16. 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. Emission allowances received free of charge are presented in the statement of financial position at par value, i.e. zero. Purchased emission allowances are recognised at purchase price. The consumption of CO₂ emission allowances for captive use is measured by way of detailed identification

CO₂ emission allowances are received by power generation units belonging to the PGE Capital Group and covered by the Act on a scheme for greenhouse gas emission allowance trading of June 12, 2015. Since 2013 only a part of emission allowances related to heat generation has been allocated unconditionally; in principle, there are no free emission allowances for electricity generation. Pursuant to Article 10c of Directive 2009/29/EC, a possibility of temporary derogation from the principle of no free emission allowances for electricity generation was introduced, provided that investment projects included in the National Investment Plan (NIP) are implemented. The condition for receiving free emission allowances for electricity generation is the submission of annual financial and material reports on the implementation of investment projects included in the National Investment Plan.

In September 2019, the PGE Capital Group submitted reports on the implementation of investment projects included in the NIP to obtain free emission allowances for electricity generation plants. The requested 12 million emission allowances were issued to the operator holding accounts in the EU Register in April 2020.

In September 2020, the PGE Capital Group submitted reports on the implementation of investment projects included in the NIP in connection with expenditures incurred for the implementation of investment projects for the period from July 1, 2019 to June 30, 2020, which is the last reporting period in the current accounting period. In accordance with the provisions of the Regulation of the Council of Ministers of 8 April 2014 on the list of electricity generating plants covered by the greenhouse gas emission allowance trading scheme, the plants belonging to the PGE Capital Group are not entitled to the allocation of free emission allowances in 2020.