5 _365 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE 2023 consolidated financial statements 2.5 Climate risk Climate risk and the Group's stated ambitions in this area have been taken into account for the preparation of the financial statements. Concerning the energy transition, the Group will eliminate the use of coal as an energy source by 2030. The number of sites still using coal is limited and the assets concerned are largely depreciated. The investments required over the period covered by the five-year strategic plan are estimated at €60 million (2022: €60 million). To optimize its energy use, in 2020 the Group launched a program to electrify its tire curing presses. Capital expenditure on the program over the period covered by the Group’s five-year strategic plan is estimated at around €120 million. This expenditure has been taken into account in the cash flow forecasts used as a basis for impairment testing (note 13.1 "Goodwill"). Beyond the period covered by the strategic plan, the rate at which the program is implemented will depend on the actual energy performance of the initial investments. The effects of climate risks on cash flows beyond the period covered by the five-year strategic plan is difficult to predict. They could arise, for example, from business interruption at sites exposed to natural disasters, or from regulatory compliance costs in certain countries (taxes or other) related to initiatives to encourage the energy transition. Given the difficulty of preparing reliable cash flow projections taking these risks into account, a simulated impairment test was carried out, limiting estimates of future cash flows to the next 20 years based on constant cash flows after the fifth year (note 13.1). Concerning measures to adapt to climate change, in 2023 around 100 manufacturing sites and office facilities were analyzed to assess the medium- and long-term risks of extreme climate phenomena (intense heat, floods, etc.). The analysis will be completed in 2024 by an assessment of the preventive measures to be put in place, so that the cost of these measures can be taken into account in the Group’s capital expenditure and operating expense forecasts. Additional costs of regulatory compliance are taken into account in the future cash flows used as a basis for impairment testing (note 13.1), to the extent that the regulations affecting the cash flows are known. This mainly concerns the CO2 emission allowances to be acquired by the Group in compliance with European Union regulations (Emissions Trading Scheme – ETS). Emissions from sites subject to these European regulations represent around one‑tenth of the Group’s Scope 1 and 2 emissions. The accounting policies applied to ETS emission allowances are described in note 3.15.1, and the balance sheet amounts at the reporting date are shown in note 13.2.4. The interest rate on the Group's €2,500 million syndicated line of credit (€2,500 million in 2022, see note 33.2.1) depends on its performance in relation to its environmental objectives (CO2 emissions and an industrial environmental performance indicator).
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