CHAPTER I

General provisions

Scope
Article 1
This Regulation shall apply to the free allocation of emission allowances under Chapter III (Stationary installations) of Directive 2003/87/EC as regards the allocation periods as from 2021, with the exception of transitional free allocation of emission allowances for the modernisation of electricity generation pursuant to Article 10c of Directive 2003/87/EC.

Definitions
Article 2
For the purposes of this Regulation, the following definitions apply:
1. ‘incumbent installation’ means any installation carrying out one or more activities listed in Annex I to Directive 2003/87/EC or an activity included in the European Union Emissions Trading System (EU ETS) for the first time in accordance with Article 24 of that Directive, which obtained a greenhouse gas emission permit before or on:
  1. 30 June 2019 for the period 2021-2025,
  2. 30 June 2024 for the period 2026-2030;
2. ‘product benchmark sub-installation’ means inputs, outputs and corresponding emissions relating to the production of a product for which a benchmark has been set in Annex I;
3. ‘heat benchmark sub-installation’ means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production other than produced from electricity, the import from an installation covered by the EU ETS, or both, of measurable heat which is:
  1. 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
  2. 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;
4. ‘district heating’ means the distribution of measurable heat for the purpose of heating or cooling of space or of production of domestic hot water, through a network, to buildings or sites not covered by EU ETS with the exception of measurable heat used for the production of products and related activities or the production of electricity;
5. ‘district heating sub-installation’ means inputs, outputs and corresponding emissions not covered by a product benchmark sub-installation relating to the production, the import from an installation covered by the EU ETS, or both, of measurable heat which is exported for the purposes of district heating;
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 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, including safety flaring;
7. ‘measurable heat’ means a net heat flow transported through identifiable pipelines or ducts using a heat transfer medium, such as, in particular, steam, hot air, water, oil, liquid metals and salts, for which a heat meter is or could be installed;
8. ‘heat meter’ means a thermal energy meter (MI-004) within the meaning of Annex VI to Directive 2014/32/EU of the European Parliament and of the Council or any other device to measure and record the amount of thermal energy produced based upon flow volumes and temperatures;
9. ‘non-measurable heat’ means all heat other than measurable heat;
10. ‘process emissions sub-installation’ means greenhouse gas emissions listed in Annex I to Directive 2003/87/EC other than carbon dioxide, which occur outside the system boundaries of a product benchmark listed in Annex I to this Regulation, or carbon dioxide emissions, which occur outside the system boundaries of a product benchmark listed in Annex I to this Regulation, as a direct and immediate result of any of the following processes and emissions stemming from the combustion of waste gases for the purpose of the production of measurable heat, non-measurable heat or electricity, provided that emissions that would have occurred from the combustion of an amount of natural gas, equivalent to the technically usable energy content of the combusted incompletely oxidised carbon, are subtracted:
  1. the chemical, electrolytic or pyrometallurgical reduction of metal compounds in ores, concentrates and secondary materials for a primary purpose other than the generation of heat;
  2. the removal of impurities from metals and metal compounds for a primary purpose other than the generation of heat;
  3. the decomposition of carbonates, excluding those for flue gas scrubbing for a primary purpose other than the generation of heat;
  4. chemical syntheses of products and intermediate products where the carbon bearing material participates in the reaction, for a primary purpose other than the generation of heat;
  5. the use of carbon containing additives or raw materials for a primary purpose other than the generation of heat;
  6. the chemical or electrolytic reduction of metalloid oxides or non-metal oxides such as silicon oxides and phosphates for a primary purpose other than the generation of heat;
11. ‘waste gas’ means a gas containing incompletely oxidised carbon in a gaseous state under standard conditions which is a result of any of the processes listed in point (10), where ‘standard conditions’ means temperature of 273,15 K and pressure conditions of 101 325 Pa defining normal cubic metres (Nm3) according to Article 3(50) of Regulation (EU) No 601/2012;
12. ‘start of normal operation’ means the first day of operations;
13. ‘safety flaring’ means the combustion of pilot fuels and highly fluctuating amounts of process or residual gases in a unit open to atmospheric disturbances which is explicitly required for safety reasons by relevant permits for the installation;
14. ‘baseline period’ means the five calendar years preceding the time-limit for submission of data to the Commission pursuant to Article 11(1) of Directive 2003/87/EC;
15. ‘allocation period’ means the five-year period starting from 1 January 2021 and each subsequent period of five years;
16. ‘uncertainty’ means a parameter, associated with the result of the determination of a quantity, that characterises the dispersion of the values that could reasonably be attributed to the particular quantity, including the effects of systematic as well as of random factors, expressed in per cent, and describes a confidence interval around the mean value comprising 95 % of inferred values taking into account any asymmetry of the distribution of values;
17. ‘merger’ means a fusion of two or more installations already holding greenhouse gas permits provided that they are technically connected, operate on the same site and the resulting installation is covered by one greenhouse gas permit;
18. ‘split’ means a division of an installation into two or more installations that are covered by separate greenhouse gas permits and are run by different operators.

National administrative arrangements
Article 3
In addition to designating a competent authority or authorities in accordance with Article 18 of Directive 2003/87/EC, Member States shall make the appropriate administrative arrangements for the implementation of the rules of this Regulation.
Directive 2014/32/EU of the European Parliament and of the Council of 26 February 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of measuring instruments (OJ L 96, 29.3.2014, p. 149).