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Module 8 of 9 · S3 · Verification, carbon price paid and the free allocation adjustment

5.Materiality: the 5 % thresholds

For each tonne of each good (by CN code), an error is material if it exceeds:

  • 5 % of the specific embedded emissions, or
  • 5 % of the specific embedded free allocation.

WATCH OUT A small error early in the chain can become material once it passes through precursors into the final good.

Sources: VPA Art 5(1)-(2); GV §6.2 p.83-84.