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Revised EU Industrial Emissions Directive

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Townsend Matthew
Matthew Townsend

Partner

London

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21 June 2021

The EU is to revise the Industrial Emissions Directive (IED) over the course of 2021. In perhaps the most consequential year for European climate legislation, the revised Directive will likely take centre stage in the European effort to tackle climate change and improve environmental protections across the Union.

The Commission’s European Green Deal set out in 2019 a new sustainable growth strategy to transition the EU economy.  As part of the “Fit for 55 Package”, the Commission intends to focus on a range of areas, from renewables to energy efficiency first, as well as climate and energy diplomacy, energy taxation, effort sharing and emissions trading, along with a wide range of other pieces of legislation. As the central directive to tackle industrial pollution, the IED will represent a key pillar of the European Green Deal.

The Industrial Emissions Directive 

The Industrial Emissions Directive 2010/75/EU (IED) was adopted in 2010 with ambitious environmental aims: to elevate the legislative protection of human health and the overall environment by reducing industrial emissions across the EU.1  

Today, over 50,000 installations within the IED’s scope are required to operate under a permit granted by Member State authorities. The conditions of every permit require each installation to comply with the IED’s requirements. Central among these is adherence to Best Available Techniques (BAT), which are the available economically viable industry best practice standards that help protect the environment.

Other key components of the IED include:

  • EU-wide emission limits – For certain activities such as large combustion plants, waste incineration and co-incineration plants, solvent using activities and titanium dioxide production. The IED also sets EU wide emission limit values for selected pollutants.
  • Mandatory environmental inspections requirements – Member States must establish a system of environmental inspections and inspection plans, with site visits to take place at least every 1 to 3 years, using risk-based criteria.
  • Public participation – the public is empowered to participate in the decision-making process, and to be informed of its consequences, having access to permit applications, permits and the results of the monitoring of releases.

Revision of the Industrial Emissions Directive

The Commission now aims to table a proposal for a revised IED for the end of 2021. The IED revision process involves an Open Public Consultation, Targeted Stakeholder Survey, and the Commission intends to hold a final IED IA stakeholder workshop in early July.

The Commission published a final report, “Support to the evaluation of the Industrial Emissions Directive”, in March 2020, setting out the results of the assessment against the evaluation criteria: effectiveness, efficiency, relevance, coherence and ‘”EU added value”.

In the March report, it was found that the IED has overall strengthened environmental protections. Most importantly, the IED has been identified as “very likely” to have contributed towards to a reduction of reported emissions of several pollutants from industrial activities consistently over the past 10 years. 

The IED has been hailed as having the potential to set ‘race to the top’ emissions incentives through EU-wide standards. Overall, the evaluation report found that the IED has contributed towards reducing air pollution from industrial activities falling within its scope, with water pollution reduce to a lesser extent. However, some stakeholders have questioned the general scale of such reductions and whether they are sufficient. Further key issues reported are:

  • Efficiency of the “Sevilla Process” – More could be done to further improve the process of drafting reference documents that set the BAT (BREF). Whilst there has been some success, major challenges persist in terms of the length of the BREF process, the time between reviews, the process for identifying key environmental issues within the BREF and the ability to identify emerging issues.2 
  • Increase in BAT-based permitting – The IED has supported Member States in implementing BAT-based permitting. There has been variation across the EU in the thresholds for permit emission limit values, with the tendency for values to be based on the more lenient upper, rather than lower emission levels obtained under normal operating conditions using BAT (BAT-AELs).
  • Enforcement – While the IED has strengthened powers of enforcement, uncertainty remains as to whether enforcement and inspections have been strengthened in practice. The also remains considerable variation in enforcement across Member States.
  • Resource efficiency and circular economy aspects – The BREF process does not systematically include BATs on circular economy topic areas such as energy use, raw materials and waste generation.
  • Innovation - BAT are inherently “backwards looking” and their ability to stimulate innovation has been limited. There has also been criticism around the BAT determination method being open to obstruction from some Member States.

A number of long-standing issues remain which have been publically raised across various stakeholder groups. We expect the above changes to drive the policy debate around the revised IED. Beyond these factors, however, there have been some calls for a more radical policy direction, including removing the prohibition in Article 9(1) to allow Member States to include emission limit values on greenhouse gases in integrated IED permits. 

Another key point of debate will likely be around expanding the IED’s scope. The scope may be pushed beyond the resource and energy-intensive industrial activities in Annex I to other sectors perceived to be high emitters.

Conclusion

While the IED’s revision is part of a regular legislative review, a number of environmental stakeholders note that a revised IED has the potential to be one of the key legislative instruments translating the EU’s international climate change obligations under the Paris Agreement and the EU Climate Law into legal obligations. 

The coming months will be vital in establishing the direction of the revised IED. Given its significance, the IED will be the subject of considerable political and legal debate between various stakeholders, be they Member States, European industry or environmental NGOs. Industry participants should closely monitor these developments and play an active role in the next phase of evolution for the IED.

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Footnotes

1. In the UK, the IED was nationally implemented through an amendment to the Environmental Permitting (England and Wales) Regulations 2010 (SI 2010 No. 675). The amendments formed the Environmental Permitting (England and Wales) (Amendment) Regulations 2013.

2. The BREF process or the “Sevilla Process” involves the European Commission, Member States and representatives of European industry and environmental NGOs (together, the Technical Working Groups) providing input into the drafting of BREFs.