The IED activities are responsible for 1,058.54 Million tonnes of GHG emissions (2023), of which about 60% are from energy generation ( EEA Industrial Emissions Portal). The EU ETS Directive (ETS-D) covers most of the stationary industrial activities also covered by the IED 2.0 but the match is not identical (e.g. IED addresses combustion of fuels as of 50MWth whilst the EU-ETS start as from 20MWth, the IED 2.0 covers further activities not listed in the EU -ETS).
One of the main policy inconsistencies remaining still to date is that the IED did not set explicit requirements on preventing greenhouse gas (GHG) emissions at the source from the largest polluters because of a serious shortcoming brought by the EU-ETS, rather the opposite: Art. 26 of the ETS-D of 2003 prohibits Member State permit writers to set ‘an emission limit value for direct emissions of that gas unless it is necessary to ensure that no significant local pollution is caused’, where the ”emissions of a greenhouse gas from an installation are specified” in the EU ETS Directive. Further, the EU-ETS allowed “not to impose requirements relating to energy efficiency in respect of combustion units or other units emitting carbon dioxide on the site”.
The EEB called instead for a “combined approach” to reinforce the ETS and make it act in synergies with performance-based pollution prevention at source standards. E.NGO argue for the removal of this climate inaction provisions (Art 9.1 + 9.2) and to instead set GHG emission limits for energy intensive activities, and/or fossil fuel switching and electrification obligations [see Position Paper “Addressing the climate crisis”].
The arguments by the European Commission was that the deletion of Art 9 (1) of the IED “might affect the operation of the ETS”, industry argued on the basis of “double regulation” claims, despite many operators being GHG emission allowance free-riders due to the free allocation system. In short: the preservation of a ‘market-based approach’ for dealing with GHG reduction is more important than favouring policy options there are more time-effective in delivering GHG pollution prevention and to protect the climate. A review is delayed again to June 2028 at the latest or when the EU ETS-D is reviewed, as stated in its Article 8 “The Commission shall review the effectiveness of synergies with Directive 2010/75/EU. Environmental and climate-relevant permits shall be coordinated to ensure efficient and speedier execution of measures needed to comply with Union climate and energy objectives.”
In the meantime, real climate protection action at the source is expected due to the following improved provisions brought by the IED 2.0:
- The BAT criteria listed in IED’s Annex III explicitly refer to decarbonisation with a general principle to prevent or reduce to a minimum the overall impact of the emissions on the environment.
- The official ‘best’ of the BAT definition has been amended to explicitly refer to a high level of protection of the environment as a whole, including human health and climate protection (Art 3 (10) point c).
- Greenhouse gases (GHG) have been added as a new pollutant group in the revised Annex II of the IED 2.0, cross linking to the Regulation establishing the Industrial Emissions Portal.
- The policy objective of the IED 2.0 explicitly lists the promotion of decarbonisation as its main goals (Art. 1)
- A new definition of “deep industrial transformation” has been added (Art 3 (9a), allowing operators to gain another extra 4 years to comply with those requirements, if the technique “allows an extremely substantial reduction of emissions of greenhouse gases in line with the objective of climate neutrality and optimises environmental co-benefits, at least to the levels that can be achieved by techniques identified in the applicable BAT conclusions, taking into account cross-media effects”
- The core role of the new ‘Innovation Centre for Industrial Transformation and Emissions (INCITE)’ will be to collect and analyse information on innovative techniques, including emerging and transformative techniques, which contribute inter alia to minimisation of pollution, decarbonisation, resource efficiency, circular economy using less or safer chemicals (Art 27a).
In short, the upcoming EU BAT-Conclusions will have to set dedicated BAT Conclusions on decarbonisation. A technique can no longer by claimed ‘BAT’ if it is not compatible with climate protection. Hence the use of fossil fuels in a combustion process with major greenhouse gas (GHG) emissions cannot be BAT any longer.
- Installation level Transformation Plans need to be drawn up by the operators of energy intensive industries (Art. 27d), which shall “contain information on how the operator will transform the installation during the 2030-2050 period to contribute to the emergence of a sustainable, clean, circular, resource-efficient and climate-neutral economy by 2050, including where relevant deep industrial transformation”
- Permit writers need to ensure that the permit conditions ensure that ‘energy is used efficiently and the use and, where possible, the production of renewable energy is promoted’ (Art 11f)
The IED 2.0 foresees that the European Commission sets out minimal expectations on the content of the transformation plan through a delegated act by latest June 2026. Please find here the main suggestions provided by the EEB in the call for evidence (March 2025).
