16. CO2 emission allowances for captive use

ACCOUNTING POLICIES

CO₂ emission allowances for captive use

A separate item of the statement of financial position presents CO₂ emission allowances for captive use of generation units. EUA received free of charge are presented in the statement of financial position at nominal amount, i.e. at nil value. Purchased emission allowances are recognised at purchase price. The cost of CO₂ emission allowances for captive use is measured by way of detailed identification.

CO₂ emission allowances are received by power generating units belonging to PGE Group, which are covered by the Act dated June 12, 2015 on a scheme for greenhouse gas emission allowance trading. Starting from 2013, only part of emission rights for production of heat will be granted unconditionally, while for production of electricity there is, as a rule, lack of free of charge EUA. Pursuant to Article 10c of Directive 2009/29/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowance trading within the Community, the derogation is possible providing the realization of investment tasks included in National Investment Plan, which allow to reduce CO₂ emission. The condition under which free of charge CO₂ emission rights can be obtained is presentation of factual-financial statements from realization of tasks included in National Investment Plan.

In September 2018, PGE Group submitted another report on investments included in the National Investment Plan in order to obtain CO2 EUA allocations concerning electricity generated in 2018. The allowances were issued in April 2019. The Group received 14 million EUAs for 2018 and additional 11 million EUAs (held for trading purposes) for years 2013-2017 as described in note 33.3 to these financial statements.

In the case of EUAs for CO₂ emissions related to heating, the allocation schedule is different – in February 2020 EUAs were allocated for the coverage of CO₂ emissions for 2020 (1 million EUAs).

In September 2019, PGE Group submitted further reports on investments included in the National Investment Plan in order to obtain CO₂ EUA allocations for power generating installations, justified by expenses incurred for investment tasks included in the National Investment Plan in the reporting period from July 1, 2018 to June 30, 2019. This period is the last period of allocation of free emission allowances in the current settlement period. The requested allowances should be released to the operator’s accounts in the EU register in April 2020.