16. CO₂ emission allowances for captive use

PGE Group emits carbon dioxide into the atmosphere as part of its operations. The demand for carbon allowances is covered in part by allowances received free of charge and the remainder must be obtained by PGE Group on the market. In order to cover the demand of PGE Group’s generating units, external transactions for the purchase of greenhouse gas emission allowances are concluded. Carbon dioxide emission allowances intended for captive use by generating units are recognised under a separate line in the statement of financial position. EUAs received free of charge are presented in the statement of financial position at nominal value, i.e. at zero. Purchased EUAs are recognised at purchase price. Outgoing CO₂ allowances purchased for own use are valued using the specific identification method.

As PGE Group enters into transactions for the purchase of CO₂ allowances at the time of contracted sales, each purchase is allocated to the relevant basket associated with the sales contracted for the year. The value of allowances allocated to the basket relating to a reporting period is reflected in the value of the CO₂ provision for that period.

{Forward transactions related to hedging the purchase of CO₂ allowances for surrender purposes benefit from the own-use exemption and are not recognised in the statement of financial position.