Green Bond Framework Investor Presentation Santander Consumer Bank - - PowerPoint PPT Presentation

green bond framework
SMART_READER_LITE
LIVE PREVIEW

Green Bond Framework Investor Presentation Santander Consumer Bank - - PowerPoint PPT Presentation

Green Bond Framework Investor Presentation Santander Consumer Bank AS February 2020 01 Who we are Santander Consumer Bank AS is a Nordic bank with more than 1,500 colleagues in Sweden, Norway, Denmark and Finland, with a long history in the


slide-1
SLIDE 1

Green Bond Framework Investor Presentation

Santander Consumer Bank AS

February 2020

slide-2
SLIDE 2

2

Who we are

We are one of the largest Nordic banks providing loans and credits, credit cards, deposits and insurance to private customers. We work with the best people in an engaged, challenging and passionate organization, which provides great opportunities for professional growth. Santander Consumer Bank AS is a Nordic bank with more than 1,500 colleagues in Sweden, Norway, Denmark and Finland, with a long history in the Nordics, and with global strength by being a part

  • f Banco Santander.

01

slide-3
SLIDE 3

Regulated in Norway, owned by Banco Santander

SCB AS is regulated by the Norwegian FSA

Santander Consumer Finance S.A. Fitch/Moody’s/S&P A-/A2/A-

Santander Consumer Bank AS Fitch/Moody’s A-/A3 Santander Consumer Bank Denmark (Branch) Santander Consumer Finance Finland (Subsidiary) Santander Consumer Bank Sweden (Branch)

Banco Santander S.A. Fitch/Moody’s/S&P A-/A2/A

3

slide-4
SLIDE 4

YTD Q3 2019 | SCB Group overview

Portfolio and results by region

4

Source: SCB Group Q3 2019 Report (All figures in NOK)

35%

Norway

20%

Denmark

23%

Sweden

22%

Finland

% of Gross Outstanding Loans

Nordic Q3 2019 Result 165.6 Bn

Gross Outstanding

2,976 MM

Profit Before Tax

Finland

Auto Loans Unsecured Loans Profit Before Tax

32.3 Bn 3.6 Bn 442 MM Sweden

Auto Loans Unsecured Loans Profit Before Tax

22.8 Bn 14.7 Bn 516 MM Denmark

Auto Loans

26.1 Bn 7.0 Bn 751 MM Norway

Auto Loans Unsecured Loans Profit Before Tax

48.6 Bn 10.4 Bn 1,267 MM

Unsecured Loans Profit Before Tax

slide-5
SLIDE 5

Auto market share and products

Position and market share in the Nordics

Source Norway: Internal calculations based on data from Finansieringsselskapenes Forening as per YTD Q3 2019 Source Finland: Internal calculations based on data from Finnish Transportation Safety Agency (Trafi) as per YTD Q3 2019 Source Denmark: Internal calculations based on data from Finans og Leasing as per YTD Q2 2019 Source Sweden: Internal calculations based on data from Finansbolagens Förening as YTD Q3 2019

Auto Loans & Hire Purchase

Loans and financial services provided to private customers, SMEs and car dealers

Customers

  • Private Customers
  • Business Customers

Distribution

  • Online direct distribution
  • Indirect distribution with

dealers and importers

  • Cross sale

Auto Leasing

Customers

  • Private Customers
  • Business Customers

Distribution

  • Dealers direct
  • SME direct

Stock & Demo Financing

Customers

  • Inventory financing for

dealers Distribution

  • New cars: Importer

agreements

  • Used Cars: Direct to

dealers

Auto & Leisure

#1

21%

market share

#1

23%

market share

#1

34%

market share

#4

9%

market share

5

slide-6
SLIDE 6

Stable financial performance

4.5 4.4 4.7 5.3 4.9 4.6

2014 2015 2016 2017 2018 Q3 2019

41 44 50 38 40 44

2014 2015 2016 2017 2018 Q3 2019

2.5 1.7 1.8 2.7 3.0 2.8

2014 2015 2016 2017 2018 Q3 2019

Return on Assets1

Per cent

Net Interest Income Ratio2

Per cent

Cost / Income Ratio3

Per cent

Source: SCB Annual Reports (2013 – 2018) and Q3 2019 report 1) ROA = PBT (annualized) / ANEA 2) NII Ratio = Net Interest Income (annualized) / ANEA 3) Cost/Income Ratio = OPEX / Gross Margin (OPEX: Total Operating Costs)

Normalised KPIs as a results of higher growth in Auto portfolio

6

slide-7
SLIDE 7

02

Sustainability at SCB AS

slide-8
SLIDE 8

Banco Santander and SCB AS Corporate Responsibility

We embrace Banco Santander’s Responsible Business Strategy, while focusing on achieving sustainable value in the Nordics

8

SCB AS acts in alignment with Banco Santander’s values: Simple, Personal and Fair, while contributing to value creation and supporting sustainable mobility in the communities in which it operates

Our Purpose Our Priorities

To help people and business prosper To be the best open financial services platform, by acting responsibly and earning the loyalty of our stakeholders New Business Environment Inclusive and Sustainable Growth

  • Simplify processes
  • Diversity & Inclusion
  • Data Trust
  • Design and

commercialization of products & services

  • Financial & social inclusion
  • Sustainable products
  • ESG risks analysis into

business decision

  • Climate change strategy

Banco Santander Responsible Business Strategy SCB AS: Contributing to value creation in the Nordics

Sustainable Mobility Supporting local communities Strong retail focus Donations & Partnerships Our Aim Our Challenges

External recognition of Banco Santander’s sustainability efforts

Included in the Dow Jones Sustainability Index since 2000 and world leader in 2019 Listed in FTSE4Good since 2003 Signatory since 2007 World leader in the Bloomberg Gender Equality Index (GEI) Rating above industry average by the main ESG firms Top Employer in Europe 2019

slide-9
SLIDE 9

Internal environment Inclusive and sustainable growth

Ensuring we have the right ght cult lture re, skills ills, gov

  • vern

ernan ance, digit gital al and busine iness prac actic ices Supporting to creat reate e new jobs bs and helping people acces ess finan nance, supporting the financing

  • f the low carb

rbon

  • n economy and fostering

sus ustaina inable ble cons

  • nsumpt

ption ion

Responsible procurement Stakeholder value Risk focus Responsible business practices Strong corporate culture Talented and motivated team

SUSTAINABLE GROWTH INCLUSIVE GROWTH

Responsible Banking Strategy

Creation of a holistic bank culture centered on responsible banking principles

9

slide-10
SLIDE 10

Sustainability approach within SCB AS

SCB AS contributes to development in the Nordics via its lending activity, which gives opportunity to advance clean transport

10

Via its core lending activity, SCB AS directly advances UN SDG 11 (Sustainable Cities and Communities)

SCB AS strategic positioning

Objective: Make cities and human settlement inclusive, safe and sustainable Target 11.2: Provide access to affordable, accessible and sustainable transport

SCB AS core lending activity

  • 89% of the business is retail
  • 79% of the business is auto
  • Auto market leader in 3 out of the 4 Nordic countries
  • SHFT
  • Car subscription service, in cooperation with dealerships. A monthly fee gives

access to a car with all services included, and with a short binding term.

  • All-in-One product
  • Speeding up renewal of one of the oldest car parks in Europe (Finland) as

product is a key driver for changing consumers buying behavior.

  • Now includes a “Green” feature by allowing customers to compensate for Co2

emissions

  • IT solutions for our partners
  • Solution enabled online sales of the all electric Nissan Leaf
slide-11
SLIDE 11

Pursuing active contribution to the UN SDGs

Overview of other highly relevant SDGs for SCB AS:

11 GOAL 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

  • SCB AS is a Gold partner supporting “Right To Play”, an organization

that protects, educates and empowers children to rise above adversity using the power of play

  • Right To Play focus in five key areas: quality education, gender equality,

health & well being, child protection and peaceful communities

  • The partnership with Right To Play for us means something more than

contributing financially. We actively participate involving employees and partners contributing

GOAL 3: Ensure healthy lives and promote well-being for all

  • Across the Nordics, SCB AS encourages a broad base of people to

physical activity:

  • Partnering “Team Rynkeby”, a charity cycling team that raise money

for children with critical illnesses

  • Engaging employees in “Kræftens Bekæmpelse”, the Danish Cancer

Society

  • Supporting the Football Association to make “3v3” kid’s soccer

tournaments – an inclusive sports variety where every team member is part of the active play and gets equal playing time

  • Promoting health and well-being initiatives internally

GOAL 7: Ensure access to affordable, reliable, sustainable and modern energy

  • We engage in collaborations to innovate new and more environmental

friendly mobility solutions, and we add the commercial strength to bring them to the market

  • In 2013 Santander pioneered the All-in-One product suite in Finland,

speeding up renewal of one of the oldest car parks in Europe

  • We developed the IT solution to enable online sales of the all electric

Nissan Leaf - helping it to be last year's single most sold car model in Norway

GOAL 13: Take action to combat climate change and its impacts by regulating emissions and promoting developments in renewable energy

  • In 2018, SCB AS partnered with CHOOOSE, a global leader in

retiring carbon credits and a platform for climate action, battling the issue of emissions from big polluters

  • SCB has been certified as “Miljøfyrtårn” since 2009, meaning that

we are compliant with all requirements regarding health, environment and safety, procurement, transportation, waste handling and energy consumption

  • We educate employees on sustainability

Through its general business activity and its community work, SCB AS directly contributes to the achievement of UN SDG 3, 4, 7, 13

slide-12
SLIDE 12

03

SCB AS Green Bond Framework

slide-13
SLIDE 13

Introduction to SCB AS Green Bond Framework

Defining an ambitious Framework, in line with best practices and standards

13

Use of Proceeds

Rationale for issuing Green Bond Following best practice and latest market developments SCB AS Green Bond Framework description

Project Evaluation and Selection Management

  • f proceeds

Reporting External Review

  • Financing and / or refinancing of new and existing retail

loan and lease contracts for electric passenger vehicles (EVs only) SCB AS Green Bond Framework:

  • Is in line with the ICMA Green Bond

Principles 2018

  • Follows the recommendations of draft EU

Taxonomy and of CBI Low Carbon Transport Standards

  • Will be updated to reflect emerging

good practices, such as the EU Green Bond Standard SCB AS intends to:

  • Align its sustainability strategy to its funding

strategy

  • Contribute to the development of a sustainable

financial market, while playing a key role in the transition to a low carbon economy

  • Contribute to the achievement of the UN SDGs
  • Diversify the investor base targeting SRI and dark

green investors, while fostering the relationship with existing investors

1 2 3 4 5

  • In accordance with the Eligibility Criteria and carried out

by the Green Bond Working Group (‘GBWG’)

  • Green Bonds net proceeds managed in a portfolio

approach

  • Allocation reporting annually until full allocation
  • Pre-issuance impact reporting. Impact calculation by

expert consultant Multiconsult

  • SPO by Sustainalytics and CBI Certification for the

upcoming transaction

  • Auditor limited assurance report on the allocation report

SCB AS Green Bond Framework is aligned with ICMA GBP 2018 and Eligibility Criteria comply with the recommendation of the draft Technical Expert Group (TEG) report on the EU Taxonomy

slide-14
SLIDE 14

Use of Proceeds: Clean transportation

14

  • Leading the transition towards a low carbon future: SCB AS intends to allocate the net proceeds of

any bonds issued under this framework to a loan portfolio (‘Eligible Green Loan Portfolio’) of new and existing retail loan and lease contracts (‘Eligible Green Loans’) for electric power train vehicles

  • Overview of the Eligible Green Bond Category:

ICMA GBP Category Eligible Green Loans Direct contribution to UN SDG EU Taxonomy Environmental Objectives Clean Transportation New and existing retail loans and lease contracts to electric powertrain vehicles

  • Environmental Objective

(1): Climate Change Mitigation

  • Substantial contribution

to Climate Change mitigation (c): Increasing clean or climate-neutral mobility

Applying strict Eligibility Criteria to ensure full compliance with the latest market standards

Target 11.2: By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons

 ICMA Green Bond Principles 2018  Draft TEG report on the EU Taxonomy  CBI Low Carbon Transport Standards and

Certification

 UN Sustainable Development Goals (UN SDGs) Strict Eligibility Criteria complying with: Environmental Exclusions such as: × Internal Combustion Engine (ICE) × Hybrid Electric and Plug-in Hybrid Electric

Vehicles (PHEVs)

× Liquefied Petroleum Gas (LPC) × Compressed Natural Gas (CNG) × Ethanol × Biofuel Sustainalytics considers that the financing or refinancing of electric vehicles will lead to positive environmental impacts and directly contributes to advance UN SDG 11 – Sustainable Cities and Communities

Indirect Contribution to UN SDGs

slide-15
SLIDE 15

Eligible Green Loan Portfolio snapshot

SCB AS Eligible Green Loan Portfolio includes EVs only and excludes any other low-carbon emission transport vehicles

15

The SCB AS’ Eligible Green Project Portfolio is composed of Eligible Loans for the acquisition of 25,787 electric vehicles which corresponds to a portfolio volume of 5,822,150,521 NOK

Eligible Green Loan Portfolio Reporting date 31 July 2019 Volume 5,822,150,521 NOK Number of contracts 25,787 Sum km/yr 283 mill. Sum person km/yr 167 mill.

2 510 440 081 2 988 027 973 3 428 625 077 4 084 798 254 5 124 850 601 5 822 150 521

0,0 1 000 000 000,0 2 000 000 000,0 3 000 000 000,0 4 000 000 000,0 5 000 000 000,0 6 000 000 000,0 7 000 000 000,0

jan.17 jul.17 jan.18 jul.18 jan.19 jul.19

NOK

Figure 1: EVs Portfolio Volume: 2017 - 2019

17 181 23 245 25 787 2017 2018 2019 H1

Figure 2: Number of EVs Contracts

SCB AS’ Eligible Electric Vehicles portfolio overview

slide-16
SLIDE 16

16

Process for Project Evaluation and Selection

Setting a clear decisional process to select and evaluate Eligible Loans, ensuring compliance with the Eligibility Criteria

SCB AS Green Bond Framework SCB AS Green Bond Working Group (‘GBWG’)

Legal, Financial Management, Market Risk, Communication Approved by:

Green Bonds

Eligible Loans financed / refinanced

Eligible Green Loans

allocated to Green Bonds Limited assurance on allocation report

SCB AS and Santander Group Sustainability Policies and Guidelines

Meets at least on an annual basis

The Green Bond Working Group selects Eligible Loans from the green register and monitors the Eligible Green Loan Portfolio on an

  • ngoing basis

Internal policies and external regulations mitigates risks associated with Eligible Loans Norwegian and EU Regulation, Directives and Agreements

slide-17
SLIDE 17

Management of Proceeds

Managing the Green Bond proceeds in accordance with the portfolio approach

17

SCB AS Green Portfolio approach

Green Bond Portfolio Green Bond Outstanding

Based on the commitment to a portfolio approach, and ongoing review to ensure compliance, Sustainalytics considers this process to be aligned with market practice

  • Eligible Green Loan Portfolio:
  • Proceeds

are allocated to an Eligible Green Loan Portfolio

  • Monitored and reviewed at least annually
  • New Eligible Loans will be added
  • Proceeds

allocation rules: Level

  • f

allocation for the Green Eligible Portfolio which matches or exceeds the balance of net proceeds from the outstanding Green Bonds

Inclusion of existing and new Green Loans Deletion of ineligible or amortising Green Loans

slide-18
SLIDE 18

Green Bond Reporting

Allocation and impact reporting in accordance with the recommendation of the ICMA Green Bond Principles 2018

18

Green Bond reporting provided annually and until full allocation. Pre-issuance impact report prepared in accordance with the ICMA Harmonized Framework for Impact Reporting (June 2019)

Allocation Reporting Impact Reporting

  • The size of the identified Eligible Green Loan Portfolio
  • The geography allocation of the assets (country level)
  • The amount or percentage of new financing and refinancing
  • The balance of unallocated proceeds
  • The total amount of proceeds allocated to Eligible Loans

In accordance with the ICMA GBP 2018, SCB AS intends to report to investors within one year from the date of a Green Bond transaction and annually thereafter, until the proceeds have been fully allocated. Impact report is already available.

  • Metrics regarding projects’ environmental impacts, calculated by external

specialized consultant Multiconsult Tailpipe emissions (Scope 1): Direct GHG emissions avoided (vs baseline): 28,600 tons CO2/year Indirect emissions, power consumption only (Scope 2): Indirect GHG emissions avoided vs baseline: -13,600 tons CO2/year Volume of gasoline saved per year (in liters): 12 million liter gasoline per yr

slide-19
SLIDE 19

External Review

19

SCB AS Green Bond Framework has been reviewed positively by expert ESG party Sustainalytics and the inaugural Green Bond has

  • btained the Climate Bond Initiative (CBI) Certification

Focus on pre-issuance and post-issuance verification

Post-issuance verification Pre-issuance verification: Second Party Opinion by Sustainalytics and CBI Certfication

1 2 3 4

Use of Proceeds Project Evaluation and Selection Management

  • f Proceeds

Reporting

  • SCB AS’ decisional framework to select and

evaluate loans is considered to be in line with market practice

  • Based on the commitment to a portfolio

approach, and ongoing review, Sustainalytics considers this process to be aligned with market practice

  • SCB AS’ approach to reporting and KPIs calculated

by an external specialized party is aligned with best practice Sustainalytics sees the SCB AS Green Bond Framework as credible, impactful and aligned with the GBP 2018

  • Sustainalytics sees EVs as the most

environmentally beneficial lower emissions vehicles from an emissions perspective

Climate Bond Initiative Certification

  • In December 2019, the Climate Bonds

Standard Board approved the certification of the proposed inaugural SCB AS Green Bond transaction

Auditor’s limited assurance report

  • One year after issuance and until full

allocation, a limited assurance report

  • n the allocation of the Green Bond

proceeds to Eligible Green Loan Portfolio will be provided by an external auditor

SCB AS

Green Bond Allocation Reporting

  • SCB AS GBF would have obtained “Dark Green” classification in accordance with

CICERO Shades of Green methodology (EVs only)

slide-20
SLIDE 20

Termsheet overview

20

Issuer Santander Consumer Bank AS Expected issue ratings A3 / A- by Moody’s / Fitch Maturity 3Y – 5Y long Currency SEK Size Benchmark Issue Type Green Bond to be issued within Santander Consumer Bank’s Green Bond Framework* Interest Rate [●] % paid quarterly FRN Format / Denomination / Listing RegS Bearer / SEK 2,000,000 + SEK 1,000,000 / Euronext Dublin Governing Law English law, except for the write-down or conversion of the Notes that is subject to Norwegian law Documentation Under the Issuer’s EMTN Programme Base Prospectus dated 27 June 2019 Use of Proceeds An amount equivalent to the net proceeds of the Green Bonds issuances (“the net proceeds”) will be exclusively used to finance and/or refinance, in whole or in part Santander Consumer Bank’s Eligible Loan Portfolio Green Bond Structuring Advisor ING Joint Bookrunners Santander, ING and SEB

*For more details, please see Santander Consumer Bank Green Bond Framework available on: https://www.santanderconsumer.no/om-oss/investor-relations/green-bonds/

slide-21
SLIDE 21

04

Capital and Funding

slide-22
SLIDE 22

Strong Capital Position

CET1 ratio of 16.1%

Recent Capital developments

  • SCB Group is using the transitional rules for

IFRS9 capital impact when calculating capital ratios

  • SCB Group had a CET1-ratio of 16.1% per Q3

2019 using transitional rules for IFRS9. The CET1-ratio is 200 bps higher than the regulatory requirement

  • SCB Group has a strong Leverage Ratio of

11.92%

  • In October 2018, SCB Group called its existing

Hybrid loan of NOK 2.25 billion and replaced it with three new Hybrid loans of NOK 750 million each

  • SCB Group paid a dividend for 2018 of NOK 1

billion to its parent

Capital ratios evolution SCB Group

Per cent

Source: SCB Group Q3 2019 Report The capital ratios include half year capital profits, based on a 50% payout ratio

15.3 15.1 15.5 15.7 16.1 17.8 17.4 17.5 17.6 17.9 19.1 18.7 19.1 19.0 19.3 11.4 11.5 12.0 12.0 11.9 2015 2016 2017 2018 Q3 2019

CET 1 Tier 1 Tier 2 Leverage ratio

22

slide-23
SLIDE 23

Self-funding is a strategic focus

Three pillars approach provides funding flexibility

2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019

Unsecured Bonds Deposits Securitization Parent funding

22% 28% 50% 62% 70% 70% 77% 73% 75%

2011 2012 2013 2014 2015 2016 2017 2018 Q3 2019

Funding Composition1 Self-funding ratio

25% 25% 43% 7% Source: SCB Group Q3 2019 Report 1) Outstanding amounts/transactions as per Q3 2019

  • In Norway deposits are guaranteed up to NOK 2

million

  • In EU countries the guarantee is up to EUR 100,000
  • NOK 64.6 billion in total deposits across Norway,

Sweden and Denmark

Deposits

  • NOK 8,050 billion outstanding in the bond market

including NOK 900 million in Commercial Paper

  • SEK 9,775 billion outstanding in the bond market

market including SEK 1,720 million in Commercial Paper

  • DKK 1,250 million outstanding in the bond market
  • EUR 2,000 million outstanding from four benchmark

transactions

Unsecured

  • 5 outstanding transactions across Nordics
  • Represents a low-cost and stable funding source

Securitization

23

slide-24
SLIDE 24

24

Unsecured Funding

Maturity profile Q3 2019 – 2024 for Senior Unsecured and Commercial Paper

Total Maturity

(EUR MM)

66 237 136 293 81 262 128 210 103 117 93 500 500 500 500 67 100

2019 2020 2021 2022 2023 2024 2025

DKK EUR SEK NOK

500 500 500 500

2019 2020 2021 2022 2023 2024 2025

2 350 1 350 2 900 800 650

2019 2020 2021 2022 2023 2024 2025

Commercial Paper Senior

2 250 1 105 1 250 1000 2 800 1 370

2019 2020 2021 2022 2023 2024 2025

Commercial Paper Senior

NOK million SEK million EUR million

Source: Bloomberg, Management Figures (outstanding amounts as per Q3 2019) FX: EURNOK 9.8953 | EURSEK 10.6958 | EURDKK 7.4662

500 750

2019 2020 2021 2022 2023 2024 2025

DKK million Total Maturity (EUR million)

slide-25
SLIDE 25

Our purpose is to help people and business prosper. Our culture is based on believing that everything we do should be:

Thank You.

Nordics

slide-26
SLIDE 26

Green Bond Framework Appendix

slide-27
SLIDE 27

Impact calculations (1/2)

The third-party expert consultant Multiconsult has developed a methodology for impact estimation (Scope 1 & Scope 2)

27

SCB AS’ portfolio is assessed regarding direct emissions (Scope 1) and indirect emissions related to electric power production (Scope 2)

Assumptions

  • Car lifetime independent of fuel: 18 years
  • Baseline emission: 2027 (half way into new cars lifetime, portfolio 2017-2019)
  • Approximation for year 0: 2018
  • Vehicle occupancy of 1.7 persons in private cars in Norway
  • All EVs and fuel cell vehicles are considered eligible with zero tailpipe emissions
  • Effect of biofuels on direct emissions not included

a) Direct emissions, tailpipe (Scope 1) Ebaseline = cweighted average*dy*ntotal = Eavoided

The estimation of the baseline is performed through the following steps: 1. Estimating the gross CO2-emission per km (c) from the average car that is being substituted by the zero emission car 2. Multiplied by the number of km (d) the car is estimated to travel 3. Multiplied by the number (n) of cars substituting fossil cars in the portfolio Table 2: The portfolio’s estimated impact on GHG-emissions in rounded numbers Eligible passenger vehicles plants in portfolio Reduced CO2-emissions compared to baseline Direct emissions only (Scope 1) 28,600 tons CO2/year Indirect emissions EV’s only (Scope 2)

  • 13,600 tons CO2/year

Direct and indirect emissions in total 15,000 tons CO2/year Table 1: Number of eligible passenger vehicles and expected yearly mileage

Number vehicles Sum km/yr Sum person km/yr

Eligible passenger vehicles in SCB portfolio 25,787 283 mill. 167 mill.

Portfolio analysis and impact assessment

Impact assessment: CO2-emissions compared to baseline for the eligible assets in the portfolio in an average year in the lifetime of the vehicles in the portfolio presented as:

  • Direct (tailpipe) emissions (Scope 1)
  • Indirect emissions EV’s only (Scope 2), production only

Methodology overview

Table 3: GHG emission factors (CO2- equivalents), direct emissions in 2027 Direct emissions fossil car- 2027 Direct emissions EV Emissions per passenger km 60 gCO2/pkm 0 gCO2/pkm Emissions per km 101 gCO2/km 0 gCO2/km Emissions per car and year 1108 kgCO2 0 kgCO2

  • cweighted average = 101 g CO2/km
  • d2027 = 10,975 km/y (linear regression on publicly available dataset, 2005-2018)
slide-28
SLIDE 28

Impact calculations (2/2)

The third-party expert consultant Multiconsult has developed a methodology for impact estimation (Scope 1 & Scope 2)

28

Total direct and indirect emissions for the whole portfolio corresponds to 15,000 tons CO2/year avoided compared to the baseline

b) Indirect emissions, Power consumption only (Scope 2)

Table 4: Electricity consumption greenhouse gas factors (CO2 equivalents) for two scenarios Scenario CO2- factor (g/kWh) European (EU28+ Norway) production mix (year 2027) 275 Norwegian consumption mix 11 Table 5: Electricity consumption greenhouse gas factors (CO2 equivalents) Indirect emissions fossil car*

Indirect emissions EV- 2027

Emissions per passenger km, indirect emissions from power production 0 gCO2/pkm 28 gCO2/pkm Emissions per km, indirect emissions from power production 0 gCO2/km 48 gCO2/km

Electricity production mix

In 2018, the Norwegian power production was 98% renewable (NVE16). As shown in figure 3, the Norwegian production mix in 2018 (95 % hydropower) results in emissions of 11 gCO2/kWh

CO2 emissions related to electricity demand

Direct GWP in European electricity production mix, trajectory from 2018 to a zero target in 2040 (EU18, Multiconsult, European Residual Mixes 2018, Association of Issuing Bodies): *Note that there are indirect emissions related fossil fuel as well but that are scope 3 emissions and not included in this analysis.

Indirect emissions calculation: Indirect emissions are calculated by multiplying distant travelled by the 25,787 cars in the portfolio in a year by the specific emission factor [CO2/km]