Greenhouse Gas Emissions
GRI 103, 305-1, 305-2, 305-3; SASB IF-EU-110a.1, IF-EU-110a.2 / SDG13
The 2015 Paris Agreement on climate change represents a commitment to limit global warming to well below 2 °C above pre-industrial levels and to pursue efforts to limit the increase to no more than 1.5°C. In CEZ Group we fully support the commitment of the United Nations’ Paris Agreement on climate change. In 2021, we strengthened our commitment to becoming a climate-neutral company by incorporating our sustainability strategy into the corporate strategy and creating a unified accelerated strategy VISION 2030—Clean Energy of Tomorrow. In May 2022, we moved forward our goal to be climate neutral by a decade to 2040. This decision was motivated by three drivers: (1) the annual review of VISION 2030—Clean Energy of Tomorrow, (2) the launch of the REPowerEU plan, and (3) the proposal of the European Commission to set stricter goals within the Fit for 55 package. In 2023, SBTi confirmed that the decarbonization strategy of the CEZ Group is sufficiently ambitious and in line with the Paris Agreement to limit the increase to no more than 1.5°C.
In CEZ Group, the Board of Directors of ČEZ, a. s., is responsible for the Safety and Environmental Protection Policy and the Energy Policy. Within the policies, our environmental protection is based on the Environmental Management System according to ISO 14001 and the Energy Management System according to ISO 50001.
CEZ Group reports its GHG emissions using the methodology of Greenhouse Gas Protocol: Corporate Accounting and Reporting Standard and 2006 IPCC Guidelines for National Greenhouse Gas Inventories. In the methodology, emissions are defined in three scopes: Scope 1, 2, and 3. We report Scope 1 and Scope 2 emissions fully, whereas in Scope 3, we report only categories relevant to CEZ Group. CEZ Group’s GHG inventory is given by financial control: this includes all companies in which ČEZ, a. s., has a financial interest of more than 50% or controls the company. In 2021, the sustainability strategy targets were set and the year 2019 was set as base year to maintain trend tracking over the three-year reporting horizon.
GHG emissions are measured directly in production (continuous monitoring) or calculated using emission factors (EF) — their sources are listed in the chart below. Non-CO2 GHGs are converted to CO2 equivalents using GWP coefficients according to the IPCC Sixth Assessment Report for a 100-year-time horizon. All GHGs covered by Kyoto Protocol are included (CO2, CH4, N2O, HFC, PFC, SF6, excluding NF3, which is not used within CEZ Group). Since 2021, we have obtained external audit of Scope 1 and Scope 2 GHG emissions, and since 2022, the Scope 3 categories relevant to CEZ Group have also been audited.
GRI 305-1; SASB IF-EU-110a.1
Scope 1 GHG emissions come from the burning of fossil fuels to generate electricity and heat (CO2, CH4, and N2O), emergency power unit (diesel generators), fuels for vehicles we own or operate (CO2), fugitive coal mining emissions (CH4), biomass burning (CH4 and N2O), waste disposal site (CH4) and minor leaks from cooling, air conditioning equipment and high-voltage switches (HFC, PFC, and SF6). Scope 1 emissions are currently the most significant in the utility sector. Nevertheless, their importance will decrease with the transition to low emission energy sources. A total of 96.25% of CO2 emissions from our energy production in 2023 were within the sphere of emission allowances used in the EU ETS. In 2022, we slightly change the scope of reporting greenhouse gas emissions within Scope 1, when direct CO2 emissions from burning biomass fuels and emissions from R22 refrigerant leaks are reported in separate categories. Accordingly, we have changed the general overview of GHG emissions included in Scope 1 for previous years.
| Unit | 2021 | 2022 | 2023 | Source of emission factor | |
|---|---|---|---|---|---|
| Fuels from facility operations | t CO2 | 18,702,178 | 17,851,659 | 15,684,472 | Laboratory analysis, NIR CZ1) |
| Emissions from non–generation diesel generators | t CO2e | 224 | 106 | 163 | NIR CZ1) |
| CH4 source emissions | t CO2e | 80,913 | 75,885 | 72,641 | IPCC2) |
| N2O source emissions | t CO2e | 119,693 | 156,730 | 157,612 | IPCC2) |
| Fugitive CH4 emissions from coal mining | t CO2e | 26,700 | 15,564 | 12,608 | Laboratory analysis |
| Fugitive CH4 emissions from landfill | t CO2e | 1 | 13 | 20 | IPCC2) |
| HFC, PFC and CH4 apart from facility operations | t CO2e | 1,403 | 2,028 | 1,548 | IPCC2) |
| SF6 | t CO2e | 1,835 | 5,220 | 3,616 | IPCC2) |
| Emissions from transport | t CO2e | 54,613 | 53,997 | 57,642 | EC3) |
| Total | t CO2e | 18,987,560 | 18,161,112 | 15,954,322 | |
| Biomass from facility operations | t CO2e | 1,293,425 | 1,063,632 | 1,029,623 | Laboratory analysis, NIR CZ1) |
1) National Greenhouse Gas Inventory Report of the Czech Republic.
2) IPCC Guidelines for National Greenhouse Gas Inventories.
3) ČSN EN 16258:2012
GRI 305-2
Within this group of indirect emissions, emissions from purchased energy that is consumed in the CEZ Group are reported. These are the (calculated) direct emissions of the energy producer. In most of the countries in which the CEZ Group operates, the purchased energy is resold and therefore falls under Scope 3. In the case of the purchase of steam, heat or cold, these are zero items or negligible quantities, which are insignificant compared to electricity, and emissions of these types of purchased energy are not reported. Within this category of indirect emissions, only indirect emissions from purchased and consumed electricity are reported according to the location-based methodology. The year-on-year reduction in 2022 occurred due to the sale of CEZ Group's distribution assets in Bulgaria.
| Unit | 2021 | 2022 | 2023 | Source of EF | |
|---|---|---|---|---|---|
| Total | t CO2e | 14,698 | 0 | 0 | Carbon Footprint1) |
1) Carbon Footprint – EF only for 2022.
GRI 305-3; SASB IF-EU-110a.2
Scope 3 includes all indirect greenhouse gas emissions resulting from the activities of CEZ Group, which are not included in Scope 1 and Scope 2. The GHG Protocol divides Scope 3 GHG emissions into 15 categories that cover indirect emissions in the value chain from upstream and downstream activities. In 2023, all fifteen categories were reviewed, of which those that contribute at least 1% to the total Scope 3 emissions were identified as significant. Category 1, which was already reported in previous years, is also reported in this year.
| Unit | 2021 | 2022 | 2023 | Source of EF | |
|---|---|---|---|---|---|
| Category 1 – Purchased goods and services | t CO2e | 40,428 | 29,977 | 48,45014 | GEMIS1, Winnipeg2, Incopa3, EPA4, Society of chemistry5 |
| Category 2 – Capital goods – NEW | t CO2e | N/A | N/A | 228,947 | EPA6 |
| Category 3 – Fuel– and energy–related activities | t CO2e | 1,265,085 | 539,640 | 2,910,43715 | GEMIS1 a EC7, AIB8, Carbonfootprint9, North sea10 |
| Category 9 – Downstream transportation and distribution – NEW | t CO2e | N/A | N/A | 213,930 | Transport tool11 |
| Category 10 – Processing of sold products (coal combustion products) – NEW | t CO2e | N/A | N/A | 344,188 | GEMIS1, EPD12 |
| Category 11 – Use of sold products16 | t CO2e | 7,975,502 | 9,896,774 | 9,338,407 | IPCC13 |
| Category 15 – Investments | t CO2e | N/A | 427,283 | 448,012 | Akenerji |
| Total | t CO2e | 9,281,015 | 10,893,674 | 13,532,370 |
1) GEMIS
2) Winnipeg
3) Incopa
4) EPA SEFA
5) The Royal Society of Chemistry
6) EPA
7) EC
8) AIB
9) Carbonfootprint
10) The North Sea Transition authority
11) GHG Protocol Transport Tool
12) EPD Česky cement
13) IPCC Guidelines for National Greenhouse Gas Inventories
14) Based on the 2023 recalculation, emissions from the purchase of raw materials for production – urea, ammonia, ammonia water, limestone and lime – are now included in this category, in addition to emissions from the production of adipic acid and other chemicals purchased in quantities greater than 100 tonnes per year.
15) Based on the 2023 recalculation, emissions related to fuel transport, distribution losses of purchased electricity and emissions related to LNG purchases are now accounted for. Calculation of emissions related to nuclear fuel production and transport is in preparation. (EF from AIB and Carbonfootprint only available for 2022 so far).
16) Based on the 2023 recalculation, the category has been recalculated assuming no GHG emissions from electricity sold to other users.
GRI 103, 305-4, 305-5; SASB IF-EU-110a.3
In 2023, with an overall reduction in electricity and heat generation compared to 2022, we have reduced our emissions intensity by 8%; coal generation is down nearly 14% from the previous year, natural gas generation is down 18% due to gas supply constraints, and renewables have seen more than a 10% increase in hydro and more than 30% increase in wind. Generation from nuclear remained almost flat, with a decrease of less than 2%.
Our climate targets are aligned with the Science Based Targets initiative (SBTi). The SBTi validated our near-term target for 2030 in May 2022. In September 2023, the validation of the short-term goal for 2033 and the long-term goal for 2040, which is also the year the CEZ Group will achieve net zero, was completed.
We regularly monitor our progress towards these targets and create new initiatives in response to new legislation, stakeholders, and markets demands to be a leader in the energy transition. Together with other European energy groups, we registered our commitments to reduce greenhouse gas emissions under the Non-State Actor Zone for Climate Action (NAZCA), formed before the Paris Climate Conference in 2015.
| Emission intensity | Unit | 2021 | 2022 | 2023 |
|---|---|---|---|---|
| CO2e per generated electricity and heat | t CO2e/MWh | 0,29 | 0,29 | 0,27 |
GRI 305-5
Avoided emissions are defined as GHC emissions that are not emitted due to the generation of electricity or heat from non-emitting sources (nuclear or renewable) instead of fossil fuel sources or using biomass. The use of non-emitting sources prevents the generation of greenhouse gas emissions that would otherwise be emitted by the mix of the existing portfolio of CEZ Group combustion sources. The calculation of the avoided emissions is based on the conversion of the amount of electricity generated by non-fossil or zero-emission sources into the emission parameters of fossil sources, i.e., the amount of electricity from each category of non-fossil sources is multiplied by the emission factor for CEZ Group coal-fired power plants in a given year. By using non-fossil sources for electricity and heat generation, the following amounts of GHG emissions were avoided in CEZ Group.
| Avoided emissions | 2021 | 2022 | 2023 |
|---|---|---|---|
| Nuclear sources | 24,630,558 | 24,760,477 | 25,383,391 |
| Renewable energy sources | 2,605,076 | 2,014,019 | 2,390,472 |
| Biomass | 718,944 | 614,645 | 598,206 |
The comparison of these values with the GHG emissions reported in Scope 1 shows that the use of non-fossil and non-emitting energy sources prevents the generation of more GHG emissions than the fossil-fired generation of electricity and heat emits.
GRI 305-6
Ozone-depleting substances (ODS) are chemicals that damage the ozone layer in the stratosphere. CEZ Group does not produce, import, or export these compounds. We avoid using ODS whenever possible; minor emissions from ODS come from leaks in cooling and air-conditioning equipment still used in CEZ Group. From 2022 onwards, emissions of these substances are counted under CO2e in Scope 1.
| Ozone–Depleting Substances | Unit | 2021 | 2022 | 2023 |
|---|---|---|---|---|
| Emissions | t CO2e | 5.27 | 0 | 0 |
| Production, import, export | t CFC–11eq | 0 | 0 | 0 |