Following up on our blog post from October 11, 2023 (EU Industrial Emissions Directive Revision – Trilogues have started - Hogan Lovells Engage), we are providing an update on some of the most controversial topics of the IED Revision.

Scope of application of the IED:

The IED is the main EU instrument regulating pollutant emissions from industrial installations. The compromise that has now been reached extends the scope of the IED:

Livestock farms

The Commission originally proposed that livestock farming activities should also be included in the scope of the IED if it involves the rearing of cattle, pigs and poultry in 150 LSU (“Livestock Units”) or more, or the rearing of any mix of cattle, pigs and poultry in installations of 150 LSU or more. The Parliament proposed to delete the extension to the scope for livestock altogether, while the Council proposed to raise the LSU thresholds and to exclude extensive production regimes from the scope.

The provisional agreement has now completely removed rearing of cattle from the scope. In addition, the thresholds have been significantly raised so that the IED now only applies in case of the rearing of pigs representing more than 350 LSU, rearing of only laying hens representing 300 LSU or more, or rearing of only other poultry categories representing 280 LSU or more. In installations rearing a mix of poultry including laying hens, the threshold is 280 LSU. Furthermore the rearing of any mix of pigs or poultry representing 380 LSU or more is in scope of the IED. The compromise has therefore been found roughly in the middle of the original positions.

Even if the rearing of pigs or the rearing of a mix of pigs and poultry reach or exceed the threshold, the IED is not applicable if organic production regimes are followed, or where the stocking density is less than 2 LSU/hectare used only for grazing or growing fodder or forage used for feeding the animals and the animals are reared outside for a significant amount of time or seasonally.

The new regulations are to be implemented by the Member States step by step over several years, starting with the biggest installations.

Mining

The agreement also brings mining activities into the scope of the directive, covering the extraction including on-site treatment of ores produced on an industrial scale such as iron, copper, gold, nickel and platinum. Subject to review and legislative proposal by the Commission, the scope may be extended to industrial minerals as well, cf. Art. 73 para. 4: “The Commission shall review the need to control emissions from the on-site treatment and extraction of non-energy industrial minerals used in industry other than for construction, as well as the need to control emissions from the on-site treatment and extraction of ores which are newly carried out in the EU.“

Batteries

The scope of the IED has also been expanded in regard of batteries. The Commission proposed to extend the scope of application of the IED to the manufacture of lithium-ion batteries with a production capacity of 3,5 GWh (only), which the Parliament agreed with. However, the Council proposed to include all kinds of batteries and a smaller production capacity. The provisional agreement now includes manufacturing of batteries (not limited to lithium-ion batteries) with a production capacity of 15 000 tonnes of battery cells or more per year.

Art. 79a (new), Compensation Claims:

According to the newly introduced Art. 79a, Member States shall ensure that, where damage to human health has occurred as a result of a violation of national measures that were adopted pursuant the IED, the individuals affected have the right to claim and obtain compensation for that damage from the relevant natural or legal persons. Member States may establish limitation periods for bringing actions for compensation.

As expected, a reversal of the burden of proof originally envisaged and heatedly discussed was not included in the provisional agreement that has now been published. In addition, compensation can only be claimed by the respective natural and legal persons, but not - as originally envisaged by the Commission - by the competent authority.

Art. 14a IED (new), Environmental Management System:

The Environmental Management System (“EMS”) was accepted by all three parties in the compromise, which has to be implemented by every operator. The EMS shall include specific environmental data such as environmental policy objectives for the continuous improvement of the environmental performance and safety of the installation, e.g. measures to prevent the generation of waste, optimise resource and energy use and water reuse.

Art. 5 IED (recast), Public access to IED permits

The parties agreed to make permitting more efficient and less burdensome by introducing an obligation for Member States to establish an electronic permit system (e-permit) by end of 2035. While the Commission included a para. 4 in its initial proposal to ensure that IED permits are made available on the internet, which the Parliament supported, the Council proposed to delete this proposal. This in fact did not make it into the final version of the IED revision.

Art. 7 IED (Recast), Incidents and Accidents:

As expected, incidents and accidents affecting human health were included in Art. 7 next to such affecting the environment. In this respect, the Commission's proposal was adopted, and the Council's proposal was adapted to the effect that the wording of the Commission’s proposal was altered so that Member States shall take the necessary measures to ensure operators not only limit the environmental consequences, but also those to human health. Art. 7 also includes a new para. on pollution events affecting drinking water resources, which was proposed by the Parliament.

Also, permit suspensions pursuant to Art. 8 have been tightened. All three parties wanted to implement stricter regulations in case of breaches of permit conditions that pose an immediate danger to human health or the environment. The recast extends the powers of the Member States in the event of persistent breaches of the permit conditions. Furthermore, the proposal of the Parliament to specifically include breaches of compliance affecting drinking water resources has been followed.

New EU Industrial emissions portal

In addition to the revision of the IED, a Proposal for a Regulation of the European Parliament and of the Council on reporting of environmental data from industrial installations and establishing an Industrial Emissions Portal (“IEP”) was submitted. According to Art. 1, the regulation lays down rules on the collection and reporting of environmental data on industrial installations and establishes an Industrial Emissions Portal at Union level in the form of an online database giving public access to such data to facilitate public participation in environmental decision-making, as well as identifying sources of industrial pollution and to enable monitoring in order to contribute to the prevention and reduction of pollution.

Next steps

New and old in-scope operators are advised to assess how to best set up internal processes to prepare for the obligations established upon (IED and consequently) Member State legislation revisions.