1. Where an application for free allocation is made under Article 5, the regulator shall determine historical activity levels of each new entrant and its sub-installations as follows:

(a) the product-related historical activity level shall be, for each product for which a product benchmark has been determined as referred to in Annex I to this Regulation, the activity level of the first calendar year after the start of normal operation for the production of this product of the sub-installation concerned;

(b) the heat-related historical activity level shall be the activity level of the first calendar year after the start of normal operation for the import from an installation covered by the EU ETS or UK ETS, production, or both, of measurable heat consumed within the installation's boundaries for the production of products, for the production of mechanical energy other than used for the production of electricity, for heating or cooling with the exception of the consumption for the production of electricity, or exported to an installation or other entity not covered by the EU ETS or UK ETS with the exception of the export for the production of electricity;

(c) the district heating-related historical activity level shall be the activity level of the first calendar year after the start of normal operation for the import from an installation covered by the EU ETS or UK ETS, production, or both, of measurable heat which is exported for the purposes of district heating;