supplements the Paris Convention. These two conventions are applicable in the signatory countries that have ratified them, including France and the United Kingdom (see also section 2.5.6 “Specific insurance for nuclear facility operations”). The Paris Convention established a special liability derogation system, with specific characteristics. Liability for nuclear damage to persons and property is strict (even in the absence of a fault), limited in terms of the amount and duration, and is exclusively focused on the operator of the nuclear facility. In France, the operator’s liability was limited to €91.5 million per nuclear accident at a facility and to €22.9 million per nuclear accident during transport. These amounts were respectively increased to €700 million and €70 million on 18 February 2016 when Article 130 of the Law of 17 August 2015 on Energy Transition for Green Growth mentioned below entered into force. Over and above the maximum amount for which the operator is liable, the State in which the incident occurred is responsible for compensating victims up to a maximum of €201.4 million (provided that said State is a Contracting State of the Brussels Convention); over and above this amount, Member States that have ratified the Brussels Convention (including France) contribute collectively to compensation up to a limit of €345.3 million. The Convention also provides that the operator has an obligation to take out insurance or lodge a financial guarantee for the liability amounts established in order to guarantee the availability of funds. The Minister for the Economy monitors French operators’ compliance with this obligation. EDF complies with the current coverage requirements (see section 2.5 “Insurance”). Protocols to amend the Paris and Brussels Conventions were signed on 12 February 2004 but have still not entered into force. They require significantly higher amounts of compensation than the original conventions, in order to cover a greater number of victims and types of damage that are eligible for indemnification. The operator’s liability will thus be at least €700 million per nuclear incident in a facility and €70 million per nuclear incident during transport. The State, in which the nuclear facility of the operator that is liable for causing the damage is located, is liable for amounts above the €700 million for which the operator is liable, up to €1.2 billion (provided that said State is a Contracting State of the Brussels Convention). Over and above this amount, the Contracting States of the Brussels Convention are liable up to a maximum amount of €1.5 billion. In addition, for personal injury only, the time limit to claim compensation has changed from 10 years to 30 years from the date of the incident. Another important change is the introduction of a detailed definition of “nuclear damage”, which includes economic losses, the cost of protective measures, the cost of measures to rehabilitate damaged environments, and certain other losses resulting from damage to the environment. These new provisions will, however, only be applicable as of the date when the protocol that amends the Paris Convention comes into force, i.e. when at least two-thirds of the sixteen Contracting States have ratified it. France has adopted a law permitting ratification of both protocols (Law no. 2006-786 of 5 July 2006), but has not yet filed the corresponding ratification instruments. Moreover, on 30 April 2014, France filed its ratification instrument for the joint protocol relating to the application of the Vienna Convention and the Paris Convention, which thus entered into force for France on 30 July 2014. This joint protocol establishes a link between the Paris Convention, which covers countries in Western Europe, and the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, which covers (among others) countries in Eastern Europe. It enables the parties to one of these two conventions (Paris or Vienna) who adhere to the protocol to benefit from the coverage provided by the other convention.

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EDF I Reference Document 2018