Glossary
Installation – EU ETS
Under the EU Emissions Trading System (EU ETS), a stationary technical unit where one or more activities listed in Annex I of the ETS Directive are carried out, together with directly associated activities on that site that could affect emissions.
- Legal source
- ETS Directive, Article 3(e) ↗
- Who it applies to
- Operators of installations that carry out an activity listed in Annex I above its threshold, where it has one, such as burning fuels in installations with a total rated thermal input above 20 megawatts (MW). Such an installation may carry out the activity only if its operator holds a greenhouse gas emissions permit, or if the installation has been excluded from the EU ETS. The permit obliges the operator to surrender allowances equal to the installation's verified emissions in each calendar year.
- Example
- A site burns natural gas in boiler A of 8 MW, boiler B of 7 MW, dryer C of 6 MW and two space heaters of 2 MW each, and carries out no other Annex I activity. The heaters are under 3 MW, so they are left out of the 20 MW test, and the other units add up to 21 MW, above 20 MW. The installation is covered, and its permit takes in all five units, 25 MW in total.
- Also known as
- EU ETS installations, stationary installation, installation (EU ETS)
The ETS Directive (Directive 2003/87/EC) defines an installation as a stationary technical unit where one or more activities listed in its 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. The person who operates or controls the installation is its operator.
One greenhouse gas emissions permit can cover one or more installations on the same site run by the same operator, and the permit contains the installation's
Commission guidance, not law: one installation can have only one operator, so where two operators each run part of a site, each part is a separate installation. Mobile machinery and vehicles, such as trucks and forklifts, aren't part of an installation, according to the same guidance.
Under the Carbon Border Adjustment Mechanism (CBAM), the word has a different definition, tied to producing the goods CBAM covers rather than to a list of activities with capacity thresholds: see
Pending, not law: Commission proposal COM(2026) 616 of 17 July 2026 would extend the definition to CO₂ transport infrastructure that carries out the transport of carbon dioxide listed in the Directive's Annex I, and would drop the words "on that site" from the rest of it.
Our explainer on which installations the EU ETS covers walks through the thresholds and the exclusions for small emitters.
Regulations
EU Emissions Trading System (EU ETS)
Implementing Decision (EU) 2026/1862 set the cross-sectoral correction factor for free allocation at 100% for each year from 2026 to 2030
Used in
EU ETS scope: does it apply to your installation, and can small emitters be excluded?
Fuel-burning units totalling over 20 MW, or an Annex I activity over its threshold, put an installation in the EU ETS. Plus the small-emitter exclusions.