In the EU, the environmental regulation of the operation of
fossil fuel-fired generating plants is dominated by two EU
directives. The EU Emissions Trading Scheme (EU ETS, established by
Directive 2003/87/EC) is designed to reduce the EU's overall
emissions of greenhouse gases through an EU-wide cap-and-trade
system. The Industrial Emissions Directive (IED, Directive
2010/75EU) is primarily focused on other pollutants—notably,
in the case of power plants, sulfur dioxide (SO2), nitrogen oxides
(NOx) and dust.
Although IED permits are in principle intended to regulate all
significant pollutant streams from industrial installations,
national authorities are generally not meant to (and do not) use
them to control GHG emissions. Yet, paradoxically, it is the IED
(with its precursors, the Large Combustion Plant Directive, or
LCPD, and the Integrated Pollution Permitting and Control
Directive, or IPPCD), rather than the EU ETS, which arguably has so
far done most to reduce
