Commission Delegated Regulation (EU) 2019/331 of 19 December 2018 determining transitional Union-wide rules for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC

Article 1

This Regulation shall apply to the free allocation of emission allowances under Chapter III (Stationary installations) of Directive 2003/87/EC as regards the allocation periods as from 2021, with the exception of transitional free allocation of emission allowances for the modernisation of electricity generation pursuant to Article 10c of Directive 2003/87/EC.

Article 2

For the purposes of this Regulation, the following definitions apply:

Article 3

In addition to designating a competent authority or authorities in accordance with Article 18 of Directive 2003/87/EC, Member States shall make the appropriate administrative arrangements for the implementation of the rules of this Regulation.

Article 4

1. The operator of an installation eligible for free allocation pursuant to Article 10a of Directive 2003/87/EC may submit to the competent authority an application for free allocation for an allocation period. That application shall be submitted before 30 May 2019 as regards the first allocation period and every five years thereafter.

Member States may set an alternative time-limit for the submission of such applications, which, however, may not be later or earlier than one month compared to the time-limit provided for in the first subparagraph.

2. An application for free allocation submitted pursuant to paragraph 1 shall be accompanied by the following particulars:

Article 5

1. Upon application by a new entrant, the Member State concerned shall determine on the basis of this Regulation the amount of allowances to be allocated free of charge to that operator's installation once it has started normal operation.

2. The operator shall divide the installation concerned in sub-installations in accordance with Article 10. The operator shall submit to the competent authority, in support of the application referred to in paragraph 1, all relevant information and a new entrant data report containing each parameter listed in sections 1 and 2 of Annex IV for each sub-installation separately, for the first calendar year after the start of normal operation, together with the monitoring methodology plan as referred to in Article 8 and the verification report issued in accordance with measures adopted pursuant to Article 15 of Directive 2003/87/EC, and shall specify to the competent authority the date of start of normal operation.

3. Where an application by a new entrant fulfils all the conditions laid down in paragraph 2, and follows the allocation rules laid down in Articles 17 to 22, the competent authority shall approve it, as well as the specified date of start of normal operation.

4. Competent authorities shall only accept data submitted pursuant to this Article that has been verified as satisfactory by a verifier, in accordance with the requirements set out in measures adopted pursuant to Article 15 of Directive 2003/87/EC.

Article 6

The operator of an installation, applying for or receiving free allocation pursuant to Article 10a of Directive 2003/87/EC shall monitor the data to be submitted as listed in Annex IV to this Regulation, based on a monitoring methodology plan approved by the competent authority by 31 December 2020.

Article 7

1. Operators shall determine complete and consistent data and ensure that there are no overlaps between sub-installations and no double counting. Operators shall apply the determination methods laid down in Annex VII, exercise due diligence and use data sources representing highest achievable accuracy pursuant to section 4 of Annex VII.

2. By way of derogation from paragraph 1, the operator may use other data sources in accordance with sections 4.4 to 4.6 of Annex VII, if any of the following conditions is met:

3. Operators shall keep complete and transparent records of all data listed in Annex IV, and supporting documents, for at least 10 years from the date of the submission of the application for free allocation. The operator shall, upon request, make those data and documents available to the competent authority and to the verifier.

Article 8

1. The operator of an installation applying for free allocation pursuant to Articles 4(2)b and 5(2) shall draw up a monitoring methodology plan containing, in particular, a description of the installation and its sub-installations, the production processes and a detailed description of monitoring methodologies and data sources. The monitoring methodology plan shall comprise a detailed, complete and transparent documentation of all relevant data collection steps, and shall contain at least the elements laid down in Annex VI.

2. For each parameter listed in Annex IV, the operator shall select a monitoring method based on the principles laid down in Article 7 and on the methodological requirements laid down in Annex VII. Based on the risk assessment in accordance with Article 11(1) and control procedures referred to in Article 11(2), when selecting monitoring methods, the operator shall give preference to monitoring methods that give most reliable results, minimise the risk of data gaps, and are least prone to inherent risks, including control risks. The selected method shall be documented in the monitoring methodology plan.

3. Where Annex VI makes a reference to a procedure, and for the purposes of Article 12(3) of Regulation (EU) No 601/2012, the operator shall establish, document, implement and maintain such a procedure separately from the monitoring methodology plan. The operator shall make any written documentation of the procedures available to the competent authority upon request.

4. The operator shall submit the monitoring methodology plan to the competent authority for approval by the date set in Article 4(1). Member States may set an earlier time-limit for the submission of the monitoring methodology plan and may require the monitoring methodology plan to be approved by the competent authority before submission of an application for free allocation.

5. Where an operator applies for free allocation but has renounced it for a previous allocation period, the operator shall submit the monitoring methodology plan for approval not later than six months before the time-limit for submission of the application pursuant to Article 4(1).

Article 9

1. The operator shall regularly check whether the monitoring methodology plan reflects the nature and functioning of the installation and whether it can be improved. To this end, the operator shall take account of any recommendations for improvements included in the relevant verification report.

2. The operator shall modify the monitoring methodology plan in any of the following situations:

3. The operator shall notify any intended modification of the monitoring methodology plan to the competent authority without undue delay. However, a Member State may allow the operator to notify, by 31 December of the same year or by another date set by the Member State, intended modifications of the monitoring methodology plan that are not significant within the meaning of paragraph 5.

4. Any significant modification of the monitoring methodology plan within the meaning of paragraph 5 shall be subject to approval by the competent authority. Where the competent authority considers that a modification that has been notified by the operator as significant is not significant, it shall inform the operator thereof.

5. The following modifications of the monitoring methodology plan of an installation shall be considered significant:

6. The operator shall keep records of all modifications of the monitoring methodology plan. In each record, the following shall be specified:

Article 10

1. For the purposes of data reporting and of monitoring, the operator shall divide each installation eligible for the free allocation of emission allowances under Article 10a of Directive 2003/87/EC into sub-installations. For this purpose, the installation's inputs, outputs and emissions shall be assigned to one or more sub-installations by establishing, where relevant, a method for quantifying specific fractions of relevant inputs, outputs or emissions to be assigned to individual sub-installations.

2. For attributing the installation's inputs, outputs and emissions to sub-installations, the operator shall carry out the following steps in the descending order:

3. For heat benchmark sub-installations, fuel benchmark sub-installations and process emissions sub-installations, the operator shall clearly distinguish on the basis of NACE and PRODCOM codes whether or not the relevant process serves a sector or subsector deemed to be exposed to a significant risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC. In addition, the operator shall distinguish the amount of measurable heat which is exported for the purposes of district heating from the measurable heat which does not serve a sector or subsector deemed to be exposed to a significant risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC.

Where at least 95 % of the activity level of the heat benchmark sub-installations, of the fuel benchmark sub-installations or of the process emissions sub-installations, serve sectors or subsectors deemed to be exposed to a significant risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC or where at least 95 % of the activity level of the heat benchmark sub-installations, of the fuel benchmark sub-installations or of the process emissions sub-installations serve sectors or subsectors not deemed to be exposed to a significant risk of carbon leakage, the operator is exempted from providing data allowing for the distinction in terms of carbon leakage exposure.

Where at least 95 % of the activity level of the district heating sub-installations or the heat benchmark sub-installations are attributable to one of these sub-installations, the operator may attribute the total activity level of these sub-installations to the one with the highest activity level.

4. Where an installation included in the EU ETS has produced and exported measurable heat to an installation or other entity not included in the EU ETS, the operator shall consider that the relevant process of the heat benchmark sub-installation for this heat does not serve a sector or subsector deemed to be exposed to a significant risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC, unless the operator provides evidence to the satisfaction of the competent authority that the consumer of the measurable heat belongs to a sector or subsector deemed to be exposed to a significant risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC.

For distinguishing measurable heat attributable to the district heating sub-installation, the operator shall provide evidence to the satisfaction of the competent authority that the measurable heat is exported to district heating.

5. By carrying out the division in accordance with paragraphs 1 and 2, the operator shall ensure all of the following:

Article 11

1. The operator shall identify sources of risks of errors in the data flow from primary data to final data in the baseline data report and shall establish, document, implement and maintain an effective control system to ensure that the reports resulting from data flow activities do not contain misstatements and are in conformity with the monitoring methodology plan and in compliance with this Regulation.

The operator shall make the risk assessment pursuant to the first subparagraph available to the competent authority upon request. The operator shall also make it available for the purposes of verification.

2. For the purpose of the first subparagraph of paragraph 1, the operator shall establish, document, implement and maintain written procedures for data flow activities as well as for control activities, and include references to those procedures in the monitoring methodology plan in accordance with Article 8(3).

3. Control activities referred to in paragraph 2 shall include, where applicable:

4. For the purposes of paragraph 3(a), the operator shall ensure that all relevant measuring equipment is calibrated, adjusted and checked at regular intervals including prior to use, and checked against measurement standards traceable to international measurement standards, where available, and proportionate to the risks identified.

Where components of the measuring systems cannot be calibrated, the operator shall identify those in the monitoring methodology plan and propose alternative control activities.

When the equipment is found not to comply with required performance, the operator shall promptly take necessary corrective action.

5. For the purposes of paragraph 3(d), the operator shall review and validate data resulting from the data flow activities referred to in paragraph 2.

Such review and validation of the data shall include:

6. For the purposes of paragraph 3(e), the operator shall ensure that, where data flow activities or control activities are found not to function effectively, or not to respect the rules set in the documentation of procedures for those activities, corrective action is taken and affected data is corrected without undue delay.

7. For the purposes of paragraph 3(f), where the operator outsources one or more data flow activities or control activities referred to in paragraph 1, the operator shall proceed to all of the following:

8. The operator shall monitor the effectiveness of the control system, including by carrying out internal reviews and taking into account the findings of the verifier during the verification of reports for the purposes of Article 4(2).

When the operator finds the control system ineffective or not commensurate with the risks identified, it shall seek to improve the control system and update the monitoring methodology plan or the underlying written procedures for data flow activities, risk assessments and control activities, as appropriate.

Article 12

1. Where for technical reasons it is temporarily not feasible to apply the monitoring methodology plan as approved by the competent authority, the operator shall apply a method based on alternative data sources listed in the monitoring methodology plan for the purpose of performing corroborative checks in accordance with Article 10(5), or, if such an alternative is not contained in the monitoring methodology plan, an alternative method which provides the highest achievable accuracy according to the generic data sources and their hierarchy laid down in section 4 of Annex VII, or a conservative estimation approach, until the conditions for application of the approved monitoring methodology plan have been restored.

The operator shall take all necessary measures to achieve a prompt application of the approved monitoring methodology plan.

2. Where data relevant for the baseline data report are missing, for which the monitoring methodology plan does not list alternative monitoring methods or alternative data sources for corroborating data or for closing the data gap, the operator shall use an appropriate estimation method for determining conservative surrogate data for the respective time period and missing parameter, in particular, based on best industry practice, recent scientific and technical knowledge, and shall provide due justification for the data gap and the use of those methods in an annex to the baseline data report.

3. Where a temporary deviation from the approved monitoring methodology plan occurs in accordance with paragraph 1, or where data relevant for the report referred to in Article 4(2)(a) or Article 5(2) are found to be missing, the operator shall without undue delay develop a written procedure for avoiding this type of data gap in the future and modify the monitoring methodology plan in accordance with Article 9(3). Furthermore, the operator shall assess whether and how the control activities referred to in Article 11(3) need to be updated and shall modify those control activities and the relevant written procedures, as appropriate.

Article 13

Member States may require operators and verifiers to use electronic templates or specific file formats for the submission of baseline data reports, monitoring methodology plans and verification reports as referred to in Article 4(2) and of new entrant data reports, monitoring methodology plans and verification reports as referred to in Article 5(2).

Article 14

1. The list pursuant to Article 11(1) of Directive 2003/87/EC shall be submitted to the Commission using an electronic template provided by the Commission and shall identify all electricity generators, small installations that may be excluded from the EU ETS pursuant to Articles 27 and 27a of Directive 2003/87/EC and installations that will be included under the EU ETS pursuant to Article 24 of that Directive.

2. The list referred to in paragraph 1 shall contain the following information for each incumbent installation applying for free allocation:

3. Upon receipt of the list referred to in paragraph 1, the Commission shall assess the inclusion of each installation in the list and the related data submitted in accordance with paragraph 2.

4. Where the Commission does not reject an installation's inclusion in that list, the data shall be used for the calculation of the revised benchmark values as referred to in Article 10a(2) of Directive 2003/87/EC.

5. Member States shall determine and notify the preliminary annual amounts per installation of free allowances, using the revised benchmark values for the relevant allocation period, as determined in accordance with Article 16(2) to (7) and Articles 19 to 22.

6. Once the preliminary annual amounts of free allowances for the relevant allocation period are notified, the Commission shall determine any factor established pursuant to Article 10a(5) of Directive 2003/87/EC by comparing the sum of the preliminary annual amounts of free allowances to installations in each year over the relevant allocation period with application of the factors as determined in Annex V to this Regulation with the annual amount of allowances that is calculated in accordance with Article 10a(5) and (5a) of Directive 2003/87/EC for installations, taking into account the relevant share of the annual Union-wide total quantity, as determined pursuant to Articles 10(1) and 10a(5) of Directive 2003/87/EC. The determination shall take into account inclusions pursuant to Article 24 and exclusions pursuant to Articles 27 and 27a of Directive 2003/87/EC, as appropriate.

7. Once the factor established pursuant to in Article 10a(5) of Directive 2003/87/EC is determined, the Member States shall determine and submit to the Commission the final annual amount of emission allowances allocated free of charge for each year over the relevant allocation period in accordance with Article 16(8).

8. Upon request, each Member State shall make the reports received on the basis of Article 4(2) available to the Commission.

Article 15

1. Member States shall assess the baseline data reports and verification reports submitted in accordance with Article 4(2) to ensure conformity with the requirements of this Regulation. Where appropriate, the competent authority shall request corrections by the operators of any non-conformities or any errors, which impact on the determination of the historical activity levels. The competent authority may request operators to submit more data in addition to the information and documents to be provided in accordance with Article 4(2).

2. On the basis of the assessed baseline data reports and verification reports, Member States shall determine historical activity levels of each sub-installation and installation for the relevant baseline period. Member States may only decide to determine historical activity levels where data relating to an installation has been verified as satisfactory or if they are satisfied that the data gaps leading to the verifier's opinion are due to exceptional and unforeseeable circumstances that could not have been avoided even if all due care had been exercised.

3. The product-related historical activity level shall, for each product for which a product benchmark has been determined as referred to in Annex I, refer to the arithmetic mean of annual historical production of that product in the installation concerned during the baseline period.

4. The heat-related historical activity level shall refer to the arithmetic mean of annual historical import from an installation covered by the EU ETS, production, or both, during the baseline period, of net measurable heat consumed within the installation's boundaries for the production of products, for the production of mechanical energy other than used for the production of electricity, for heating or cooling with the exception of the consumption for the production of electricity, or exported to an installation or other entity not covered by the EU ETS with the exception of the export for the production of electricity expressed as terajoule per year.

The district heating-related historical activity level shall refer to the arithmetic mean of annual historical import from an installation covered by the EU ETS, production, or both, during the baseline period, of measurable heat which is exported for the purposes of district heating expressed as terajoule per year.

5. The fuel-related historical activity level shall refer to the arithmetic mean of annual historical consumption of fuels used for the production of non-measurable heat consumed for the production of products, for the production of mechanical energy other than used for the production of electricity, for heating or cooling with the exception of the consumption for the production of electricity, including safety flaring, during the baseline period expressed as terajoule per year.

6. For process emissions, which occurred in relation with the production of products in the installation concerned during the baseline period, the process-related historical activity level shall refer to the arithmetic mean of annual historical process emissions expressed as tonnes of carbon dioxide equivalent.

7. For the purposes of the determination of the arithmetic mean values referred to in paragraphs 3 to 6, only calendar years during which the installation has been operating for at least one day shall be taken into account.

If a sub-installation has been operating for less than two calendar years during the relevant baseline period, the historical activity levels shall be the activity levels of the first calendar year of operation after the start of normal operation of this sub-installation.

If a sub-installation has not been operating for a calendar year after the start of normal operation during the baseline period, the historical activity level shall be determined when the activity level report after the first calendar year of operation is submitted.

8. By way of derogation from paragraph 3, Member States shall determine the product-related historical activity level for products to which the product benchmarks referred to in Annex III apply on the basis of the arithmetic mean of annual historical production according to the formulas set out in that Annex.

Article 16

1. Where the operator of an incumbent installation has submitted a valid application for free allocation in accordance with Article 4, the Member State concerned shall, based on the data collected in accordance with Article 14, calculate, for each year, the number of emission allowances allocated free of charge from 2021 onwards to that installation.

2. For the purpose of the calculation referred to in paragraph 1, Member States shall first determine the preliminary annual number of emission allowances allocated free of charge for each sub-installation separately, as follows:

If a sub-installation has been operating for less than one calendar year after the start of normal operation during the baseline period, the preliminary allocation for the relevant alloction period shall be determined after the historical activity level has been reported.

3. For the purpose of Article 10b(4) of Directive 2003/87/EC, the factors determined in Annex V to this Regulation shall be applied to the preliminary annual number of emission allowances allocated free of charge determined for each sub-installation pursuant to paragraph 2 of this Article for the year concerned where the processes in those sub-installations serve sectors or subsectors deemed not to be exposed to a significant risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC.

By way of derogation from the first subparagraph, for district heating sub-installations, the factor to be applied shall be 0,3.

4. Where the processes in the sub-installations referred to in paragraph 2 serve sectors or subsectors deemed to be exposed to a significant risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC, the factor to be applied shall be 1.

5. The preliminary annual number of emission allowances allocated free of charge for sub-installations that received measurable heat from sub-installations producing products covered by the nitric acid benchmark shall be reduced by the annual historical consumption of that heat during the relevant baseline periods, multiplied by the value of the heat benchmark for this measurable heat for the relevant allocation period, adopted in accordance with Article 10a(2) of Directive 2003/87/EC.

From 2026, the preliminary annual number of emission allowances allocated free of charge for product benchmark sub-installations for the relevant allocation period shall be reduced by the annual historical emissions stemming from waste gases flared, with the exception of safety flaring, and not used for the purpose of the production of measurable heat, non-measurable heat or electricity.

6. The preliminary annual amount of emission allowances allocated free of charge for each installation shall be the sum of all sub-installations' preliminary annual numbers of emission allowances allocated free of charge calculated in accordance with paragraphs 2 to 5.

Where an installation encompasses sub-installations producing pulp (short fibre kraft pulp, long fibre kraft pulp, thermo-mechanical pulp and mechanical pulp, sulphite pulp or other pulp not covered by a product benchmark) exporting measurable heat to other technically connected sub-installations, the preliminary amount of emission allowances allocated free of charge shall, without prejudice to the preliminary annual numbers of emission allowances allocated free of charge for other sub-installations of the installation concerned, only take into account the preliminary annual number of emission allowances allocated free of charge, to the extent that pulp products produced by this sub-installation are placed on the market and not processed into paper in the same or other technically connected installations.

7. When determining the preliminary annual amount of emission allowances allocated free of charge for each installation, Member States and operators shall ensure that emissions or activity levels are not double-counted and that the allocation is not negative. In particular, where an intermediate product that is covered by a product benchmark according to the definition of the respective system boundaries set out in Annex I is imported by an installation, emissions shall not be double-counted when determining the preliminary annual amount of emission allowances allocated free of charge for both installations concerned.

8. The final annual amount of emission allowances allocated free of charge for each incumbent installation, except for installations covered by Article 10a(3) of Directive 2003/87/EC, shall be the preliminary annual amount of emission allowances allocated free of charge for each installation determined in accordance with paragraph 6 of this Article, multiplied by the factor as determined in accordance with Article 14(6) of this Regulation.

For installations covered by Article 10a(3) of Directive 2003/87/EC and eligible for the allocation of free emission allowances, the final annual amount of emission allowances allocated free of charge shall correspond to the preliminary annual amount of emission allowances allocated free of charge for each installation determined in accordance with paragraph 6 of this Article annually adjusted by the linear factor referred to in Article 9 of Directive 2003/87/EC, using the preliminary annual amount of emission allowances allocated free of charge for the installation concerned for 2013 as a reference, except for any year in which those allocations are adjusted in a uniform manner pursuant to Article 10a(5) of Directive 2003/87/EC.

By way of derogation from the second subparagraph, for any year for which the factor determined in accordance with Article 14(6) is lower than 100 %, for installations covered by Article 10a(3) of Directive 2003/87/EC and eligible for the allocation of free emission allowances, the final annual amount of emission allowances allocated free of charge shall correspond to the preliminary annual amount of emission allowances allocated free of charge for each installation determined in accordance with paragraph 6 of this Article, annually adjusted by the factor as determined in accordance with Article 14(6) of this Regulation.

9. For the purpose of the calculations referred to in paragraphs 1 to 8, the number of allowances for sub-installations and installations shall be expressed as the nearest integer.

Article 17

Member States shall determine historical activity levels of each new entrant and its sub-installations as follows:

Article 18

1. For the purposes of the free allocation of emission allowances to new entrants, Member States shall calculate the preliminary annual number of emission allowances allocated free of charge as of the start of normal operation of the installation for each sub-installation separately, as follows:

Article 16(3), (4), (5) and (7) shall apply mutatis mutandis to the calculation of the preliminary annual number of emission allowances allocated free of charge to new entrants.

2. The preliminary annual number of emission allowances allocated free of charge for the calendar year where the start of normal operation occurs shall correspond to the value of the applicable benchmark value for each sub-installation multiplied by the activity level of that year.

3. The preliminary annual amount of emission allowances allocated free of charge for each installation shall be the sum of all sub-installations' preliminary annual numbers of emission allowances allocated free of charge calculated in accordance with paragraphs 1 and 2. The second subparagraph of Article 16(6) shall apply.

4. Member States shall notify to the Commission without delay the annual amount of emission allowances per installation allocated free of charge to new entrants.

Emission allowances from the new entrants reserve created pursuant to Article 10a(7) of Directive 2003/87/EC shall be allocated by the Commission on a first come, first served basis as from receipt of that notification.

The Commission may reject the preliminary annual amount of emission allowances allocated free of charge to a specific installation.

5. The final annual amount of emission allowances allocated free of charge shall correspond to the preliminary annual amount of emission allowances allocated free of charge for each installation determined in accordance with paragraphs 1 to 4 annually adjusted by the linear factor referred to in Article 9 of Directive 2003/87/EC, using the preliminary annual amount of emission allowances allocated free of charge for the installation concerned for the first year of the relevant allocation period as a reference.

6. For the purpose of the calculations referred to in paragraphs 1 to 5, the number of allowances for sub-installations and installations shall be expressed as the nearest integer.

Article 19

By way of derogation from Article 16(2)(a) and Article 18(1)(a), the preliminary annual number of emission allowances allocated free of charge for a product benchmark sub-installation relating to the production of high value chemicals (‘HVC’) shall correspond to the value of the steam cracking product benchmark for the relevant allocation period multiplied by the historical activity level determined in accordance with Annex III and multiplied by the quotient of the total direct emissions including emissions from net imported heat over the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, calculated in accordance with Article 22(2) and expressed as tonnes of carbon dioxide equivalent and the sum of these total direct emissions and the relevant indirect emissions over the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, calculated in accordance with Article 22(3). To the result of that calculation, 1,78 tonnes of carbon dioxide per ton of hydrogen times the mean historical production of hydrogen from supplemental feed expressed in tons of hydrogen, 0,24 tonnes of carbon dioxide per ton of ethylene times the mean historical production of ethylene from supplemental feed expressed in tons of ethylene, and 0,16 tonnes of carbon dioxide per ton of HVC times the mean historical production of other high value chemicals than hydrogen and ethylene from supplemental feed expressed in tons of HVC, shall be added.

Article 20

By way of derogation from Article 16(2)(a) and Article 18(1)(a), the preliminary annual number of emission allowances allocated free of charge for a sub-installation relating to the production of vinyl chloride monomer (‘VCM’) shall correspond to the value of the VCM benchmark for the relevant allocation period multiplied by the historical activity level for VCM production expressed as tonnes and multiplied by the quotient of the direct emissions for the production of VCM including emissions from net imported heat over the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, calculated in accordance with Article 22(2), expressed as tonnes of carbon dioxide equivalent and the sum of those direct emissions and the hydrogen-related emissions for the production of VCM over the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, expressed as tonnes of carbon dioxide equivalent calculated on the basis of the historical heat consumption stemming from hydrogen combustion expressed as terajoules times the value of the heat benchmark for the relevant allocation period.

Article 21

Where a product-benchmark sub-installation encompasses measurable heat imported from an installation or other entity not included in the EU ETS, the preliminary annual number of emission allowances allocated free of charge for the product benchmark sub-installation concerned determined pursuant to Article 16(2)(a) or Article 18(1)(a), as appropriate, shall be reduced by the amount of heat historically imported from an installation or other entity not included in the EU ETS in the year concerned multiplied by the value of the heat benchmark for measurable heat for the relevant allocation period.

Article 22

1. For each product benchmark sub-installation corresponding to a product benchmark defined in section 2 of Annex I with consideration of exchangeability of fuel and electricity, the preliminary annual number of emission allowances allocated free of charge shall correspond to the value of the relevant product benchmark for the relevant allocation period multiplied by the product-related historical activity level and multiplied by the quotient of the total direct emissions including emissions from net imported heat over the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, calculated in accordance with paragraph 2, expressed as tonnes of carbon dioxide equivalent and the sum of these total direct emissions and the relevant indirect emissions over the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, calculated in accordance with paragraph 3.

2. For the purposes of the calculation of emissions from net imported heat, the amount of measurable heat for the production of the product concerned imported from installations covered by the EU ETS during the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, shall be multiplied by the value of the heat benchmark for the relevant allocation period.

3. For the purposes of the calculation of indirect emissions, the relevant indirect emissions refer to the relevant electricity consumption as specified in the definition of processes and emissions covered in Annex I during the baseline period referred to in Article 15(2) or of the first calendar year after the start of normal operation referred to in Article 17(a), as appropriate, expressed in megawatt-hours for the production of the product concerned times 0,376 tonnes of carbon dioxide per megawatt-hour and expressed as tonnes of carbon dioxide.

Article 23

1. Operators shall inform the relevant competent authority of any change related to the operation of an installation which has an impact on the installation's allocation. Member States may set a time-limit for that notification and may require the use of electronic templates or specific file formats.

2. After assessing the relevant information, the competent authority shall submit to the Commission all relevant information, including the revised final annual amount of emission allowances allocated free of charge for the installation concerned.

The competent authority shall submit the relevant information pursuant to the first subparagraph using an electronic system operated by the Commission.

3. The Commission may reject the revised final annual amount of emission allowances allocated free of charge for the installation concerned.

4. The Commission shall adopt a Decision based on the notification received, shall inform the relevant competent authority and shall introduce the changes, where appropriate, into the Union Registry set up pursuant to Article 19 of Directive 2003/87/EC and the EUTL, referred to Article 20 of that Directive.

Article 24

1. An operator that has been granted free allocation of allowances may renounce it in respect of all or certain sub-installations at any time during the relevant allocation period by submitting an application to the competent authority.

2. After assessing the relevant information, the competent authority shall submit to the Commission the revised final annual amount of emission allowances allocated free of charge for the installation concerned as described in Article 23(2).

The revised allocation shall concern the calendar years following the year of the application referred to in the paragraph 1.

3. The Commission shall adopt a Decision as regards the renunciation and shall follow the procedure referred to Article 23(4).

4. The operator shall have no right to withdraw its application referred to in paragraph 1 the same allocation period.

Article 25

1. The operators of new installations resulting from a merger or a split shall provide the following documentation to the competent authority, as appropriate:

2. Installations resulting from mergers or splits shall submit to the competent authority the reports referred to in Article 4(2). If the installations before the merger or split were new entrants, operators shall report to the competent authority the data from the start of normal operation.

3. Mergers or splits of installations, including splits within the same corporate group shall be assessed by the competent authority. The competent authority shall notify the Commission of the change of operators.

Based on the data received pursuant to paragraph 2, the competent authority shall determine the historical activity levels in the baseline period for each sub-installation of each newly formed installation after the merger or split. In the case that a sub-installation is split into two or more sub-installations, the historical activity level and allocation to the sub-installations after the split shall be based on the historical activity levels in the baseline period of the respective technical units of the installation before the split.

4. Based on the historical activity levels after the mergers or splits, the free allocation of allowances of the installations after mergers or splits shall correspond to the final amount of free allocation, before the mergers or splits.

5. The Commission shall review each allocation of allowances of the installations after mergers or splits and communicate the results of that assessment to the competent authority.

Article 26

1. An installation is deemed to have ceased operations where any of the following conditions is met:

2. Where an installation has ceased operation, the Member State concerned shall not issue emission allowances to it as of the year following the cessation of operations.

3. Member States may suspend the issuance of the emission allowances to installations that have suspended operations as long as it is not established whether they will resume operations.

Article 27

Decision 2011/278/EU is repealed with effect from 1 January 2021. However, it shall continue to apply to allocations relating to the period prior to 1 January 2021.

Article 28

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.