Natural capital

Natural resources are assets used by TAURON Group such as water, solar energy, biomass, minerals (coal, limestone, gas), wind, which are deployed throughout the entire chain of its operations. The Group’s aspiration is to use natural resources responsibly, at the same minimising any negative environmental and climate impact.

This approach is backed up by the implementation of initiatives under the 2022 Strategy, which the Board adopted and which greatly changes the share of the respective natural resources in TAURON Group’s value chain.

This will be possible thanks to the Group’s ongoing decarbonisation effort, namely the alienation of mining assets from the Group (completed by 31.12.2022) and the readiness to divest conventional (coal-fired) generation assets (TAURON power plants) to Polish National Energy Security Agency (NABE) in 2023. The transition towards RES implies a successive increase in the use of wind and solar power as well as a reduced use of non-renewable resources (such as solid fossil fuels). The new Strategy also highlights the need to intensify efforts towards a stronger circular economy.

The use of natural resources in the coming years of the TAURON Group’s business will be ensured without compromising the continuity of electricity supply to customers. In 2022, despite the unfavourable external circumstances, TAURON Group had a relatively stable pool of resources enabling it to supply its conventional generation assets and external customers.

Russia’s aggression against Ukraine triggered a global crisis in the fossil fuel market, which necessitated appropriate actions, namely maximised used of hard coal from the domestic market and supplemental supplies of fuel imported from third countries (e.g. Indonesia and Colombia) that are beyond the influence of the Russian Federation.

By securing the supply of fuel, it was possible to provide stable power generation during the fluctuations and extreme weather conditions, which adversely affect the security of the overall energy system.

TAURON Group’s natural resources are renewable and non-renewable. Deposits of non-renewable resources are exploited in a responsible, rational, organised, structured and sustainable manner.

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Non-renewable resources exploited by TAURON Group in 2022

Number of deposits	Mineral		Number of coal mines	Aggregate area of the mining sites km²	Operative resources m ton
8	Primary mineral	hard coal**	3	218.77	324.4*
1		limestone	1	1.34	63.6*
1	Associated mineral	methane	1

* In the case of both TAURON Wydobycie and the Kopalnia Wapienia (Limestone Mine) "Czatkowice", the resources have been determined on the basis of the inventory level as of 31.12.2021 minus the extraction for 2022. The exact inventory level of the operative resources as of 31.12.2022 will be known after the preparation of a resource inventory report, which will take into account not only depletion related to extraction, but also changes in the deposit's resources related to the more accurate intelligence, losses and the resource reclassifications made.

Resources used in TAURON Group, 2020-2022

TOTAL	2022	2021	2020
RENEWABLE RESOURCES
Agro biomass [tons]	58 946	82 283	124 203
Forest biomass [tons]	356 885	435 137	553 537
NON-RENEWABLE RESOURCES *
Net coal [tons]	6 518 851	6 419 493	4 888 015
Net coal production** [tons]	5 007 348	5 146 853	4 541 216
Sludge [tons]	203 775	248 142	249 980
Natural gas [m³]	41 940 767	30 057 357	12 067 032
Heating oil [tons]	40 924	40 340	26 324
Diesel oil [m³]	7 105	6 796	6 289
Limestone [tons]	266 639	269 563	197 288
Limestone production [tony]	2 108 880	2 011 529	1 722 376

* Includes the consumption and production by the Group’s subsidiaries
** On 31.12.2022 there was a spin-off of coal assets outside the Group. Discontinued operations

The proximity principle applies in the case primary resources that are used in the Group, thereby reducing the carbon footprint associated with transport operations.

2022

In 2022, the Group made preparations to comply with the obligation to verify the sustainability of biomass that is used for energy generation.

415

thous. t

The total consumption of renewable resources in the form of biomass was over 415,000 tons in the Group in 2022.

Its subsidiaries which operate biomass combustion systems (TAURON Wytwarzanie, TAURON Ciepło) and which take part in the emission trading system, and the supplier of biomass (Bioeko Grupa TAURON) all became certified to confirm the sustainability criteria. Since January 2022, the biomass used for the Group’s energy needs has been compliant with the ‘sustainable biomass’ criteria.

The renewable natural resources used by the Group are:

biomass;
water used in a total of 34 run-of-river and reservoir power plants as well as in conventional power generation processes;
wind in 11 wind turbines;
solar energy in 3 photovoltaic farms as at 31.12.2022, with total capacity 19 MW.

Natural resources management

TAURON Group complies with the law and any requirements stemming from decisions of authorities that apply to its business, and acts in a way that contributes to the broader goal of sustainable development and especially towards the closed-loop economy and achievement of resource performance objectives.

The following table shows the areas of potential direct environmental impact from TAURON Group’s business in 2022.

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Identified and grouped areas of potential direct environmental impact of TAURON Group's operations in 2022.

* TZE, TEC1 I-VI, TEC1 EW Gołdap, TEC1 Ino1, Aval 1, Wind T1, Polpawer, Megawatt Wind T4, WindT30MW, FF Park PV1, Windpower Gamów.
** direct and indirect impact, potentially negative but also potentially positive

Measures that support the responsible management of resources in TAURON Group, beyond the mandatory requirements of authorities, included: TAURON Group Environmental Policy and TAURON Group Climate Policy. These policies comprehensively cover all types of operations of the Group where environmental impact is involved and they utilise resources in line the principles of sustainable development.

impact of TAURON Group’s measures in the area of natural resources management

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Emission of NOx, SO2 and other relevant chemicals to the air by TAURON Group, in 2022, 2021 and 2020. [Mg]

TOTAL	2022	2021	2020
NOx	13 148	8 369	7 491
SO2	10 105	7 250	7 051
Total dust	636	429	435
Other*	8 545	8 050	5 972

* other emission includes the following compounds and substances: CO, HCl, HF, NH3, mercury and other metals, and others controlled and reported to the National Pollution Register (RKUiTZ).

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Total water intake [m3/year] by source in TAURON Group, 2022, 2021 and 2020

[m³/year]	Total
[m³/year]	2022	2021	2020
rivers	45 250 492	47 230 609	117 712 190
wetlands	0	0	0
groundwater	46 729 460	46 577 742	46 458 181
rainwater directly collected and stored	339 196	278 954	318 988
municipal network water	4 370 059	4 143 445	3 613 660
other	19 565 350	18 741 603	15 941 437
Total water taken from all included sources	116 254 558	116 972 353	184 044 456

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Total hazardous waste [Mg] by type and method of treatment, in 2022, 2021 and 2020.

	2022	2021	2020
Re-used	0.0	9.3	101.6
Recycled	354.9	2.2	541.4
Recovered (incl. energy recovery)	298.0	494.3	103.0
Treated	104.2	24.7	148.8
Stored	15.6	36.2	5.1
Other *	118.1	437.4	52.4
Total waste	891	1 004	952

* the Group does not generate radioactive waste.

Natural resources in the context of other assets and capital

TAURON Group uses renewable and non-renewable natural resources in its operations. Thanks to the energy transition, the group-level role and impact of renewable resources is going to grow at the expense of non-renewable resources. The rising environmental and climate awareness in the society and among the staff has been increasingly influencing the use of natural resources in TAURON Group. Fossil-based operations and the associated emissions are not neutral to natural resources and reducing their impact while increasing the involvement of renewable resources has major influence on other assets and capital.

The positive perception of businesses that take advantage of renewable resources translates into both better human and social capital. The effect of today’s decisions on the extent and level of natural resource usage will also affect how the company is perceived by other stakeholders, including investors and financial institutions. Moving away from fossil fuels has become the prerequisite for investment funding. As such, the efficient utilisation of resources and the scope of use of renewable resources pre-determines the development of production assets and also the intellectual property considering the new technology needed (e.g. green hydrogen production, energy storage).