EDF_REGISTRATION_DOCUMENT_2017

PRESENTATION OF EDF GROUP Legislative and regulatory environment

the Brussels Convention (including France) contribute collectively to compensation up to a limit of €345.3 million. The Convention also provides that the operator has an obligation to take out insurance or lodge a financial guarantee for the liability amounts established in order to guarantee the availability of funds. The Minister for the Economy monitors French operators’ compliance with this obligation. EDF complies with the current coverage requirements (see section 2.5 “Insurance”). Protocols to amend the Paris and Brussels Conventions were signed on 12 February 2004 but have still not entered into force. They require significantly higher amounts of compensation than the original conventions, in order to cover a greater number of victims and types of damage that are eligible for indemnification. The operator’s liability will thus be at least €700 million per nuclear incident in a facility and €70 million per nuclear incident during transport. The State, in which the nuclear facility of the operator that is liable for causing the damage is located, is liable for amounts above the €700 million for which the operator is liable, up to €1.2 billion (provided that said State is a Contracting State of the Brussels Convention). Over and above this amount, the Contracting States of the Brussels Convention are liable up to a maximum amount of €1.5 billion. In addition, for personal injury only, the time limit to claim compensation has changed from 10 years to 30 years from the date of the incident. Another important change is the introduction of a detailed definition of “nuclear damage”, which includes economic losses, the cost of protective measures, the cost of measures to rehabilitate damaged environments, and certain other losses resulting from damage to the environment. These new provisions will, however, only be applicable as of the date when the protocol that amends the Paris Convention comes into force, i.e. when at least two-thirds of the sixteen Contracting States have ratified it. France has adopted a law permitting ratification of both protocols (Law no. 2006-786 of 5 July 2006), but has not yet filed the corresponding ratification instruments. Moreover, on 30 April 2014, France filed its ratification instrument for the joint protocol relating to the application of the Vienna Convention and the Paris Convention, which thus entered into force for France on 30 July 2014. This joint protocol establishes a link between the Paris Convention, which covers countries in Western Europe, and the Vienna Convention of 21 May 1963 on Civil Liability for Nuclear Damage, which covers (among others) countries in Eastern Europe. It enables the parties to one of these two conventions (Paris or Vienna) who adhere to the protocol to benefit from the coverage provided by the other convention. Protection of facilities that house nuclear materials The purpose of the regulations on the protection and control of nuclear material governed by Article L. 1333-1 of the French Defence Code is to detect and prevent the loss, theft or misappropriation of nuclear material that is stored at facilities or being transported, or any attempts to alter, damage or disperse such material. These regulations were completely recast by Decree no. 2009-1120 of 17 September 2009 on the protection and control of nuclear material, its facilities and its transportation, as set forth in the French Defence Code. The main purpose of this Decree was to extend the protection of nuclear material to the facilities where it is stored. Several orders published in 2011 detail operators’ obligations. For nuclear power plants, the Order of 10 June 2011 on the physical protection of facilities that house nuclear materials, which can only be held with an authorisation, is based on in-depth defence of targets, namely the nuclear material, equipment or functions, which, in the event of default or damage by a malicious act, are liable to have radiological consequences. Accordingly, the operator must set up several lines of protection in the form of six zones (e.g. access control areas, a vital area, an internal area, etc.). Following an amendment by an Order of 15 September 2015, the Order of 10 June 2011 now makes it possible to set up safety devices in dangerous areas if the assessment of the contents of the safety study provided for in Article R. 1333-4 of the French Defence Code reveal that the means implemented to meet the safety objectives appear to be insufficient.

The Order of 9 June 2011 organises the system for physically monitoring nuclear material, as well as the accounting conditions for nuclear material and operator obligations. Accordingly, operators must ensure that the physical monitoring and accounting are protected against the malicious actions identified when the authorisation is issued. Law no. 2015-588 of 2 June 2015 on the Improvement of the Protection of Civilian Facilities That House Nuclear Materials, which is now incorporated into the French Defence Code, created a specific criminal misdemeanour of trespassing in these facilities. For the implementation of these rules, Decree no. 2015-1255 of 8 October 2015 created restricted access nuclear areas (ZNAR) that must be delineated within each facility. Trespassing in a ZNAR constitutes a criminal misdemeanour that carries a one-year prison sentence and a €15,000 fine. These penalties are increased in the event of aggravating circumstances (to a three-year prison sentence and a €45,000 fine, in particular when the offence is committed in a group, and to a seven-year prison sentence and a €100,000 fine, in particular if the offence is committed with the use or threat of a weapon). All of the orders that define the ZNAR for each nuclear power plant have been published. Regulations applicable to fossil fuel-fired 1.5.6.2.3 energy generation The EDF group’s fossil fuel-fired energy generation business is subject in France to the regulations that are applicable to ICPEs (see section 1.5.6.2.1 “Regulations applicable to facilities classified for the protection of the environment (ICPEs)”). EDF’s fossil fuel-fired facilities must also comply with specific regulations on air quality, adopted mainly as a result of European Directive no. 2001/81/EC of 23 October 2001 on National Emission Ceilings for Certain Atmospheric Pollutants (the NEC Directive), and Directive no. 2001/80/EC of 23 October 2001 on the Limitation of Emissions of Certain Pollutants into the Air from Large Combustion Plants (the LCP Directive), which, since 1 January 2016, has been repealed and replaced by Directive no. 2010/75/EU of 24 November 2010 on Industrial Emissions (the IED Directive). These Directives have been transposed into French law by several orders, in particular the Order of 30 July 2003 on boilers that are present in existing combustion facilities with a power rating of more than 20MWth, which, since 1 January 2016, has been repealed and replaced by the Order of 26 August 2013 on combustion facilities with a power rating of 20MW or more, which are subject to authorisation under section 2910 and section 2931. Exemptions from obligations concerning emissions into the air were possible until 31 December 2015. As of that time, the ceilings and the exemptions originating from the IED Directive mentioned above will apply, with, in particular, specific issues concerning production facilities in the overseas departments and emergency systems, for which the pollution levels require negotiating adapted provisions. Two orders of 26 August 2013, which entered into force on 1 January 2014, bring together all the provisions that are applicable to combustion facilities and specify the conditions under which these facilities will be allowed to exceed emissions limits. Fossil fuel-fired energy production is also subject to the provisions of the Seveso 3 Directive and to the obligation to lodge financial guarantees (see section 1.5.6.2.1 “Regulations applicable to facilities classified for the protection of the environment (ICPEs)”). Directive no. 2015/2193/EU of 25 November 2015 on the limitation of emissions of certain pollutants into the air from medium combustion plants must be transposed into French law by 19 December 2017. It lays down rules designed to limit the air pollution caused by sulphur dioxide (SO 2 ), nitrogen oxides (NO x ) and dust from medium combustion plants, and to reduce the airborne emissions and their potential risks for human and environmental health. The facilities concerned are combustion plants with a rated thermal input of 1MW or more and less than 50MW, regardless of the type of fuel they use. Draft decrees and orders amending the regulations applicable to combustion facilities under the classified installations regulation for the protection of the environment for the purpose of transposing Directive 2015/2015/EU are in the process of being adopted. Regulations applicable to hydropower 1.5.6.2.4 facilities In France, hydropower facilities are subject to the provisions contained in Articles L. 511-1 et seq. of the French Energy Code. They require concession agreements granted by the State (for facilities generating over 4.5MW), or an authorisation from the Prefecture (for facilities under 4.5MW), (see section 1.5.1.4.1.4 “Hydropower generation issues”) concerning hydropower concessions.

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EDF I Reference Document 2017