
The study aims at introducing the instrument of product benchmarks as a possibility to determine free allocation of carbon certificates to facilities covered by a future emissions trading scheme (ETS) in Mexico. The study shall help to illustrate the concept of product benchmarks by discussing it – in a simplified form – with the example of the steel sector. Based on public information and the experience with product benchmarks from established ETS, conclusions are drawn with respect to technical, methodical and procedural aspects of a possible benchmark-based free allocation approach in Mexico.