13.10. Other operating expenses
| NOTE | 2021 | 2020 | |
| Loss on sale of non-current non-financial assets | (68) | (45) | |
| Recognition of provisions | (179) | (227) | |
| Recognition of impairment allowances of property, plant and equipment and intangible assets, right-of-use asset, other non-current assets and classified as held for sale | 14.4 | (415) | (1 961) |
| Penalties, damages and compensations | (101) | (54) | |
| Settlement and valuation of derivative financial instruments related to operating exposure | (2 976) | (3 566) | |
| Ineffective part related to valuation and settlement of operating exposure | (34) | (47) | |
| Settlement of hedging costs | (2) | (6) | |
| Other, incl.: | (223) | (320) | |
|
donations |
(97) | (214) | |
| (3 998) | (6 226) |
Net settlement and valuation of derivative financial instruments related to operating exposure
| 2021 | 2020 | |
| Valuation of derivative financial instruments | 420 | 216 |
|
commodity forwards (CO2 futures) |
395 | 318 |
|
commodity forwards (electricity) |
(99) | – |
|
commodity swaps |
124 | (102) |
| commodity forwards (CO2 futures) | 1 946 | 1 077 |
|
commodity forwards (CO2 futures) |
3 112 | 382 |
|
commodity swaps |
(1 166) | 695 |
| 2 366 | 1 293 |
For 2021 and 2020 the change of net positions of valuation and settlement of derivative financial instruments related to operating exposure (non-designated instruments for hedge accounting purposes) mainly related to the valuation and settlement of CO2 forward contracts as a part of „transaction” portfolio. Moreover this line includes inter alia, the effect of valuation and settlement of commodity swaps hedging time mismatch on crude oil purchases and bitumen hedging, refining margin hedging as well as the Upstream Canada transactions hedging oil and gas.
As part of the commodity risk management strategy related to the time mismatch between the date of crude oil purchase and the date of processing and sale of refining products, the Group uses paper market instruments to hedge against the risk of a decline in crude oil prices. The risk concerned occurs when crude oil is purchased by sea. In this way, the Group eliminates the risk related to the volatility of crude oil prices, incurring only an additional cost or provides additional profit resulting from the market structure at the moment of concluding the hedging transaction.
The result on a physical item, hedged by the Group with forward transactions is reflected in the profit/(loss) on sales under manufacturing costs (cost of crude oil used to manufacture refining products based on weighted average acquisition prices) and revenue from sales of refining products. Therefore, the result on the settlement of derivative financial instruments relating to the operational exposure should always be considered together with the profit/(loss) generated by the Group on the sale of a physical position.