Fluxys Belgium : Annual Financial Report 2023 Fluxys SA

This is who we are

100 %

focus on speeding up the energy transition

independent infrastructure group headquartered in Belgium

active in Europe, Latin America and the Middle East

Europe

Latin America

What we're doing to speed up the energy transition

Middle East

Our ambition

For the market

30x30x30

By 2030

provide capacity for annual transport: 30 TWh of hydrogen and 30 million tonnes of CO2

In our own activities

Our investments in infrastructure

EUR 300 m

Fluxys | Annual Financial Report 2023 | Looking to the future

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Looking

to the future

Fluxys | Annual Financial Report 2023 | Looking to the future

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Breaking ground

to make the transition tangible

Before we look ahead, what did Fluxys stand for in 2023?  

Pascal De Buck We broke ground on projects showing what Fluxys stands for in the energy transition. In Belgium, the new pipeline along the Zeebrugge-Brussels corridor was built and is now in use. And in Germany, work is well underway to upgrade the TENP pipeline. Together with other investments, these two pipelines bolster the security of supply of natural gas today and the infrastructure is ready to be used in the hydrogen networks of tomorrow. We're here to offer society security of supply while speeding up the green transition.

Andries Gryffroy We have set off. Industrially, we've taken the first big steps towards multi- molecule infrastructure for a carbon-neutral future. Via our stake in German transmission system operator Open Grid Europe, we've created a bridge to geographically complementary hydrogen and CO2 networks. And our partnership in Omani transmission system operator OQGN gives us

a foothold in a country with an extraordinary potential for exporting hydrogen to Europe. At the same time, we're continuing to move full steam ahead at the pace of industry. For numerous companies, switching to hydrogen or CO2 capture is the only way forward if they want to continue anchoring their business and employment locally.

Supporting security of supply 24/7

Throughout the year, our teams across Europe made every effort to ensure security of supply. The geopolitical situation resulting from the war in Ukraine has profoundly changed the dynamics of gas markets and the direction of flows in Europe.

The Belgian grid once again confirmed its role as an energy hub for Europe with the transit of large quantities to the Netherlands and Germany. We brought in plenty of flows from Norway, from the UK and through our LNG terminals. In Germany we imported significant quantities from Belgium and the Netherlands, from the new floating LNG terminals in the north and also from and to Switzerland. Desfa in Greece provided substantial transit to Bulgaria and TAP continued to supply large volumes to Europe.

Partner in the largest German transmission system operator

In 2023, Fluxys became a 24% partner in Open Grid Europe (OGE). The partnership aligns perfectly with our strategy. OGE is the largest German

transmission system operator and, like Fluxys, is a pioneer in the field of hydrogen and CO2 infrastructure. With highly complementary hydrogen and CO2 infrastructure, we are speeding up the development of cross-border routes for hydrogen and CO2 between Belgium and Germany.

Fluxys | Annual Financial Report 2023 | Looking to the future

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 We're here to offer society security of supply while speeding up the green transition.

Pascal De Buck

Managing Director and CEO

Is industry ready for this transition?  

Pascal De Buck Decarbonisation is a major economic challenge for industry. We offer an answer to this challenge because we operate internationally and because we're particularly well positioned between the North Sea and the large industrial valleys in North-West Europe. We're on the path between overseas imports of low-carbon molecules and consumers, and in the opposite direction, between captured CO2 from industry and safe storage sites in the North Sea. This enables us to attract large volumes and factor economies of scale into the costs of our services. We're on track to become the hydrogen and CO2 hub of choice for industry in Belgium and North-West Europe.

What challenges lie ahead?  

Pascal De Buck We absolutely need an integrated approach to the energy system as a whole because making the transition to net- zero is a threefold challenge. We must ensure a carbon-neutral energy mix while households and businesses need to have energy at all times - all at the lowest possible cost to society. This is only possible by looking at and planning everything holistically. Energy efficiency must improve, we need more green electricity, we need more green and low-carbon molecules and we must ensure that captured CO2 can be reused or stored. We must make all these solutions work together seamlessly like a Swiss watch for the benefit of all consumers.

Andries Gryffroy Efficient investing requires a long-term approach. In developing hydrogen and CO2 infrastructure, we work closely with the market. At the same time, looking further ahead is key: to be cost-effective for society in the long run, we must build the right size infrastructure today for the volumes that will come later. So it's important to find mechanisms together with the public authorities to limit the risks of initial investments.

Additional transmission capacity ready for hydrogen

In Belgium we reinforced the Zeebrugge-Brussels corridor with an additional pipeline to carry more natural gas inland from Zeebrugge and in Germany

we started renewing part of the TENP pipeline. Moreover, the new infrastructure has been designed to carry hydrogen as soon as the market is ready for it. We are bolstering security of supply and at the same time this is our first concrete step in speeding up the energy transition.

Range of export solutions for CO2

We are working closely with partners on infrastructure that offers industry a solution for carrying captured CO2 to safe and permanent storage sites in the North Sea. With Equinor we are investigating a subsea pipeline between Zeebrugge

and storage sites in Norwegian waters. At the ports of Dunkirk, Antwerp and Ghent we are working on facilities for CO2 export by ship to storage sites in the North Sea.

Strong partners for large-scale decarbonisation

We aim to offer European industry large-scale solutions for decarbonisation. In Belgium we are continuing to build a multi-molecule hub to carry hydrogen and CO2. And we are joining forces with various partners to make maximum use of Belgium's central location for the large-scale decarbonisation of industry in North-West

Europe. We explore cross-border hydrogen connections with Open Grid Europe in Germany and Hynetwork Services in

the Netherlands. We are also working with National Gas in the UK in the context of the energy transition. And cross-border CO2 routes we are exploring with Open Grid Europe and Wintershall Dea in Germany.

Fluxys | Annual Financial Report 2023 | Looking to the future

What does sustainable development look like for Fluxys?  

Andries Gryffroy With our investment plans for hydrogen and CO2 infrastructure, we're developing solutions for the large-scale decarbonisation that society needs. The ESG approach we further deepened together with our stakeholders in 2023 gives us direction. It is our compass for developing our business activities sustainably in a long-term perspective for all of

Efficient investmentour stakeholders. requires a long-term

approach.

Andries Gryffroy

Chairman of the

Board of Directors

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System operator candidates in Belgium: Fluxys hydrogen and Fluxys c-grid

In Belgium, the federal Hydrogen Act, passed in July, regulates the appointment of the Belgian hydrogen transmission network operator. In line with the Hydrogen Act, Fluxys Belgium set up subsidiary Fluxys hydrogen, which is a candidate for

serving as Belgian hydrogen network operator. The federal government is expected to appoint the network operator in the first months of 2024. The regions are setting up a regulatory framework for CO2 transmission activities. In anticipation of this, together with Pipelink, Socofe and SFPIM, we have founded the subsidiary Fluxys c-grid, a separate company that is ready to take part in the planning, development, and operation of the CO2 transmission infrastructure in Belgium.

Partner in Omani transmission system operator

A robust hydrogen market in Belgium and Europe is a value chain with a wide range of sources, both close

by and overseas. In that perspective, we have partnered with OQGN, Oman's state- owned transmission system operator. The country has the ambition and the assets to become a leading export hub for renewable hydrogen and OQGN, like Fluxys, is a pioneer in decarbonisation projects. Together we are exploring strategic cooperation in the development of hydrogen and CO2 infrastructure in Oman.

Tapping the

North Sea's energy potential

The North Sea countries want to boost their combined offshore wind power generating capacity to 300 GW by 2050 with a view to making the North Sea the largest green energy plant in Europe. In order to carry maximum green hydrogen from North Sea wind ashore, we teamed up with the other

major gas grid operators at the North Sea Summit in Ostend to develop, together with electricity grid operators, the best infrastructure to ensure that not a single puff of wind goes to waste in the North Sea.

Fluxys | Annual Financial Report 2023 | Our profile

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Our profile

a purpose-driven company

Fluxys | Annual Financial Report 2023 | Our profile

Why, what and how: our strategic framework

Our purpose: why we matter

As a key infrastructure partner, we are building a sustainable and cleaner energy future. That is our purpose. With our terminalling, transmission and storage infrastructure for different molecules, we bring energy where it is needed - today and tomorrow.

together

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Shaping together

a bright energy

future

bright

HOW

fluxtainable

The energy ecosystem is complex and the demand for energy as a driver of human progress combined with a global need to make energy more sustainable is a challenge that requires everyone's commitment. Redesigning the energy system will not be easy, yet it can be done if we work together. Together refers to all our stakeholders: our employees, shareholders, industrial partners, customers, the general public and all actors in the energy system. At Fluxys we firmly believe in this collaboration.

What we want to achieve: our ambition

As a key infrastructure partner, we want to accelerate the energy transition with infrastructure for different mol- ecules. We aim to offer customers substantial capacity for supplying hydrogen and carrying away CO2 by 2030.

bright - Our infrastructure, with its storage capacity and capacity to handle molecules for a low-carbon future such as hydrogen and CO2, will play a major role in the transition to a bright energy future for all.

future

The word future entails responsibility. With our unique assets as an infrastructure company, we owe it to ourselves to contribute to a greener energy future for generations to come.

by 2030, we aim to offer our

customers transport capacity for

30 TWh of hydrogen and

30 million tonnes of CO2 per year

Fluxys | Annual Financial Report 2023 | Our profile

How we do it: 3 pillars

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2

an inspiring

vision of

sustainability

Fluxtainable is our ESG compass (Environment - Social - Governance).

How do we ensure we develop our activities sustainably while taking a long-term view for us and for all our stakeholders? We are moving forward in five areas on our sustainability path.

respect

We value the uniqueness of

every individual.

We look out for each other, keeping

our employees safe and well.

We make our decisions consciously for the environment, communities and future generations.

open

We foster teamwork and open

communication to create a workplace where different perspectives are embraced, and employees are empowered to shape the future.

With an open mind, we take action,

we adapt swiftly, and we seize

opportunities with

1. can-doattitude to drive the energy transition.

1

our values

3

1. clear strategy

reliable

We are committed to earning and building trust in all our partnerships.

We go above and beyond for our

customers and partners.

We are in it for the long term and society can count on us for affordable, sustainable and safe infrastructures.

secure

contribute to versterken

a sustainable

and securebijdragen tot een duurzame en

energy supplybetrouwbaregroene

energiebevoorradingtransitie

green transitionde es en iële

inf astructuurpartner om de energietransitie te versnellen

expand

develop, scale-upverbreden

and operate

infrastructuurmulti-voormolecule verschillende molecules ontwikkelen,infrastructureuitbreiden

en exploiteren