Mercury Greenhouse Gas Emissions Inventory Report

Important Information for Readers

This Emissions Inventory report has been prepared by Mercury NZ Limited (Mercury) for informational purposes and in connection with its FY25 Climate Statement, in accordance with the Aotearoa New Zealand Climate Standards. Information in this report has been prepared with due care and attention to ensure accuracy. Mercury will not be liable for any reliance placed upon this report by any third party.

Purpose of Document

The purpose of this document is to provide an inventory of Mercury's greenhouse gas emissions, measured and prepared in accordance with The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition) and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard. This framework ensures transparency, robustness, and a consistent approach for benchmarking. The report details unique emissions factors for Mercury's geothermal generation facilities and its involvement in emissions trading and forestry carbon units. It also facilitates disclosure of Mercury's carbon footprint, review of climate-related risks and opportunities, and educates stakeholders. Public disclosure of carbon data and management of climate risks enables Mercury to reflect Aotearoa New Zealand Climate Standards requirements. This report includes restated historical data for enhanced accuracy and consistency, recalculating selected Scope 3 categories (Purchased Goods and Services, Capital Goods) and Scope 2 emissions for improved methodology and data availability.

1.0 Greenhouse Gas Emissions Inventory Summary

Note: Data from FY2022 to FY2024 for Purchased Goods & Services, and Capital Goods presented in table 1 has not been subject to assurance procedures. Historical data (unverified) for 2015-2021 is provided in Appendix A.

1.1 FY2025 Changes in Organisational Structure

In January 2025, Mercury acquired a 10% interest in Forest Partners Limited Partnership, a forestry investment fund.

1.2 Material Restatements of Emissions

1.2.1 Restatement of Emissions to Include Additional Scope 3 Categories

Mercury has introduced historical emissions figures to incorporate two new scope 3 sub-categories: Purchased Goods and Services, and Capital Goods. These categories are published for the first time in the FY2025 inventory to better reflect the full emissions profile of operations. These additional scope 3 categories were previously excluded while calculation methodologies were developed and have now been retrospectively included in the three prior reporting periods to enable consistent year-on-year comparison.

1.2.2 Electricity Emissions Restated

Electricity emissions have been restated to reflect improvements in data sourcing and calculation. Updates to internal processes have enhanced the availability and accuracy of electricity consumption data. Historical figures have been updated using a consistent approach for current and future reporting.

1.3 Notable Changes in Emissions

The most notable change in this year's inventory is the increase in reported emissions due to the inclusion of purchased goods and services and capital goods under Scope 3. These subcategories cover: Purchased Goods and Services: Emissions associated with the procurement of goods and services to support Mercury's operations; and Capital Goods: Emissions from the development and upgrade of electricity generation assets.

1.4 Other Notable Changes

• Refrigerant Gases: Emissions from refrigerant gases have been calculated and included for the first time in FY25.
• Sulphur Hexafluoride (SF6): Emissions are calculated based on electrical equipment top-ups. As no SF6 top-ups occurred in 2024, there are no reportable emissions from SF6 releases in the FY25 inventory.
• Stationary Combustion - Geothermal Drilling: Scope 1 emissions from stationary combustion have continued to increase in FY25, reflecting the ongoing activity of Mercury's geothermal drilling programme. The diesel-powered rig has operated throughout the year, with the campaign scheduled for completion in late 2025.

2.0 Introduction

Mercury NZ Limited (Mercury) generates electricity from renewable sources and is a multi-product retailer providing electricity, gas, broadband, and telecommunication services. This report covers Mercury's greenhouse gas (GHG) inventory from FY2015 to FY2025, providing a complete and accurate quantification of GHG emissions directly attributable to Mercury's operations within the declared boundary and scope for the reporting period. Mercury participates in the New Zealand Emissions Trading Scheme (NZ ETS), utilizing unique emission factors from physical sampling of geothermal facilities, externally audited by Deloitte. Emissions are measured monthly for calculating annual totals and required carbon units. Mercury has invested in New Zealand forestry since 2010, using carbon credits to cover fugitive geothermal scope 1 emissions and scope 3 downstream emissions from customer gas sales. Carbon credits surrendered under the NZ ETS differ from geothermal fugitive emissions figures due to surrender obligations based on equity ownership.

3.0 Statement of Intent

Mercury's reporting aligns with the Aotearoa New Zealand Climate Standards (NZ CS1). Mercury is committed to transparency and uses commonly accepted standards for accounting greenhouse gas emissions, following The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition) and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard. This report is part of an ongoing commitment to measure and manage emissions, educate stakeholders, and facilitate discussions on carbon reduction targets and carbon neutrality.

4.0 Description of Mercury

4.1 Mercury

Mercury NZ Limited (Mercury) generates electricity from renewable sources: hydro (wai), geothermal (ngāwhā), and wind (hau). Its electricity generation sites are located along the Waikato River, the steam fields of New Zealand's Central Plateau, and in the Manawatū, South Taranaki, Otago, and Southland regions. Mercury is expanding its renewable generation pipeline, with construction underway on the second stage of the Kaiwera Downs wind farm and the new Kaiwaikawe Wind Farm, as well as progress on the fifth generating unit at the Ngā Tamariki geothermal station. Mercury also retails electricity, gas, mobile, and telecommunications products to approximately 906,000 customers across New Zealand.

References:

• 1. www.xrb.govt.nz/standards/climate-related-disclosures/aotearoa-new-zealand-climate-standards/
• 2. https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf

4.2 Sustainability Policies, Strategies and Programmes

In FY23, Mercury introduced its purpose and long-term aspirations, forming foundational aspects of its strategic framework. The purpose, 'Tiakina te anamata, mā te tūhono i ngā tāngata me ngā wāhi o te inamata. Taking care of tomorrow, Connecting people and place today,' captures the company's 'why' by recognizing its role in using unique assets to enable everyday living and connectivity, and to foster care for the natural environment. Long-term aspirations for 2035 cover five focus areas: Customer, Commercial, People, Partnerships, and Stewardship. Sustainability underpins these aspirations, particularly the Stewardship aspiration: 'We leave our physical assets and the natural environment thriving for future generations.' Sustainability is integrated into short-term business planning, including the objective to 'Play a leading role in New Zealand's successful transition to a low-carbon economy.' Mercury's Sustainability Policy outlines an integrated approach to incorporating sustainability into its strategic framework, planning, and decision-making.

5.0 Persons Responsible

The Chief Sustainability Officer is responsible for this GHG inventory. A team of individuals across Mercury has contributed to the greenhouse gas accounting and reporting. This team includes: Sustainability & Strategy Analyst, Adaptive Pathways Lead, Senior Plant Chemist, Future Insights Manager, Environmental Advisor, Property Manager, Reputation and Social Impact Lead, Resource Lead, Senior Analytics Engineer, Specialist Engineer – High Voltage, Procurement Advisor, General Counsel, Finance Connect, Business Analyst, Legal & Commercial Advisor, Finance Lead, Energy Analyst, Commercial Manager – Telco, Senior Financial Reconciliation Analyst, Business Insights Analyst, Project Manager, Project Commercial Coordinator, Workplace Experience Lead, and Facilities Manager.

6.0 Reporting Period Covered

This GHG inventory covers the period 1 July 2024 to 30 June 2025. Historical data (unverified) is provided for the period from 1 July 2014 to 30 June 2021.

7.0 Organisational Boundaries

Mercury's organisational boundary for GHG reporting is set with reference to the GHG Protocol, encompassing operations owned and controlled by Mercury, its subsidiaries, associate companies, and joint ventures. 100% of emissions from Mercury NZ Limited, Mercury Geothermal Limited, TPC Holdings Limited, Rotokawa (Joint Venture), Ngā Awa Pūrua (Joint Venture), and NOW New Zealand Limited are included. EnergySource LLC, EnergySource Minerals LLC, and Forest Partners Limited Partnership are outside operational control and treated as Scope 3 - Category 15 emissions, assessed as immaterial.

7.1 Consolidation Approach

Mercury applies the operational control consolidation approach to determine organisational boundaries, focusing on emissions where it has operational control. The table below summarizes the treatment of each entity:

8.0 Mercury Facilities

8.1 Wai (hydro) Generation Facilities

Mercury owns nine stations on the Waikato River. Flexible and rain-fed, hydro output can be increased or decreased quickly and efficiently.

8.2 Ngāwhā (geothermal) Generation Facilities

Mercury operates five geothermal stations and a steamfield facility in the North Island, providing steady baseload. Geothermal runs at full capacity about 95% of the time.

8.3 Hau (wind) Generation Facilities

Mercury operates five wind farms in the North Island and two in the South Island.

8.4 Other Facilities

Other facilities include offices in Auckland, Hamilton, Rotorua, Taupō, Wellington, Tauranga, Oamaru, and Palmerston North.

8.5 Organisation Chart

Mercury, as the Climate Reporting Entity (CRE), its associated entities and facilities are shown in the organisation chart below:

CRE: MERCURY NZ LIMITED

• OFFICES: Auckland Office, Hamilton Office, Rotorua Office, Taupō Office, Wellington Office, Tauranga Office, Oamaru Office, Palmerston North Office
• HYDRO FACILITIES: Taupō Control Gates, Aratiatia Hydro Power Station, Ohakuri Hydro Power Station, Ātiamuri Hydro Power Station, Whakamaru Hydro Power Station, Maraetai Hydro Power Station, Waipāpa Hydro Power Station, Arapuni Hydro Power Station, Karāpiro Hydro Power Station
• WIND FACILITIES: Turitea Wind Farm, Subsidiary: Tararua Wind Power Limited, Tararua Wind Farm, Mahinerangi Wind Farm, Kaiwera Downs 1 Wind Farm, Subsidiary: Waverley Wind Farm Limited, Waipipi Wind Farm

SUBSIDIARY: MERCURY GEOTHERMAL LIMITED

• Subsidiary: Rotokawa Geothermal Limited
• Subsidiary: Ngā Tamariki Geothermal Limited
• Ngā Tamariki Geothermal Power Station
• Subsidiary: Rotokawa Generation Limited
• Facility: Rotokawa Geothermal Power Station
• Joint Operation: Ngā Awa Pūrua Joint Venture (unincorporated)
• Facility: Ngā Awa Pūrua Geothermal Power Station
• Associate: Rotokawa JV (unincorporated)
• Facility: Rotokawa Steamfield Operation

SUBSIDIARY: NOW NEW ZEALAND LIMITED

• Christchurch Office
• Napier Office
• Subsidiary: Kawerau Geothermal Limited
• Kawerau Geothermal Power Station
• Joint Operation: Tuaropaki Power Company Holdings Limited
• Mōkai Geothermal Power Station

Other entities: EnergySource LLC, EnergySource Minerals LLC, Forest Partners Limited Partnership

Entities without any facilities: Subsidiaries: Blockchain Energy Limited, Bosco Connect Limited, Glo-Bug Limited, Mercury Energy Limited, Mercury Solar Limited, Mercury SPV Limited, Mercury Wind Limited, Mighty Geothermal Power International Limited, Mighty Geothermal Power Limited, Mighty River Power Limited, Special General Partner Limited, Waverley Wind Farm (NZ) Holding Limited, Gas Industry Company Limited, TPC Holdings Limited, Rotokawa Joint Venture Limited.

9.0 Emissions Source Inclusions

9.1 Emissions Assessment and Categorisation

Mercury uses the GHG Protocol to assess business activities and facilities for emissions sources. Emissions sources from prior years are maintained unless the associated activity or facility has ceased or been divested. Additional business activities or facilities commenced or acquired during the financial year are assessed for new emissions sources. Emissions sources are classified into:

• Scope 1: Direct GHG emissions operationally controlled by Mercury.
• Scope 2: Indirect emissions from the generation of purchased electricity.
• Scope 3: Indirect emissions from activities of Mercury but from sources not owned and controlled by Mercury.

9.2 Materiality

Scope 1 and Scope 2 emissions are considered material. For Scope 3 emissions, categories below 5% of total emissions may be excluded, provided total excluded emissions do not exceed 5%.

9.3 Other Emissions - Perfluorocarbons (PFCs)

Mercury does not use or hold PFCs, so no emissions from these sources are included.

9.4 Other Emissions - CO2 emissions from the Combustion of Biomass

There was no combustion of biomass in Mercury's operations during the reporting period.

9.5 Emissions Inclusions

10.0 Emissions Source Exclusions

The emissions sources listed below are excluded from Mercury's GHG inventory report as they are considered immaterial or not applicable:

11.0 Data Collection and Uncertainties

11.1 Data Collection

Mercury has developed robust GHG information systems, particularly for fugitive geothermal emissions, which form a significant part of its carbon footprint and are required for NZ ETS obligations. These geothermal emissions factors are subject to external audit and assurance. The preparation of this report has prompted collation of additional datasets to ensure conformance with the GHG Protocol. Future reports will follow the same process, with opportunities to improve data integrity. Additional data comes from internal operational data, scope 2 and 3 emissions sourced from specific providers, internal financial records, and supplier-provided data. Quantification of emissions uses spreadsheets to relate consumption and usage to emissions factors sourced from New Zealand Government guidance, IPCC publications, or recognised GHG emission databases.

11.2 Impact of Uncertainties

Mercury's GHG inventory follows the GHG Protocol, using calculation methods based on data quality and emissions source significance. Fugitive geothermal sources and emissions from the use of sold products (gas) have low uncertainty. Geothermal steam data is gathered internally and subject to independent assurance. Gas sales data is gathered from systems subject to New Zealand gas measurement technical standards. Capital goods and purchased goods and services, calculated for the first time in FY25, use spend-based and hybrid methods respectively, with emission factors from the 2022 Thinkstep-ANZ dataset. Spend-based methods and supplier-derived methods carry high uncertainty due to generalised factors, assumptions, and product variation. Mercury is focused on improving data quality by reducing reliance on spend-based methods. Scope 2 calculations for offices and generation sites involve estimations based on employee numbers and usage data, with uncertainties in the absence of comprehensive site-specific data. Scope 3 emissions from business travel (air, accommodation, mileage) are derived from third-party reports and staff claims, reconciled against spend. While uncertainties exist, their impact on overall emissions reporting is considered not material, with ongoing efforts to improve accuracy and reliability.

12.0 The Base Year Selected

The chosen base year is 1 July 2021 to 30 June 2022 and remains unchanged. Additional Scope 3 categories (Purchased Goods & Services, Capital Goods) have been retrospectively applied to the FY2022 base year and subsequent reporting years. Emissions reported for FY25 have been assured, while historical emissions for Purchased Goods & Services and Capital Goods for FY2022-FY2024 have not yet been assured. These updates increased Scope 3 emissions for FY2022 by approximately 19%, contributing to higher total emissions figures and ensuring consistency. Section 19.1 compares direct emissions over the past two financial years to the FY2022 base year and FY15.

12.1 Base Year Recalculation Methodology

Mercury's base year emissions will be recalculated if misstatements, business changes (mergers, acquisitions, divestments), or methodology changes result in changes of more than 5% to total emissions in the base year. If recalculation is significantly uncertain or impossible due to lack of data, a new base year will be established.

13.0 GHG Emissions Calculations and Results

Emissions source datasets were gathered from metered consumption points, financial records, and third-party suppliers. Factors used for calculations are sourced from:

• Analysis of physical samples (for geothermal fugitive emissions only).
• New Zealand Government guidance documents (MfE - Measuring Emissions: A guide for organisations 2025 - Emissions Factor Workbook).
• Thinkstep-anz (2024). Emission Factors for New Zealand: Greenhouse Gas Emission Intensities for Commodities and Industries. v1.1.

Mercury's emissions profile is dominated by Scope 1 emissions, primarily fugitive emissions from geothermal electricity generation, accounting for approximately 50% of all emissions. Scope 3 emissions from Purchased Goods and Services, Capital Goods, and Use of sold products are also significant sources.

14.0 GHG Specific Information

Mercury's direct emissions for the base year (FY2022) and FY2023-FY2025 by greenhouse gas and source, including Global Warming Potentials (GWP), are detailed below. Direct emissions are converted to CO2e using GWP conversion factors from the latest MfE guidance and Thinkstep documents (AR5). Methodologies for geothermal fugitive emissions and non-geothermal sources have now been aligned.

4 Numbers may not exactly total summary figures in Section 1 due to rounding.

15.0 GHG Removals and Reductions

All emissions figures are gross emissions, excluding biogenic or other removals. Mercury held 10 forestry contracts under the NZ ETS, with four active as of 30 June 2025, supporting the sequestration of approximately 300,000 tonnes of carbon annually. GHG removals from these contracts are not included or netted off from emissions figures.

16.0 GHG Liabilities

Mercury uses sulphur hexafluoride (SF6) in circuit breakers, which has a high global warming potential. Its storage and use require annual audit under the Resource Management Act. Total GHG holdings for the previous eight years are provided below. The decrease in holdings during FY2020 is due to consolidation and centralisation of stored SF6.

Data from FY18 to FY21 presented in table 11 has not been subject to assurance procedures.

17.0 Audit of the GHG Inventory

Mercury's FY2025 GHG Emissions Inventory report (excluding Appendices A and B) has been audited to a limited level of assurance (refer Appendix C). Mercury's fugitive geothermal emissions are subject to monthly sampling and annual review and audit under the NZ ETS.

18.0 Description of Additional Indicators

Mercury presents its generation emissions intensity and compares it to the New Zealand grid average in Table 12.

5The Measuring emissions guide: 2025 is for Aotearoa New Zealand-based organisations wishing to measure and report their greenhouse gas emissions.

19.0 Assessment of Performance Against Relevant Benchmarks

19.1 Emissions Intensity

Mercury's emissions intensity for FY2015 (base year), FY2022, and FY2024-FY2025 are shown in Table 12 and Figure 1. Emissions intensity is impacted by hydro and wind generation volatility. The calculation uses gross Scope 1 generation emissions only, with no adjustments for NZUs surrendered under the NZ ETS.

* The NZ grid Electricity Emissions Intensity is based on MfE advised figures. The FY figure is calculated by averaging the emissions intensities from that and the previous calendar years. The FY25 figure is based on CY2024 only.

Data from FY2015 to FY2021 presented in table 12, figure 1, and appendix B has not been subject to assurance procedures. FY16-FY21 information is presented in appendix B.

19.2 Geothermal Emissions and Emissions Intensity by Station

Mercury's geothermal fugitive emissions and emissions intensity by station for the past seven years are shown in Table 13 and Figures 2 and 3.

Data from FY19 to FY21 presented in table 13 and figures 2 & 3 has not been subject to assurance procedures.

20.0 Appendix A - Historical Data - GHG Emissions Inventory Summary

This appendix provides historical GHG emissions data from FY2015 to FY2021. Data from FY2015 to FY2021 presented in Appendix A has not been subject to assurance procedures.

21.0 Appendix B – Historical Data - GHG Emissions, Reductions and Intensity Calculations for Mercury's Electricity

This appendix provides historical data related to GHG emissions, reductions, and intensity calculations for Mercury's electricity from FY2016 to FY2021. Data from FY2016 to FY2021 presented in Appendix B has not been subject to assurance procedures.

* The NZ grid Electricity Emissions Intensity is based on MfE advised figures. The FY figure is calculated by averaging the emissions intensities from that and the previous calendar years.

22.0 Appendix C. Independent Limited Assurance Report

Assurance Conclusion

Based on limited assurance procedures performed, nothing has come to attention that causes belief that Mercury NZ Limited's Greenhouse Gas ("GHG") emissions inventory report for the year ended 30 June 2025 is not prepared, in all material respects, in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised version) (2004), and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) (the "Criteria").

Scope

Ernst & Young Limited ("EY") has undertaken a limited assurance engagement to report on Mercury's GHG Emissions Inventory Report for the year ended 30 June 2025.

Criteria Applied by Mercury

In preparing the Report, Mercury applied the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised version) (2004), and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) (the "Criteria"). Methods and assumptions used are described on pages 11-12 and 14 of the Report, along with estimation uncertainties.

Mercury's Directors Responsibility

Mercury's directors are responsible for the preparation of the Report in accordance with the Criteria, including establishing and maintaining internal controls, adequate records, and relevant estimates to ensure freedom from material misstatement.

EY's Responsibility

EY's responsibility is to express a limited assurance conclusion based on performed procedures and obtained evidence. The engagement was conducted in accordance with International Standard for Assurance Engagements (New Zealand): Assurance Engagements on Greenhouse Gas Statements ("ISAE (NZ) 3410").

Our Independence and Quality Management

EY has complied with independence and ethical requirements of the Professional and Ethical Standard 1 International Code of Ethics for Assurance Practitioners. The firm applies Professional and Ethical Standard 3 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements.

Description of Procedures Performed

Procedures performed in a limited assurance engagement are less extensive than for a reasonable assurance engagement. They included obtaining an understanding of Mercury's control environment, performing walkthroughs, inquiring with staff, evaluating estimation methods, testing limited items, assessing emission factor sources, performing analytical procedures, and considering presentation and disclosure. Procedures did not include testing controls or IT systems. Inherent Uncertainties in GHG quantification arise from incomplete scientific knowledge and estimation uncertainty.

Use of our Assurance Report

This assurance report is for the Directors of Mercury and for the purpose for which it was prepared. No assumption of responsibility is made for reliance by other persons or for other purposes.

Ernst & Young Limited
Auckland
19 August 2025