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ČEZ, a.s.

CEZ a.s.

ČEZ is a leading Czech energy conglomerate involved in power generation, distribution, and coal mining.

Lobbying Activity

Meeting with Kadri Simson (Commissioner) and

9 Feb 2023 · Electricity market design.

Meeting with Antoine Colombani (Cabinet of Executive Vice-President Frans Timmermans) and ELECTRICITE DE FRANCE and

21 Sept 2022 · Energy derivatives markets

Meeting with Florian Denis (Cabinet of Commissioner Mairead Mcguinness) and ELECTRICITE DE FRANCE and

21 Sept 2022 · EMIR review, clearing threshold

Response to Review of the de minimis aid Regulation

21 Jul 2022

Existing rules in Regulation 1407/2013 of 18 December 2013 on the conditions for the use of de minimis aid are now obsolete. Even though it is residual State aid category compliant with the rules of Article 107 TFEU, the limit of EUR 200 000 per one undertaking is currently insufficient as it does not take into account price developments since 2014. When setting new de minimis state aid rules, the Commission should consider increasing the general limit per one undertaking to a minimum threshold of EUR 400 000. Regarding the transparency of this state aid, we consider the current set-up of the de minimis aid register at the level of Member States to be adequate and functioning. The current state of the national de minimis state aid registers provides sufficient legal certainty for both, applicants for de minimis aid and state aid providers, including control authorities.
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Response to Environmental, social and governance (ESG) ratings and sustainability risks in credit ratings

6 Jun 2022

ESG Rating Methodology If companies are rated based on publicly available information, methodologies for assessment of the information should also be public. There should be standardized metrics and clearly defined requirements, so that benchmarking is reliable. Discrepancies in ESG Rating Categories The division of rated data into E, S, and G categories is not aligned, and there are differences between rating agencies. Also, the weights of these categories are often unclear. This leads to the same information being weighted differently by different rating agencies and having a bigger/smaller impact on the overall score, which can disadvantage companies. Environmental, social and governance categories should be clearly defined and consistently applied. Sources of Information for ESG Rating Rating agencies should be obliged to use the most recent and relevant data and information available. Rating agencies should be obliged to use correct and accurate information. It should not be the burden of the rated companies to clarify errors for them, e.g., mistaking a public relations office for political lobbying, and working with outdated 2019 data for a 2021 rating. Legislation Not Considered In several rated areas (human rights, employment, tax) rating agencies do not take into account the already existing laws, which are in force and binding, e.g., the prohibition of child labor and slavery. Instead, rating agencies require policies and commitments as proof, which is a redundant burden and only clutters the issues. Also, the fulfilment of such commitments is actually unmeasurable: either companies obey the law and have zero children in employment (and no policy is required), or companies break the law (and a policy should not exculpate them). Potential Conflict of Interest If rating agencies provide several types of services (e.g., consulting, second-party opinion, TCFD implementation), while these services A) are paid by companies and B) might have a potential impact on the rating, there is a risk of conflicts of interest. The process of cooperation between rating providers and companies should be transparent to avoid suspicions that the rating is not objective unless paid services are requested by companies. Rating based on publicly available data should not be subject to payment. Open Communication of Ratings Companies should have the right to inform their stakeholders about the rating process and outcomes openly, especially if the rating is based on publicly available data and information, which stakeholders can also access. At present, open publication of rating reports is limited by rating agencies and subject to contractual conditions. At least, industry-specific material issues and their ratings should be available freely and publicly, so that companies can have an opportunity to address these issues, benchmark, and inform their stakeholders. This would also put more pressure on the rating agencies and their analysts to treat information about companies carefully and avoid misinterpretation. Omissions could easily be rectified if there was open feedback.
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Response to Social and labour aspects of the climate transition

18 Nov 2021

Decarbonisation will lead to job losses in the coal and fossil energy sectors. CEZ Group is preparing several projects that will be able to ensure the future meaningful use of sites for energy and related industries and create opportunities for SMEs established in the areas of implementation, repair and maintenance, and operations. At the same time, the implementation of new projects with modern technologies will enable the creation/retention of jobs that will mitigate employment impacts in the locality. The key aspects of this process will be: • The opening of new production facilities will not always follow immediately after the closure of existing operations. Our aim is to make maximum use of the knowledge and experience of existing employees in the operation and management of the new facilities. In order to maintain continuity of their employment, we anticipate retaining jobs during the period of site transformation, retaining skilled employees during the construction of the new resources, and then filling the newly created jobs to operate the new technologies primarily with existing employees. It would be advisable to support, in an appropriate form and amount, the personnel costs of employees who will find further employment in the new facilities during the transition to the new technologies (in the event that the closure of the existing facilities and the start-up of the new projects do not coincide). The aim is to maintain employment in regions heavily dependent on the energy and mining sectors. • Filling the newly created jobs, either with employees from the closed energy plants or with jobseekers at the labour market, will require the need to increase or deepen their qualifications with new competences in relation to the new modern technologies that are the subject of the development projects. A support of employers, schools and other professional institutions in providing and coordinating these activities will be useful. • The anticipated need for employees in the new projects will not provide employment for all workers in the existing power plants. It seems appropriate to provide appropriate support for these employees as well, in particular in the area of retraining, so that after the end of their employment in connection with the closed power plant, the employees being made redundant can be prepared for their new employment in the labour market, even in different fields. • It would be beneficial to provide a subsidy to socially responsible employers who will provide a social programme for employees affected by the energy transition at the end of their employment, including above-standard severance pay on the top of the obligations imposed by the Labour Code, a retraining allowance and outplacement services.
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ČEZ urges flexible implementation of new EU sustainability reporting

14 Jul 2021
Topic — This initiative updates how companies report environmental and social performance and impacts.
Message — ČEZ requests flexibility for sensitive information and a longer transition period. They also oppose complex electronic tagging and mandatory separate audits.12
Why — This approach reduces compliance costs and shields strategic business secrets from competitors.3
Impact — Public stakeholders lose access to specific data about the company's future projects.4
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ČEZ Group Demands Delayed and Simplified Green Reporting

2 Jun 2021
Topic — The policy defines how large companies must report their alignment with sustainable investment standards.
Message — ČEZ requests postponing the reporting start to clarify definitions and avoid inconsistent data. They call for an exemption from publishing sensitive information like energy infrastructure safety details. Additionally, they suggest making operational expenditure reporting non-mandatory to reduce administrative complexity.123
Why — A delay and reduced transparency would lower administrative expenses and protect proprietary operational data.45
Impact — Investors and regulators lose access to standardized data necessary for verifying company sustainability claims.67
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CEZ Group urges gas and nuclear inclusion in EU taxonomy

17 Dec 2020
Topic — The consultation establishes criteria for identifying environmentally sustainable economic activities for investments.
Message — CEZ Group requests a technology-neutral approach that includes nuclear energy and gas as transitional activities. They propose raising emission thresholds for gas-fired power plants to ensure an affordable transition.123
Why — This would prevent negative economic impacts on the company's energy generation business.4
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Response to Updating the EU Emissions Trading System

25 Nov 2020

CEZ Group can support an increase of the GHG target to 55 % by 2030. However, we expected that the impact of increasing the GHG target to at least 55 % by 2030 on different Member States would be analysed in the Impact Assessment that the EC presented in September. Unfortunately, it only assessed the impact on the EU as a whole. On the other hand, it was emphasized that the EC is aware that the impacts will be more significant for some countries than for others. Consequently, the increase in the decarbonisation ambition should be reflected by an adequate increase of compensatory mechanisms for countries that are disadvantaged by different starting positions (higher share of coal in energy mix/energy-intensive industry in their GDP, lower GDP than average in the EU, bigger distributional effects). It should particularly concern the number of allowances allocated for Modernisation Fund and Solidarity Mechanism that should be increased and not decreased due to overall cut to the cap. Increasing volume of allowances going to the Modernisation Fund should be the only reassessment of the Fund as mentioned in the IIA. Any other modification would be harmful due to its mature phase of the implementation in most eligible States. The EU ETS Directive cannot be updated separately, without considering changes in other energy and climate legislation (notably in the Renewable Energy Directive and Energy Efficiency Directive). Otherwise the so-called problem of overlapping policies would re-emerge: emission savings realised as a secondary effect of these parallel climate-related measures negatively affect the EU ETS supply/demand balance and therefore threaten its stability and its capacity to provide a reliable long-term incentive to low-emission investments. Similarly, MSR parameters must be updated in order to reflect changes both in European and in national climate policies. Faster deployment of renewables and mandatory coal phaseouts in majority of European countries will lead to lower EUA hedging needs which means that the MSR thresholds should be decreased accordingly. The possibility of keeping the intake rate at the current pace of 24% until the end of the Phase IV should be considered. Also, The EC could consider an introduction of minimum price of allowance as it has been proposed by some Member States as another option to assure the stability of the system. In general, we think that the decarbonisation should be primarily driven by the price signals provided by the EU ETS (price of the allowance) which also means that this tool should not be overshadowed by setting too ambitious targets for RES and EE. Not only the market-based measures are efficient, but also a reasonably high and stable EUA level can help the deployment of new low-carbon technologies such as the carbon-neutral hydrogen. In this context it is important that all the Green Deal legislations/communications/strategies (including financial instruments such as Taxonomy or Hydrogen Strategy) underline that all low-carbon or carbon-neutral energy sources will be needed if the EU really wants to achieve the net-zero emissions by 2050. A market solution in a form of cap-and-trade mechanism should be supported as a decarbonisation tool also in other sectors such as road transport and buildings. This has several advantages; it is simple (compared to the current reality of many different national regulations), it guarantees achievement of predefined targets and it generates additional financial resources. Inclusion of these sectors into the EU ETS would be the preferred solution - it is an already existing system and an extended scope would have further benefits in terms of its efficiency and liquidity. Also, it is logical to have one CO2 price for the whole economy. Corresponding additional auction revenues could be then used for eventual compensations for the most affected entities and to boost the Green Deal investments
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ČEZ Group urges technology neutrality and taxonomy reporting delays

8 Sept 2020
Topic — Regulation defining how large companies report their alignment with EU sustainable investment standards.
Message — CEZ Group calls for a technology neutral approach and simpler reporting indicators. They request reporting be postponed until nuclear energy is assessed and targets are finalized.12
Why — This avoids reputational damage and economic losses from reporting figures without nuclear energy.3
Impact — Consumers could face higher costs resulting from the administrative burden of new reporting requirements.4
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Response to Modernising the EU’s batteries legislation

9 Jul 2020

CEZ Group welcomes the initiative of the European Commission to revise the Batteries Directive and suggests to include the following in its Impact Assessment: Proposed policies should cover the entire value chain, starting with the secure supply of raw materials with special attention paid to local deposits of raw materials. CEZ Group welcomes an integrated approach in dealing with products, chemicals and waste policies that allows to reflect the need for sustainability during the entire life cycle of batteries. The EU battery legislation should ensure a sustainable and competitive EU battery industry, while establishing a regulatory framework that facilitates access to and use of raw materials by recognizing their unreplaceableuse in battery technologies.
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Response to A EU hydrogen strategy

5 Jun 2020

CEZ Group welcomes Commission's focus on hydrogen as a central element of the energy system integration and the emphasis on clean hydrogen which covers both renewable and low-carbon hydrogen. We strongly believe that hydrogen and other carbon-neutral alternatives will drive indirect electrification using carbon-neutral power and will be crucial for storing surplus electricity and production and distribution of heat. Carbon pricing shall ensure that technologies most contributing to CO2 decrease are remunerated and thereby a perspective for new investments is given. A quantified hydrogen share in energy consumption/industrial use should not be a goal as such. We rather see hydrogen and decarbonized gases as enablers of decarbonization in certain industrial sectors. Producing hydrogen in low-carbon ways and using it in industrial processes, for heating and transport is a challenge for all low-carbon technologies, incl. nuclear electrolysis and pyrolysis. Thus, a regulatory framework enabling support and largely use of all kinds of hydrogen has to be provided and R&I on hydrogen steered. Euratom funded projects already aim to develop the design basis of nuclear reactors for needs of European industry and to offer one design for different applications, incl. hydrogen production.
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Response to Strategy for smart sector integration

13 May 2020

The CEZ Group appreciates the opportunity to express its views on the future sector integration. Based on the EC questions the attached CEZ Group’s position paper strives to outline the priorities and issues which should be tackled in the strategy. In CEZ Groups´ view: - Market signals should be a driving force behind the sector integration - Smart sector integration should be linked to electrification - Fuels contributing to achieving climate neutrality shall be acknowledged and operate on an equal level playing field - Different starting positions of Members States should be taken into account - Any legislative measure should be preceded by a detailed gap analysis and be compliant with the Clean Energy Package implementation
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CEZ Group urges EU to label nuclear energy as sustainable

17 Apr 2020
Topic — This consultation defines which economic activities count as environmentally sustainable for investment purposes.
Message — CEZ Group calls for a technology-neutral approach that includes nuclear energy as a sustainable activity. They propose establishing an expert group of radiation protection specialists to finalize the assessment. They argue this is essential for cost-efficient decarbonization and security of energy supply.123
Why — Inclusion would facilitate cheaper financing for their primary low-carbon power generation assets.4
Impact — Excluding nuclear would result in higher administrative costs for the industry and consumers.5
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Meeting with Maroš Šefčovič (Executive Vice-President)

5 Feb 2020 · Batteries

Response to Small, medium and large power transformers - Commission Regulation amending Regulation (EU) No 548/2014

21 Nov 2018

Feedback is provided in an attached word document, due to the format of comments (partly in tables).
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Meeting with Dominique Ristori (Director-General Energy)

10 Jan 2018 · Energy policy

Meeting with Miguel Arias Cañete (Commissioner) and ELECTRICITE DE FRANCE and

22 Nov 2016 · ETS reform

Meeting with Dominique Ristori (Director-General Energy)

24 Oct 2016 · Energy issues

Meeting with Jos Delbeke (Director-General Climate Action)

24 Oct 2016 · Revision of the EU ETS

Meeting with Joachim Balke (Cabinet of Vice-President Miguel Arias Cañete)

15 Jun 2016 · Market Design

Meeting with Dominique Ristori (Director-General Energy) and Eni S.p.A. and

6 Oct 2015 · European energy policies

Meeting with Miguel Arias Cañete (Commissioner) and

23 Jun 2015 · Internal Electricity Market

Meeting with Jos Delbeke (Director-General Climate Action)

23 Jun 2015 · Paris - COP21

Meeting with Maroš Šefčovič (Vice-President) and ENGIE and

21 Apr 2015 · Energy Union

Meeting with Věra Jourová (Commissioner)

10 Feb 2015 · Energy Union and Women on Boards proposal

Meeting with Christian Linder (Cabinet of Vice-President Maroš Šefčovič)

26 Jan 2015 · Energy Union, Internal Market

Meeting with Věra Jourová (Commissioner) and Microsoft Corporation and

16 Jan 2015 · Round Table on Gender Diversity

Meeting with Dominique Ristori (Director-General Energy) and ENEL SpA and

11 Dec 2014 · European Energy Policy priorities