--- description: "How EU ETS free allowances are worked out for 2026-2030: benchmarks, the carbon leakage list, the 20% conditions, the CBAM factor and two pending proposals." title: "EU ETS free allocation: benchmarks, the carbon leakage list and how free allowances are cut" image: "https://greenfineprint.com/card/articles/eu-ets-free-allocation.png?v=cpby4b" url: "https://greenfineprint.com/articles/eu-ets-free-allocation" --- Explainer 15 min read # EU ETS free allocation: benchmarks, the carbon leakage list and how free allowances are cut By [Clara Christ](https://greenfineprint.com/editors/clara-christ) and [Cenker Karagöz](https://greenfineprint.com/editors/cenker-karagoz) Published 25 Oct 2026 Status as of 25 Oct 2026 Who it applies to Operators of installations in the EU ETS that apply for free allocation. Electricity production gets none, with narrow exceptions, and aircraft operators get none from 2026, apart from reserved quantities. What to do Check each sub-installation against the carbon leakage list and the CBAM goods, implement your energy-audit recommendations, keep a verified climate-neutrality plan if you are above the 80th percentile of a product benchmark, and report your activity levels every year. Deadline Each year: verified activity level report by 31 March; free allocation issued by 30 June Legal basis Articles 10a, 10b and 11 of the ETS Directive (Directive 2003/87/EC), Delegated Regulation (EU) 2019/331 and Implementing Regulation (EU) 2026/1412 Part of [EU ETS](https://greenfineprint.com/regulations/eu-ets) In force Change pending In force since 25 October 2003 Under the EU Emissions Trading System (EU ETS), some installations receive part of their [allowances](https://greenfineprint.com/glossary/emission-allowance) free of charge, although from 2021 the ETS Directive ([Directive 2003/87/EC](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301)) sets the share of allowances to be auctioned at 57% [1](#src-1)[11](#src-11). How many an installation gets depends on EU-wide [benchmarks](https://greenfineprint.com/glossary/benchmark) and on whether its sector is deemed to be at risk of [carbon leakage](https://greenfineprint.com/glossary/carbon-leakage) [1](#src-1)[8](#src-8). For 2026 to 2030, the benchmark values are set by Implementing Regulation (EU) 2026/1412 [10](#src-10). Our [EU ETS overview](https://greenfineprint.com/regulations/eu-ets) explains how the rest of the system works. The European Commission describes carbon leakage as the transfer of CO₂ emissions from one country to another [12](#src-12). It happens when companies relocate production to countries with weaker emission constraints because of strict climate policies, and this can contribute to an increase in global greenhouse gas emissions [12](#src-12). [Free allocation](https://greenfineprint.com/glossary/free-allocation) is meant to address that risk while the EU's basic principle remains auctioning [13](#src-13). Free allocation is shrinking. Sectors that aren't on the carbon leakage list get 30% of their benchmark amount in 2026 and nothing in 2030, except district heating [8](#src-8)[9](#src-9)[14](#src-14). Production of goods covered by the Carbon Border Adjustment Mechanism (CBAM) gets less each year from 2026, and none from 2034 [1](#src-1). Two Commission proposals of 17 July 2026 would change these rules; they are proposals, not law [15](#src-15)[16](#src-16). ## Do I get free allowances, and at what rate? Answer these four questions in order. Each one ends in a result and the reason for it. 1. **Do you run an installation in the EU ETS, for something other than producing electricity?** Free allocation goes to installations under harmonised EU rules [1](#src-1). Electricity production gets none, except electricity produced from waste gases and the transitional option in Article 10c, which some EU countries with a lower gross domestic product (GDP) per head can use until 31 December 2030 [1](#src-1)[17](#src-17). Aircraft operators get none from 1 January 2026, apart from reserved quantities [3](#src-3). An installation that has ceased operating gets none [1](#src-1). Free allocation is also only given where your country's list of installations includes your sub-installation data [2](#src-2). If you run an eligible installation, go on to the next question. 2. **Is your sector on the carbon leakage list?** If yes, you get 100% of the amount your benchmarks give, until 2030 [8](#src-8). If no, you get 30% in 2026, falling by equal steps to nothing in 2030; district heating keeps its 30%, and in some EU countries can get an extra 30% under conditions explained below [8](#src-8)[9](#src-9)[14](#src-14). Either way, go on to the next question. 3. **Do you produce goods covered by CBAM, such as cement, fertilisers, iron and steel, aluminium or hydrogen?** If yes, the amount for those goods is multiplied by the CBAM factor, which is 97.5% in 2026 and falls each year after [1](#src-1)[9](#src-9)[18](#src-18). Go on to the next question. 4. **Have you met the two conditions on energy audits and climate-neutrality plans?** If an installation misses one, its final amount is cut by 20% [1](#src-1)[5](#src-5)[6](#src-6). If it meets both, or neither applies to it, there is no such cut. The sections below explain each step: how the amount is calculated, the list, the CBAM factor and the two conditions. ## How is the free amount worked out? Your EU country calculates it for each year, one sub-installation at a time, using the benchmark values for the period [9](#src-9). As an operator, you divide your installation into sub-installations, in this order of priority [4](#src-4): * Product benchmark sub-installations, for products that have their own benchmark [4](#src-4)[19](#src-19) * Heat benchmark or district heating sub-installations, for measurable heat such as steam or hot water not covered by a product benchmark [4](#src-4)[19](#src-19) * Fuel benchmark sub-installations, for heat that can't be measured that way, from burning fuel or from electricity [4](#src-4)[19](#src-19) * Process emissions sub-installations, for emissions from processes such as reducing metal ores or breaking down carbonates [4](#src-4)[19](#src-19) Each sub-installation's amount is its benchmark value multiplied by its historical activity level, such as tonnes of product or terajoules (TJ) of heat [9](#src-9). Process emissions sub-installations have no benchmark: their historical activity level is multiplied by 0.97 for the years until 31 December 2027 and by 0.91 from 2028 [9](#src-9). The historical activity level comes from your data for the baseline period, the five calendar years before the deadline for your country's list of installations [9](#src-9)[19](#src-19). That amount is then multiplied by the carbon leakage factor for the sub-installation (1 for sectors on the list) and, for CBAM goods, by the CBAM factor [9](#src-9). The installation's total is the sum of its sub-installations, multiplied by the cross-sectoral correction factor, a uniform cut used only when free allocation would exceed the maximum amount [1](#src-1)[9](#src-9). For each year from 2026 to 2030, that factor is 100%, so it cuts nothing [20](#src-20). The 20% reductions, where they apply, come off this final amount [5](#src-5)[6](#src-6). The Commission sums up the result: because benchmarks reflect the 10% most efficient installations in each sector, only the most efficient installations will receive enough free allowances to cover their needs [12](#src-12). Installations that don't reach the benchmark have to cut emissions, buy allowances, or both, according to the Commission's page on allocation to industrial installations [21](#src-21). ### What is a benchmark? A benchmark is the number of allowances given per unit of output, set for the whole EU [1](#src-1)[22](#src-22). Its starting point is the average performance of the 10% most efficient installations in a sector or subsector in 2007-2008, and benchmarks are set for products rather than inputs wherever possible [1](#src-1). The Commission counts 54 benchmarks: 52 for products and two fallback benchmarks, for heat and for fuel [21](#src-21)[23](#src-23). For 2026 to 2030, the values were updated with data for 2021 and 2022 [1](#src-1)[23](#src-23). As a rule, each benchmark falls by an annual reduction rate for every year from 2008 to 2028, but by no more than 2.5% and no less than 0.3% a year [1](#src-1). Over those 20 years, that means a reduction of at least 6% and at most 50% [23](#src-23). Some benchmarks follow other rules: aromatics and syngas are adjusted by the same percentage as the refineries benchmarks, and for soda ash, intermediary emissions are added after the reduction rate is applied [1](#src-1)[23](#src-23). These are some of the 2026-2030 values; Implementing Regulation (EU) 2026/1412 lists all 54 [22](#src-22)[23](#src-23): | Benchmark | Average of the 10% most efficient installations, 2021-2022 | Benchmark value for 2026-2030 | | ------------------- | ---------------------------------------------------------- | --------------------------------- | | Hot metal | 1.360 t CO₂e per tonne \[22\] | 1.248 allowances per tonne \[22\] | | Grey cement clinker | 0.689 t CO₂e per tonne \[22\] | 0.656 allowances per tonne \[22\] | | Aluminium | 1.489 t CO₂e per tonne \[22\] | 1.423 allowances per tonne \[22\] | | Ammonia | 1.630 t CO₂e per tonne \[22\] | 1.522 allowances per tonne \[22\] | | Hydrogen | 8.24 t CO₂e per tonne \[22\] | 7.98 allowances per tonne \[22\] | | Nitric acid | 0.015 t CO₂e per tonne \[22\] | 0.151 allowances per tonne \[22\] | | EAF carbon steel | 0.130 t CO₂e per tonne \[22\] | 0.142 allowances per tonne \[22\] | | Lime | 0.771 t CO₂e per tonne \[22\] | 0.693 allowances per tonne \[22\] | | Float glass | 0.412 t CO₂e per tonne \[22\] | 0.394 allowances per tonne \[22\] | | Heat benchmark | 7.2 t CO₂e per TJ \[22\] | 31.2 allowances per TJ \[22\] | | Fuel benchmark | 10.4 t CO₂e per TJ \[22\] | 28.1 allowances per TJ \[22\] | _Source: Implementing Regulation (EU) 2026/1412, Annex, adopted on 26 June 2026_ [21](#src-21)[22](#src-22)_. CO₂e (CO₂ equivalent) counts greenhouse gases as the amount of CO₂ with the same warming effect. EAF: electric arc furnace._ [22](#src-22)[24](#src-24)[25](#src-25) In this table, the benchmark value is higher than the 10% average for nitric acid, EAF carbon steel and the heat and fuel benchmarks; for those four rows, the limit on the yearly reduction rate is the reason, in our reading of Article 10a(2) and the regulation's recitals [1](#src-1)[22](#src-22)[23](#src-23). The heat and fuel benchmarks show a large gap, and they are what Commission proposal COM(2026) 619 is about (see "What could change?") [15](#src-15)[22](#src-22). ### Why is there no across-the-board cut for 2026 to 2030? The Directive caps total free allocation so that the auction share of 57% is respected, and a uniform correction factor cuts every installation's amount if demand goes above that cap [1](#src-1)[11](#src-11). Installations below the average of the 10% most efficient for their benchmarks are exempt from that cut [1](#src-1). For 2026 to 2030, Implementing Decision (EU) 2026/1862 set the factor at 100% for each year [20](#src-20). The Commission's reasons are in the decision. For 2026, the maximum available for free allocation is 432,346,850 allowances, after deductions that include 40 million allowances for the Social Climate Fund [26](#src-26)[27](#src-27). Allowances left unused from 2021 to 2025 and an extra amount of up to 3% of the total quantity of allowances can top this up, so demand fits under the cap [1](#src-1)[26](#src-26). ## Is my sector on the carbon leakage list? A sector is deemed to be at risk of carbon leakage if its trade intensity with non-EU countries, multiplied by its emission intensity, exceeds 0.2 [8](#src-8). Trade intensity is exports to and imports from non-EU countries, divided by the market size in the European Economic Area; emission intensity is kilograms of CO₂ per euro of gross value added [8](#src-8). Sectors between 0.15 and 0.2, and some with an emission intensity above 1.5, could also be added after a further assessment [8](#src-8)[13](#src-13). The list is in Delegated Decision (EU) 2019/708 and covers 2021 to 2030 [28](#src-28). It names sectors by their NACE code, the EU's statistical classification of economic activities, and some subsectors by their Prodcom code, the classification of goods used for statistics on industrial production [13](#src-13)[29](#src-29). The Commission says the list identifies 63 sectors and subsectors, covering about 94% of industrial emissions in the EU ETS [12](#src-12). The full list is at the end of this page. The list decides your rate, sub-installation by sub-installation [4](#src-4)[9](#src-9): * **On the list:** 100% of the benchmark amount until 2030 [8](#src-8)[9](#src-9) * **Not on the list:** 30% in 2026, 22.5% in 2027, 15% in 2028, 7.5% in 2029 and 0% in 2030 [8](#src-8)[14](#src-14) * **District heating:** 30% each year, outside the phase-down [8](#src-8)[9](#src-9) District heating can get more in some EU countries. Where a country's share of EU emissions from district heating, divided by its share of EU GDP, was greater than five on average from 2014 to 2018, district heating gets an additional 30% for 2026 to 2030 [8](#src-8). The condition is that an investment worth the value of that extra allocation significantly reduces emissions before 2030, in line with a climate-neutrality plan whose targets and milestones are confirmed by verification [8](#src-8). The operator of the district heating sub-installation needs to apply for it [6](#src-6). You must show, using NACE and Prodcom codes, whether each heat, fuel and process emissions sub-installation serves a listed sector [4](#src-4). Heat you export to a site outside the EU ETS counts as serving a sector not at risk, unless you prove to the competent authority that the buyer is in a listed sector [4](#src-4). Free allocation isn't the only support for carbon costs. EU countries may also compensate sectors at risk for carbon costs passed on in electricity prices, through State aid; that compensation isn't free allocation [1](#src-1). ## How does the CBAM factor cut free allocation? No free allocation is given for producing goods listed in Annex I to the CBAM Regulation ([Regulation (EU) 2023/956](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02023R0956-20251020)), but in the first years they receive reduced amounts, cut by a CBAM factor [1](#src-1). Those goods are cement, electricity, fertilisers, iron and steel, aluminium and hydrogen [18](#src-18). You must show, using [Combined Nomenclature (CN) codes](https://greenfineprint.com/glossary/cn-code), whether each process serves the production of CBAM goods [4](#src-4). Heat exported to a site outside the EU ETS counts as used for CBAM goods unless you prove otherwise [4](#src-4). The table shows the CBAM factor in force beside the change Commission proposal COM(2026) 616 would make [1](#src-1)[16](#src-16). The right-hand column is a proposal, not law. | Year | CBAM factor in law | Proposed in COM(2026) 616, not law | | ------------ | ------------------------------------------- | ---------------------------------- | | 2026 | 97.5% \[1\] | 97.5% \[16\] | | 2027 | 95% \[1\] | 95% \[16\] | | 2028 | 90% \[1\] | 91.5% \[16\] | | 2029 | 77.5% \[1\] | 81% \[16\] | | 2030 | 51.5% \[1\] | 59% \[16\] | | 2031 | 39% \[1\] | 48% \[16\] | | 2032 | 26.5% \[1\] | 37.5% \[16\] | | 2033 | 14% \[1\] | 27% \[16\] | | 2034 to 2037 | No CBAM factor, so no free allocation \[1\] | 15% \[16\] | | From 2038 | No free allocation \[1\] | 0% \[16\] | _Source: Directive 2003/87/EC, Article 10a(1a); Commission proposal COM(2026) 616 of 17 July 2026._ [1](#src-1)[16](#src-16) The allowances cut by the CBAM factor go to the Innovation Fund, which supports low- and zero-carbon technologies [1](#src-1). On the import side, the [CBAM certificates](https://greenfineprint.com/glossary/cbam-certificate) importers surrender are adjusted to reflect the free allocation EU producers of the same goods receive [30](#src-30). Our [CBAM overview](https://greenfineprint.com/regulations/cbam) covers CBAM itself, and our explainer on [what a CBAM certificate costs](https://greenfineprint.com/articles/cbam-certificates-price-cost) shows how that adjustment enters the price. ## What can cut my allocation by 20%? Two conditions can each cut an installation's final free allocation by 20% [1](#src-1)[5](#src-5)[6](#src-6). The 20% withheld is first used to spare other installations from the correction factor; anything left goes half to innovation support and half to auctions [1](#src-1). ### The energy-audit condition If your installation has to carry out an energy audit or run a certified energy management system under Article 8 of Directive 2012/27/EU, your free allocation depends on implementing its recommendations [1](#src-1). If you can't show the competent authority that all of them are implemented, your final amount is cut by 20% [5](#src-5). There is no cut if you can show that one of these applies [5](#src-5): * The investment for a recommendation pays back in more than three years [1](#src-1)[5](#src-5) * Its cost is above 5% of the installation's annual turnover or 25% of its profit, both averaged over the three years before your application [5](#src-5) * Its cost is above 50% of the average yearly value of the allowances the cut would remove, at the average auction price in the year before your application [5](#src-5) * You took other measures that cut emissions by as much as the recommendations would [1](#src-1)[5](#src-5) * The recommendation wouldn't save energy within the boundaries of the industrial process, the operating conditions behind the pay-back period haven't occurred yet, or it wasn't issued in the first four years of the baseline period [5](#src-5) Your verifier checks this as part of the baseline data report, and where relevant in the annual activity level report [5](#src-5). If you were cut and later complete the recommendations, or equivalent measures, you can ask to recover the allowances with your verified activity level report; once your competent authority agrees and the Commission has adopted its decision on the adjustment, you get the full amount for the remaining years of the period [31](#src-31). ### The climate-neutrality plan condition This condition applies if at least one of your product benchmark sub-installations had emission levels above the 80th percentile for its benchmark in 2016 and 2017 [6](#src-6). It doesn't apply where that sub-installation accounted for no more than 20% of the installation's preliminary free allocation for 2021 to 2025 [6](#src-6). To avoid the 20% cut, all three of these must hold [6](#src-6): * You submitted a climate-neutrality plan to the competent authority by 30 May 2024, or with your application for free allocation [6](#src-6) * The competent authority found its content and format compliant with Implementing Regulation (EU) 2023/2441 [6](#src-6) * A verifier confirmed you reached the plan's targets and milestones [1](#src-1)[6](#src-6) The plan sets out measures and investments to reach climate neutrality by 2050, milestones and targets for 2025 and each five-year period after, the investments in euros, and the expected effect of each measure on emissions [8](#src-8)[32](#src-32). The milestones are checked for the period until 31 December 2025, and then for each period ending on 31 December of every fifth year [1](#src-1). You report on them in a verified climate-neutrality report, due by 31 March 2026 for the period until 31 December 2025, and by 31 March of every fifth year after, unless your competent authority sets an earlier date [33](#src-33). If the milestones to the end of 2025, or for 2026 to 2030, aren't verified, you get no more than 80% of your free allocation [1](#src-1). ## What happens if my production changes? Your free allocation follows your output when it moves by more than 15% [1](#src-1)[34](#src-34). Every year, the competent authority compares each sub-installation's average activity level over the two previous years with the historical activity level used to set the allocation [34](#src-34)[35](#src-35). If the difference is more than 15%, the allocation for that sub-installation changes by the exact percentage, from the following year [34](#src-34). Further changes follow only when the difference passes the next 5% step, and no change is made unless it adds up to at least 300 allowances [34](#src-34)[36](#src-36). For heat, fuel and process emissions sub-installations, the comparison uses the average of the expected activity level instead [34](#src-34). The comparison runs on your activity level report. You must submit it, verified, by 31 March each year, unless your competent authority has set an earlier date, and the 2026 report covers the two years before [7](#src-7). Without a verified report, the authority suspends the issue of your free allowances [7](#src-7). A sub-installation that stops operating loses its free allocation for the rest of that year, pro rata, and gets nothing from the following year [34](#src-34). You must also tell the competent authority about any other change to the installation that affects its allocation [37](#src-37). ## When do I receive the allowances? By 30 June each year, the competent authorities issue that year's free allocation [2](#src-2). The Commission says it adopted Decision C/2026/5089 setting the free allocation for each installation for 2026 to 2030, alongside Decision (EU) 2026/1312 on the national implementation measures [21](#src-21). Our explainer on [the yearly compliance cycle](https://greenfineprint.com/articles/eu-ets-compliance-cycle) shows where this date sits in the yearly cycle of reporting and [surrendering allowances](https://greenfineprint.com/glossary/surrender-of-allowances). ## What could change? Two Commission proposals of 17 July 2026 would change free allocation [15](#src-15)[16](#src-16). Neither is law, and both could change before they are adopted. ### Higher heat and fuel benchmarks: COM(2026) 619 Commission proposal COM(2026) 619 would raise the free allocation that the heat and fuel benchmarks give for 2026 to 2030 [15](#src-15). It would lower the maximum annual reduction rate for those benchmarks from 2027 to 2030, so as to use the extra amount available for free allocation without triggering the correction factor; the Commission puts that amount at around 80 million allowances [15](#src-15). The top-up for 2026 would come through the benchmark values for 2027 [15](#src-15). Installations carrying out oil and gas activities, under NACE codes 0610, 0620, 1920 and 4950, would be left out [15](#src-15). If adopted, it would enter into force on the third day after its publication [15](#src-15). ### Free allocation after 2030: COM(2026) 616 Commission proposal COM(2026) 616, the review of the EU ETS, would change free allocation in three ways [16](#src-16): * **A slower CBAM phase-out.** The CBAM factor would fall more slowly from 2028 and reach 0% in 2038, as the table above shows; this change would apply from 30 September 2027 [16](#src-16). * **Investment conditions from 2031.** From the period starting on 1 January 2031, an installation would get 80% of its free allocation once its "Invest in EU decarbonisation plan" is verified and approved [16](#src-16). The other 20% would come only after the competent authority confirms that investments worth at least the value of all its free allocation for the period were made in the EU and led to significant emission reductions [16](#src-16). This would replace the energy-audit and climate-neutrality plan conditions from 2031 [16](#src-16). * **The list and the 100% rate until 2040.** The carbon leakage list would continue to apply until 31 December 2040, and sectors on it would keep 100% free allocation until 2040 [16](#src-16). Free allocation to district heating would fall after 2030, to nothing in 2040 [16](#src-16). The Commission calls 2031 to 2040 Phase V; it calls 2021 to 2030 phase 4 [16](#src-16)[21](#src-21). Our Decode on [what the July 2026 review would change](https://greenfineprint.com/articles/eu-ets-review-changes) covers the rest of the proposal [16](#src-16). ## What should I do? Work through these steps for each installation that applies for free allocation: 1. **Map your sub-installations.** Assign every product, heat, fuel and process emissions sub-installation, and record the NACE or Prodcom code each one serves and the CN codes of any CBAM goods [4](#src-4). Then check those codes against the carbon leakage list at the end of this page [29](#src-29). 2. **Check your energy-audit recommendations.** If your installation has to carry out an energy audit, implement its recommendations, or document why one of the exceptions applies, before your verifier checks it [5](#src-5). Or, if you were already cut, you can ask to recover the allowances once the recommendations are implemented [31](#src-31). 3. **If you are above the 80th percentile on a product benchmark,** keep your climate-neutrality plan current and have its milestones verified; the next climate-neutrality report covers the period from 2026 to 2030 [6](#src-6)[33](#src-33). 4. **Submit your verified activity level report by 31 March each year,** or by any earlier date your competent authority sets, and tell it about changes that affect your allocation [7](#src-7)[37](#src-37). 5. **Plan for the cuts in law.** If you are not on the list, your free allocation falls to nothing in 2030, except for district heating; if you produce CBAM goods, it falls each year to nothing from 2034 [1](#src-1)[8](#src-8)[9](#src-9)[14](#src-14). Treat the proposals as possible changes until they are adopted. This is general information, not legal advice. For decisions about your company, check with a lawyer or adviser. ## Which sectors are on the carbon leakage list? These sectors are deemed to be at risk of carbon leakage for 2021 to 2030, under Delegated Decision (EU) 2019/708 [28](#src-28)[29](#src-29). | Code | Sector or subsector | | --------------- | ----------------------------------------------------------------------------------------------------------------------------------------------- | | 0510 \[29\] | Mining of hard coal | | 0610 \[29\] | Extraction of crude petroleum | | 0710 \[29\] | Mining of iron ores | | 0729 \[29\] | Mining of other non-ferrous metal ores | | 0891 \[29\] | Mining of chemical and fertiliser minerals | | 0893 \[29\] | Extraction of salt | | 0899 \[29\] | Other mining and quarrying n.e.c. | | 1041 \[29\] | Manufacture of oils and fats | | 1062 \[29\] | Manufacture of starches and starch products | | 1081 \[29\] | Manufacture of sugar | | 1106 \[29\] | Manufacture of malt | | 1310 \[29\] | Preparation and spinning of textile fibres | | 1330 \[29\] | Finishing of textiles | | 1395 \[29\] | Manufacture of non-wovens and articles made from non-wovens, except apparel | | 1411 \[29\] | Manufacture of leather clothes | | 1621 \[29\] | Manufacture of veneer sheets and wood-based panels | | 1711 \[29\] | Manufacture of pulp | | 1712 \[29\] | Manufacture of paper and paperboard | | 1910 \[29\] | Manufacture of coke oven products | | 1920 \[29\] | Manufacture of refined petroleum products | | 2011 \[29\] | Manufacture of industrial gases | | 2012 \[29\] | Manufacture of dyes and pigments | | 2013 \[29\] | Manufacture of other inorganic basic chemicals | | 2014 \[29\] | Manufacture of other organic basic chemicals | | 2015 \[29\] | Manufacture of fertilisers and nitrogen compounds | | 2016 \[29\] | Manufacture of plastics in primary forms | | 2017 \[29\] | Manufacture of synthetic rubber in primary forms | | 2060 \[29\] | Manufacture of man-made fibres | | 2110 \[29\] | Manufacture of basic pharmaceutical products | | 2311 \[29\] | Manufacture of flat glass | | 2313 \[29\] | Manufacture of hollow glass | | 2314 \[29\] | Manufacture of glass fibres | | 2319 \[29\] | Manufacture and processing of other glass, including technical glassware | | 2320 \[29\] | Manufacture of refractory products | | 2331 \[29\] | Manufacture of ceramic tiles and flags | | 2332 \[29\] | Manufacture of bricks, tiles and construction products, in baked clay | | 2341 \[29\] | Manufacture of ceramic household and ornamental articles | | 2342 \[29\] | Manufacture of ceramic sanitary fixtures | | 2351 \[29\] | Manufacture of cement | | 2352 \[29\] | Manufacture of lime and plaster | | 2399 \[29\] | Manufacture of other non-metallic mineral products n.e.c. | | 2410 \[29\] | Manufacture of basic iron and steel and of ferro-alloys | | 2420 \[29\] | Manufacture of tubes, pipes, hollow profiles and related fittings, of steel | | 2431 \[29\] | Cold drawing of bars | | 2442 \[29\] | Aluminium production | | 2443 \[29\] | Lead, zinc and tin production | | 2444 \[29\] | Copper production | | 2445 \[29\] | Other non-ferrous metal production | | 2446 \[29\] | Processing of nuclear fuel | | 2451 \[29\] | Casting of iron | | 081221 \[29\] | Kaolin and other kaolinic clays | | 10311130 \[29\] | Frozen potatoes, prepared or preserved (including potatoes cooked or partly cooked in oil and then frozen; excluding by vinegar or acetic acid) | | 10311300 \[29\] | Dried potatoes in the form of flour, meal, flakes, granules and pellets | | 10391725 \[29\] | Concentrated tomato puree and paste | | 105121 \[29\] | Skimmed milk powder | | 105122 \[29\] | Whole milk powder | | 105153 \[29\] | Casein | | 105154 \[29\] | Lactose and lactose syrup | | 10515530 \[29\] | Whey and modified whey in powder, granules or other solid forms, whether or not concentrated or containing added sweetening matter | | 10891334 \[29\] | Bakers' yeast | | 20302150 \[29\] | Vitrifiable enamels and glazes, engobes (slips) and similar preparations for ceramics, enamelling or glass | | 20302170 \[29\] | Liquid lustres and similar preparations; glass frit and other glass in powder; granules or flakes | | 25501134 \[29\] | Open die forged ferrous parts for transmission shafts, camshafts, crankshafts and cranks etc. | _Source: Commission Delegated Decision (EU) 2019/708, Annex. Four-digit codes are NACE sectors; longer codes are Prodcom subsectors._ [29](#src-29) ## References 1. [ETS Directive, Article 10a](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F10a) · EUR-Lex OFFICIAL 2. [ETS Directive, Article 11](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F11) · EUR-Lex OFFICIAL 3. [ETS Directive, Article 3d](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F3d) · EUR-Lex OFFICIAL 4. [Free Allocation Regulation, Article 10](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#art%5F10) · EUR-Lex OFFICIAL 5. [Free Allocation Regulation, Article 22a](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#art%5F22a) · EUR-Lex OFFICIAL 6. [Free Allocation Regulation, Article 22b](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#art%5F22b) · EUR-Lex OFFICIAL 7. [Activity Level Changes Regulation, Article 3](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R1842-20260101#art%5F3) · EUR-Lex OFFICIAL 8. [ETS Directive, Article 10b](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F10b) · EUR-Lex OFFICIAL 9. [Free Allocation Regulation, Article 16](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#art%5F16) · EUR-Lex OFFICIAL 10. [Implementing Regulation (EU) 2026/1412 on benchmark values 2026-2030, Article 1](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026R1412#art%5F1) · EUR-Lex OFFICIAL 11. [ETS Directive, Article 10](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F10) · EUR-Lex OFFICIAL 12. [European Commission web page 'Carbon leakage'](https://climate.ec.europa.eu/areas-action/carbon-markets/eu-emissions-trading-system-eu-ets/free-allocation/carbon-leakage%5Fen) · European Commission OFFICIAL 13. [Carbon leakage list, Delegated Decision (EU) 2019/708, recitals 1, 2, 6 and 12](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32019D0708#rct%5F1) · EUR-Lex OFFICIAL 14. [Free Allocation Regulation, Annex V](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#anx%5FV) · EUR-Lex OFFICIAL 15. [Commission proposal COM(2026) 619](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52026PC0619) · European Commission OFFICIAL 16. [Commission proposal COM(2026) 616](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52026PC0616) · European Commission OFFICIAL 17. [ETS Directive, Article 10c](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F10c) · EUR-Lex OFFICIAL 18. [CBAM Regulation, Annex I](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02023R0956-20251020#anx%5FI) · EUR-Lex OFFICIAL 19. [Free Allocation Regulation, Article 2](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#art%5F2) · EUR-Lex OFFICIAL 20. [Implementing Decision (EU) 2026/1862 on the cross-sectoral correction factor, Article 1](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026D1862#art%5F1) · EUR-Lex OFFICIAL 21. [European Commission web page 'Allocation to industrial installations', version](https://climate.ec.europa.eu/areas-action/carbon-markets/eu-emissions-trading-system-eu-ets/free-allocation/allocation-industrial-installations%5Fen) · European Commission OFFICIAL 22. [Implementing Regulation (EU) 2026/1412 on benchmark values 2026-2030, Annex 1](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026R1412#anx%5F1) · EUR-Lex OFFICIAL 23. [Implementing Regulation (EU) 2026/1412 on benchmark values 2026-2030, recitals 4, 5 and 10](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026R1412#rct%5F4) · EUR-Lex OFFICIAL 24. [ETS Directive, Article 3](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02003L0087-20240301#art%5F3) · EUR-Lex OFFICIAL 25. [Free Allocation Regulation, Annex I](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#anx%5FI) · EUR-Lex OFFICIAL 26. [Implementing Decision (EU) 2026/1862 on the cross-sectoral correction factor, recitals 6, 8 and 9](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026D1862#rct%5F6) · EUR-Lex OFFICIAL 27. [Regulation (EU) 2026/667 amending the European Climate Law, Article 2](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32026R0667#art%5F2) · EUR-Lex OFFICIAL 28. [Carbon leakage list, Delegated Decision (EU) 2019/708, Article 1](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32019D0708#art%5F1) · EUR-Lex OFFICIAL 29. [Carbon leakage list, Delegated Decision (EU) 2019/708, Annex 1](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32019D0708#anx%5F1) · EUR-Lex OFFICIAL 30. [CBAM Regulation, Article 31](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02023R0956-20251020#art%5F31) · EUR-Lex OFFICIAL 31. [Activity Level Changes Regulation, Article 3a](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R1842-20260101#art%5F3a) · EUR-Lex OFFICIAL 32. [Implementing Regulation (EU) 2023/2441 on climate-neutrality plans, Annex 1](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R2441#anx%5F1) · EUR-Lex OFFICIAL 33. [Activity Level Changes Regulation, Article 3b](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R1842-20260101#art%5F3b) · EUR-Lex OFFICIAL 34. [Activity Level Changes Regulation, Article 5](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R1842-20260101#art%5F5) · EUR-Lex OFFICIAL 35. [Activity Level Changes Regulation, Article 2](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R1842-20260101#art%5F2) · EUR-Lex OFFICIAL 36. [Activity Level Changes Regulation, Article 6a](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R1842-20260101#art%5F6a) · EUR-Lex OFFICIAL 37. [Free Allocation Regulation, Article 23](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#art%5F23) · EUR-Lex OFFICIAL [Clara Christ](https://greenfineprint.com/editors/clara-christ) [Cenker Karagöz](https://greenfineprint.com/editors/cenker-karagoz) ## More on EU ETS [Open the EU ETS hub →](https://greenfineprint.com/regulations/eu-ets) PROPOSAL COM(2026) 153 In force Change pending ### [EU ETS market stability reserve: what the provisional deal on invalidating allowances would change](https://greenfineprint.com/articles/eu-ets-market-stability-reserve-invalidation) Council and Parliament provisionally agreed to keep invalidating EU ETS reserve allowances, but above 700 million instead of 400 million. 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