1. When defining the relevant tiers for major fuel streams, to determine the released fuel amounts and each calculation factor, each regulated entity shall apply the following:

(a) at least the tiers listed in Annex V, in the case of a category A entity, or where a calculation factor is required for a fuel stream that is a commercial standard fuel;

(b) in cases other than those referred to in point (a), the highest tier as defined in Annex IIa.

However, for released fuel amounts and calculation factors of major fuel streams the regulated entity may apply a tier up to two levels lower than required in accordance with the first subparagraph, with a minimum of tier 1, where it shows to the satisfaction of the competent authority that the tier required in accordance with the first subparagraph, or where applicable the next highest tier, is technically not feasible or incurs unreasonable costs.