1. For each product benchmark sub-installation referred to in Annex I with consideration of exchangeability of fuel and electricity, the preliminary annual number of emission allowances allocated free of charge shall correspond to the value of the relevant product benchmark set out in Annex I multiplied by the product-related historical activity level and multiplied by the quotient of the total direct emissions including emissions from net imported heat over the baseline period referred to in Article 9(1) of this Decision expressed as tonnes of carbon dioxide equivalent and the sum of these total direct emissions and the relevant indirec ...[+++]t emissions over the baseline period referred to in Article 9(1) of this Decision.

2. The product-related historical activity level shall, for each product for which a product benchmark has been determined as referred to in Annex I, refer to the median annual historical production of this product in the installation concerned during the baseline period.

Further statistical analyses and plausibility checks using indicators such as, for example, proposed allocation per historical activity level compared to benchmark values or historical activity level compared to production capacity helped in identifying additional potential irregularities in the application of the harmonised allocation rules.

Furthermore, given the significant impact on allocations, the Commission analysed in detail the calculation of the historical activity levels of installations, cases of significant capacity changes during the baseline period as well as cases of installations starting operation during the baseline period, the calculation of the preliminary number of emission allowances to be allocated free of charge taking into account the exchangeability of fuel and electricity, the carbon leakage status as well as heat exports to private households.

In this context, the standard capacity utilisation factor is necessary to determine the product-related activity level for products for which a product benchmark has been determined in Annex I to Decision 2011/278/EU.

For installations which had a significant capacity extension or reduction, Member States are to use the standard capacity utilisation factor to determine the product-related activity level of the added or reduced capacity of the subinstallation concerned.