The European Commission has determined a cross-sectoral correction factor (CSCF) of 100pc for the EU emissions trading system (ETS) in 2021-25, meaning no cuts will be made to free allocations. ETS-covered sectors deemed most at risk of carbon leakage - where companies relocate to other jurisdictions to avoid carbon costs - receive a proportion of their allowances free each year. The CSCF reduction is applied to free allocations across all installations if the total number of free allowances to be distributed exceeds a pre-determined limit.
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