(1) The flexible reserve is a reserve of allowances for the trading period from which allowances may be allocated until the reserve is exhausted.

(2) The flexible reserve consists of the following -

(a) allowances equal to the sum of the amounts set out in paragraphs (i) and (ii), if the sum is greater than zero -

(i) 28,081,237;

(ii) the sum of A and C minus 53,294,847, where -

(aa) A is 240,342,255 (industry cap for 2021-2025 allocation period) minus B;

(bb) B is the final annual number of allowances approved by the UK ETS authority [See article 14 of S.I. 2020/1265 for "UK ETS authority".] under Article 16b of the Free Allocation Regulation [EUR 2019/331, amended by S.I. 2020/1557, 2021/1455, 2022/1173, 2023/850, 2023/1387, 2024/192 and this Order. See article 4(1) of S.I. 2020/1265 for the definition of "Free Allocation Regulation".] (final allocation at installation level for incumbent installations) to be allocated in respect of all installations for all scheme years in the 2021-2025 allocation period;