EU ETS sites: keeping your free allocation and unlocking specific energy savings certificates through ISO 50001

The national carbon allowance allocation scheme in brief

The Plan National d'Allocation des Quotas (PNAQ) was approved by the European Commission in 2004. Its purpose is to cut greenhouse gas emissions across the European Union. One of its key components is the allocation of allowances, one allowance representing the right to emit one tonne of CO2.

The vocabulary has since moved on. National allocation plans covered the first two phases of the scheme, between 2005 and 2012. Free allocation has been harmonised at European level since 2013 and the French Ministry for Ecological Transition now refers to the scheme as the SEQE-UE, the EU Emissions Trading System [1]. In France it covers a little over a thousand installations, 1,059 in 2022 for 84 MtCO2 [2], most of them classified installations for environmental protection (ICPE). An envelope is allocated by sector: it falls to companies in the sectors concerned to stay within the allowances set for them.

The EU ETS reform: acting to keep your free allocation

In May 2023, a reform of Directive 2003/87, the legal basis of the EU Emissions Trading System, changed the shape of the carbon market by tightening its rules [3]. Keeping your free allocation remains possible, provided energy efficiency is addressed.

The mechanism works as a penalty. Article 10a(1) of the directive provides that free allocation is reduced by 20 % where an installation subject to the energy audit or certified energy management system requirement fails to implement the recommendations of the audit report or of the certified system [4]. The text sets out two reservations: a payback period longer than three years, or a disproportionate cost. The operator also keeps its full allocation by demonstrating that it has implemented other emission reduction measures equivalent to those recommended. The same 20 % cut applies to installations whose emissions exceed the 80th percentile of their product benchmark and which had not drawn up a climate neutrality plan by 1 May 2024.

In French law, Decree no. 2024-546 of 14 June 2024 created articles R. 229-7-1 and R. 229-7-2 of the Environmental Code, which carry this conditionality [5]. It applies to the allocation for the second sub-period of phase 4, 2026-2030, and covers only companies subject to the energy audit requirement, meaning those that are not SMEs in the European sense.

A second form of support depends on the same effort, the compensation of indirect carbon costs paid to electro-intensive users. Decree no. 2026-113 of 20 February 2026 rewrote articles D. 122-19 and D. 122-20 of the Energy Code to align the scheme with the energy efficiency directive [6]. The beneficiary provides an energy audit or energy review less than four years old covering at least 80 % of its energy bills, with ISO 50001:2018 certification serving as an alternative to the audit. Companies subject to the audit requirement also file an energy performance plan with the regional prefect, before 30 November of the year the audit is presented [7]. The allowance price used to calculate the 2025 payment is 68.86 euros per tonne [8].

The horizon matters as much as the immediate deadline. For sectors covered by the carbon border adjustment mechanism (steel, cement, aluminium, nitrogen fertilisers, hydrogen), free allocation is phased out: 97.5 % maintained in 2026, 51.5 % in 2030, then nothing from 2034 [9]. The definitive regime of the carbon border adjustment mechanism has applied since 1 January 2026 [10].

EU ETS sites and specific energy savings certificates: how to fund your energy efficiency projects

To fund your investments under the emissions trading scheme, specific CEE payments can be mobilised, provided the eligibility criteria are met and the associated energy savings are evidenced.

Cutting your emissions and staying within your authorised allowances calls for a decarbonisation action plan. The CEE scheme helps fund your energy efficiency projects. It entered its sixth period on 1 January 2026, running to 31 December 2030 [11], on the basis of an annual obligation of 1,050 TWh cumac [12]. Three questions follow: on what conditions a site under allowances is eligible, how to spot the projects that qualify, and how a claim actually proceeds.

Conditions for accessing energy savings certificates

Note that it is mainly specific CEE that apply here. Standard CEE are rare for EU ETS sites, since they can only cover uses that are independent of the consumption of CO2 emitting fuels.

The standard CEE most often used on EU ETS sites are electronic variable speed drive systems on asynchronous motors (IND-UT-102) and control systems on refrigeration units allowing floating high pressure (IND-UT-116). Both sheets remain in the catalogue of standardised operations in force in 2026 [13].

The essential energy management system

Since 2019, specific CEE payments have been open to sites subject to EU ETS allowances, on one condition: the classified installation must be covered by an ISO 50001 certified energy management system. ISO 50001 certification is therefore essential to access specific CEE.

The timetable has tightened since. Article D. 221-20 of the Energy Code requires the management system to be certified at the date the operation is committed, the tolerance that allowed certification up to the start of the measurement period having ended with operations committed up to 31 December 2021 [14]. The gross payback period of the operation must also exceed three years, calculated after valuing free allowances, set at 73.23 euros per tonne of CO2 equivalent for 2026 [15].

An obligation of results

For an EU ETS site to claim specific CEE payments, a commissioning report is required by the funding bodies and conditions the release of the full amount. For EU ETS sites, six months of data evidencing the installation's performance must be supplied before a CEE claim is filed. That measurement period drops to two months where the operation gives rise to a claim below 20 million kWh cumac [16].

Identifying eligible projects

For EU ETS sites, guidelines set out certain elements for specific operations, such as:

• ●
  Lifetime
• ●
  Baseline situation
• ●
  Measurement period and protocol
• ●
  Methods for calculating energy savings

These guidelines are set out in the four annexes to the decision of 15 July 2020, which repealed and replaced the decision of 20 February 2020 [18]. They cover the following:

• ●
  Heat recovery systems on refrigeration units
• ●
  Waste heat recovery for use on a heating network or by a third party
• ●
  Heat production by a boiler plant fuelled by solid recovered fuels
• ●
  Production of heat and on-site consumed electricity by cogeneration fuelled by solid recovered fuels

How a specific CEE claim proceeds

The steps for activating a specific CEE payment are as follows:

1. 1.
   Identification of eligible actions, based on technical information supplied by the site.
2. 2.
   Preparation of the technical file.
3. 3.
   Launch of the CEE process by signing an agreement. For EU ETS sites, ISO 50001 certification must be held at the date the operation is committed.
4. 4.
   Commitment of the works, evidenced by a signed quote or an order.
5. 5.
   Completion of the works, evidenced by an invoice.
6. 6.
   Validation of the technical file. For EU ETS sites, this validation involves measuring energy performance over six months, or two months below 20 million kWh cumac.
7. 7.
   Completion of the administrative file and signature of a sworn statement, together with the measurement data evidencing that the expected performance has been achieved.
8. 8.
   Filing and validation of the payment.

TURPE reduction for sites connected to the RTE transmission grid

The TURPE reduction was introduced by article 157 of law no. 2015-992 of 17 August 2015 on the energy transition for green growth, published in the Official Journal the following day [19]. Accessing it requires ISO 50001 certification and an energy performance plan filed with the DREAL. Two parameters drive the outcome: the site's offtake profile and compliance with the commitments made in the plan.

The table annexed to article D. 341-9 of the Energy Code sets out four categories of eligible sites [20]:

• ●
  Stable profile: annual offtake above 10 GWh and grid utilisation time of at least 7,000 hours, for an 81 % reduction.
• ●
  Large electricity consumer: annual offtake above 500 GWh and off-peak grid utilisation rate between 0.40 and 0.44, for 76 %.
• ●
  Counter-cyclical profile: annual offtake above 10 GWh and off-peak utilisation rate of at least 0.44, for 74 %.
• ●
  Storage sites: 50 %, with a 10 point deduction where the three year average ratio between energy injected and energy taken off remains below 70 %.

This energy performance plan is a five year action plan, reviewed and approved by the DREAL under delegation from the regional prefect. It is binding: every year, you must supply a progress report evidencing the results achieved, the corrective measures taken or the actions abandoned. Article D. 351-5 of the Energy Code sets the deadlines: the plan is filed with the regional prefect no later than one year after the first attestation, the energy management system is certified within eighteen months and the performance target is met at the end of five years [21]. The annual request reaches the grid operator no later than 30 November of the year preceding the year it applies to [22].

The financial stake follows the tariff itself. TURPE 7 came into force on 1 August 2025 and the HTB grid, the one covering sites connected to the transmission network, rose by 3.34 % on 1 August 2026 [23]. On a stable profile site, the 81 % reduction therefore applies to a base that keeps growing.

Getting ISO 50001 certified: an asset for funding your actions

ISO 50001 certification is increasingly central to accessing investment support, whether that means keeping free carbon allowances, obtaining specific CEE or securing the TURPE reduction. Its status has also changed since this article was first published.

Voluntary until now, it has become a legal requirement. Article 25 of law no. 2025-391 of 30 April 2025 requires a certified energy management system for legal entities whose average annual final energy consumption is greater than or equal to 23.6 GWh, by 11 October 2027 at the latest [24]. Below that threshold and from 2.75 GWh, a four yearly energy audit applies, with a first deadline set at 11 October 2026 [25]. Consumption is assessed as the average of the three preceding calendar years, including self-consumed renewable energy produced on site [26], and both the audit and the management system must cover at least 80 % of the company's final energy consumption [27]. Failure to comply exposes the company to a fine capped at 2 % of the pre-tax turnover of the last closed financial year, rising to 4 % where the same obligation is breached again [28].

The funding landscape has shifted too. Registration for the PRO-SMEn grant, which paid 20 % of annual energy spend up to 40,000 euros, closed on 1 October 2025, the envelope of 280 grants having been exhausted [29]. Companies already registered continue their claim through to payment, while the others turn to the schemes still open.

Two levers remain available for 2026. The PACTE Industrie programme, extended to 2028 with a budget of 46.5 million euros, funds up to 80 % of support packages on energy management, low carbon investment pathways or energy mix opportunity studies [31]. The second round of the DECARB IND 25 call for projects is open until 7 September 2026 for projects cutting more than 1,000 tCO2eq per year, with a minimum investment of 3 million euros [32].

ISO 50001 certification is a significant asset on your low carbon pathway. It allows substantial savings by cutting your energy consumption. It also strengthens your competitiveness by meeting growing sustainability requirements, opening up new commercial opportunities. Finally, it provides an internationally recognised certification, reinforcing your company's credibility on the market and its commitment to sustainable development. France counted 1,409 active ISO 50001 certificates at the end of 2022, against 812 at the end of 2019 [33].

Lemon Energy expertise supporting your decarbonisation

An ISO 50001 project naturally comes with prerequisites: producing reliable data and indicators, defining an energy policy, structuring the organisation and above all committing to monitoring and continuous improvement, the marks of a documented and effective management system.

You now know what there is to know about the national allocation of CO2 allowances. Lemon Energy brings you its expertise in implementing your ISO 50001 project, in studying and preparing specific CEE claims and in designing and monitoring your decarbonisation action plans. Get in touch to review your objectives.