<p>Free allocations to individual operators are managed dynamically via the Activity Level Changes (ALC) process to reflect significant increases and decreases in production accurately. Operators must submit a verified Activity Level Report to their UK ETS regulator annually. If the data shows an increase or decrease in activity of more than 15% from historic activity levels (calculated from the previous 2 years’ activity levels), free allocation of allowances will be recalculated.</p>