The definition of ‘installation’ in Article 3(e) of Directive 2003/87 is qualified by four elements. Namely, it refers firstly to a stationary technical unit where one or more activities listed in Annex I to the directive are carried out; secondly to any other directly associated activities which, thirdly, have a technical connection with the activities carried out on that site and which, fourthly, could have an effect on emissions and pollution.

There are indeed differences between the different language versions in relation to the question of whether the other activities directly associated with the main activity are carried out inside the technical unit or also outside it.  5 See Commission, Guidance on Interpretation of ‘Installation’ and ‘Operator’ for the Purposes of the IPPC Directive, Version 1, April 2007, p. 1. However, these differences are less significant than they appear.

This is because the term ‘technical unit’ is not defined and can therefore be interpreted with greater flexibility. As a result, it depends on the other features of the definition: the other activity’s direct association with the activity in the annex, the technical connection between the two activities and the effects on the environment.

These elements of the ‘installation’ definition cannot be interpreted restrictively as there would otherwise be a risk of excluding certain greenhouse gas emissions from the relevant installation and of removing them from the scheme under Directive 2003/87.

The storage of coal at a power-plant site with regard to its later combustion within the power plant is admittedly not listed in Annex I to Directive 2003/87. Yet it follows from the very definition of ‘installation’ that other activities are also to be attributed to the installation if they are directly associated with the main activity (combustion in this instance). Such a direct association exists in the case of the storage of coal which is the subject of this dispute as the stored fuel is essential to the operation of the power plant furnace.

This direct association is evidenced by the element of the technical connection. Such a connection should be assumed if the relevant activity is integrated into the same technical process as the main activity that opens up the application of Directive 2003/87. This is satisfied in the present case through the very existence of the conveyor belt to the power plant. The fact that the two parts of the installation are separated by a road and a certain distance is of secondary importance compared with this.

Ultimately, the CO2 emissions from the self-heating show that the storage of coal can have an impact on emissions and on environmental pollution. Other pollution from the open-air storage of coal, in the form of fine powder for example, cannot be ruled out.

For that reason, a coal storage facility such as the one in the present dispute is part of the power plant installation.

This conclusion is corroborated by the rather more specifically worded definitions of ‘installation’ in the area of waste incineration under Article 42(1) of the Industrial Emissions Directive and Article 3(8) of the ‘Seveso III’ Directive on the control of major-accident hazards involving dangerous substances.  6 Directive 2012/18/EU of the European Parliament and of the Council of 4 July 2012 (OJ 2012 L 197, p. 1).

At waste incineration plants the storage of waste (the fuel in this case) is expressly defined as part of the relevant installation. Under the Seveso III Directive, also, installations include warehouses that are necessary for their operation.

Admittedly, these two definitions are oriented primarily towards the specific objectives of the relevant regulations but, like the definition in Directive 2003/87, their objective is to take full account of the relevant environmental effects they regulate. To that extent, both special definitions illustrate the fact that installations typically also include the respective storage required.

At the same time, the definition in the area of waste incineration is of particular interest because it focuses on incineration plants and the power plant is also an incineration plant. This definition shows that incineration plants frequently also have a fuel storage facility.

EPZ nevertheless takes the view that, given the objectives of Directive 2003/87, a narrower interpretation of the term ‘installation’ is required. In this connection EPZ particularly emphasises the fact that the operator of a coal storage facility is unable to control or to prevent emissions due to self-heating.

This view is based on the idea that the market mechanism for trading in emissions allowances should ensure that operators of installations minimise as far as possible the CO2 emissions arising in the course of their activities.

Even if one takes it for granted that the operator of a coal storage facility really cannot avoid self-heating, EPZ nevertheless fails to recognise that included in the market mechanism is a measure whereby certain activities will in some circumstances cease completely if they are no longer competitive due to the cost of their unavoidable emissions.

The objectives of Directive 2003/87 therefore similarly confirm the inclusion of the coal storage facility in the power plant installation.

Although on initial impressions Regulation No 601/2012 appears not to give a clear answer to the question of the inclusion of the storage facility’s emissions, ultimately it does not call this into question.

Article 20 of the regulation appears to open up the possibility of not including the storage facility. Under this provision the operator defines the monitoring boundaries for each installation. However, this provision cannot be understood as meaning that the operator of a coal-fired power plant may exclude the associated storage facility and hence not take it into account.

The power to define boundaries does not relate to the installation as such but to the monitoring thereof. A restriction on monitoring that fails to include certain emissions of an installation would, however, contradict the purpose of the monitoring. Specifically, under Article 5 of the regulation this should be complete and cover all process and combustion emissions from all emission sources and source streams belonging to activities listed in Annex I to Directive 2003/87. The self-heating of the coal in the storage facility is, however, similarly an emissions source belonging to the activity of the power plant and must therefore be covered by the monitoring.

In this connection EPZ is understandably requesting clarification as to whether, if the storage were organised differently, this would potentially rule out its inclusion as part of the power plant installation. Such a clarification is certainly not essential to the answering of the reference for a preliminary ruling. However, this could help the final clarification of the dispute between EPZ and the relevant entities in the Netherlands as to whether the storage facility should be included. For that reason, the Court should rule on this point.

The element of the technical connection shows that this may not depend on the commercial organisation of the activity, for example on whether it is outsourced. Rather, it depends much more on its integration into a technical process with the main activity that opens up the application of Directive 2003/87.

Accordingly, in recital 6 of the Industrial Emissions Directive and in Article 3(4) and Article 5(2) of that directive (which uses a virtually identical definition of ‘installation’), the legislature has taken into account the possibility of different operators operating different parts of an installation.

This is also supported by the specific definitions of ‘installation’ in the area of waste incineration and on the control of major-accident hazards involving dangerous substances. They demonstrate that installations cannot be looked at in isolation but regularly include a technical process that needs to be assessed in its entirety.

Consequently, the choice of technical means to connect different parts of the installation may be of just as little relevance as long as these parts of the installation are connected within the same technical process. The conveyor belt used here is therefore only an example of a technical connection. Other more flexible connections, such as lorries, would also be conceivable.

In the assessment of such a technical process the distance between a fuel storage facility and the combustion site cannot be more than indicative. The further they are away from each other, the more unlikely it is that there is a direct technical connection. But a temporary storage facility that is operated solely in order to supply a particular power plant should be regarded as part of the power plant installation even if the distance between it and the installation is significant.

A similar approach should be adopted where other customers are supplied from the same storage facility. This would indicate that the storage facility is not part of the power plant installation. However, on condition that the main purpose of the storage facility remains to supply the power plant, the assumption that it is part of a single installation would continue to apply. This is also supported by Article 27(2) of Regulation No 601/2012, to be discussed below. That is because this regulation clearly assumes that fuel can be delivered from one installation to other customers.

It follows from this that, irrespective of how it is organised, it is virtually impossible to segregate the storage facility from the installation. Rather, the company would need structurally to separate the coal storage from the power plant to such a degree that any technical connection with the power plant is ruled out.

To conclude, the first question should therefore be answered to the effect that a coal-fired power plant and a coal storage facility supplying it in which CO2 emissions occur as a result of self-heating must be treated as being the same installation within the meaning of Article 3(e) of Directive 2003/87 if the two are connected to each other as part of a common technical process for the operation of the power plant.