Approval of the Regulation on the free allocation of emission allowances for the period 2021-2030

07 January 2019 | Markets

On December 19 of last year, the European Commission approved and published on its website the new delegated Regulation determining transitional Union-wide rules for harmonized free allocation of emission for the period 2021-2030, which replaces Decision 211/278/EU.

This new Regulation lays down the bases and new requirements for free allocation for the period 2021-2030. In general terms, the aspects of the free allocation procedure remain similar to those of Phase III. Thus, as in the 2013-2020 phase, the free allocation will have to be requested and verified, along with the level of activity. Likewise, the sub-installations system is maintained, although with technical improvements; a new district heating sub-installation is introduced and the Benchmarks system is also maintained (54 of product, 1 of heat, 1 of fuel, 1 of process emissions and 1 of district heating is included).

However, this new Regulation also brings some important changes, among them, the division of the free allocation into 2 periods: 2021-2025 and 2026-2030. Thus, the calculation of the HAL (historical activity level) in each period will be based on the arithmetic mean of the 5 years of the reference period (2014-2018 for the first period and 2019-2023 for the second period). In addition, there is a new document called Monitoring Methodology Plan, which will include information on sub-installations and energy flows. This document, as well as the application for allocation, must be verified and approved by the competent authority.

As for the dates of presentation of these documents, the period indicated for 2021-2025 according to the Regulation, can be from April 30 to June 30, leaving it to each Member State to decide. In the case of Spain, this date is expected to be May 31st, which is pending the approval of the Royal Decree that sets this date.

Contrary to the previous stage, the documentation submitted will not include the amount of allowances requested, as the Benchmarks will not be published until 2020.

This Regulation, adopted by the European Commission and published on its website, will not enter into force until the day after its publication in the Official Journal of the European Union, which is expected immediately.


From Factor, we will keep you informed of all new developments, however, if you want more information on this or assistance in managing your allocation request, please contact us.



Iria Flavia Peñalva