35. Inventories

Inventory is measured at a lower of two values: purchase price or manufacturing cost and net achievable sales price. Greenhouse gas  emission allowances which are purchased for sale and generation of profit in the short term due to volatility of market prices are measured at a fair value as at each balance sheet date.

Inventory releases are measured using the weighted average method, except for energy certificates of origin and CO₂ emission allowances whose releases are measured using the FIFO method.

The Group’s inventories comprise mainly fuel stocks.

Measurement of inventories requires an estimate of the net achievable sales price. It is the estimated price of sales performed in the course of ordinary business, less costs of finishing and estimated costs required to make the sales effective. Valuation of the inventory of CO₂ emission allowances described above at a fair value is based on prices quoted in an active market.