No CSCF application

The European Commission’s cross-sectoral correction factor decision provides important clarity on free allocation under the EU ETS for 2026–2030.

Beyond determining whether installations face an additional uniform reduction in free allowances, the decision shows how the available allocation is funded across different allowance pools. This has wider implications for the flexibility reserve, proposed support for installations covered by fallback benchmarks, and the allowances available for industrial decarbonisation measures.

This article examines how the allocation volumes are structured, which reserves are being used, and what the decision could mean for the balance between free allocation and other EU ETS funding priorities.