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EU Taxonomy

A green classification system that translates the EU’s climate and environmental objectives into criteria for specific eligible economic activities. Scatec reports on financial KPIs for eligible economic activities in accordance with the regulations EU (2020/852) and the supplementing Delegated Acts.

Alignment assessment

For eligible economic activities to qualify as Taxonomy aligned, economic activities must fulfil the technical screening criteria defined in the Taxonomy Delegated Acts:

  1. Make a substantial contribution to at least one environmental objective.
  2. Do no significant harm (DNSH) to any other environmental objective.

Furthermore, the Company carrying out the activities must comply with the Taxonomy’s Minimum Social Safeguards.

Since 2020, Scatec, along with third parties, carried out multiple assessments to confirm alignment of its economic activities with the Taxonomy criteria and to identify potential gaps. The assessments are specific to the six environmental objectives and the DNSH technical criteria. In 2022, an internal climate risk and risk mitigation assessment was performed for each solar and wind plant. During the last year, Scatec screened each project following a standardised template covering the criteria for substantial contribution and all applicable DNSH, as well as the minimum social safeguards criteria (on a corporate level).

Substantial contribution criteria

  • As a leading renewable energy solutions provider, Scatec is dedicated to accelerating access to reliable and affordable clean energy in emerging markets. The core of our strategy is to develop, construct, finance, own, and operate renewable energy projects with 4.2 GW in operation and under construction across four continents at year end 2023. Additionally, Scatec started construction for 0.3 GW in the first quarter 2024.
  • The requirements for assessing the substantial contribution of Scatec’s economic activities are that such activities produce electricity using solar PV and wind technology, and comprise of the construction and operation of electricity storage.
  • Further for hydrogen, the activity should comply with the life cycle GHG emissions savings requirement of 73.4%.
  • Scatec’s solar and wind projects are aligned to the Taxonomy and our green hydrogen project will be fully assessed once operation.

DNSH criteria

  • Renewables must be deployed with respect for nature, social inclusion and in close cooperation with the broader society. The impact of renewable power plants on biodiversity and local communities needs to be understood and minimised and economic development and job creation is essential for renewable deployment to gain support.
  • Most of Scatec’s economic activities are considered to be aligned to the DNSH criteria in 2023. The following projects are not considered aligned as per the publication of this report:
    • Electricity generation using solar photovoltaic (PV) technology: Czech portfolio and Release projects not yet under construction or in operation.
    • Storage of electricity enabling activities: The BESS project in South Africa currently under development.

Minimum social safeguards

  • Sustainability is a fundamental part of Scatec’s organisation, rooted in all business units and integrated across the value chain. The Company is committed to operating in line with the Equator Principles and IFC’s Environmental and Social Performance Standards to ensure consistent practices across all projects. Scatec’s work is also guided by the OECD Guidelines for Multinational Enterprises and UN Guiding Principles on Business and Human Rights.
  • Our Code of Conduct prohibits all forms of corruption, and we implement internal controls to prevent, detect and remedy improper conduct through our and Anti-Corruption Compliance Programme. Scatec is committed to fair and open competition, and we comply with applicable anti-trust laws. Scatec is committed to follow the best practices of responsible taxation and tax governance, including international principles and recommendations, such as the OECD Compliance and Risk Management standard.
  • The minimum social safeguards in the Taxonomy entails ensuring that certain minimum governance standards are adhered to, such as anti-corruption and fair competition; and that social norms are not violated, including human and labour rights. During the last year, on a corporate level, Scatec’s alignment was screened following a standardised template covering the detailed minimum social safeguards criteria.
  • All Scatec’s economic activities are considered to be aligned to the minimum social safeguards criteria in 2023. In addition, we expect all future economic activities to be aligned to the criteria.

Reporting on the financial KPIs

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Revenue Capex Opex
NOK mill Percentage NOK mill Percentage NOK mill Percentage
Eligible 3,352 99% 8,812 100% 345 100%
Aligned 3,193 94% 8,529 97% 334 97%
Not aligned 159 5% 283 3% 11 3%
Non eligible 44 1% 9 0% - -
  • 94% of Scatec’s revenue is derived from eligible activities that are aligned with the Taxonomy. 5% of the revenue is related to sale of electricity from the Czech portfolio that is assessed as non-aligned. The remaining 1% is related to miscellaneous goods and services sold from different entities in the Group classified as non-eligible.
  • Capex is 98% associated with Taxonomy eligible activities. Non-eligible capex is related to office leases, purchase of office fixtures and equipment and capitalisation on internal projects. 
  • 97% of the capex recognised during the year relate to Taxonomy-aligned economic activities, namely the generation of electricity through solar PV technology. This is related to the construction of solar plants, mainly the Kenhardt projects in South Africa. All projects under construction (Kenhardt and Sukkur) in 2023 are considered to be aligned to the Taxonomy, except for Release Mexico and Cameroon.
  • Scatec’s revenue is mainly derived from eligible economic activities aligned to the Taxonomy and the operating expenses incurred in relation to the same activities are also aligned.

Refer to our EU Taxonomy Report 2023 available on our corporate website.

Reports