How CLP manages impacts and performance

In 2024, the EDD process was updated to incorporate more nature-related elements, which included the adoption of IBAT (Integrated Biodiversity Assessment Tool) for identifying biodiversity sensitive areas. IBAT contains a database of global biodiversity-sensitive areas and threatened species, and is used during the pre-investment stage to avoid biodiversity risks. This tool enables CLP to identify potential biodiversity risks early, allowing for due diligence and early evaluation of operational and business risks. Further analysis and stakeholder engagement exercises follow to mitigate these risks if appropriate.

The CLP Biodiversity Impact Assessment Guideline applies to power generation, transmission and distribution, mines and other power-related projects. It provides a framework for systematically assessing biodiversity impacts and managing biodiversity risks. For example, the Guideline helps CLP flag new operations that could affect the IUCN Red List of Threatened Species and the relevant country’s national conservation list of threatened species well ahead of any investment decision. The Guideline is currently being updated to include considerations from sectoral guidelines issued by the TNFD.

The biodiversity impact assessment also observes local legislative requirements and references the International Finance Corporation Sustainability Framework. It involves describing the baseline conditions, evaluating the magnitude and significance of project impacts and investigating options for mitigation. The assessment only contemplates offsets after considering options for avoidance, minimisation and restoration or rehabilitation.

Mitigation measures will be developed based on the findings and on recommendations from the EDD and Environmental Impact Assessment (EIA) exercises, to address adverse impacts related to nature, biodiversity and ecosystems.

At the project operation stage, all identified adverse impacts will be monitored and controlled under the EMS. The EMS is also continuously reviewed to incorporate emerging environmental matters, such as nature, into existing management processes.

The biodiversity and nature-related enhancement programmes undertaken in 2025 include:

• Aquaculture and fisheries conservation in Hong Kong
  CLP Power has continued to support marine conservation and fisheries enhancement projects through the Marine Conservation Enhancement Fund (MCEF) and the Fisheries Enhancement Fund (FEF), both established under the Hong Kong Offshore LNG Terminal Project in 2020. By 2025, a total of HK$100 million had been allocated to help finance 44 projects under the MCEF and 29 projects under the FEF. The MCEF backs efforts such as marine conservation, habitat restoration, rehabilitation, education and ecotourism, while FEF supports fisheries education and tourism, enhancement of fisheries resources and sustainable fishery development. A series of project highlights was published on CLP’s social media channels to showcase the achievements of these funded projects, with the aim of raising public awareness and knowledge of marine and fisheries conservation topics.
  
• Biodiversity restoration programmes at thermal power plants in Australia
  For biodiversity conservation, EnergyAustralia has biodiversity offset management plans in place at its major fossil fuel assets including Mount Piper, Tallawarra and Yallourn Power Stations. The objective is to enhance habitats for native flora and fauna species through monitoring, site rehabilitation and revegetation. In 2025, a wombat monitoring programme was undertaken in the vicinity of Mount Piper Power Station, and habitat restored where necessary. Several habitat (nesting) boxes have been installed in the Pine Dale Mine area, and these have been observed being used by birds and possums.
  
  Following the commissioning of the new gas-fired Tallawarra B Power Station in 2024, a biodiversity offset programme for Tallawarra Power Station was implemented, along with a comprehensive Fauna and Flora Management Plan managed by local ecologists and indigenous community groups. The 2025 monitoring programme indicated a healthy growth of the newly planted vegetation, indicating effective restoration efforts.
  
• Biodiversity regeneration programmes at CLP China’s Hydro Power Station
  At the Jiangbian Hydro Power Station, annual fish stock has been enhanced by releasing various fish species to maintain the ecological balance of the river. In 2025, the fishes release were completed in November. Survey findings indicated the endemic Schizothorax species remains present in the Jiulong River basin, demonstrating the effectiveness of these enhancement efforts and their positive impact on biodiversity restoration and conservation.
  
  At the Huaiji Hydro Power Station, water source conservation forests have been planted near the facility. Over 700 saplings of various species suited to the local climate, such as osmanthus, ginkgo and camellia, have been planted, enriching biodiversity and supporting the health of the local ecosystem around the power station.
• Enhancing biodiversity with agrivoltaic and aquavoltaic systems at CLP China’s Solar Power Stations
  To enhance biodiversity at its solar farms on the Chinese Mainland, CLP has integrated fishery and agriculture initiatives with its solar power generation by installing photovoltaic panels above ponds and fields. In aquavoltaic systems, aquacultural activities are carried out beneath the photovoltaic panels, such as the farming of crabs and crayfish at Sihong Solar Power Station. In agrivoltaic systems, plants suited to the local climate, such as honeysuckle and roses, are grown under the photovoltaic panels, as seen at Xicun Solar Power Station.
  
• Engagement with local communities for the promotion of nature and biodiversity
  In 2025, CLP China continued to promote nature conservation by engaging with local communities and governments. In addition to tree planting activities in different regions where it operates, CLP China also organised an eco-themed class in Beihai, Guangxi, for a group of young students. The students performed short plays exploring the importance of nature conservation, and pledged to care for the planet as “little green guardians”.
  
  The Lingyuan Solar Power Station organised a "Biodiversity: Everyoneʼs Participation" event in Sihedang Town to raise awareness and encourage community involvement in biodiversity conservation. Through a range of science education and community engagement activities, the event shared biodiversity knowledge with people of different ages and backgrounds, and encouraged them to actively practise environmental protection in their daily routines.

According to the CLP Group HSEMS, the coal-fired and gas-fired power plants under CLPʼs operational control must adhere to CLP’s prescribed limits on SO₂, NO_x and total PM, or they must fully comply with local regulations, whichever is more stringent. These emissions are monitored by continuous emissions monitoring systems. Aware of the increasing focus on mercury emissions from coal-fired power plants, CLP has also been monitoring and reporting mercury quantities from its coal-fired power plants since 2021.

In addition to incorporating state-of-the-art air emissions control technologies and mitigation measures into its plant management, CLP has also designed new gas-fired power stations with advanced generation technologies. These new technologies enhance electricity generation efficiency, and are contributing to the further reduction in air pollutants and greenhouse gas emissions.

Coal-fired power plants, such as Yallourn, Mount Piper and Castle Peak Power Stations, are the main contributors to the Groupʼs air emissions, and its emissions metrics are largely influenced by these plants’ performances. CLP uses a combination of a carefully managed fuel mix and advanced technologies to limit its air emissions.

CLP has set Group-wide medium- and long-term emissions targets for the years 2025 and 2030 to guide further improvements in reducing air emissions of NO_x, SO₂ and particulate matters (PM). The emission targets scope covers all power plants under CLP’s operational control.

The 2025 results related to the air emissions targets and progress are shown in the following table:

In 2025, CLP achieved all three air emissions targets through multiple efforts in the past few years. This was partly due to the divestment of the coal-fired Fangchenggeng Power Station on the Chinese Mainland and the exclusion of assets in India, notably the coal-fired Jhajjar Power Station, since Apraava Energy has ceased to be a subsidiary and is now accounted for as a joint venture. CLP further reduced emissions through its fuel diversification strategy and effective air emission controls. Compared to the baseline year of 2021, emissions of NO_x, SO₂ and PM were reduced by 35%, 19%, and 28% respectively in 2025.

Key initiatives and programmes in 2025 included:

• Measures to reduce NO_x emissions at thermal power plants in Australia
  In 2025, the Tallawarra Power Station A unit was upgraded with high-performance turbine and combustion components to improve its combustion and thermal efficiency, resulting in an incremental reduction in NO_x emissions. Mount Piper Power Station also implemented various mitigation measures, such as combustion and coal mill optimisation, as well as boiler equipment refurbishment and repairs, which helped reduce NO_x emissions.

• Control of fugitive GHG emissions from electrical
  equipment
  CLP has been reducing its SF₆ emissions from high-voltage equipment in recent years by refurbishing the Gas Insulated Switchgear (GIS) at its Hong Kong substations. This ongoing initiative aims to ensure supply reliability while helping to reduce potential SF₆ emissions by preventing sudden SF₆ leaks caused by the failure of ageing components. CLP has also continued to conduct trials of non-SF₆ GIS at 11kV distribution substations, with these systems having been installed and commissioned at two substations in Hong Kong by the end of 2025.
• Adoption of biodiesel and the Battery Energy Storage System (BESS) in CLP’s operations
  CLP Power commenced trials of B5 biodiesel for heavy-duty mobile plant equipment in the coal yards at Castle Peak Power Station in 2025. Additionally, CLP is adopting the battery energy storage system (BESS) to reduce air emissions and enhance energy management. For instance, in Hong Kong, a BESS unit was utilised during the construction of the Yuen Long Industrial Estate Substation, reducing reliance on diesel generators and lowering air emissions. Grid-scale BESS projects are currently under development in both Australia and Hong Kong.

Through the EDD and EIA during the project design and construction stage and the EMS during the operation stage, all hazardous and non-hazardous waste is managed appropriately and in accordance with local regulations. Following the waste reduction hierarchy, CLP prioritises waste reduction and then reuse and recycling rather than disposal. CLP also encourages the adoption of CE principles throughout the project cycle, from design to end-of-life. If hazardous waste has to be collected for recycling or disposal, it is handled by licensed contractors in accordance with local regulatory requirements.

The main operational by-products of CLP’s coal-fired power stations are coal ash from coal combustion and gypsum from the flue gas desulphurisation process. CLP actively manages these by-products according to the waste management processes and procedures outlined in the EMS. Rather than disposing of them, CLP endeavours to reuse them for construction and other applications in line with circular economy principles and in accordance with local regulations and practices.

While CLP’s regular operations produce relatively small amounts of solid and liquid waste, projects involving demolition and construction usually increase the generation of non-hazardous solid waste. These waste streams are addressed and monitored under the EMS, and incorporate CE concepts to minimise waste and pollution. CLP also collaborates with its suppliers in identifying recovery and recycling opportunities, and works to drive behavioural changes among its own employees. This includes setting up recycling facilities at power stations and office premises, and providing e-learning courses on circular economy principles and waste management.

CLP monitors waste generation on a monthly basis by tracking the solid and liquid forms of hazardous and non-hazardous waste produced and recycled at its facilities.

Reviews of all the ash impoundments at CLP-owned plants (i.e. the various ash lagoons at Castle Peak Power Station in Hong Kong and Yallourn Power Station in Australia) have identified them as having low hazard potential and satisfactory structural integrity.

Various measures and initiatives have been implemented to minimise waste and promote the reuse and recycling of materials during electricity generation and other operations. CLP recycles both hazardous and non-hazardous waste and sells or recycles by-products, such as ash and gypsum, for reuse in other industries where feasible.

Different assets generate varying types of waste, with fossil fuel plants being the main contributors. The amount of waste produced and recycled is not directly linked to the amount of electricity sent out, but it can be affected by maintenance and construction activities, as well as local waste facilities and treatment practices.

CLP has set Group-wide medium- and long-term waste targets for the years 2025 and 2030 in terms of a percentage reduction of total waste produced, including by-products produced by its coal-fired power plants, against the base year of 2021. Waste targets for 2025 also include recycling of 100% of Waste Electrical & Electronic Equipment (WEEE), scrap rechargeable batteries, scrap metals and inert construction waste, and eliminating single-use plastics in catering facilities. The waste target scope covers all assets under CLP’s operational control.

In 2025, CLP achieved all its waste management targets, including those for 100% recycling. Compared to 2021, total waste from operations was reduced by 74%, due to the implementation of waste management initiatives, the divestment of the coal-fired Fangchenggeng Power Station on the Chinese Mainland, and the exclusion of assets in India, notably the coal-fired Jhajjar Power Station, since Apraava Energy has ceased to be a subsidiary and is now accounted for as a joint venture.

The 2025 results relating to the waste targets and their progress are shown in the following table:

Key programmes and initiatives in 2025 are outlined below. Each of the following icons indicates that each initiative is relevant to which pillar of the CLPʼs CE Strategy adopted, as described in the Framework for implementing the Circular Economy Strategy in operations section.

• Use of sustainable and renewable materials in CLP’s transmission and distribution operations
  In line with its CE Strategy, CLP Power conducted a trial using natural ester insulation fluid derived from renewable vegetable oils as an eco-friendly alternative to mineral oil in distribution power transformers. This initiative also helps reduce the generation of hazardous waste. In 2025, the trial with one-year testing on a 300 kVA pole-mounted transformer and a 2,000 kVA ground-mounted transformer was completed with satisfactory results. The Company will continue to collaborate with suppliers on further development based on the trial findings. Additionally, in 2025, CLP Power commenced trials with synthetic ester insulation fluid for transmission power transformers, the results of which will be further evaluated to assess its viability as a sustainable alternative to mineral oil.
• Waste reduction by extending the lifespan of assets and equipment
  In Australia, EnergyAustralia has adopted circular economy principles to extend the operational life of the Jeeralang and Hallet Power Stations. As part of its asset re-lifing projects, replacement rotors and spare parts have been sourced from Germany to partially rebuild and re-life the units at both sites. At Hallet Power Station, the rotor in one generation unit has already been replaced, and replacements will be made in other units as needed. Similarly, second-hand rotors and spare parts from Germany will be used at Jeeralang Power Station as a long-term strategy to prolong asset life.On the Chinese Mainland, CLP China is implementing circular economy practices at its Shandong wind farms by working with suppliers to maintain and repair equipment, reusing spare parts like inverter driver boards, rectifiers, and slip ring fans in order to extend equipment life and support sustainability.

• Establishment of a Green Recycling Station in the community
  Lingyuan Solar Power Station actively supported recycling initiatives and raised environmental awareness in the Datangou Village community by launching a "Green Recycling Station" project. Retired photovoltaic (PV) modules were repurposed to construct the station, and solar energy was supplied to power its LED lights, putting circular economy principles into practical action.
• Community education on waste reduction and recycling promotion
  In Huaiji, Guangdong, CLP collaborated with a local primary school to organise a drawing competition that attracted 35 creative submissions of the children’s visions for a more sustainable world. Staff from the Huaiji Hydro Power Station acted as eco-ambassadors, delivering interactive lessons and facilitating recycling games for the students to promote waste reduction, recycling and environmental awareness.
• Circular Economy Concepts Promotion Programme
  CLP has continued to implement its CE Strategy in its operations. In Hong Kong, a range of educational programmes and awareness campaigns were conducted throughout the year, including CE-related webinars, e-learning modules, promotional videos and roadshows for employees as well as upcycling workshops for their families. These programmes provided education on circular economy concepts and fostered a deeper understanding of waste reduction and recycling among CLP employees and their families.

CLP is working to reduce the amount of fresh water it uses for its operations, and to minimise the impact of new energy projects on water systems. CLP’s power stations carry out a range of water conservation initiatives depending on their site conditions, operational situation and age. The amount of water which can be recycled also depends on factors such as location, power station design and local regulatory requirements.

There are two major water concerns that affect CLP. One is that water use in its power plants may impact local water quality and contribute to local water scarcity. To address this, EIAs are carried out at the planning stage of new projects, in accordance with local requirements, to ensure that any water use impacts associated with project construction and plant operation are managed and mitigated to an acceptable level.

The second concern is water security at CLP’s fossil fuel and hydropower generation assets. Four of CLPʼs six fossil fuel plants under operational control use seawater for cooling. Where seawater cooling is not feasible, CLP strives to minimise its use of freshwater and instead adopt water recirculation processes. Solar farms also use water for the cleaning of solar panels, but the amount required is comparatively small. These measures help limit the risks caused by water security issues.

CLP assesses water risks associated with its new projects through systematic environmental due diligence and using globally recognised tools such as WRI Aqueduct. Its assessments cover parameters such as water availability, water sensitivity, water stress mapping, potential competing use with other stakeholders and the management strategies in each region. Where a water supply risk is identified, the Company engages with local stakeholders to understand their needs and with local water suppliers to mitigate or resolve the issue. The latest assessments across the Group indicate that its current water supply regimes are stable and the overall risk of substantial impact is minimal.

The quality of CLP’s water discharges must also meet licensing and regulatory standards. Under CLP’s EMS, the adverse impacts of water discharges are identified, monitored and controlled under programmes which are reviewed on a regular basis. Specific emergency response plans have also been developed to prevent and address the spillage or leakage of pollutants. As a result of the wastewater treatment processes put in place, none of CLPʼs operations had any material impact on the water bodies associated with them.

To monitor its water-use efficiency, CLP tracks its freshwater withdrawal, discharge and intensity (based on electricity sent out). Internal targets are set each year to encourage continuous improvement in water management practices. CLP also participates in the CDP water security questionnaire. By sharing water resource management data through the survey, CLP is able to benchmark its practices against industry peers.

In 2023, CLP reviewed its environmental target-setting process and refined its water targets to reflect the upcoming retirement of its fossil fuel plants. CLP has set Group-wide medium- and long-term freshwater consumption targets for the years 2025 and 2030 in terms of a percentage reduction of freshwater and municipal water consumption quantities against the base year of 2021. It set an ambitious freshwater consumption target comprising an absolute reduction of 45% to 55% by 2025, and a reduction of 85% by 2030, using 2021 as the baseline. The freshwater consumption target scope covers all CLP’s operationally controlled assets.

The 2025 results against the Group-wide medium- and long-term freshwater consumption targets are shown in the following table:

CLP achieved its 2025 freshwater consumption target due to the implementation of water conservation initiatives at certain assets, the divestment of the Fangchenggeng coal-fired Power Station on the Chinese Mainland, and the exclusion of assets in India, notably the coal-fired Jhajjar Power Station, since Apraava Energy has ceased to be a subsidiary and is now accounted for as a joint venture. As a result, CLP achieved an 55% reduction in freshwater and municipal water consumption in 2025 compared to the 2021 baseline year.

CLP will continue to track the volume of water recycling in its power stations for continual improvement, as well as share good practices across the Group to maximise the benefit of individual power stationsʼ efforts.

Best practice examples of CLP’s water management are summarised below:

• Minimising water usage in trenchless operations
  CLP uses the trenchless construction method for subsurface projects like underground cable installation to minimise the impact on traffic and the general public. This method relies on slurry, a water-soil mix, to transport excavated material. For water conservation and pollution prevention, CLP Power requires its contractors to use slurry circulation systems that separate solids so that the water can be reused.

• Water conservation and recycling initiatives at CLP Chinaʼs wind farms
  CLP China strives to reduce freshwater consumption even though renewable energy assets generally require minimal water use. At Qian’an Wind Farm, several measures have been introduced to further reduce freshwater consumption. In 2025, rainwater collection pits were installed to reduce reliance on fresh water. Additionally, backwash wastewater from the domestic water purification facility is reused in the fire-fighting water tanks. Water-saving faucets have also been installed in high water-use areas such as kitchens and public restrooms.
• Water conservation education and promotion
  CLP encourages efficient water use and promotes the wise use of natural resources among employees. In Australia, EnergyAustralia conducts annual environmental training for its employees and major contractors, in which one focus is water conservation. On the Chinese Mainland, site staff receive water conservation training. In Hong Kong, a dedicated webpage offers practical water-saving tips and printable promotional stickers for on-site display.

Freshwater balance

In addition to a variety of electricity efficiency and conservation measures, CLP also promotes energy-saving behaviours among its employees. CLP will continue to look for energy conservation opportunities and initiatives through energy audits and various energy conservation programmes across its operations. Key initiatives and programmes for 2025 are highlighted below.

For details on fuel consumption for power generation and energy sent out based on renewable resources, please refer to the Asset management section. For details on how CLP supports customers in improving energy efficiency, please refer to the Energy services and solutions section.

• Energy saving initiatives at CLP China renewable energy assets
  CLP China has introduced several energy-saving measures at Lingyuan and Xicun Solar Power Stations, including building solar carports with spare solar panels and installing micro-battery storage for lighting. Additionally, the Lingyuan Solar Power Station created a rooftop “Green Energy Space”, installing spare solar panels to reduce energy consumption. In the wind farms of the Shandong region, solar-powered streetlights have also been installed in the plant and living areas.

• Energy conservation design in new transmission substations in Hong Kong
  CLP Power has incorporated energy conservation features into the design and construction of new transmission substations, such as energy-efficient equipment, LED lighting and daylight sensors. Additionally, design elements such as low window-to-wall ratios have been incorporated to reduce solar heat gain, while solar panels have been installed to provide supplementary electricity generation.
• Innovation for energy saving in CLP offices
  CLP has been adopting new technologies to achieve efficient energy management and encourage energy conservation in its operations. The Company has implemented Building Energy Management Systems (BEMS) in its main offices, with some (such as the CLP Headquarters) having now been upgraded to incorporate artificial intelligence-driven smart controls. In older office buildings without BEMS, such as the office building of Black Point Power Station, CLP has introduced intelligent control systems with automated management of lighting and air conditioning . These improvements have increased operational efficiency and reduced energy consumption, while also enhancing user comfort in the indoor environment. By integrating these advanced building energy management solutions, CLP is improving energy performance and enabling real-time monitoring of building conditions.