Combating climate change: New IED and ETS interactions required

Legal note on why a redesign of the IED and ETS relation is urgently needed

The EU’s Industrial Emissions Directive (IED) regulates pollutant emissions from (agro)industrial installations and is currently being revised by the European Commission. The IED has huge potential to become one of the key legislative instruments translating the climate targets under the Paris Agreement and the new EU Climate Law into tangible legal obligations. As the current exclusive relation of the IED and the Emission Trading System (ETS) hinders stringent provisions on industry’s decarbonisation under the IED, the paper illustrates why there is an urgent need to reshape their interactions from a legal perspective. This analysis has been submitted to the European Commission as part of our response to the Open Public Consultation in March 2021.