6.4. EU TAXONOMY

With the adoption of the European Green Deal in 2019, the European Union (EU) set green investment targets. In order to achieve an energy-neutral economy, it is necessary to encourage private investments into sustainable, i.e. green projects. The EU Taxonomy Regulation (EU) 2020/852 was adopted in order to achieve the European climate goals and those of the European Green Deal.

This is the first year that Croatia Airlines d.d., as an entity obligated to draw up non-financial statements, published key performance indicators (turnover, capital expenditure and operating expenditure) of its Taxonomy non-eligible and Taxonomy-eligible economic activities that contribute to mitigation of and adaptation to climate change, as prescribed by the EU Taxonomy Regulation and the Delegated Regulation on disclosures (EU) 2021/2178.

For the financial year of 2021, it was necessary to disclose only the proportion of Taxonomy non-eligible and Taxonomy-eligible economic activities in the total turnover, capital expenditure (CapEx) and operational expenditure (OpEx) of the Company for the first two environmental objectives: a. climate change mitigation b. climate change adaptation. Therefore, an analysis of technical screening criteria (TSC) and a DNSH analysis, referred to in the annexes to the above-mentioned delegated regulations, were not performed in the process of calculating the 2021 turnover, CapEx and OpEx.

In order to determine eligibility of an economic activity, the Working Group on Non-Financial Reporting carried out a two-level analysis to establish: - If an economic activity is carried out at the level of Croatia Airlines d.d., and - If an economic activity is listed in the annexes to the delegated regulations of the EU Taxonomy Regulation.

The analysis showed that none of our activities were on the list of published delegated acts, meaning that the Company’s main activity could be classified as Taxonomy non-eligible. It also showed that the proportion of Taxonomy eligible economic activities related to investments, total turnover and operating expenditure defined by the Taxonomy equals 0%.

It is expected that in the upcoming years the operations of airlines will be included in the EU Taxonomy, and that the proportion of eligible and aligned activities will increase accordingly.

Š. Lugarov