Decarbonization

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 1.5°C. We fully support the commitment of the United Nations’ Paris Agreement on climate change. In 2021, we strengthened our commitment to becoming a carbon-neutral company by incorporating our sustainability strategy into the corporate strategy and creating a unified accelerated strategy VISION 2030—Clean Energy of Tomorrow. We moved forward our goal to be climate neutral by a decade to 2040 in May 2022. 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 CEZ Group, the Board of Directors is responsible for the Environmental Protection and Safety Policy and the Energy Policy. Environmental protection within the policies 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. CEZ Group’s inventory Scope 1 and 2 for reporting 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 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.
In 2021, the sustainability strategy targets were set and 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 from the IPCC Sixth Assessment Report for the 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 assurance of our Scope 1 and Scope 2 GHG emissions, and since 2022, the Scope 3 categories relevant to CEZ Group have also been audited.

Scope 2 Emissions

Scope 2 Emissions	Unit	2020	2021	2022	Source of EF
Total	t CO2e	333,409	142,698	0	Carbon Footprint

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.

Relevant categories for CEZ Group are:

• Category 1: Purchased goods and services,
• Category 3: Energy and fuel-related activities not included in Scope 1 and 2, where emissions from purchased fuels for production (coal, natural gas, biomass, fuel oils) are included, excluding emissions from own coal extraction (included in Scope 1) and excluding emissions from the purchase of petrol and diesel for transport (included in Scope 1), emissions from distribution losses from the purchase of electricity for own consumption, e.g. for pumped storage plants or during power plant shutdowns, emissions from the generation of purchased electricity that is subsequently sold,
• Category 11: Use of sold products (emissions from sales of natural gas, coal and electricity),
• Category 15: Investments.

In 2022, the GWP coefficients were updated to the IPCC Sixth Assessment Report for a 100-year time horizon. Duplicities in categories 3 and 11 were removed, data were recalculated and corrected. We will evaluate and calculate other relevant Scope 3 categories.

Scope 3 Emissions

Scope 3 Emissions	Unit	2020	2021	2022	Source of EF
Category 1 – Purchased goods and services	tCO2e	48,6111)	40,428	29 977	GEMIS3
Category 3 – Energy and fuel-related activities	tCO2e	1,825,3062)	1,265,0852)	539 640	GEMIS3) a EC4)
Category 11 – Use of sold products	tCO2e	11,832,281	9,211,727	11 265 875	IPCC5)
Category 15 – Investments*	tCO2e	N/A	N/A	427,283	Akenerji6)
Total	tCO2e	13,706,198	10,517,240	12,262,775

^* Reported since 2022.
¹⁾ Data corrected.
²⁾ Data recalculated and corrected using GWP coefficients from the IPCC Sixth Assessment Report for a 100-year time horizon.
³⁾ GEMIS
⁴⁾ EC (European Commission’s Joint Research Centre, EUCAR and Concawe)
⁵⁾ IPCC
⁶⁾ Akenerji

Emission Intensity

Emission Intensity	Unit	2020	2021	2022
CO2e per generated electricity and heat	t CO2e/MWh	0.34	0.29	0.29

In our accelerated strategy, we set the target to reduce emission intensity (Scope 1 and 2) by more than 50% compared to the base year 2019. To achieve the target, we use innovative technologies in our production; we will decarbonize and eventually phase out coal production of electricity and heat. We also plan to build a new unit in our nuclear plant in Dukovany and increase the share of renewable energy in our portfolio.

In 2022, with an overall reduction in electricity and heat generation compared to 2021, we have reduced our emission intensity by 0.8%; coal generation remains at 2021 levels given the current geopolitical situation; natural gas generation has decreased by 22% due to gas supply constraints; and renewable generation has decreased by 21%, mainly due to climatic conditions. Nuclear generation increased by almost 1% to 31.02 TWh.

Avoided emissions (in tCO₂e)

Avoided emissions are defined as 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. 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. By using non-fossil sources for electricity and heat generation, the following amounts of GHG emissions were avoided in CEZ Group between 2020 and 2022.

Avoided emissions (in tCO₂e)

	Unit	2020	2021	2022
Nuclear sources	t CO2e	24,907,354	24,630,558	24,760,477
Renewable energy sources	t CO2e	3,448,715	2,605,076	2,014,019
Biomass	t CO2e	967,162	718,944	614,645

Coal Decommissioning

To achieve the goal of our vision, we plan to decarbonize the generation portfolio via a gradual phase-out of coal-fired plants. We plan to completely stop using coal-fired plants by 2038 at the latest; however, an earlier date is very likely. CEZ Group has made medium and long-term commitments to coal decommissioning:

• Reduce the share of coal-fired electricity generation to 25% by 2025 and 12.5% by 2030.
• Transform coal-fired locations into new lower-carbon or no-carbon fuels such as natural gas, biomass, and hydrogen. In 2022, the environmental impact assessment process was completed for the Mělník steam power plant, which is expected to replace coal-fired heat generation for the capital city, Prague, by 2030. The replacement of coal-fired heat generation is currently under consideration in Dětmarovice, Trmice and Prunéřov.

Ozone-Depleting Substances

	Unit	2020	2021	2022
Production, import, export	t CFC-11e	0	0	0

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.