Sustainability Statement Climate change (E1) 04 4.2.9.7 Carbon allowances Created in 2005, the CO2 Allowance Management Committee tracks legislation governing carbon markets and taxes in all the countries where Group production sites are located. Its role is to define carbon allowance management principles and guidelines, ensure their proper application and conduct the necessary forecasting studies. GHG removals and GHG mitigation projects financed through carbon credits The Group’s ambitions are compatible with the net-zero emissions target for 2050, which is being pursued without using any carbon credits to offset CO2 emissions from its direct or indirect activities, in accordance with SBTi standards. As a result, the carbon credits derived from projects undertaken by the Group’s investee funds are not set off against the Group’s carbon footprint. Internal carbon pricing Since 2016, the Group has applied a standard internal carbon price, both to address carbon issues in capital projects and to steer capital expenditure towards low-carbon solutions and prepare for the introduction of a global carbon price. Applicable to any capital project likely to have a material positive or negative impact on the Group’s Scope 1 and 2 CO2 emissions, the price is a factor in two decision-support programs used to: n calculate the return on investment of projects undertaken by any Group entity. The price simulates the impact of monetizing an investment’s carbon credits on its financial rate of return; n consolidate projects with a major impact on energy efficiency (curing press insulation, lighting upgrades, etc.). This program is applicable to capital projects undertaken by entities in the legacy scope of the tire business, which accounted for 97% of the Group’s Scope 1 and 2 emissions in 2024. The internal carbon price is also used by the Scope 3 logistics entities as a baseline for assessing carbon-free solutions. The price is based on: n carbon allowance market price trends in Europe and five and ten-year projections; n an analysis of the carbon price’s sensitivity to the ROI of energy and logistics projects; n an external benchmark based on prices used by other companies(1). It is set by the Managers on the proposition of the Environmental Governance body and periodically revised as needed. For example, from the original €50 per tonne in 2016, it was raised to €100 per tonne in 2021 and to €200 per tonne in 2023. (1) Based on replies to the Carbon Disclosure Project (CDP) questionnaire. 216 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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