In principle, heat is eligible for free allocation if it can be regarded as covered by the ETS and if it is not produced via electric boilers. This is in particular likely to be the case for measurable heat directly linked (combustion process or exothermic production process) to source streams which are contained in the monitoring plan of an installation covered by the EU ETS.
Exceptions to this rule are the following:
- The export or consumption of heat produced in the nitric acid production process is not eligible for free allocation as this heat is already taken into account by the nitric acid benchmark. (see Art 10 (6) of the CIMs)
- The consumption of heat produced by a non-ETS plant or unit (not covered by a GHG permit) is not eligible for free allocation. (see Art. 9 (3) and Art. 13 of the CIMs)
- The export or consumption of heat used for electricity generation is not eligible for free allocation. (see Art. 3 (c) and 9 (3) of the CIMs)