Judgment;Summary — ECLI:EU:C:2024:465
Date: 2024-06-06
Language of the case: Swedish
Court formation: Ninth Chamber
Subject matter: Environment;Pollution
Procedure: Reference for a preliminary ruling
Origin: Sweden

summary, the 
permit enables the company each year to process and produce a significant 
quantity of chemicals of various sorts. The production quantity exceeds one 
hundred tons per day. 
8 The production process creates hazardous waste in the form of waste water. 
Pursuant to a provisional order 3 in the permit, the company is to process such 
 
3 […] 
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water in an incinerator or have the water treated in another authorised installation 
for hazardous waste […]. Nouryon has chosen to process the waste water in an 
incinerator at the installation in Stenungsund. The installation is constructed in 
such a way that the polluted water is piped directly from that part of the 
installation where the chemical production takes place to the incinerator. 
9 It has emerged during the case that the incinerator is used almost exclusively to 
incinerate the waste water produced during the process, in all approximately 
40 000 tons per year. The water’s energy content, as stated by Nouryon, is near to 
negligible, so the incineration is carried out with the addition of combustible gas. 
The energy from the incineration is then recovered for the installation in the form 
of steam to be used in the production process. The greater part of the energy for 
the production is obtained, however, from an industrial boiler. In 2017, the 
incinerator was supplied with 4 289 tons of combustible gas, which corresponds to 
245 terajoules, and returned 182 terajoules. In that year, the incineration of 
combustible gas in the industrial boiler corresponded to approximately 726 
terajoules (approximately 14 069 tons). The incineration in the incinerator gives 
rise, according to Nouryon, to greenhouse gas emissions into the atmosphere of 
approximately 11 500 tons of carbon dioxide per year. According to the NV, the 
yearly emissions amount to 17 000 tons. 
10 Nouryon’s installation for bulk chemical production falls under activity 
description 23 in the annex to the Ordinance on certain greenhouse gas emissions. 
That means that the company not only requires authorisation under the MB […], 
but also a special authorisation for permission to release greenhouse gases from 
the installation (see Paragraph 2 of the Law on certain greenhouse gas emissions 
and Chapter 3, Paragraph 1 of the Ordinance on certain greenhouse gas 
emissions). The company does also hold such an authorisation, but that 
authorisation does not cover emissions from the incinerator. 
The NV’s order 
11 [Or. 6] When considering the application made by Nouryon for free allocation 
before the fourth trading period, the NV noted that the incinerator was not 
mentioned in the installation’s monitoring plan, that is to say, the plan which is to 
contain, inter alia, a description of the installation and the activities carried on 
there, as well as a list of the installation’s emission sources (see Paragraph 6 of the 
Law on certain greenhouse gas emissions which refers to [the Monitoring and 
Reporting Regulation]). The greenhouse gas emissions from the incinerator are 
therefore not included in the calculation of the overall emissions from Nouryon’s 
installation. 
12 On the basis thereof, the NV ordered Nouryon to submit a supplemented 
monitoring plan which also included the incinerator. The NV pointed out that the 
company needs emission allowances for emissions from all units which are 
integral parts of the installation, since the installation is covered by an activity 
description in the annex to the Ordinance on certain greenhouse gas emissions. In 
NOURYON FUNCTIONAL CHEMICALS 
 
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such a situation, it is, in the view of the NV, not relevant that one of the integrated 
units incinerates hazardous waste. 
13 Nouryon argued that a unit which incinerates hazardous waste should not be 
included in the emission allowance trading scheme, irrespective of whether it is an 
integral part of an installation which is included in the scheme. The company 
pointed out that that follows from the wording of the directive and of the national 
ordinance and that there is no ground for interpreting the provisions differently. 
The company also stated that the recovery of the energy, and thus its integration, 
is merely a part of the company’s energy management and that the aim of the 
incinerator is to incinerate the waste water produced during the production 
process. The monitoring plan subsequently submitted by the company to the NV 
did not include the incinerator. 
The case before the Land and Environment Court, Nacka 
14 Nouryon appealed against the order to the Land and Environment Court, Nacka. 
That court held that it is clear that the purpose of the incinerator is to incinerate 
hazardous waste. With reference to the exception in instruction 4 in the annex to 
the Ordinance on certain greenhouse gas emissions – that all units which burn fuel 
are to be included in the greenhouse gas emissions permit, except for units for the 
incineration of hazardous waste – the court found that the incinerator was not to 
be included in the permit and thus nor was it to be included in the monitoring plan 
for the company’s greenhouse gas emissions. The court therefore rescinded the 
order. 
The case before the MÖD 
15 The NV appealed against the judgment to the MÖD and claimed that the order 
should be maintained. The NV also claimed that the court should request a 
preliminary ruling from the Court of Justice of the European Union on the 
question of whether the incinerator should be regarded as a part of the installation 
and whether the exception in clause 5 of Annex I to the Emission Allowance 
Trading Directive in that case means that emission allowances are not required for 
[Or. 7] the emissions from that incinerator. Nouryon contended that the judgment 
of the Land and Environment Court should not be amended. 
16 The NV submitted, in summary, as follows. Nouryon has opted to treat the 
hazardous waste in its own incinerator. The waste occurs as a direct consequence 
of the chemical production. The incinerator gives rise to a significant amount of 
heat which is used directly in the production of chemicals. The incinerator is not 
therefore a separate unit such as is referred to in instruction 4 but is an integral 
part of the production installation. Since the incinerator has a function in the 
production of chemicals, it is not a unit for the incineration of hazardous waste. 
The application of instruction 4 as a general exception for units which burn 
hazardous waste is not in line with the overall purpose of the emission allowance 
trading scheme. 
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17 Nouryon has, in summary, submitted as follows. The expression ‘except for units 
for the incineration of hazardous waste’ means unequivocally that units which 
form part of an installation for which an emissions permit is required may be 
exempt. The question is therefore whether the incinerator is a unit which is 
covered by the exception. The purpose of the incineration plays a decisive role in 
that assessment. The purpose of the incinerator is not to recover energy but to 
incinerate the waste water produced in the production process. The installation is 
not dependent on the energy from the incinerator. The incinerator is linked to 
other parts of the installation merely so that the heat does not go to waste. A 
failure to make use of the heat would run counter to the aim of the environmental 
legislation to recover and conserve energy, but implies no functional effect on the 
installation. There is therefore no question of co-incineration. Against that 
background, the incinerator is not to be included in the emission allowance trading 
scheme. 
EU law 
The Emission Allowance Trading Directive 
18 The Emission Allowance Trading Directive is to be applied to those activities set 
out in Annex I to the directive (see Article 2(1)). ‘Installation’ means a stationary 
technical unit where one or more activities listed in Annex I are carried out and 
any other directly associated activities which have a technical connection with the 
activities carried out on that site and which could have an effect on emissions and 
pollution (see the first subparagraph, point (e), of Article 3). 
19 The introduction to the annex contains both general provisions on the activities 
and installations covered by the directive (see points 1 to 6) and more precise 
provisions on the specific activities which are covered. 
20 Clause 5 [of Annex I] provides that when the capacity threshold of any activity in 
that annex is found to be exceeded in an installation, all units in which fuels are 
combusted, other than units for the incineration of hazardous or municipal waste, 
are to be included in the greenhouse gas emissions permit (the English-language 
version of the directive states ‘other than units for the incineration of hazardous or 
municipal waste’). 
21 [Or. 8] The precise provisions concerning the activities which are covered by the 
directive include, inter alia, production of bulk organic chemicals by cracking, 
reforming, partial or full oxidation or by similar processes, with a production 
capacity exceeding 100 tonnes per day, that is to say, the type of activity carried 
out by Nouryon. 
22 An activity which involves the combustion of fuels in installations with a total 
rated thermal input exceeding 20 MW (except in installations for the incineration 
of hazardous or municipal waste) is also included in the list of activities which are 
covered. Nouryon’s activity is not, so far as is apparent, covered by that 
description. 
NOURYON FUNCTIONAL CHEMICALS 
 
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23 Usually it is the production capacity or production threshold which is used to 
assess whether an activity is to fall within the scope of the directive, but the total 
rated thermal input is also used. The input is calculated by adding together the 
rated thermal input of all technical units which form part of the installation in 
which fuels are combusted. Such units can, inter alia, be all types of boilers, 
burners, furnaces and incinerators. (Units with a rated thermal input under 3 MW 
and units which use exclusively biomass are not, however, to be taken into 
account for the purposes of that calculation.) (See points 2 and 3 of Annex I to the 
directive.) 
The Monitoring and Reporting Regulation (EU) 2018/2066 
24 The emission allowance trading scheme is based on the operators informing the 
regulatory authority of the emissions which the individual activities create (but 
also of any changes of activity). To that end, it is provided that a greenhouse gas 
emissions permit must contain a statement of the installation’s activities and 
emissions and a monitoring plan (see Article 6(2)). 
25 The Monitoring and Reporting Regulation provides that monitoring and reporting 
are to be complete and cover all process and combustion emissions from all 
emission sources and source streams belonging to activities listed in Annex I to 
the Emission Allowance Trading Directive (see Article 5). The regulation also 
contains specific provisions concerning the measurement and reporting of 
emissions for the various activities. The provisions concerning the production of 
bulk organic chemicals are set out in section 18 of Annex IV. 
26 The operators are to modify the monitoring plan if it is not in conformity with the 
requirements of that regulation and the competent authority requests the operator 
to modify it (see Article 14(2)). 
The EU Commission’s Guidance 
27 The Commission’s Guidance 4 states, with regard to clause 5 of Annex I to the 
Emission Allowance Trading Directive that that concerns ‘units’ for the 
incineration of waste and further that the point deals primarily with the inclusion 
(in the emission allowance trading scheme) of ‘associated activities’, namely 
activities which are [Or. 9] directly associated with an activity referred to in the 
annex. To decide whether a unit is to be included or exempt under clause 5, the 
Commission provides the following decision-making process (see section 3.3.3): 
1. Is there a unit part of this installation, which according to the competent 
authority’s opinion is dedicated to the incineration (not co-incineration) of 
hazardous or municipal waste)? If no: no unit to be exempt. 
 
4 Guidance on Interpretation of Annex I of the EU Emission Trading System Directive (excl. 
aviation activities), 18 March 2010. 
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2. Is this unit part of another activity listed in Annex I of the [Emission 
Allowance Trading] Directive (e.g. integral part of a refinery or a bulk 
organic chemical production? If yes, it is included in the EU [Emissions 
Trading Scheme] anyway as part of that activity. 
3. If under 2 the answer is no, this unit can be exempt from the EU 
[Emissions Trading Scheme]. 
28 The Guidance thus appears, on application of clause 5, to differentiate between 
units which are part of the activity and units which are directly associated with the 
activity. According to the Commission, therefore, the exception for hazardous and 
municipal waste is not to apply to a unit for incineration which is part of an 
activity which is listed in Annex I to the directive. That appears to mean that, 
under the Guidance, it is of decisive importance for the application of the 
exception in clause 5 whether a unit for incineration of hazardous waste is to be 
regarded as a part of the principal activity of the installation. 
29 In that connection, it may be noted that the Guidance, as regards larger 
incineration plants (the introductory activity description in Annex I to the 
directive), states that an installation which incinerates waste is to be included in 
the emission allowance trading scheme, provided that the fuel used is not 
hazardous or municipal waste (see section 3.3.2). In the same section, it is further 
stated that co-incineration plants must also be included in the scheme. The 
Commission refers in that regard to the definition in the Waste Incineration 
Directive 5 of ‘co-incineration plant’. That definition is now to be found, with 
essentially the same content, in the Industrial Emissions Directive. 6 Co-
incineration is when the main purpose is not the disposal of waste but the 
generation of energy or production of material products (see Article 3(41)). If a 
unit with such an activity is operated within an installation for industrial 
production, the activity is to be deemed to be a co-incineration plant, for example 
when a significant part of the fuel which is used is conventional, or if it consists of 
waste other than hazardous or municipal waste. It appears to follow from the 
example given in the Guidance of the decision-making process for application of 
the exception provision now at issue that units for co-incineration are not to be 
exempt (see section 3.3.3). 
[Or. 10] The Swedish legislation 
30 The Law on certain greenhouse gas emissions seeks to implement the Emission 
Allowance Trading Directive and to supplement regulations which have been 
adopted on the basis of the directive (see Paragraph 1). Greenhouse gas emissions 
means the release into the atmosphere of carbon dioxide, nitrous oxide or 
 
5 Directive 2000/76/EC of the European Parliament and of the Council of 4 December 2000 on 
the incineration of waste. 
6 Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on 
industrial emissions (integrated pollution prevention and control) [(recast)]. 
NOURYON FUNCTIONAL CHEMICALS 
 
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perfluorocarbons from one or more sources situated within an installation. An 
installation means a stationary technical unit where one or more activities which 
give rise to emissions which requires a permit under the legislation issued on the 
basis of the Law, and any other directly associated activities which have a 
technical connection with the activities carried out on that site and which could 
have an effect on emissions and pollution. (See Paragraphs 2, 3 and 7.) 
31 It is prohibited without a permit to release greenhouse gases from installations 
where activity for which authorisation is required is carried out (see Chapter 3, 
Paragraph 1, of the Ordinance on certain greenhouse gas emissions). The operator 
is to monitor and report emissions in accordance with the Monitoring and 
Reporting Regulation (see Chapter 3, Paragraph 13). 
32 The annex to the Swedish ordinance contains – similarly to the formulation of the 
regulatory framework in Annex I to the Emission Allowance Trading Directive – 
in part instructions for the assessment of whether an activity falls within a 
description and in part descriptions of the activities which require authorisation. 
The provisions in the annex which are relevant to the present case correspond in 
essence to those set out in Annex I to the directive. 
33 Under the Swedish ordinance, the total rated thermal input is to be calculated 
together for all technical units, for example boilers and incinerators, in which fuels 
are combusted within the installation. (Units with a rated thermal input of less 
than three megawatts and units which burn exclusively biomass are, however, not 
to be included in the calculation.) (See instruction 2.) 
34 If the threshold for a particular activity has been exceeded, all units in which fuels 
are combusted, other than units for the incineration of hazardous or municipal 
waste, are to be included in the greenhouse gas emissions permit (see instruction 
4). The provision has the same content as the corresponding instruction in the 
directive (see Emission Allowance Trading Directive, clause 5 of Annex I.) 
35 Description 1 in the annex to the Swedish ordinance covers the emission of carbon 
dioxide from an incineration plant which (1) has a total rated thermal input of over 
20 megawatts, or (2) has a rated thermal input of less than 20 megawatts and is (a) 
connected for delivery to a district heating network having a total rated thermal 
input of over 20 megawatts and (b) approved by the European Commission under 
Article 24 of the Emission Allowance Trading Directive. 
36 Installations for the production of bulk organic chemicals with a production 
capacity exceeding 100 tonnes per day require a permit (see the 23rd description). 
The provision has in essence the same content as the corresponding provision in 
Annex I to the directive. 
[Or. 11] The need for a preliminary ruling 
37 Instruction 4 in the Swedish ordinance implements clause 5 of Annex I to the 
Emission Allowance Trading Directive. The MÖD considers that, with regard to 
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units for incineration of hazardous waste, the Swedish provision has the same 
wording and meaning as that of the directive. The wording appears to be clear: if 
an installation exceeds the capacity threshold for an activity listed in the annex, all 
units in which fuels are combusted are to be included in the greenhouse gas 
emissions permit other than, so far as relevant here, units for incineration of 
hazardous waste. 
38 The Commission Guidance appears to take as its basis that a unit’s purpose is 
important for the question whether a unit for incineration of hazardous waste is or 
is not to be included in the emission trading scheme. In the view of the MÖD, 
there is some support for the interpretation of clause 5 which states that it must be 
a question of a unit for incineration of hazardous waste. In its Guidance, the 
Commission uses the expression ‘dedicated to’ incineration of hazardous waste; 
an incinerator which is dedicated to energy production but which can also be used 
to dispose of waste would thus not be exempt. The Guidance appears also to state 
that units for co-incineration, that is to say, units which have a main purpose other 
than the disposal of waste, are not to be exempt. 
39 The Guidance further states that the exemption provision in clause 5 is primarily 
intended to regulate when a unit for the incineration of hazardous waste which is 
directly connected with the main activity – that is to say, a unit which, from a 
technical point of view, is associated to the activity which is carried out on the site 
and which can have an effect on emissions and pollution (associated activities) – 
is to be included in the emission allowance trading scheme. The Guidance states 
that the provision is as a rule not relevant if there is, within an installation, a unit 
for the incineration of hazardous waste which is an integral part of an activity 
covered by the directive. The MÖD considers that that view lacks direct support in 
the wording of the provision, but that this can indeed be a way, when applying this 
provision, of resolving the question whether the incinerator’s purpose is to 
incinerate hazardous waste or to enable production (at the same time as being used 
for the disposal of hazardous waste). 
40 The MÖD is of the view that the provision in clause 5 can be interpreted in 
different ways. It is not clear to the court that, under the provision, there is to be a 
requirement for the unit to be dedicated to the incineration of hazardous waste; an 
incinerator which is dedicated to producing heat for the production process but is 
also used to dispose of hazardous waste can be regarded as a unit for the 
incineration of hazardous waste. If the Commission’s interpretation of the 
provision is accepted, it remains unclear which are the relevant criteria for the 
assessment of the degree to which a unit can be said to be associated with an 
activity. For example, it is unclear whether it should be required that the 
production be impossible or not allowed without the unit under consideration (see 
EU Commission’s Guidance, page 14, footnote 14) for the unit to be regarded as 
an integral part [of the activity], or [Or. 12] whether it is sufficient for the unit to 
be technically linked to the installation in general and to accept hazardous waste 
only from that installation. 
NOURYON FUNCTIONAL CHEMICALS 
 
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41 The MÖD is also doubtful as to whether other factors might also be relevant to the 
assessment of whether a unit is to be regarded as being dedicated to the 
incineration of hazardous waste. One factor, for example, can be that there is co-
incineration and another can relate to the amount of fuel which is added to 
incinerate the hazardous waste (see Commission Guidance, section 3.3.2 and 
3.3.3). 
42 In summary, the MÖD is of the view that it is not clear and has not been clarified 
how clause 5 of Annex I to the Emission Allowance Trading Directive is to be 
interpreted in a case such as the present case. The question is relevant to EU law. 
In order to be able to rule in the case, the MÖD needs answers to the questions of 
interpretation set out below. 
The request for a preliminary ruling 
43 The MÖD requests the Court of Justice of the European Union to answer the 
following questions by a preliminary ruling. 
1. Is the exemption for units for the incineration of hazardous waste in clause 5 
of Annex I to the Emission Allowance Trading Directive – that all units in which 
fuels are combusted are to be included in the greenhouse gas emissions permit, 
other than units for the incineration of hazardous waste – applicable to all units 
which incinerate hazardous waste, or must there be some qualifying factor in 
order for the exemption to be applied? If such a factor is necessary, is the purpose 
of the unit thus to be decisive for application of the exemption, or can other 
factors also be relevant? 
2. If the unit’s purpose is decisive to the assessment, is the exemption still to be 
applied to a unit which incinerates hazardous waste but which has a main purpose 
other than that incineration? 
3. If the exemption applies only to a unit which has as its main purpose the 
incineration of hazardous waste, which criteria are to be used in the assessment of 
the purpose? 
4. If, in an assessment, it is decisive whether the unit is to be regarded as an 
integral part of an activity in an installation for which a permit is required under 
the directive – for example, as set out in section 3.3.3 of the Commission 
Guidance – which requirements are thus to be set in order for the unit to be 
regarded as an integral part thereof? Can it be required, for example, that the 
production must be impossible or not allowed without the unit (see Commission 
Guidance, page 14, footnote 14), or can it be sufficient for the unit to be 
technically linked to the installation and accept hazardous waste only from that 
installation? 
[…]