Emissions balance

In fiscal 2008, our electricity generation operations emitted 172.1 million metric tons of carbon dioxide. RWE-owned power plants accounted for 145.0 million metric tons, and the remaining 27.1 million metric tons come from contractually secured capacity in Germany. CO₂ emissions were down by 15.0 million metric tons compared with 2007. In Germany, emissions declined by 16.9 million metric tons to 140.9 million metric tons. This is because the recommissioning of Biblis increased CO₂-free nuclear electricity output and decreased coal-based generation. In contrast, our carbon dioxide emissions in the UK rose by 2.8 million to 24.8 million metric tons, because RWE npower’s hard coal power plants had a much higher capacity utilization. In Hungary, we emitted 6.2 million metric tons, which was down on the previous year’s level.

In the year under review, we received free state allocations of certificates equal to 104.6 million metric tons of CO₂. This is much less than in 2007 (169.8 million metric tons) and was due to new allocation rules effective in the second allocation period of the EU emissions trading scheme (see the chapter emissions trading). Therefore, we had to buy more certificates even though our emissions declined. Our shortage totalled 67.5 million metric tons, versus 17.3 million metric tons in 2007. In Germany, we received certificates corresponding to 84.9 million metric tons, while in the UK, the allocation represented 14.9 million metric tons. This resulted in shortfalls of 56.0 million metric tons and 9.9 million metric tons, respectively (2007: 13.1 and 5.0 million metric tons, respectively). In Central Eastern Europe, the allocation was 1.6 million metric tons less than needed.

In the trading period from 2008 to 2012, we are allowed to cover a maximum of 100 million metric tons of our CO₂ emissions by submitting certificates obtained through Kyoto “Clean Development Mechanism” Glossary (CDM) and “Joint Implementation” Glossary (JI) projects. This is advantageous because the cost of these certificates is usually below the market price of emissions allowances allocated by EU member states. By the end of the 2008 financial year, we had contractually secured certificates for about 60 million metric tons of CO₂. Taking project risks into account, we estimate that this will give us emissions certificates covering approximately 34 million metric tons. We have already received certificates for 5.6 million metric tons.