Commission Delegated Regulation (EU) 2024/873 of 30 January 2024 amending Delegated Regula…

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Outline, 2 provisions

art_1 art_2

art_1 #art_1

Article 1

Delegated Regulation (EU) 2019/331 is amended as follows:

(1)	Article 2 is amended as follows:(a)point (3) is replaced by the following:‘(3)“heat benchmark sub-installation” means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production of measurable heat or the import of measurable heat from an installation covered by the EU ETS other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, or both, which is:(a)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 other than the consumption for the production of electricity; or(b)exported to an installation or other entity not covered by the EU ETS other than district heating with the exception of the export for the production of electricity;’;(b)point (6) is replaced by the following:‘(6)“fuel benchmark sub-installation” means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation, relating to the production of non-measurable heat, by fuel combustion or from electricity, for the primary purpose of the generation of 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 other than the consumption for the production of electricity, and including safety flaring;’;
(a)	point (3) is replaced by the following:‘(3)“heat benchmark sub-installation” means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production of measurable heat or the import of measurable heat from an installation covered by the EU ETS other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, or both, which is:(a)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 other than the consumption for the production of electricity; or(b)exported to an installation or other entity not covered by the EU ETS other than district heating with the exception of the export for the production of electricity;’;
‘(3)	“heat benchmark sub-installation” means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production of measurable heat or the import of measurable heat from an installation covered by the EU ETS other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, or both, which is:(a)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 other than the consumption for the production of electricity; or(b)exported to an installation or other entity not covered by the EU ETS other than district heating with the exception of the export for the production of electricity;’;
(a)	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 other than the consumption for the production of electricity; or
(b)	exported to an installation or other entity not covered by the EU ETS other than district heating with the exception of the export for the production of electricity;’;
(b)	point (6) is replaced by the following:‘(6)“fuel benchmark sub-installation” means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation, relating to the production of non-measurable heat, by fuel combustion or from electricity, for the primary purpose of the generation of 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 other than the consumption for the production of electricity, and including safety flaring;’;
‘(6)	“fuel benchmark sub-installation” means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation, relating to the production of non-measurable heat, by fuel combustion or from electricity, for the primary purpose of the generation of 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 other than the consumption for the production of electricity, and including safety flaring;’;

(2)	in Article 4, paragraph 2 is amended as follows:(a)the following point is inserted:‘(ba)where relevant, the climate-neutrality plan in accordance with Article 10a(1), fifth subparagraph, and Article 10b(4) of Directive 2003/87/EC;’;(b)point (c) is replaced by the following:‘(c)a verification report issued in accordance with measures adopted pursuant to Article 15 of Directive 2003/87/EC on the baseline data report.’;
(a)	the following point is inserted:‘(ba)where relevant, the climate-neutrality plan in accordance with Article 10a(1), fifth subparagraph, and Article 10b(4) of Directive 2003/87/EC;’;
‘(ba)	where relevant, the climate-neutrality plan in accordance with Article 10a(1), fifth subparagraph, and Article 10b(4) of Directive 2003/87/EC;’;
(b)	point (c) is replaced by the following:‘(c)a verification report issued in accordance with measures adopted pursuant to Article 15 of Directive 2003/87/EC on the baseline data report.’;
‘(c)	a verification report issued in accordance with measures adopted pursuant to Article 15 of Directive 2003/87/EC on the baseline data report.’;

(3)	Article 6 is replaced by the following:‘Article 6The 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.’;

(4)	Article 10 is amended as follows:(a)the following paragraph is inserted:‘2a. For product benchmark sub-installations, where relevant, the operator shall clearly distinguish, based on CN codes, and provide evidence to the satisfaction of the competent authority, whether or not the relevant process serves the production of goods listed in Annex I to Regulation (EU) 2023/956 of the European Parliament and Council(1).(1) Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a carbon border adjustment mechanism (OJ L 130, 16.5.2023, p. 52, ELI: http://data.europa.eu/eli/reg/2023/956/oj).’;" (b)paragraph 3 is replaced by the following:‘3. For heat benchmark sub-installations, fuel benchmark sub-installations and process emissions sub-installations, the operator shall clearly distinguish, based on NACE and PRODCOM codes, whether or not the relevant process serves a sector or subsector deemed to be at 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 at risk of carbon leakage, as determined in accordance with Article 10b(5) of Directive 2003/87/EC.In addition, the operator shall clearly distinguish, based on CN codes, and provide evidence to the satisfaction of the competent authority, whether or not the relevant process serves the production of goods listed in Annex I to Regulation (EU) 2023/956.’;(c)paragraph 4 is amended as follows:(i)the first subparagraph is replaced by the following: ‘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 at 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 at risk of carbon leakage, as determined in accordance with Article 10b(5) of Directive 2003/87/EC.’;(ii)the following third subparagraph is added: ‘In addition, 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 provide evidence on the quantity of measurable heat used to produce goods listed in Annex I to Regulation (EU) 2023/956. Unless the operator provides such evidence to the satisfaction of the competent authority, that heat shall be considered as used to produce goods listed in Annex I of that Regulation’;(d)paragraph 5 is amended as follows:(i)point (d) is replaced by the following:‘(d)for all measurable heat produced, imported or exported by sub-installations, it is documented whether the measurable heat was produced within an EU ETS installation, imported from other heat producing processes, imported from non-EU ETS entities or imported from EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC;’;(ii)point (f) is deleted;(iii)point (j) is replaced by the following:‘(j)for avoiding any double counting, products of a production process returned into the same production process are deducted from annual activity levels, in line with product definitions laid down in Annex I;’;(iv)point (k) is deleted;
(a)	the following paragraph is inserted:‘2a. For product benchmark sub-installations, where relevant, the operator shall clearly distinguish, based on CN codes, and provide evidence to the satisfaction of the competent authority, whether or not the relevant process serves the production of goods listed in Annex I to Regulation (EU) 2023/956 of the European Parliament and Council(1).(1) Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a carbon border adjustment mechanism (OJ L 130, 16.5.2023, p. 52, ELI: http://data.europa.eu/eli/reg/2023/956/oj).’;"
(b)	paragraph 3 is replaced by the following:‘3. For heat benchmark sub-installations, fuel benchmark sub-installations and process emissions sub-installations, the operator shall clearly distinguish, based on NACE and PRODCOM codes, whether or not the relevant process serves a sector or subsector deemed to be at 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 at risk of carbon leakage, as determined in accordance with Article 10b(5) of Directive 2003/87/EC.In addition, the operator shall clearly distinguish, based on CN codes, and provide evidence to the satisfaction of the competent authority, whether or not the relevant process serves the production of goods listed in Annex I to Regulation (EU) 2023/956.’;
(c)	paragraph 4 is amended as follows:(i)the first subparagraph is replaced by the following: ‘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 at 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 at risk of carbon leakage, as determined in accordance with Article 10b(5) of Directive 2003/87/EC.’;(ii)the following third subparagraph is added: ‘In addition, 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 provide evidence on the quantity of measurable heat used to produce goods listed in Annex I to Regulation (EU) 2023/956. Unless the operator provides such evidence to the satisfaction of the competent authority, that heat shall be considered as used to produce goods listed in Annex I of that Regulation’;
(i)	the first subparagraph is replaced by the following: ‘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 at 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 at risk of carbon leakage, as determined in accordance with Article 10b(5) of Directive 2003/87/EC.’;
(ii)	the following third subparagraph is added: ‘In addition, 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 provide evidence on the quantity of measurable heat used to produce goods listed in Annex I to Regulation (EU) 2023/956. Unless the operator provides such evidence to the satisfaction of the competent authority, that heat shall be considered as used to produce goods listed in Annex I of that Regulation’;
(d)	paragraph 5 is amended as follows:(i)point (d) is replaced by the following:‘(d)for all measurable heat produced, imported or exported by sub-installations, it is documented whether the measurable heat was produced within an EU ETS installation, imported from other heat producing processes, imported from non-EU ETS entities or imported from EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC;’;(ii)point (f) is deleted;(iii)point (j) is replaced by the following:‘(j)for avoiding any double counting, products of a production process returned into the same production process are deducted from annual activity levels, in line with product definitions laid down in Annex I;’;(iv)point (k) is deleted;
(i)	point (d) is replaced by the following:‘(d)for all measurable heat produced, imported or exported by sub-installations, it is documented whether the measurable heat was produced within an EU ETS installation, imported from other heat producing processes, imported from non-EU ETS entities or imported from EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC;’;
‘(d)	for all measurable heat produced, imported or exported by sub-installations, it is documented whether the measurable heat was produced within an EU ETS installation, imported from other heat producing processes, imported from non-EU ETS entities or imported from EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC;’;
(ii)	point (f) is deleted;
(iii)	point (j) is replaced by the following:‘(j)for avoiding any double counting, products of a production process returned into the same production process are deducted from annual activity levels, in line with product definitions laid down in Annex I;’;
‘(j)	for avoiding any double counting, products of a production process returned into the same production process are deducted from annual activity levels, in line with product definitions laid down in Annex I;’;
(iv)	point (k) is deleted;

(5)	Article 14 is amended as follows:(a)paragraph 1 is replaced by the following:‘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 installations covered by the EU ETS, including installations covered by the EU ETS only for the purposes of Articles 14 and 15 of that Directive, small installations that may be excluded from the EU ETS pursuant to Articles 27 and 27a of that Directive and installations that will be included under the EU ETS pursuant to Article 24 of that Directive.’;(b)paragraph 2 is amended as follows:(i)point (a) is replaced by the following:‘(a)an identification of the installation and its boundaries using the installation identification code in the Union Registry’;(ii)the following points are inserted:‘(da)the competent authority’s assessment on the reduction of free allocation of 20 % in accordance with Article 22a and Article 22b(1), where applicable;(db)the fulfilment of the conditions related to the additional 30 % free allocation pursuant to Article 22b(3), where applicable;’;(iii)point (e) is replaced by the following:‘(e)for each sub-installation, information on whether it belongs to a sector or subsector deemed to be at risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC, including the PRODCOM codes of the products produced, where applicable’;(iv)the following point is inserted:‘(ea)for each sub-installation, information on whether the goods produced are listed in Annex I to Regulation (EU) 2023/956, using the CN codes of these goods produced, where applicable’;(c)paragraph 6 is replaced by the following:‘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 applying 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 Article 10(1) and Article 10a(5) of Directive 2003/87/EC as well as the exemption of the 10 % most efficient sub-installations as determined pursuant to Article 16(8), second subparagraph, of this Regulation. The determination shall take into account inclusions pursuant to Article 24 of Directive 2003/87/EC and exclusions pursuant to Articles 27 and 27a of that Directive, as appropriate.’;(d)paragraph 8 is replaced by the following:‘8. Upon request, each Member State shall make the reports and plans received on the basis of Article 4(2) available to the Commission.’;(e)the following paragraph is added:‘9. Member States shall ensure that excess allowances allocated to operators are duly returned. Where operators do not return the excess allowances, the competent authority shall request the national registry administrator to deduct the amount of excess allowances from the quantity of allowances to be allocated to the operator. Member States shall inform the Commission of any such requests.’;
(a)	paragraph 1 is replaced by the following:‘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 installations covered by the EU ETS, including installations covered by the EU ETS only for the purposes of Articles 14 and 15 of that Directive, small installations that may be excluded from the EU ETS pursuant to Articles 27 and 27a of that Directive and installations that will be included under the EU ETS pursuant to Article 24 of that Directive.’;
(b)	paragraph 2 is amended as follows:(i)point (a) is replaced by the following:‘(a)an identification of the installation and its boundaries using the installation identification code in the Union Registry’;(ii)the following points are inserted:‘(da)the competent authority’s assessment on the reduction of free allocation of 20 % in accordance with Article 22a and Article 22b(1), where applicable;(db)the fulfilment of the conditions related to the additional 30 % free allocation pursuant to Article 22b(3), where applicable;’;(iii)point (e) is replaced by the following:‘(e)for each sub-installation, information on whether it belongs to a sector or subsector deemed to be at risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC, including the PRODCOM codes of the products produced, where applicable’;(iv)the following point is inserted:‘(ea)for each sub-installation, information on whether the goods produced are listed in Annex I to Regulation (EU) 2023/956, using the CN codes of these goods produced, where applicable’;
(i)	point (a) is replaced by the following:‘(a)an identification of the installation and its boundaries using the installation identification code in the Union Registry’;
‘(a)	an identification of the installation and its boundaries using the installation identification code in the Union Registry’;
(ii)	the following points are inserted:‘(da)the competent authority’s assessment on the reduction of free allocation of 20 % in accordance with Article 22a and Article 22b(1), where applicable;(db)the fulfilment of the conditions related to the additional 30 % free allocation pursuant to Article 22b(3), where applicable;’;
‘(da)	the competent authority’s assessment on the reduction of free allocation of 20 % in accordance with Article 22a and Article 22b(1), where applicable;
(db)	the fulfilment of the conditions related to the additional 30 % free allocation pursuant to Article 22b(3), where applicable;’;
(iii)	point (e) is replaced by the following:‘(e)for each sub-installation, information on whether it belongs to a sector or subsector deemed to be at risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC, including the PRODCOM codes of the products produced, where applicable’;
‘(e)	for each sub-installation, information on whether it belongs to a sector or subsector deemed to be at risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC, including the PRODCOM codes of the products produced, where applicable’;
(iv)	the following point is inserted:‘(ea)for each sub-installation, information on whether the goods produced are listed in Annex I to Regulation (EU) 2023/956, using the CN codes of these goods produced, where applicable’;
‘(ea)	for each sub-installation, information on whether the goods produced are listed in Annex I to Regulation (EU) 2023/956, using the CN codes of these goods produced, where applicable’;
(c)	paragraph 6 is replaced by the following:‘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 applying 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 Article 10(1) and Article 10a(5) of Directive 2003/87/EC as well as the exemption of the 10 % most efficient sub-installations as determined pursuant to Article 16(8), second subparagraph, of this Regulation. The determination shall take into account inclusions pursuant to Article 24 of Directive 2003/87/EC and exclusions pursuant to Articles 27 and 27a of that Directive, as appropriate.’;
(d)	paragraph 8 is replaced by the following:‘8. Upon request, each Member State shall make the reports and plans received on the basis of Article 4(2) available to the Commission.’;
(e)	the following paragraph is added:‘9. Member States shall ensure that excess allowances allocated to operators are duly returned. Where operators do not return the excess allowances, the competent authority shall request the national registry administrator to deduct the amount of excess allowances from the quantity of allowances to be allocated to the operator. Member States shall inform the Commission of any such requests.’;

(6)	Article 15 is amended as follows:(a)paragraph 1 is replaced by the following:‘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 ensure that operators correct any non-conformities or any errors that 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).’;(b)paragraphs 3 to 8 are replaced by the following:‘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 median 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 median of annual historical import from an installation covered by the EU ETS, other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical import from an installation covered by the EU ETS, other than EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical consumption of energy used for the primary purpose of 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, and 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 median of annual historical process emissions expressed as tonnes of carbon dioxide equivalent.7. For the purposes of the determination of the median 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 level shall be the activity level of the first calendar year of operation after the calendar year where the start of normal operation occurs of this sub-installation.If a sub-installation has been operating for less than one calendar year after the start of normal operation during the baseline period, the historical activity level shall be determined when the activity level report for the first calendar year after the calendar year where the start of normal operation occurs 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 median of annual historical production according to the formulas set out in that Annex.’;
(a)	paragraph 1 is replaced by the following:‘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 ensure that operators correct any non-conformities or any errors that 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).’;
(b)	paragraphs 3 to 8 are replaced by the following:‘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 median 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 median of annual historical import from an installation covered by the EU ETS, other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical import from an installation covered by the EU ETS, other than EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical consumption of energy used for the primary purpose of 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, and 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 median of annual historical process emissions expressed as tonnes of carbon dioxide equivalent.7. For the purposes of the determination of the median 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 level shall be the activity level of the first calendar year of operation after the calendar year where the start of normal operation occurs of this sub-installation.If a sub-installation has been operating for less than one calendar year after the start of normal operation during the baseline period, the historical activity level shall be determined when the activity level report for the first calendar year after the calendar year where the start of normal operation occurs 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 median of annual historical production according to the formulas set out in that Annex.’;

(6)

Article 15 is amended as follows:(a)paragraph 1 is replaced by the following:‘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 ensure that operators correct any non-conformities or any errors that 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).’;(b)paragraphs 3 to 8 are replaced by the following:‘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 median 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 median of annual historical import from an installation covered by the EU ETS, other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical import from an installation covered by the EU ETS, other than EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical consumption of energy used for the primary purpose of 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, and 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 median of annual historical process emissions expressed as tonnes of carbon dioxide equivalent.7. For the purposes of the determination of the median 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 level shall be the activity level of the first calendar year of operation after the calendar year where the start of normal operation occurs of this sub-installation.If a sub-installation has been operating for less than one calendar year after the start of normal operation during the baseline period, the historical activity level shall be determined when the activity level report for the first calendar year after the calendar year where the start of normal operation occurs 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 median of annual historical production according to the formulas set out in that Annex.’;

(a)

paragraph 1 is replaced by the following:‘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 ensure that operators correct any non-conformities or any errors that 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).’;

(b)

paragraphs 3 to 8 are replaced by the following:‘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 median 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 median of annual historical import from an installation covered by the EU ETS, other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical import from an installation covered by the EU ETS, other than EU ETS installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, 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 median of annual historical consumption of energy used for the primary purpose of 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, and 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 median of annual historical process emissions expressed as tonnes of carbon dioxide equivalent.7. For the purposes of the determination of the median 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 level shall be the activity level of the first calendar year of operation after the calendar year where the start of normal operation occurs of this sub-installation.If a sub-installation has been operating for less than one calendar year after the start of normal operation during the baseline period, the historical activity level shall be determined when the activity level report for the first calendar year after the calendar year where the start of normal operation occurs 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 median of annual historical production according to the formulas set out in that Annex.’;

(7)	Article 16 is amended as follows:(a)paragraph 1 is replaced by the following:‘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 as regards the first allocation period and every five years thereafter.’;(b)paragraph 2 is amended as follows:(i)point (d) is replaced by the following:‘(d)for fuel benchmark sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the value of the fuel benchmark for the relevant five-year period, adopted in accordance with Article 10a(2) of Directive 2003/87/EC, multiplied by the fuel-related historical activity level for the energy consumed.’;(ii)point (e) is replaced by the following:‘(e)for process emissions sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the process-related historical activity level multiplied by 0,97 for the years until 31 December 2027 and by 0,91 for the years 2028 and onwards.’;(c)in paragraph 3, the first subparagraph is replaced by the following: ‘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 at risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC.’;(d)paragraph 4 is replaced by the following:‘4. Where the processes in the sub-installations referred to in paragraph 2 serve sectors or subsectors deemed to be at 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.’;(e)the following paragraph is inserted:‘(4a) Where the processes in the sub-installations referred to in paragraph 2 serve the production of goods listed in Annex I to Regulation (EU) 2023/956, the preliminary annual number of emission allowances allocated free of charge determined for each sub-installation pursuant to paragraph 2 for the year concerned shall be multiplied by the relevant CBAM factor set out in Article 10a(1a), second subparagraph, of Directive 2003/87/EC.’;(f)paragraph 8 is replaced by the following:‘8. The final annual amount of emission allowances allocated free of charge for each incumbent installation 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.By way of derogation from the first subparagraph, the final annual amount of emission allowances allocated free of charge shall be 100 % of the preliminary annual amount of emission allowances allocated free of charge to each installation whose sub-installations with greenhouse gas emission levels below the average of the 10 % most efficient sub-installations for the relevant benchmarks in the period referred to in Article 10a(2), third subparagraph, point (c), of Directive 2003/87/EC, cover more than 60 % of the preliminary annual amount of emission allowances allocated free of charge for this installation.’;
(a)	paragraph 1 is replaced by the following:‘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 as regards the first allocation period and every five years thereafter.’;
(b)	paragraph 2 is amended as follows:(i)point (d) is replaced by the following:‘(d)for fuel benchmark sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the value of the fuel benchmark for the relevant five-year period, adopted in accordance with Article 10a(2) of Directive 2003/87/EC, multiplied by the fuel-related historical activity level for the energy consumed.’;(ii)point (e) is replaced by the following:‘(e)for process emissions sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the process-related historical activity level multiplied by 0,97 for the years until 31 December 2027 and by 0,91 for the years 2028 and onwards.’;
(i)	point (d) is replaced by the following:‘(d)for fuel benchmark sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the value of the fuel benchmark for the relevant five-year period, adopted in accordance with Article 10a(2) of Directive 2003/87/EC, multiplied by the fuel-related historical activity level for the energy consumed.’;
‘(d)	for fuel benchmark sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the value of the fuel benchmark for the relevant five-year period, adopted in accordance with Article 10a(2) of Directive 2003/87/EC, multiplied by the fuel-related historical activity level for the energy consumed.’;
(ii)	point (e) is replaced by the following:‘(e)for process emissions sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the process-related historical activity level multiplied by 0,97 for the years until 31 December 2027 and by 0,91 for the years 2028 and onwards.’;
‘(e)	for process emissions sub-installations, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the process-related historical activity level multiplied by 0,97 for the years until 31 December 2027 and by 0,91 for the years 2028 and onwards.’;
(c)	in paragraph 3, the first subparagraph is replaced by the following: ‘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 at risk of carbon leakage as determined in accordance with Article 10b(5) of Directive 2003/87/EC.’;
(d)	paragraph 4 is replaced by the following:‘4. Where the processes in the sub-installations referred to in paragraph 2 serve sectors or subsectors deemed to be at 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.’;
(e)	the following paragraph is inserted:‘(4a) Where the processes in the sub-installations referred to in paragraph 2 serve the production of goods listed in Annex I to Regulation (EU) 2023/956, the preliminary annual number of emission allowances allocated free of charge determined for each sub-installation pursuant to paragraph 2 for the year concerned shall be multiplied by the relevant CBAM factor set out in Article 10a(1a), second subparagraph, of Directive 2003/87/EC.’;
(f)	paragraph 8 is replaced by the following:‘8. The final annual amount of emission allowances allocated free of charge for each incumbent installation 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.By way of derogation from the first subparagraph, the final annual amount of emission allowances allocated free of charge shall be 100 % of the preliminary annual amount of emission allowances allocated free of charge to each installation whose sub-installations with greenhouse gas emission levels below the average of the 10 % most efficient sub-installations for the relevant benchmarks in the period referred to in Article 10a(2), third subparagraph, point (c), of Directive 2003/87/EC, cover more than 60 % of the preliminary annual amount of emission allowances allocated free of charge for this installation.’;

(8)	in Article 17, points (a) to (f) are replaced by the following:‘(a)the product-related historical activity level shall be, for each product for which a product benchmark has been determined as referred to in Annex I to this Regulation or pursuant to Article 24 of Directive 2003/87/EC, the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the production of this product of the sub-installation concerned;(b)the heat-related historical activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the import from an installation covered by the EU ETS, other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, production, or both, of 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;(c)the district heating-related historical activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the import from an installation covered by the EU ETS other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, production, or both, of measurable heat which is exported for the purposes of district heating;(d)the fuel-related historical activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the consumption of energy used for the primary purpose of 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, and including safety flaring, of the installation concerned;(e)the process emissions-related activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the production of process emissions of the process unit;(f)by way of derogation from point (a), the product-related historical activity level for products to which the product benchmarks referred to in Annex III apply shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the production of this product of the sub-installation concerned, determined by applying the formulas set out in that Annex.’;
‘(a)	the product-related historical activity level shall be, for each product for which a product benchmark has been determined as referred to in Annex I to this Regulation or pursuant to Article 24 of Directive 2003/87/EC, the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the production of this product of the sub-installation concerned;
(b)	the heat-related historical activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the import from an installation covered by the EU ETS, other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, production, or both, of 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;
(c)	the district heating-related historical activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the import from an installation covered by the EU ETS other than installations covered by the EU ETS only for the purposes of Articles 14 and 15 of Directive 2003/87/EC, production, or both, of measurable heat which is exported for the purposes of district heating;
(d)	the fuel-related historical activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the consumption of energy used for the primary purpose of 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, and including safety flaring, of the installation concerned;
(e)	the process emissions-related activity level shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the production of process emissions of the process unit;
(f)	by way of derogation from point (a), the product-related historical activity level for products to which the product benchmarks referred to in Annex III apply shall be the activity level of the first calendar year after the calendar year where the start of normal operation occurs for the production of this product of the sub-installation concerned, determined by applying the formulas set out in that Annex.’;

(9)	Article 18(1) is amended as follows:(a)in the first subparagraph, point (b) is replaced by the following:‘(b)for each process emissions sub-installation, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the process-related historical activity level multiplied by 0,97 for the years until 31 December 2027 and by 0,91 for the years 2028 and onwards.’;(b)the second subparagraph is replaced by the following: ‘Article 16(3), (4), (4a), (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.’;
(a)	in the first subparagraph, point (b) is replaced by the following:‘(b)for each process emissions sub-installation, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the process-related historical activity level multiplied by 0,97 for the years until 31 December 2027 and by 0,91 for the years 2028 and onwards.’;
‘(b)	for each process emissions sub-installation, the preliminary annual number of emission allowances allocated free of charge for a given year shall correspond to the process-related historical activity level multiplied by 0,97 for the years until 31 December 2027 and by 0,91 for the years 2028 and onwards.’;
(b)	the second subparagraph is replaced by the following: ‘Article 16(3), (4), (4a), (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.’;

(10)

Articles 19, 20 and 21 are replaced by the following:‘Article 19Allocation in respect of steam crackingBy way of derogation from Article 16(2), point (a), and Article 18(1), point (a), the preliminary annual number of emission allowances allocated free of charge for a product benchmark sub-installation and 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. To the result of that calculation, 1,78 tonnes of carbon dioxide per tonne of hydrogen times the median historical production of hydrogen from supplemental feed expressed in tonnes of hydrogen, 0,24 tonnes of carbon dioxide per tonne of ethylene times the median historical production of ethylene from supplemental feed expressed in tonnes of ethylene, and 0,16 tonnes of carbon dioxide per tonne of HVC times the median historical production of other high value chemicals than hydrogen and ethylene from supplemental feed expressed in tonnes of HVC, shall be added.Article 20Allocation in respect of vinyl chloride monomerBy way of derogation from Article 16(2), point (a), and Article 18(1), point (a), the preliminary annual number of emission allowances allocated free of charge for a sub-installation and 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, calculated on the basis of the historical net heat import expressed as terajoules times the value of the heat benchmark for the relevant allocation period, over the baseline period referred to in Article 15(2) or of the first calendar year after the calendar year where the start of normal operation occurs referred to in Article 17, point (a), as appropriate, 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 calendar year where the start of normal operation occurs referred to in Article 17, point (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 21Heat flows between installationsWhere a product-benchmark sub-installation encompasses measurable heat imported from an installation or other entity not included in the EU ETS or only included for the purposes of Articles 14 and 15 of Directive 2003/87/EC, the preliminary annual number of emission allowances allocated free of charge for the product benchmark sub-installation concerned determined pursuant to Article 16(2), point (a), or Article 18(1), point (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 or only included for the purposes of Articles 14 and 15 of that Directive in the year concerned multiplied by the value of the heat benchmark for measurable heat for the relevant allocation period.’;

(11)	Article 22 is deleted;

(12)	the following Articles are inserted:‘Article 22aConditionality of free allocation on implementation of energy efficiency improvement measures1. The final annual amount of emission allowances allocated free of charge, determined pursuant to Article 16(8) of this Regulation to the installation referred to in Article 10a(1), third subparagraph, of Directive 2003/87/EC, shall be reduced by 20 % in accordance with Article 10a(1) of that Directive if the operator cannot demonstrate to the satisfaction of the competent authority that all recommendations under Article 8 of Directive 2012/27/EU of the European Parliament and of the Council(2) have been implemented.By way of derogation from the first subparagraph, no such reduction shall apply if the operator can demonstrate to the satisfaction of the competent authority that any of the following conditions apply:(a)the pay-back time for the relevant investments of a recommendation exceeds three years;(b)the investment costs for the implementation of a recommendation exceed either of the following thresholds:(i)5 % of the installation’s annual turnover or 25 % of the installation’s profit, calculated on the basis of the corresponding annual averages over the three calendar years prior to the date on which the application for free allocation shall be submitted in accordance with Article 4;(ii)50 % of the average annual economic equivalent of the amount reduced in accordance with the first subparagraph from the final annual amount of emission allowances allocated free of charge pursuant to Article 16(8) calculated based on the average price of allowances on the common auction platform in the relevant calendar year preceding the application referred to in Article 4(2);(c)other measures have been implemented during or after the relevant baseline period which lead to greenhouse gas emission reductions within the installation equivalent to those recommended by the energy audit report or the certified energy management system under Article 8 of Directive 2012/27/EU;(d)the recommendations would not lead to energy savings within the system boundaries of the industrial process carried out at the installation;(e)the installation-specific operating conditions, including planned or unplanned periods of maintenance, based on which the pay-back period referred to under point (a) was determined, have not occurred yet;(f)the recommendations of the audit report or of the certified energy management system were not issued during the first four years of the relevant baseline period.2. The operator shall establish, implement, document and maintain a procedure for implementing recommendations and, where applicable, demonstrating the application of the conditions as referred to in paragraph 1.3. The verifier shall check as part of the verification of the baseline data report referred to in Article 4(2) whether the recommendations referred to in paragraph 1, first subparagraph, are implemented and whether the conditions set out in paragraph 1, second subparagraph, are met, where applicable.Where relevant, the verifier shall check, as part of the verification of the annual activity level report in accordance with Article 7 of Commission Implementing Regulation (EU) 2018/2067(3), whether the recommendations referred to in paragraph 1, first subparagraph, are implemented and whether the conditions set out in paragraph 1, second subparagraph, are met, where applicable.4. The competent authority shall only consider the recommendations referred to in paragraph 1, first subparagraph, as implemented where all of the following conditions are met:(a)the operator demonstrates the completion of the implementation of those recommendations;(b)the verifier has confirmed the completion referred to in point (a) in accordance with paragraph 3.Article 22bConditionality of free allocation on climate-neutrality plans1. For the purposes of Article 10a(1), fifth subparagraph, of Directive 2003/87/EC, the final annual number of emission allowances allocated free of charge, determined pursuant to Article 16(8) of this Regulation, shall be reduced by 20 % for an installation with product benchmark sub-installations where the greenhouse gas emission levels of at least one of those product-benchmark sub-installations were higher than the 80th percentile of emission levels for the relevant product benchmarks in the years 2016 and 2017.By way of derogation from the first subparagraph, no such reduction shall apply if the following conditions are fulfilled:(a)the operator of an installation referred to in the first subparagraph has submitted a climate-neutrality plan for its activities covered by Directive 2003/87/EC to the competent authority by 30 May 2024, or as appropriate, pursuant to Article 4 of this Regulation as part of the application for free allocation;(b)the achievement of the targets and milestones referred to in Article 10b(4), third subparagraph, point (b), of Directive 2003/87/EC has been confirmed by the verification carried out in accordance with Article 10b(4), fourth subparagraph, of that Directive;(c)the competent authority has checked and deemed compliant the content and format of the climate-neutrality plan pursuant to paragraph 4.2. Paragraph 1, first subparagraph, shall not apply where the relevant product benchmark sub-installation does not contribute to more than 20 % of the sum of all sub-installations’ preliminary annual numbers of emission allowances allocated free of charge in respect of the period from 2021 to 2025, calculated in accordance with Article 16, paragraphs 2 to 5.3. For the purposes of Article 10b(4), second, third and fourth subparagraphs, of Directive 2003/87/EC, the preliminary annual number of emission allowances allocated free of charge to a district heating sub-installation, calculated in accordance with Article 16, paragraphs 2 and 3, of this Regulation, shall be increased by 30 % of the number calculated in accordance with paragraph 2 of Article 16, where the operator of a district heating sub-installation has submitted an application in accordance with Article 4 of this Regulation and where, in respect of the period until the end of 2025 or in respect of the period from 2026 to 2030, all of the following conditions are met:(a)the installation or district heating company is located in a Member State that meets the criteria set out in Article 10b(4), second subparagraph, of Directive 2003/87/EC and as referred to in Annex VIII;(b)the installation or district heating company invested a volume at least equivalent to the economic value of the additional number of free allowances for the period from 2026 to 2030, in accordance with the intermediate targets and milestones as set out in the climate-neutrality plan to measure, by 31 December 2025 and by 31 December of each fifth year thereafter, progress made towards reaching climate-neutrality;(c)the investment referred to under point (b) leads to significant emission reductions before 2030;(d)the installation or district heating company submits a climate neutrality plan by 30 May 2024 pursuant to Article 4(1) or as appropriate, for its activities covered by Directive 2003/87/EC;(e)the achievement of the targets and milestones referred to in Article 10b(4), third subparagraph, point (b), of Directive 2003/87/EC is confirmed by the verification carried out in accordance with Article 10b(4), fourth subparagraph, of that Directive;(f)the competent authority has checked and deemed compliant the content and format of the climate-neutrality plan pursuant to paragraph 4.For the purposes of point (b), the economic value of the additional 30 % allowances shall be determined by multiplying the additional number of free allowances over the period from 2026 to 2030 by the average price of allowances on the common auction platform in the calendar year preceding the application referred to in Article 4(2) and multiplied by the factor determined in accordance with Article 14(6), as applicable to the installation.For the purposes of point (c), emission reductions are significant where the specific emissions, expressed as tonnes of CO2 per terajoules of district heating supplied, of the installation or district heating company are reduced below the average specific emissions during the relevant baseline period with an emission reduction rate equivalent to the application of the linear reduction factors referred to in Article 9 of Directive 2003/87/EC, starting from the mid-point of the relevant baseline period.4. The competent authority shall check, by 30 September 2024, that the content and format of the climate-neutrality plans referred to in paragraphs 1 and 3 of this Article comply with Implementing Regulation (EU) 2023/2441.Article 22cNon-cumulative nature of the 20 % reduction in Articles 22a and 22bThe 20 % reduction referred to in Articles 22a and 22b shall be applied to an installation only once in the relevant allocation period.Article 22dUpdate of the climate-neutrality plan1. The operators shall, at periods specified in the climate-neutrality plan referred to in Article 22b and whenever necessary, evaluate the effectiveness of the climate-neutrality plan regarding greenhouse gas emissions reductions and implement corrective actions where appropriate to ensure that the milestones and targets are met. Any update shall only affect future milestones and targets.2. Where the climate-neutrality plan is updated with respect to milestones and targets, the operator shall submit the updated plan to the competent authority without undue delay.Article 22ePublication of the climate-neutrality plan1. Competent authorities shall publish the climate-neutrality plan submitted pursuant to Article 22b.2. If an operator considers that the climate-neutrality plan contains commercially sensitive elements which, if disclosed, would harm its commercial interests, the operator may request the competent authority not to publish those elements. Where the request is justified the competent authority shall publish the climate-neutrality plan without those elements.(2) Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (OJ L 315, 14.11.2012, p. 1, ELI: http://data.europa.eu/eli/dir/2012/27/2023-05-04)." (3) Commission Implementing Regulation (EU) 2018/2067 of 19 December 2018 on the verification of data and on the accreditation of verifiers pursuant to Directive 2003/87/EC of the European Parliament and of the Council (OJ L 334, 31.12.2018, p. 94, ELI: http://data.europa.eu/eli/reg_impl/2018/2067/2021-01-01).’ " ;
(a)	the pay-back time for the relevant investments of a recommendation exceeds three years;
(b)	the investment costs for the implementation of a recommendation exceed either of the following thresholds:(i)5 % of the installation’s annual turnover or 25 % of the installation’s profit, calculated on the basis of the corresponding annual averages over the three calendar years prior to the date on which the application for free allocation shall be submitted in accordance with Article 4;(ii)50 % of the average annual economic equivalent of the amount reduced in accordance with the first subparagraph from the final annual amount of emission allowances allocated free of charge pursuant to Article 16(8) calculated based on the average price of allowances on the common auction platform in the relevant calendar year preceding the application referred to in Article 4(2);
(i)	5 % of the installation’s annual turnover or 25 % of the installation’s profit, calculated on the basis of the corresponding annual averages over the three calendar years prior to the date on which the application for free allocation shall be submitted in accordance with Article 4;
(ii)	50 % of the average annual economic equivalent of the amount reduced in accordance with the first subparagraph from the final annual amount of emission allowances allocated free of charge pursuant to Article 16(8) calculated based on the average price of allowances on the common auction platform in the relevant calendar year preceding the application referred to in Article 4(2);
(c)	other measures have been implemented during or after the relevant baseline period which lead to greenhouse gas emission reductions within the installation equivalent to those recommended by the energy audit report or the certified energy management system under Article 8 of Directive 2012/27/EU;
(d)	the recommendations would not lead to energy savings within the system boundaries of the industrial process carried out at the installation;
(e)	the installation-specific operating conditions, including planned or unplanned periods of maintenance, based on which the pay-back period referred to under point (a) was determined, have not occurred yet;
(f)	the recommendations of the audit report or of the certified energy management system were not issued during the first four years of the relevant baseline period.
(a)	the operator demonstrates the completion of the implementation of those recommendations;
(b)	the verifier has confirmed the completion referred to in point (a) in accordance with paragraph 3.
(a)	the operator of an installation referred to in the first subparagraph has submitted a climate-neutrality plan for its activities covered by Directive 2003/87/EC to the competent authority by 30 May 2024, or as appropriate, pursuant to Article 4 of this Regulation as part of the application for free allocation;
(b)	the achievement of the targets and milestones referred to in Article 10b(4), third subparagraph, point (b), of Directive 2003/87/EC has been confirmed by the verification carried out in accordance with Article 10b(4), fourth subparagraph, of that Directive;
(c)	the competent authority has checked and deemed compliant the content and format of the climate-neutrality plan pursuant to paragraph 4.
(a)	the installation or district heating company is located in a Member State that meets the criteria set out in Article 10b(4), second subparagraph, of Directive 2003/87/EC and as referred to in Annex VIII;
(b)	the installation or district heating company invested a volume at least equivalent to the economic value of the additional number of free allowances for the period from 2026 to 2030, in accordance with the intermediate targets and milestones as set out in the climate-neutrality plan to measure, by 31 December 2025 and by 31 December of each fifth year thereafter, progress made towards reaching climate-neutrality;
(c)	the investment referred to under point (b) leads to significant emission reductions before 2030;
(d)	the installation or district heating company submits a climate neutrality plan by 30 May 2024 pursuant to Article 4(1) or as appropriate, for its activities covered by Directive 2003/87/EC;
(e)	the achievement of the targets and milestones referred to in Article 10b(4), third subparagraph, point (b), of Directive 2003/87/EC is confirmed by the verification carried out in accordance with Article 10b(4), fourth subparagraph, of that Directive;
(f)	the competent authority has checked and deemed compliant the content and format of the climate-neutrality plan pursuant to paragraph 4.

(13)	in Article 23, paragraph 4 is replaced by the following:‘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 transaction log, referred to in Article 20 of that Directive.’;

(14)	Article 25(4) is deleted;

(15)	Article 26 is amended as follows:(a)in paragraph 1, point (a) is replaced by the following:‘(a)the relevant greenhouse gas emissions permit has expired or been withdrawn, including if the installation no longer meets the thresholds of the activities listed in Annex I to Directive 2003/87/EC;’;(b)paragraph 2 is replaced by the following:‘2. Where an installation has ceased operations, the Member State concerned shall not issue emission allowances to that installation for the remainder of the calendar year following the day of cessation of operations. Such adjustments shall be made on a pro-rata basis.’;
(a)	in paragraph 1, point (a) is replaced by the following:‘(a)the relevant greenhouse gas emissions permit has expired or been withdrawn, including if the installation no longer meets the thresholds of the activities listed in Annex I to Directive 2003/87/EC;’;
‘(a)	the relevant greenhouse gas emissions permit has expired or been withdrawn, including if the installation no longer meets the thresholds of the activities listed in Annex I to Directive 2003/87/EC;’;
(b)	paragraph 2 is replaced by the following:‘2. Where an installation has ceased operations, the Member State concerned shall not issue emission allowances to that installation for the remainder of the calendar year following the day of cessation of operations. Such adjustments shall be made on a pro-rata basis.’;

(16)	Annex I is amended in accordance with Annex I to this Regulation;

(17)	Annex III is replaced by the text in Annex II to this Regulation;

(18)	Annex IV is amended in accordance with Annex III to this Regulation;

(19)	Annex VI is amended in accordance with Annex IV to this Regulation;

(20)	Annex VII is amended in accordance with Annex V to this Regulation;

(21)	the text set out in Annex VI to this Regulation is added as Annex VIII.

art_2 #art_2

Article 2

This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union. It shall apply to allocations relating to the period from 1 January 2024.

However, Article 1, points (1), (4)(a), (4)(b), (4)(c)(ii), (4)(d)(i), (4)(d)(ii), (4)(d)(iv), (6) and (7), (10) and (11) and points (16) and (17) shall apply to allocations relating to the period from 1 January 2026 to new entrants whose applications were submitted by 31 December 2023 and to incumbent installations.

Provenance and validity dates, identifier, hash

as of	2024-01-30 → this publisher state was selected
publisher state	publisher version 2024-01-30 → latest held publisher-asserted
type	REG_DEL Commission Delegated Regulation (EU) 2024/873 of 30 January 2024 amending Delegated Regulation (EU) 2019/331 as regards transitional Union-wide rules for harmonised free allocation of emission allowances
language	en
published	2024-01-30
lex_id	eu-eurlex:32024r0873:2024-01-30--e96d4af4ef35c618f906c9781cbedb631341f9eae6ef53423513150374d671d9
record sha256	6eaf1e563f7d150cfb691904a07ad0e35c06ee2bd2ff84edaed3b5b34ec642f0

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