Participates in the EU ETS (Norway Links with EU ETS). 2013 cap for emissions from fixed installations is set at 2,084,301,856 allowances as part of Phase 3. Between 2013-2020, this cap decreases each year by 1.74%, amounting to a reduction of 38,264,246 allowances each year (EU Emissions Cap). Auctioning is the default method for allocating allowances and 300 million allowances set aside in the New Entrants Reserve to fund the deployment of innovative renewable energy technologies and carbon capture and storage through the NER 300 programme (Phase 3). In 2021, the pace of annual reductions in allowances increases to 2.2% as of 2021 as part of Phase 4. Phase 4 will also continue the free allocation of allowances as well as include low-carbon funding mechanisms (Phase 4).