New Industrial Emissions Directive (IED) risks counteracting the green transition and prolonging permit processes

Extensive adjustment is underway in the business sector to achieve the green transition, and the Confederation of Swedish Enterprise backs the climate goals and ambitious targets in the environmental sphere. Well-functioning and effective instruments are crucial for us to achieve the transition.

On 5 April, the European Commission presented its proposals for a revised Industrial Emissions Directive (IED) as part of the Green Deal and with a view to accelerate environmental and climate improvements. Swedish Enterprise believes that the impact of the proposals could result in the opposite.

The Commission’s proposals, which have now been presented, risk significantly prolonging permit processes and businesses may risk disqualification as not all necessary levels of requirements can be achieved simultaneously. This risks hindering innovation and investment in industry. In addition, almost all flexibility is removed as lower emission levels becomes the new norm for all emissions and binding values are to be set for the use of energy, water and materials In order for the industry to continue its transformation towards fossil-free energy, a stable and clear regulatory process is required that does not hamper development. There must also be an acceptance that the green transition will require more energy to reduce air emissions and to produce more resource-efficient/climate-smart products.

Swedish rules for environmental permits are largely based on EU regulations. Larger businesses – approximately 1,200 industrial plants in Sweden – are subject to special rules in the Industrial Emissions Directive. The new revisions extend the Directive to new sectors such as mining, large scale battery production and livestock farming.

The proposals also suggest the introduction of binding rules for the drafting of green transformation plans that describe how individual facilities are to be operated on a non-toxic, circular and climate-neutral basis.

The Commission states that it wants to support innovation with these plans, but the scope of the proposals’ requirements is currently unknown. Swedish Enterprise believes that it is inappropriate to establish requirements at individual plant level, as investment is decided at group level and may change over time. Green transformation plans should therefore not be linked to permits because this risks hampering innovation and counteracting investment in industry’s green transition. 

Green transformation plans that businesses currently produce are usually produced at group level and are dependent on circumstances that businesses do not always have at their disposal, such as new innovations, access to fossil-free electricity, water and raw materials, current financial position and prevailing economic conditions.

In addition, the Directive states that authorities must ensure that plans exist and are implemented as early as 31 December 2031. Swedish Enterprise doubts whether businesses and authorities could achieve this in practice in such a short period of time.

Several of the IED proposals are already being addressed in other major legislative packages under the Green Deal, (Fitfor55, chemicals legislation circular economy). Swedish Enterprise believes that it would have been preferable to have delayed the revision of the IED until other acts were in place to reduce the risk of overlapping and conflicting legislation and uncertainties.