Company: BCDRF
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0000891478-25-000054
Chunk: 84

Company: Banco Santander, S.A.
Filing Date: 2025-02-28
Form: 20-F
Chunk 84
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 become the market’s number one engine type, manufacturers must fulfil their commitments regarding their development and the phasing out of combustion engines.                                                                                                                                                                                                                                                                              |

Thermal coal phase-out

Sector boundaries: For the thermal coal target, we assess customers for whom coal fired power generation represents directly more than 10% of revenues on a consolidated basis; and customers that own thermal-coal mines worldwide. Industry dynamics: Power utilities can reduce their usage of thermal coal power plants by replacing them with other technologies, e.g. CCGT (Combined Cycle Gas Turbine) or renewables. Thermal coal miners can either responsibly divest their mine or run down their mining activity, eventually closing the mine sustainably. According to EIA (Environmental impact assessment), record highs have been reached in 2023 as a consequence of the Covid-19 recovery, Ukraine's conflict and the continuous growth of Indian and Chinese demand. The substitution of coal by other sources of energy, such as electricity, bioenergy or natural gas is expected to accelerate in the later years of this decade.

Portfolio composition: Most of our customers in this group already have plans in place to comply with our policy in 2030.

| Sector                                                 |     | Year |     |     |     | Exposure (drawn amount EUR bn) |
| Thermal coal-related power & mining phase out (EUR bn) |     | 2021 |     | 7.0 |     |                                |
| 2022                                                   |     |  5.9 |     |     |     |                                |
| 2023                                                   |     |  4.9 |     |     |     |                                |
| 2024                                                   |     |  4.8 |     |     |     |                                |

Portfolio evolution: We have been continuously reducing our exposure to thermal coal customers in scope of our target. Many of our customers will need financing to transition away from coal. Transition finance support to these entities may, therefore, temporarily increase before declining over the longer term as we aim to achieve our targets.

Annual report 2024 67

| Contents |     | Business model and strategy |     | Sustainability statement |     | Corporate governance |     | Economic and financial review |     | Riskmanagement and compliance |

2.4.2 Monitoring of other portfolios

Further to the five existing alignment targets published in 2021, and the two new targets in the automotive sector in 2023, in 2024 we also worked on monitoring the alignment of other climate-relevant portfolios including