Linear Reduction Factor (LRF)
Since 2013, there has been a cap on emissions from EU ETS compliant entities. The LRF is the rate at which the cap is reduced annually.
Following the 2023 revision of the ETS Directive, the EU ETS cap is set to bring emissions down by 62% by 2030 compared to 2005 levels. To achieve this, the reduction factor has been increased to 4.3% per year over the period 2024-2027 and to 4.4% per year from 2028.