Greenhouse gas emissions

The EU-ETS is the European greenhouse gas emissions trading scheme. The basic goal of the system is to limit greenhouse gas emissions and gradually reduce such emissions in a cost-effective manner.
During 2018, total emissions of greenhouse gas CO₂ from HEP’s sources decreased by 17% compared to 2017. This is the result of lower consumption of liquid fuels in thermal power plants (TPPs) and combined heat and power plants (CHPs) and city heating boiler facilities, as well as reduced number of operating hours of coal-fired thermal power plants. At the same to, CO₂ emissions from BE-TO Sisak CHP and BE-TO Osijek CHP increased by 26% in 2018, since in 2017 both power plants were in test operation and therefore both operated fewer hours, so that the consumption of forest biomass was lower. CO₂ emissions from city heating boiler facilities decreased by 7% compared to 2017.

Total annual emissions of GHG CO₂ from HEP's sources

	2017	2018	2018/2017 (%)
Thermal power plants and combined heat and power plants/tCO2	2,780,074	2,274,841	82
Wood chips (biomass) fired power plants/tCO2	36,967	46,667	126
City heating boiler facilities /tCO2	33,353	30,973	93
TOTAL	2,850,394	2,352,481	83

 

Intensity of CO₂ emissions

In 2018, the intensity of CO₂ emissions pertaining to electricity generated by HEP’s generation mix (TPP, CHP, HPP and 50 percent of NPP Krško) was 147 g CO₂/kWh.
 

Trading greenhouse gas emission allowances (EU-ETS)

The basic objective of setting up the EU-ETS is to limit greenhouse gas emissions and reduce them gradually in a cost-effective manner. The third period of the EU-ETS began in 2013 and will last until the end of 2020. Trading entities may purchase emission allowances at government auctions, stock exchanges and through bilateral agreements with partners. All HEP’s thermal power plants and combined heat and power plants operated by HEP-Proizvodnja d.o.o. (HEP-Generation) and HEP-Toplinarstvo d.o.o. – Plant Osijek (HEP-District Heating – Pogon Osijek), are obligated to trade in greenhouse gas emission allowances.
The methodology and emission factors defined in the approved GHG emission monitoring plans of the Ministry of the Environment and Energy are used in the calculation of CO₂ emissions from thermal power plants within HEP-Proizvodnja, while those prescribed by the Intergovernmental Panel on Climate Change (IPCC) for plants within HEP-Toplinarstvo.
HEP’s sources participating in the EU greenhouse gas emission trading scheme (EU-ETS) submit an Emission Report and a Verification Report to the Ministry of the Environment and Energy by March 1 of the current year for the previous year. The verification of GHG emissions is performed by an independent accredited verifier.

CO₂ emissions from HEP's sources participating in the EU-ETS system (combustion plants with capacity ˃ 20 MWt)

	2017	2018	2018/2017 (%)
Thermal power plants and combined heat and power plants/tCO2	2,780,074	2,274,841	82
City heating boiler facilities /tCO2	190	64	34
TOTAL:	2,780,264	2,274,905	82

 
The European Commission allocates free emission allowances to HEP' facilities participating in the EU-ETS. Such allowances are granted for heat generated and delivered to the central district heating system (DHS), energy supplied to the so-called  „carbon leakage“ facilities (i.e. the facilities that are at risk of shifting their production to non-EU-ETS countries) and a part of energy supplied to the so-called  non-carbon leakage facilities (i.e. facilities for which there is no such risk).  The European Commission allocates free emission allowances based on the Reference Data Report (NIMsBL) and the Monitoring Methodology Plan. The allocated quotas are subject to change, depending on heat generation for the previous year, in line with reports submitted by the operators to the Ministry of the Environment and Energy by 15 January of the current year for the previous calendar year.  

Number of free allowances allocated to HEP's sources participating in the EU-ETS

	2017	2018	2018/2017 (%)
Thermal power plants and combined heat and power plants/tCO2	262,114	224,991	86
City heating boiler facilities /tCO2	296	54	34
TOTAL:		225,045	86

 
As in the preceding years, since joining the EU-ETS in 2013, HEP Group has surrendered emission allowances onto all nine accounts open at the EU Registry within the legal deadlines and in quantities corresponding to verified CO₂ emissions.