Introduction
The new Industrial and Livestock Rearing Emissions Directive 2024/1785 (IED 2.0) is the main legislative framework addressing industrial emissions from large industrial installations in the EU. It covers around 37,000 industrial plants and 38,500 pig & poultry farms. IED 2.0 requires that industrial plants operate with a permit granted based on the implementation of Best Available Techniques (BAT), which are specified in the BAT conclusions that are published in the Official Journal of the European Union. The activities/types of installations regulated by the IED include power plants, refineries, waste treatment, the production of metals, cement, glass and chemicals as well as livestock farming.
The modernisation of EU rules on industrial emissions were undertaken to align with the European Green Deal objectives. Large industrial plants and livestock farms are responsible for 20% of Europe’s emissions to air, 20% of emissions to water and 40% of GHG emissions, and the revised framework aims to accompany the green and circular transformation of industry. The updated rules will notably promote a faster uptake of innovative techniques while increasing data transparency and improving public participation in the permitting process. These will effectively contribute as well to new priorities set out by the European Commission such as the upcoming Clean Industrial Deal with a focus on inter alia competitiveness and align with strategic objectives set out in the recently announced Draghi report.
This paper provides an overview of the main legislative changes that are part of the IED 2.0 and presents the Innovation Centre for Industrial Transformation and Emissions (INCITE), designed to bring a forward-looking mechanism to the Sevilla Process, the participatory stakeholder engagement process used to draft and review the Best Available Techniques (BAT) reference documents (BREFs).
The IED 2.0 legislative framework
The IED 2.0 introduces a number of new requirements designed to address five areas identified as needing modernisation during the evaluation of the Directive (see Figure 1).
- Promoting innovation and transformation: INCITE will be established to identify and evaluate innovative processes and techniques that industrial operators will implement to align with the EU’s sustainable, clean, circular, and climate-neutral policy objectives. Operators will also need to create installation-specific transformation plans as part of their environmental management system, with energy-intensive installations required to produce such plans by 30 June 2030.
- More effective legislation: Member State permitting authorities will be required to use tighter pollutant emission limit values when revising permits or setting new permit conditions. The emission limit values will now be based on an assessment by the operator of the entire BAT-Associated Emission Level (BAT-AEL) range, looking at the feasibility of meeting the strictest end of the BAT-AEL range when applying BAT. Moreover, Member States will implement systems and procedures for electronic permitting of installations by the end of 2035.
- Consumption, circular economy and chemicals use: The BAT conclusions may include binding environmental performance levels related to BAT for consumption levels (e.g. water and energy resources, waste generation). Additionally, industrial installations will be required to establish a chemicals management system including a chemicals inventory for hazardous substances present in or emitted from the installation, along with an analysis of potential options to substitute them with safer alternatives or to reduce their use or emission.
- Enhanced Aarhus rights: The new Industrial Emissions Portal Regulation replacing the E-PRTR Regulation sets rules on collection and reporting of environmental data from industrial installations and enhances access to environmental information by setting up the Industrial Emissions Portal. It is a tool for the public and the authorities to identify and monitor sources of industrial pollution and thus contributing to its prevention and reduction.
- Widening of IED scope: The IED coverage will be extended to new sectors such as the manufacture of lithium battery cells in giga-factories and extractive industry installations (for ores). The adoption of BAT conclusions under the IED for the operation of waste landfills will become possible, which shall contribute to the reduction of methane emissions in this sector.
The INCITE
The IED 2.0 establishes a new Innovation Centre for Industrial Transformation and Emissions (INCITE), gathering information on innovative techniques, fostering and accelerating their development.
The INCITE launch event took place on 21 June 2024 in Seville with approximately 260 in person participants and 550 online ones, covering a wide range of stakeholders from industry, Member States, technology providers, research organisations, sustainable finance and financial institutions, the European Commission and environmental NGOs. The recording of this pivotal event can be watched here.
One of the objectives of INCITE is to become a leading centre for identification and analysis of innovative techniques with high potential for decarbonisation, depollution, and increasing resource efficiency and circularity in large industrial installations covered under the IED. The Joint Research Centre (JRC) Seville has set up and operates INCITE in close cooperation with the Directorate-General for Environment (DG ENV), but also with support from other Commission DGs (e.g. RTD, CLIMA, GROW). The concept of INCITE is summarised in Figure 2.
- Objectives and scope: INCITE aims to be a central reference point for identifying and analysing the environmental performance of innovative techniques in Europe and beyond. It aims to inform future policy developments and investments, remove informational barriers for investors, and support front-runners through flexible permitting rules. The goal is to accelerate the development and uptake of innovations to make industry more competitive and greener. INCITE will cover all industrial sectors under the IED 2.0 but will focus work during its first years of operation on energy-intensive industries.
- Key activities: INCITE will systematically scan the horizon, gathering information on innovative techniques worldwide. If they are deemed ready for use at an industrial scale, are cost-effective and provide significant environmental benefits, these techniques could be incorporated in the Sevilla Process for the development of environmental norms. For this purpose, INCITE will establish a global and publicly available online platform where a wide range of stakeholders (EU-funded project leaders, industry, technology providers, research and technology organisations) will be able to submit and access information. This platform will also enable demonstration plants and first-of-a-kind industrial installations to be mapped. INCITE will ensure that the information is complete and accurate and will analyse the degree of maturity and environmental performance of innovative techniques. Sectoral scoreboards showing the degree of advancement of industry sectors towards the EU objectives of e.g. decarbonisation or circular economy will be developed to help prioritise the revision of BREFs and define the work programme of the Sevilla Process.
- Outputs: INCITE will organise sectoral workshops and site visits to front-runner industrial installations to facilitate exchange between stakeholders on innovative techniques and learn from experts on the maturity and environmental benefits of the technologies developed. INCITE will publish recommendations in JRC Technical Reports and curate the information to support Member States when permitting installations using innovative techniques and to help direct funding towards promising technologies.
- Added value: INCITE will help to remove informational barriers for public and private investors in industrial transformation but will also support front-runners through flexible permitting rules. It will provide curated information on the environmental performance and economics of key technologies. INCITE technical outputs are also expected to assist sustainable finance actors in verifying taxonomy criteria alignment or conducting credibility checks for transition plans prepared by industrial installations under the Corporate Sustainability Reporting Directive.
Decarbonisation of the steel industry
The steel industry is responsible for around 5% of CO2 emissions in the EU and 7% globally. It needs to develop and commercialise new low-CO2 technologies in order to be in line with the EU’s climate targets.
CO2 emissions and energy use in European steel production have already been halved since 1960, and the sector aims to achieve further cuts of 80-95% by 2050, compared to 1990 levels. The conventional Blast Furnace – Basic Oxygen Furnace production route is highly CO2-intensive (usually with a carbon footprint of 1.6-2.0 tonnes of CO2 per tonne of crude steel produced) and most EU steel mills are operating close to optimum efficiency. Accordingly, the industry is now increasingly focusing on the implementation of alternative technologies e.g. hydrogen-based ironmaking using direct reduction of iron ore combined with electric arc furnace steelmaking, solid molten electrolysis to decarbonise the sector.
INCITE could play a crucial role for accompanying the decarbonisation of the steel industry by frontloading information on relevant innovative techniques that could be included in the next revision of the Iron and Steel Best Available Technique Reference document (IS BREF), expected to start in 2026 (tentative date). To this end, a sectoral workshop dedicated to the iron and steel sector shall normally take place in 2025, it will constitute an important milestone to showcase and exchange on the most promising technologies between industry, MS competent authorities, research and technology organisations, environmental NGOs and European Commission services (e.g. JRC, RTD, GROW, ENER).
References
(1) The Industrial and Livestock Rearing Emissions Directive (IED 2.0), European Commission
(2) Commission Staff Working Document – Evaluation of the Industrial Emissions Directive (IED) – SWD (2020) 181 Final – 23/09/2020.
(3) EU climate targets: How to decarbonise the steel sector, JRC 2024
