Auctioning Factor represents the share of allowances the sectors eligible for free allocation would need to purchase if not on the carbon leakage list in order to cover their emissions stemming from activities eligible for free allocation.
This may be expressed in a formula:
AF= Allowances to purchase/Direct emissions=1-Basic allocation/Direct emissions
AF - auctioning factor
Basic allocation - the quantity of allowances allocated for free to an installation if none of the activities it carries out are on the carbon leakage list.
Source: Commission Staff Working Document Impact Assessment Accompanying the document Commission Decision determining, pursuant to Directive 2003/87/EC of the European Parliament and the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage for the period 2015-2019