Here's a more detailed answer:

The [above-mentioned](https://mathoverflow.net/questions/5065/what-is-induction-up-to-varepsilon-0#comment5716_5065) link (recreated below [1]) constructs a recursive relation $E$ on $\omega$, such that $(\omega, E)$ is isomorphic to $(\epsilon_0, \in )$. Then, induction up to $\epsilon_0$ is interpreted as $E$-induction, that is, for every predicate $\phi$, if $(\forall x E y \phi(x))\rightarrow \phi(y)$ then $\forall y \phi(y)$.

[1]  P. Tosi, _Normal derivability and first-order arithmetic_,
Notre Dame J. Formal Logic 21(2): 449-466 (April 1980) doi:[10.1305/ndjfl/1093883058](https://doi.org/10.1305/ndjfl/1093883058).