Climate Action

Draft implementing regulation on the free allocation adjustments due to activity level changes


A draft implementing act establishing rules for adjusting the free allocation due to activity level changes during phase 4 of the EU Emissions Trading System (ETS), from 2021 until 2030, has been published on the Better Regulation portal for a four‑week stakeholder feedback period. This will be open until 9 July 2019.

While the revised EU ETS Directive establishes the main rules for adjusting free allocation to activity level changes, more detailed implementation requirements need to be determined. The Directive establishes that the level of free allocation will be adjusted, as appropriate, if activity levels change by more than 15%, evaluated based on a rolling average of two years. The draft implementing regulation sets out further provisions to ensure the effective, non-discriminatory and uniform application of the adjustments and threshold set, to avoid undue administrative burden and to prevent manipulation or abuse.

After the feedback period, the Commission will submit the draft for vote in the Climate Change Committee. The Commission will then adopt and publish the regulation, which will enter into force on the twentieth day after the publication.

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