--- description: "Under the EU Emissions Trading System (EU ETS), a share of an installation's inputs, outputs and emissions that gets its own free allocation calculation. Operators divide each installation eligible for free allocation into them." title: "Sub-installation – EU ETS: meaning and legal source" image: "https://greenfineprint.com/card/glossary/eu-ets-sub-installation.png?v=1mq5cgl" url: "https://greenfineprint.com/glossary/eu-ets-sub-installation" --- Glossary # Sub-installation – EU ETS Under the EU Emissions Trading System (EU ETS), a share of an installation's inputs, outputs and emissions that gets its own free allocation calculation. Operators divide each installation eligible for free allocation into them. Legal source [Free Allocation Regulation, Article 10 ↗](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02019R0331-20240101#art%5F10) Who it applies to Operators of installations eligible for free allocation, which divide them into sub-installations for data reporting and monitoring. Their EU country's list of installations gives, for each sub-installation, its yearly activity level and emissions in the baseline period, whether it belongs to a sector deemed at risk of carbon leakage and whether the goods it produces are covered by the Carbon Border Adjustment Mechanism (CBAM). Example A paper mill that receives free allocation makes newsprint, a product with its own benchmark, and also exports steam to a district heating network. The newsprint's inputs, outputs and emissions go first to a product benchmark sub-installation, and the steam exported for district heating goes to a district heating sub-installation, each with its own calculation. Also known as sub-installations, product benchmark sub-installation, heat benchmark sub-installation, district heating sub-installation, fuel benchmark sub-installation, process emissions sub-installation The Free Allocation Regulation (Delegated Regulation (EU) 2019/331) has no single definition of a sub-installation: it defines each type. The operator assigns the installation's inputs, outputs and emissions to them in this order of priority: * Product benchmark sub-installations, for products that have their own benchmark * Heat benchmark and district heating sub-installations, for measurable heat not covered by a product benchmark * Fuel benchmark sub-installations, for heat that isn't measurable, from burning fuel or from electricity * Process emissions sub-installations, for certain emissions outside product benchmarks, such as from reducing metal ores or breaking down carbonates Measurable heat is a net heat flow carried through identifiable pipes or ducts by a medium such as steam, hot air or water, for which a heat meter is or could be installed. Each physical product of the installation goes to one sub-installation, with nothing left out or counted twice. The EU country calculates free allocation for each sub-installation separately: for a benchmark sub-installation, the [benchmark](https://greenfineprint.com/glossary/benchmark) value multiplied by its historical activity level. The historical activity level is the median of yearly production, heat, fuel use or process emissions over the baseline period, the five calendar years before the deadline for submitting data to the Commission. Each sub-installation's amount is then multiplied by its factor for [carbon leakage](https://greenfineprint.com/glossary/carbon-leakage), and by the CBAM factor where it makes goods covered by CBAM. The installation's total is the sum of its sub-installations, multiplied by the [cross-sectoral correction factor](https://greenfineprint.com/glossary/cross-sectoral-correction-factor). Our [free allocation explainer](https://greenfineprint.com/articles/eu-ets-free-allocation) shows the whole calculation, the codes to record for each sub-installation and what happens when activity changes. [Free allocation](https://greenfineprint.com/glossary/free-allocation) and [Installation – EU ETS](https://greenfineprint.com/glossary/eu-ets-installation) have entries of their own. ## Regulations DIRECTIVE 2003/87/EC In force Change pending ### [EU Emissions Trading System (EU ETS)](https://greenfineprint.com/regulations/eu-ets) Implementing Decision (EU) 2026/1862 set the cross-sectoral correction factor for free allocation at 100% for each year from 2026 to 2030 ## Used in DIRECTIVE 2003/87/EC, ART. 10A AND 10B In force Change pending ### [EU ETS free allocation: benchmarks, the carbon leakage list and how free allowances are cut](https://greenfineprint.com/articles/eu-ets-free-allocation) 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. 15 min read ```json {"@context":"https://schema.org","@graph":[{"@type":"WebSite","@id":"https://greenfineprint.com/#website","name":"Green Fine Print","url":"https://greenfineprint.com/","inLanguage":"en","publisher":{"@id":"https://greenfineprint.com/#publisher"}},{"@type":"NewsMediaOrganization","@id":"https://greenfineprint.com/#publisher","name":"Green Fine Print","url":"https://greenfineprint.com/","logo":{"@type":"ImageObject","url":"https://greenfineprint.com/card/logo.png","width":512,"height":512}},{"breadcrumb":{"@id":"https://greenfineprint.com/glossary/eu-ets-sub-installation#breadcrumb"},"@type":"WebPage","@id":"https://greenfineprint.com/glossary/eu-ets-sub-installation","url":"https://greenfineprint.com/glossary/eu-ets-sub-installation","name":"Sub-installation – EU ETS: meaning and legal source","description":"Under the EU Emissions Trading System (EU ETS), a share of an installation's inputs, outputs and emissions that gets its own free allocation calculation. 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