Article 22 Article 18 amended (preliminary allocation to new entrants)

Article 18 is amended as follows.

In paragraph 1(a) after “for the relevant” insert “scheme year or”.

In the second sentence of paragraph 1—

After paragraph 2A insert—

“2B.

Where the benchmarks for the 2028, 2029 and 2030 scheme years have not been adopted under paragraph 9(b)(ii) on or before 30 September 2026, the calculation referred to in paragraph 1 and 2 of preliminary annual number of allowances to be allocated free of charge for the 2028, 2029 and 2030 scheme years must be undertaken by the regulator on or after 1 October 2027.

2C.

Where the regulator has calculated the preliminary annual number of allowances to be allocated free of charge for a UK CBAM sub-installation for a scheme year and a different factor is subsequently provided for under Article 16(14), the regulator must recalculate the preliminary annual number of emissions allowances allocated free of charge in respect of the relevant period for the UK CBAM sub-installation in accordance with paragraph 1 or 2.

2D.

In paragraph 2C “relevant period” begins with the scheme year for which the factor has changed under Article 16(14) and ends with the 2030 scheme year; but:

(a)

where paragraph 2B applies and the scheme year for which the factor has changed is 2027, the relevant period refers to the 2027 scheme year; or

(b)

where the scheme year for which the factor has changed is 2030, the relevant period refers to the 2030 scheme year.

2E.

Where the product benchmark or the PRODCOM code of the product produced in a sub-installation that is not a UK CBAM sub-installation for the 2027-2030 allocation period is subsequently added to the relevant table in Annex 9, the regulator must carry out a recalculation in respect of the sub-installation as if paragraph 2C applied, except that the relevant period is to be read as beginning with the scheme year after the scheme year in which the product benchmark or PRODCOM code was added to the relevant table in Annex 9 and ending with the 2030 scheme year; but:

(a)

where paragraph 2B applies and the scheme year after the scheme year in which the product benchmark or PRODCOM code was added to the relevant table is 2027, the relevant period refers to the 2027 scheme year; or

(b)

where the scheme year after the scheme year in which the product benchmark or PRODCOM code was added to the relevant table is 2030, the relevant period refers to the 2030 scheme year.”.

After paragraph 8 insert—

“9.

In paragraphs 1 and 2, reference to benchmarks is to:

(a)

for new entrants applying for free allocation in the 2025 scheme year, 2026 scheme year or both, in respect of the calculation of preliminary annual number of allowances for the 2025 and 2026 scheme years, the benchmarks set out in Annex 8;

(b)

for new entrants applying for free allocation in the 2027-2030 allocation period:

(i)

in respect of the calculation of preliminary annual number of allowances for the 2027 scheme year, the benchmarks set out in Annex 8; and

(ii)

in respect of the calculation of preliminary annual number of allowances for the 2028, 2029 and 2030 scheme years, the benchmarks adopted by way of an order under Part 3 of the Climate Change Act 2008^f1.”.