EUROPEAN COMMISSION

Brussels, 26.10.2022

SWD(2022) 541 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT

Accompanying the document

Proposal for a Directive of the European Parliament and of the Council

concerning urban wastewater treatment (recast)

{COM(2022) 541 final} - {SEC(2022) 541 final} - {SWD(2022) 544 final}

Table of contents

1.Introduction: Political and legal context

2.Problem definition

2.1 What are the problems and their drivers?

2.1.1 Remaining pollution from urban sources – problem and drivers    

2.1.1.1 Non-compliant agglomerations    

2.1.1.2 Storm water overflow (SWO) and urban runoff    

2.1.1.3 Individual appropriate systems (IAS)    

2.1.1.4 Small agglomerations    

2.1.1.5 Remaining releases from Nitrogen and Phosphorus    

2.1.1.6 Micro-pollutants and Micro-plastics    

2.1.1.7 Non domestic releases    

2.1.2 Alignment with Green Deal, new societal challenges - problems and drivers    

2.1.2.1 Green House Gas emissions    

2.1.2.2 Energy use    

2.1.2.3 Sludge and water re-use    

2.1.2.4 Health and wastewaters    

2.1.3 Modernisation and Governance - problem and drivers    

2.1.3.1 Operators’ performances and transparency    

2.1.3.2 Uneven application of the ‘polluter pays’ principle    

2.1.3.2 Not adapted monitoring and reporting    

2.1.3.2 Insufficient access to sanitation    

2.2 How likely is the problem to persist?

3.Why should the EU act?

3.1 Legal basis

3.2 Subsidiarity: Necessity of EU action

3.3 Subsidiarity: added value of EU action

4.Objectives: What is to be achieved?

4.1 General objectives

4.2 Specific objectives

5.What are the available policy options?

5.1 What is the baseline from which options are assessed?

5.2 Description of the policy options

5.2.1 Storm water overflows (SWO) and urban runoff    

5.2.2 Small Agglomerations    

5.2.3 Loads from individual or other appropriate systems (IAS)    

5.2.4 N and P releases and eutrophication    

5.2.5 Micro-pollutants    

5.2.6 Non-domestic emissions    

5.2.7 Energy    

5.2.8 Sludge management and water re-use    

5.2.9 Wastewater and health    

5.2.10 Transparency and Governance    

5.2.11 Monitoring and reporting    

5.2.12 Access to sanitation    

5.3 Options discarded at an early stage

6.What are the impacts of the policy options, How do they compare and what are the preferred options?

6.1 Storm water overflows and urban runoff

6.2 Individual or other appropriate systems (IAS)

6.3 Small Agglomerations

6.4 N and P releases and eutrophication

6.5 Micro-pollutants

6.6 Non-domestic Emissions

6.7 Energy neutrality and GHG emissions

6.8 Governance – transparency

6.9 Wastewater and health

6.10 Access to sanitation

6.11 Reporting

7.Preferred option

7.1 Preferred Option – summary

7.2 REFIT and “One in, One out”

8.How will actual impacts be monitored and evaluated?

Annex 1: Procedural information

1.Lead DG, DEcide Planning/CWP references

2.Organisation and timing

3.Consultation of the RSB

4.Evidence, sources and quality

Annex 2: Stakeholder consultation (Synopsis report)

1. CONSULTATION STRATEGY & ACTIVITIES

2. STAKEHOLDER GROUP

3. METHODOLOGY AND TOOLS USED TO PROCESS THE DATA

4. OPC – GENERAL VIEW

5. STAKEHOLDERS’ VIEWS ON THE DIFFERENT AREAS

6. POSITION PAPERS

Annex 3: Who is affected and how?

1.Practical implications of the initiative

2.Summary of costs and benefits

3.Relevant Sustainable Development Goals

Annex 4: Analytical methods

Annex 5: Summary of Member State Situation

Annex 6: Assessing Compliance

Annex 7: Additional detailed information

Annex 8: Main relations between ongoing initiatives and the present initiative

Annex 9: Actors involved in an EPR scheme and their respective roles

Annex 10: Literature References

Glossary

Abbreviations

1.Introduction: Political and legal context

The European Union adopted in 1991 the  Urban Wastewater Treatment Directive  (UWWTD). The objective of this Directive is to “protect the environment from adverse effects of wastewater discharges from urban sources and specific industries”. Member States (MS) are required to ensure that wastewater from all agglomerations above 2.000 inhabitants is collected and treated according to minimum EU standards. Stricter standards apply for ‘sensitive areas’ which have to be identified by MS according to criteria included in the Directive – for instance in case of risk of eutrophication.  

MS report every two years on the implementation of the Directive. This information is published by the Commission in biennial reports . Across the EU, 21.708 agglomerations generating wastewater equivalent to the pollution from 517 million population equivalents (p.e.) 1 are treated in centralised systems. Wastewater operators are either private companies operating for a public competent authority or public companies owned by the public competent authorities (around 60%) or mixed companies. Collection and treatment of urban wastewater have improved over the last decade: 98% of the generated load is appropriately collected, 92% meet the primary and secondary treatment standards (basic treatment of organic pollution – see glossary), while another 92% meet more stringent treatment standards (tertiary treatment removing Nitrogen and Phosphorus). There are differences between MS – a limited number of MS still having difficulties to reach compliance (Annex 7, Table 1). 

The 2019 UWWTD REFIT Evaluation  (hereby referred to as ‘the Evaluation’), which entailed a comprehensive stakeholder consultation, confirmed that the Directive’s implementation has caused a significant reduction of pollutant releases. The effects on the quality of the EU lakes, rivers and seas are visible and tangible. The Evaluation also identified remaining challenges which served as a basis for the definition of the problem for this impact assessment (IA). MS supported the main findings of the Evaluation during an Environment Council  meeting as well as the European Parliament through a  Resolution  focusing on the need to improve the energy balance of the sector. There is a large consensus in the Council and the Parliament, as well as within the stakeholder community, on the need to modernise the Directive and to better link it with the European Green Deal (EGD) ambitions. Similarly, the European Committee of the Regions agreed with the Evaluation findings, pushing for a revision of the UWWTD to adapt it to new societal needs and urging the Commission to better apply the “polluter pays” principle .

Since the publication of the Evaluation, the EU took important steps to set out its ambitions with the adoption of the European Green Deal . The review of the Directive is included as one of the actions of the Zero Pollution Action Plan  (ZPA), in close connection with a sound implementation of the Chemicals Strategy for Sustainability and the Pharmaceuticals Strategy . There are direct connections with the Biodiversity Strategy as reducing water pollution has a direct beneficial effect to ecosystems. Actions to green the cities, such as those stemming from the upcoming Nature Restoration Law , can not only create a good habitat for pollinators, birds and other species, but also directly help to control rain water and related pollution, while improving the overall quality of life. Better management of water quality and quantities in the urban areas will also contribute to climate adaptation. The new Circular Economy Action Plan sets out that a better integration of the urban wastewater sector with the circular economy is needed. This is particularly relevant for the Sewage Sludge Directive  (currently being evaluated ), which regulates the use of sewage sludge in agriculture and has implications for the Soil Health proposal announced in the EU Soil Strategy for 2030 .

Furthermore, the EU climate neutrality objective as included in the EU Climate Regulation , combined with the Effort Sharing Regulation , requires MS to reduce their GHG emissions according to national objectives from the sectors such as the wastewater treatment sector which are not covered by the EU Emission Trading Scheme. 2 At the same time, the recent recast proposal  of the Energy Efficiency Directive (EED) requires MS to reduce their overall energy consumption by 9% by 2030 compared to 2020, while including a specific target of 1,7% reduction each year of the energy consumption of all public bodies. The EED also includes the obligation to achieve energy audits for enterprises consuming large amounts of energy. As detailed in section 2.1.2.2, a large part of the UWWT facilities would be excluded from this obligation. The 2021 proposal for a revision of the Renewable Energy Directive (“REDII”) includes an objective of 40% of renewable energy in the energy mix by 2030. The Evaluation showed that the wastewater sector has specific potential not only to reduce its own energy consumption, currently amounting to around 0.8% of the overall EU energy use, but also to produce, in a steady and reliable manner not dependent on weather variations, renewable biogas out of sewage sludge next to offering well-suited locations for the production of renewable energies (wind and solar). This sector-specific potential should be untapped, in line with the recently adopted Repower EU Communication insisting on the need to accelerate action for more affordable, secure and sustainable energy, including from biogas.

Over the past months it has become apparent that surveillance of different health related parameters in wastewaters can provide useful information for public health purposes. This was the case with SARS-CoV-2 virus and its variants monitoring in wastewaters, used as a complementary approach to public health measures. To support the use of this tool and enhance the early detection capacities across all MS the Commission published a Recommendation and provided in 2021 financial support to 26 MS. Also in line with the “ A Europe fit for the Digital Age ” Communication, the potential benefits of digitalisation should be further explored as they are particularly relevant in the water sector.

The revision of the UWWTD is linked to the revision of the pollutants lists under the Environmental Quality Standards Directive and the Groundwater Directive – two ‘daughter’ Directives of the Water Framework Directive (WFD), regulating the acceptable levels of pollutants in surface and ground water bodies. It is also connected to the revision of the Industrial Emissions Directive (IED) and the related review of the E-PRTR Regulation , as some industrial emissions are collected in public collection networks. It will have a positive impact on the ongoing review of the Marine Strategy Framework Directive ( MSFD ) and on the review of the Bathing Water Directive  (BDW). These parallel revisions and reviews help to ensure that any coherence issues can be resolved. N emissions to the environment are regulated both by the UWWTD (urban pollution) and by the Nitrates Directive (N from agriculture) and, as recalled in the ZPA, the revision of the UWWTD will support the concrete implementation of the future Nutrient Management Action Plan. Over the last decades, the UWWTD has contributed to achieving  the Sustainable Development Goals (SDGs) , in particular SDG 6 on access to adequate and equitable sanitation and hygiene for all. Most MS have signed the 1999 UN Protocol on Water and Health , setting out requirement on access to sanitation. As such, it contributes to achieving the commitments made under the European Pillar of Social Rights Action Plan  on access to essential services.  

2.Problem definition

2.1 What are the problems and their drivers?

In the Evaluation, three main sets of problems were identified, which are discussed in more depth below together with their drivers:

1)Remaining pollution from urban sources (section 2.1.1);

2)Insufficient alignment of the Directive to new societal ambitions and the Green Deal objectives (section 2.1.2);

3)Insufficient/uneven level of governance of the sector (section 2.1.3).

The stakeholder consultation 3 showed a broad consensus on (1) the necessity to undertake a revision of the Directive, and (2) the list of problems to be tackled in a possible review. No other important issue emerged during the different consultations. Overall, no major problems of coherence with other legislation were found in the Evaluation, even if some adjustments might be needed as several Directives were adopted after the UWWTD. This is further detailed in the ad hoc sections below.

2.1.1 Remaining pollution from urban sources – problem and drivers

The Evaluation provided a first quantification of the remaining sources of pollution not optimally addressed by the Directive. This quantification was updated and fine-tuned using the same model developed by the JRC for the Evaluation (see Annexes 1 and 4). The Evaluation also pointed to the new types of pollutants requiring more attention (such as micro-pollutants) having emerged since the adoption of the Directive.

At the time of its adoption the focus of the Directive was on organic pollution from domestic sources emitted in usual (‘dry weather’) conditions and collected and treated in centralised facilities, for which the requirements are clear and precise. Less attention was given to rain waters, smaller agglomerations and individual appropriate systems for which the requirements were kept more generic. The emissions from these sources have progressively become equivalent to the releases from centralised facilities. This is illustrated in modelling results presented in Table 1  and Figure 1 below showing the remaining load of pollutants rejected in the environment from different sources. The total initial load generated amounts to 708,8 p.e. Of this, 517 million p.e. is sent to centralised wastewater treatment plants and 191,8 million p.e. is not collected and thus not treated in centralised facilities (49,3 million p.e. is generated in small agglomerations, 16,5 million in IAS and 126 million are coming from SWO/urban runoff.)

Figure 1: Remaining loads from urban sources (p.e./year) - Source JRC - see Annex 4. Breakdown per MS is provided in Table A7.5 in Annex 7

The remaining load sent to the environment varies from one pollutant to another (from 66,2 million p.e. for BOD to 264 million p.e. for micro-pollutants). Part of this pollution could be avoided. However, as shown in Table 1 , with the maximum feasible scenario 4 , there are limits to what can be technically achieved: with the current techniques, it is indeed impossible to remove and treat 100% of the load from the wastewaters (between 48% for BOD to 92% for E. Coli – could be removed - see line (5) in Table 1).

Table 1: Remaining loads sent to the environment (p.e./year) - source JRC - see Annex 4. More details are provided in Annex 7, Table A7.2 and Table A7.5 (details per MS)

2.1.1.1 Non-compliant agglomerations

Discharges from non-compliant agglomerations above 2.000 p.e. represent around 6,7% of the remaining load for BOD, 1,9% for Nitrogen (N), 7,78 % for Phosphorus (P) and 7,4% for bacteria (E. coli). The Evaluation pointed out that the deadlines set in the Directive might have been overly ambitious for some MS. As explained in the Evaluation, effective legal actions were taken by the Commission to ensure timely and correct implementation of the Directive. More than 40 CJEU rulings were issued against nearly all MS and 30 horizontal cases are still open today. Despite significant progress accomplished by MS, implementing the Directive remains challenging in a limited number of them (see Annex 7, Table 1).

The Evaluation showed that this is mainly due to the lack of institutional/administrative capacity, combined to a lesser extent with insufficient financing capacities. At the same time, some MS have managed to fully implement the Directive in a rather short time, particularly MS having joined the EU after 2004. Such better performances are mainly due to a proper organisation and planning of the required investments combined with a sound financing strategy and the support of EU funds. These MS have also benefitted from newest and more effective technologies compared to MS having invested in their infrastructures after the adoption of the 1991 Directive.

2.1.1.2 Storm water overflow (SWO) and urban runoff

During rainfall events, storm water overflows (SWO- see Glossary) and urban runoff represent a sizeable remaining source of loads sent to the environment: 19% of the remaining load for BOD, 7,2% for Nitrogen, 9,5% for Phosphorus, 29,77% for E. coli and 25,7% for micro-pollutants (see Figure 1 ). These emissions are expected to increase due to the combined effects of urbanisation and progressive change of the rain regime due to climate change. Most of this pollution takes place during a relatively short period of time bringing suddenly, in the receiving water body, a peak of untreated pollutants including waste and litters from the streets, such as plastics and micro-plastics (‘flushing effect’). The Evaluation showed that part of this pollution is due to a lack of detailed provisions in the Directive: in case of heavy rain, MS have indeed the possibility to send directly to the environment part of SWO and urban run-off without any need for previous treatment. 5

Reporting under the WFD showed that at least 15% of UWWTPs above 10.000 p.e. are in waterbodies failing to meet the WFD ecological status due to SWO pressure. 6 According to a report from the EEA , the absence of proper management measures for SWO and urban run-off combined with the increasing number of heavy rains events due to climate change are the main reasons why the limit values of the BWD for bacteria are exceeded in several EU bathing areas. The situation differs from one agglomeration to another depending on the local conditions (rainfall patterns, density of population, urbanisation green spaces), but also according to the performance of the collecting/treatment system.

The Evaluation also showed that the lack of specific provisions in the Directive has led to an uneven management of the issue across the MS (see Annex 5). Only very few MS have put in place systematic integrated water management approaches in their cities: the division of competences between services in charge of wastewater collection and/or treatment, urban planning, monitoring of water bodies quality, often represents an obstacle for designing integrated, optimal and cost effective solutions.

2.1.1.3 Individual appropriate systems (IAS)

As seen in Figure 1 and Table A7.2 in Annex 7, the use of IAS contributes to 15,7% of the remaining load for BOD, 7% for N, 8,6% for P, 16,1% for E. coli and 4,7% for micro-pollutants. The Directive allows the use of these individual systems where building a collecting system comes at disproportionate costs, and as long as these systems achieve the ‘same level of environmental protection’ as in a centralised plant.

However, in the absence of more precise requirements, it is difficult to verify whether IAS are conform or not. Also, some MS report high and non-justified use of IAS ( Figure 2 ) in their agglomerations above 2.000 p.e. (more than 21% of the total load in Croatia). 

Figure 2: Percentage of reported generated load treated by IAS in agglomerations above 2.000 p.e. in 2018, Source: Annex 10, report 7

There is a variety of requirements for IAS set at national level, with a few MS applying best practices in terms of design, maintenance, monitoring and reporting (see Annex 5 for more details). Some MS (such as AT, DE, NL, BE and FR) have put in place their own national environmental standards to complete or replace the standards laid down under the Construction Product Regulation (CPR) for smaller facilities below 50 p.e. The multiplication of national standards has resulted in some degree of disruption of the internal market – but also in some confusion, as the ‘CE marking’ under the CPR does not relate to the environmental performances of the installations (source: Annex 10, report 16). 7 Under the March 2022 proposal for reviewing the CPR , wastewater treatment would be excluded from the CPR scope. This will contribute to clarify the situation while increasing the importance of developing environmental standards under the UWWTD.

2.1.1.4 Small agglomerations

Small agglomerations are covered by the Directive only in a very general manner 8 and yet constitute a significant pressure on 11% of the EU’s surface water bodies ( EEA ): as shown in  F igure 1 , around 24,9% of the remaining load for BOD, 15,8% for N, 18,9% for P, 26,2% for E. coli and 9,7% for micro-pollutants. The situation varies across MS: some MS like AT, DE, SE and FR have established in their legislation that all urban wastewater needs to be treated. Other MS have set standards for smaller agglomerations with a few, like EE, IE and PT, going beyond the requirements set out in the Directive.

2.1.1.5 Remaining releases from Nitrogen and Phosphorus

Despite the significant reduction of emissions achieved with the existing Directive for Nitrogen and Phosphorus 9 , wastewater treatment plants remain an important point source of both N and P (see  Figure 3 ). Released wastewater is a more important source of P than fertilizers used in agriculture. N from urban wastewater is the second most significant source of inputs into rivers and seas after agriculture.

Figure 3: Loads of N (tonnes/year) to EU regional seas by source (JRC).

As shown during the stakeholder consultation (see Annex 2), the problem is due to a combination of two factors: (1) not enough areas were designated by the MS as ‘sensitive’ for eutrophication, and (2) the standards of the Directive for N/P are outdated.

Under Article 5.1 of the Directive, MS are required to designate ‘sensitive areas’ subject to eutrophication and apply either more stringent standards for N/P for each facility or an overall load reduction rate for N/P. The Evaluation showed that MS have applied the Directive in different ways (see Figure 4 ) leading to some inconsistencies: for the same river the designation might not be the same. It means that the efforts made by some MS to reduce N/P are undermined by the lack of efforts by others. On the contrary, in the Baltic Sea basin, for instance, coordination is ensured at regional level: the same more stringent standards for N/P is applied for all incoming waters.

From MS current practices 10 , it appears that emission limit values in the Directive for N/P could be reinforced: several MS (DE, AT, NL, HU and DK) are achieving better performances than those prescribed by the minimum requirements of the Directive.

N and P releases are directly contributing to eutrophication (see Glossary) which remains an important problem in several rivers, lakes and seas in the EU. According to the EEA assessment, there are significant impacts from nutrient pollution on 426.267 km of rivers and 19.460 km2 of lakes across the EU. According to a recent report on the implementation of the MSFD, eutrophication occurs in the Baltic and the Black Seas, along the North-western coast of France within the North-east Atlantic Ocean and along coastal areas mainly in the vicinity of riverine outflows within the Mediterranean Sea.

Figure 4: Overview of sensitive areas and their catchments in the EU (2016) - Article 5(2-3): more stringent treatment > 10.000 p.e.; Article 5(4): 75% removal of N and P; Article 5(8): more stringent treatment on the whole country, Source: Annex 10, report 7.

2.1.1.6 Micro-pollutants and Micro-plastics

As shown in the Evaluation, the scientific community, policy makers and general public consider the growing evidence of micro-pollutants and micro-plastics in water bodies an increasingly important issue. The need for action was also highlighted in the Commission’s recent strategies. 11  

Micro-pollutants arise from the use of many products in households. Pharmaceuticals and to a lesser extent Personal care products (PCP) represent a large share of the potentially harmful substances found in wastewater (see report 2, Annex 10). The toxic load (see glossary) corresponding to 264 million p.e. is emitted to the environment, part of it (158 million p.e.) coming from centralised treatment plants, the rest being emitted by other sources (see Table 1 and Figure   1 ). Part of these emissions are taking place in rivers with a relatively low dilution rate, leading to higher risk of toxicity: the outlet of around 115 million p.e. are emitted in rivers with a dilution rate lower than 5 (Source: JRC, Annex 10, reports 13 and 14). Their accumulation in the environment and the creation of ‘hot spots’ with low dilution rates are becoming a serious environmental and, in some instances, public health concern, notably where the downstream waters are used for bathing or for extracting and producing drinking waters. 12  

As shown in the Evaluation and in Figure 5 , micro-pollutants are now detected in all EU waters. The cumulative effects of these substances, notably in fish communities, were already shown on several occasions: fish exposed to micro-pollutant residues may change their behaviour, harming their survival abilities, or even change sex, harming their reproduction abilities and fertility rates.

Figure 5: Number of pharmaceuticals detected in surface, ground or drinking water. Source: Aus der Beek et al., 2015

These findings were confirmed by a 2022 study on pharmaceutical pollution (US National Academy of Science) based on samples from 1.052 locations in 104 countries from all continents. 25.7% of the samples included at least one pharmaceutical in concentration higher than what is considered safe for aquatic organisms. According to this study, ‘pharmaceutical pollution poses a global threat to environmental and human health, as well as to the delivery of the United Nations Sustainable Development Goals’.

Plastics and Micro-plastics: Most of the micro-plastics found in the domestic wastewaters directly stem from the use of textiles (micro fibres emitted during the washing of clothes). They also come from the degradation of tyres on the roads or from the uncontrolled use of plastic pellets in plastic production, when wastewaters are mixed with rain waters (source Annex 10, report 3). The recently adopted Textile strategy as well as the upcoming EU initiative on Micro-plastics are expected to reduce micro-plastics emissions from these sources. As a result, less micro-plastics from these sectors should over time be found in incoming waters of the urban wastewaters treatment plants.

Currently, when collected and sent to centralised treatment facilities, nearly all large pieces of plastics are removed at the beginning of the treatment process. Also micro-plastics are relatively well captured in the treatment plants – 80,5% with a primary treatment, 97,5% with a secondary treatment and 99,2% with a tertiary treatment (Annex 10, report 8). Significant amounts of (micro) plastics can be released in the environment in case of heavy rains (see previous section 2.1.1.2). It thus remains crucial to secure that appropriate measures are put in place in order to cater for SWO/urban run offs.

The captured micro-plastics are partly degraded in the treatment plants. A recent Swedish study show that about 40-60% of the micro-plastics in the incoming wastewater were found in the sludge. This is confirmed by another recent Norwegian study : over 500 billion micro-plastic pieces are released each year into the environment via sludge use on the soils. As half of the sludge is used agriculture in the EU (see Figure 8 below), attention should be given to the presence of micro-plastics in the sludge and then in the soils.

Micro-plastics biomedia (micro pieces of plastics used in very specific treatment process) are also used in a limited number of wastewater treatment plants (0,1% in France in 2016). According to a report from the Surfrider foundation, significant amount of micro-plastics were found under the stream of such wastewater plants. 13

2.1.1.7 Non domestic releases

Treatment plants covered by the UWWTD, although designed to treat ‘domestic wastewaters’, also receive other types of waters including industrial wastewaters, mainly from SMEs. These wastewaters can include a range of pollutants not targeted by the Directive such as heavy metals, micro-pollutants or other chemicals. Wastewater operators are in the first line when harmful releases are not controlled enough.

Under Article 11 of the Directive, industrial releases in the public network are subject to pre-authorisation and, if required pre-treatment. Releases to water from the larger installations regulated by the Industrial Emission Directive (IED) are already subject to authorisation requirements. As detailed in the Impact Assessment (adopted by the College on 5 April 2022) on the review of the IED, there is a need to better align the IED and the UWWTD to avoid the release of pollutants not abated in urban treatment plants into the public network. When it comes to releases from smaller installations not covered by the IED, the consultation showed that the regulatory approach, the level of control as well as the degree of involvement of wastewater operators in the permitting process differ from one MS to another (see Annex 5). 

Since the UWWTD entails no requirement for monitoring and reporting on such non-domestic pollution entering the wastewater treatment plants, it is difficult to provide a quantification of this issue. The current lack of understanding prevents additional actions to reduce pollution at source notably through stricter permits and better control of industries connected to the public network.

2.1.2 Alignment with Green Deal, new societal challenges - problems and drivers

Since the adoption of the Directive, new societal challenges have emerged. The European Green Deal (EGD) sets ambitious policy objectives to fight climate change and environmental degradation. The below listed topics are the most relevant aspects of the EGD to which the UWWTD needs to align.

2.1.2.1 Green House Gas emissions

In 2018, wastewater treatment was responsible for 34,45 million tons CO2e/year - around 0,86% of the total GHG emissions of the EU including 4% of methane (CH4) and 3% of Nitrous Oxide (N2O) emissions (source: Annex 10, report 9). GHG emissions are specific to each facility and the type of treatment applied.  As shown in Figure 6 , 14,1 million tons CO2/year are due to carbon footprint of the infrastructures (mainly sewer networks). Another 3,98 million tons is due to rejected effluents and further degradation of the remaining load. A last part – 3,34 million tons - is linked with the use of inputs produced by other industries, such as chemicals used for the treatment. These emissions cannot be avoided with measures in the wastewater sector.

The remaining and avoidable GHG emissions (13,03 million tons) are related to operational activities: use of energy (electricity) for the collection and treatment of wastewaters (4,6 million tons) and emissions linked with the treatment process (8,4 million tons – diffuse emissions of N2O in the process). The potential impacts of the existing or forthcoming EU legislations on GHG emissions is discussed in section 5.1 on the baseline.

Figure 6: Breakdown of GHG emission from wastewater sector – EU 27, source JRC 2022, ref in Annex 10, report 9

2.1.2.2 Energy use

As shown in Figure 7 , there are large differences between operators in terms of energy use depending on the size of the facilities and the technologies in place. Overall, the wastewater sector is using about 0,8% of the total EU energy consumption. This comes at high expenses: around €2 billion per year representing between 25% and 56% of the operational costs (source: Annex 10, report 1). Despite the significant potential, there is a poor uptake of energy efficiency and renewable technologies in the sector. The Evaluation showed that, apart from some advanced MS (see Box 1), there is a lack of understanding of the potential to reduce energy use or even produce energy partly due the absence of systematic energy audits for the wastewater treatment plants but also at the level of the collecting networks.

Figure 7: Annual electricity used vs size of treatment plants, source: Ganora et al, 2019 

The recent proposal to revise the EED, tabled by the Commission as part of the “Fit for 55” package, entails the requirement, for large enterprises consuming more than 10 tera-joules/year, to be subject to energy audits. Most of the wastewater treatment plants would however not be covered by this new obligation, as the average energy consumption of large wastewater facilities of 100.000 p.e. amounts to 7,2 terajoules/ year (or 2Mw/h). The REFIT evaluation has shown the lack of understanding of the sector on the potential energy savings in the treatment facilities and to a certain extent in the collecting systems.

2.1.2.3 Sludge and water re-use

Sludge reuse in agriculture is governed by the Sewage Sludge Directive (currently under evaluation ). The UWWTD contains limited provisions on sludge reuse or recovery 14 . The Evaluation concluded that, currently, sludge management is not optimal and not aligned with the principles of the circular economy: today about half of the sludge is reused in agriculture while another large part is being incinerated or landfilled representing a clear loss of valuable resources, including Phosphorus (see Figure 8 ).

A joint seminar was organised on sludge management in the context of the ongoing Evaluation of the SSD and of this IA. It confirmed that, over the past years, some MS have heavily restricted the use of sludge in agriculture on public health grounds (DE, AT, NL, BE), while others do use it extensively. Without additional action to limit pollution at source and improve sludge control before its use in agriculture, there is a risk that this trend increases in the coming years. Phosphorus could also be easily recovered from the ashes of mono-incinerated sludge, but this is not yet current practice in most MS.

Figure 8: Sewage sludge reuse in EU-28 in the period 2012-2016 (% of sewage sludge reused in soil and agriculture – source: Annex 10, report 7)

Water reuse after treatment in wastewater facilities should also be better incentivised: in 2015, according to the impact assessment on the Water Reuse Regulation, only 2,4% of the treated wastewater was reused. In the aggravating climate change context leading to more frequent instances, across the EU, of droughts and water scarcity, the entry into application, in 2023, of that new Regulation creates further incentives to reuse water.

2.1.2.4 Health and wastewaters

Today there is lack of understanding of the added value of accurate monitoring of public health relevant parameters in urban wastewaters. This is partly due to the absence of systematic dialogue and coordination between public health and wastewater authorities. The COVID-19 pandemic has revealed the added value of tracking the virus and its variants in wastewaters. Such surveillance helps to anticipate and follow the dissemination of the virus into the population. Today, with the financial support of the EU and in line with the 2021 Commission Recommendation on Covid 19, 26 MS have a surveillance infrastructure in place. Other types of health parameters could be monitored in the wastewaters as a complementary and reliable indicator of the public health state of the population.

Antimicrobial Resistance (AMR – see glossary) is a major human-health threat aggravated by the fact that, for the time being, there are no alternatives to antibiotics. Wastewater treatment plants are a potential entry point of antimicrobial-resistant genes and organisms in the environment. Treatment plants may contribute to the removal of AMR from the effluents. There is no obligation to monitor and remove AMR, neither at the outlet of the treatment facilities nor in the receiving water bodies.

2.1.3 Modernisation and Governance - problem and drivers

Like drinking water operators, wastewater operators are part of a ‘captive’ market: both citizens and businesses connected to the public network cannot choose their operators. The Evaluation and the consultation process confirmed that the wastewater sector is mainly reactive to legal requirements. Most competent authorities are implementing only the minimum requirements of the Directive. There are indeed few incentives to ‘do better’ beyond such legal requirements, as doing more usually entails additional costs, to be covered by water tariffs or further budgetary expenditures. Some MS apply more stringent standards, for instance when it is necessary to meet the objectives of other relevant legal obligations such as the Bathing, Drinking and Water Framework Directives, but this is not systematic (see Annex 5).

2.1.3.1 Operators’ performances and transparency

A recent OECD analysis (Annex 10, report 6) showed differences in terms of performances between operators in relation to energy efficiency, GHG emissions, social and economic governance, operational aspects (see Figure 9 ). Some of these differences can be explained by different operating conditions (facilities size, climatic/geographical conditions). Others can only be explained by a sub optimal management due to lack of real incentives (‘captive’ market) and/or a lack of technical skills in fragmented utilities.

Figure 9: Operational costs – EU wastewater operators – OECD (2022), Annex 10, report 6 

The level of transparency also differs from one operator to another: some operators are providing detailed information either on the bills, on their web sites or via apps not only on their level of performance but also on the main elements included in the water bills. This uneven level of access to information prevents an equal empowerment amongst EU citizens. Respondents to the OPC indicated the need for receiving more information.

2.1.3.2 Uneven application of the ‘polluter pays’ principle

The lack of the application of the “polluter pays” principle in the water sector was raised in a recent report for the Court of the Auditors. In order to cover the costs related to the implementation of the Directive, MS are using a mix of public budget and water tariffs. Many relied, and some still rely, on EU funding to build up the initial infrastructure. 15   As shown in Figure 10 , public budget covers around 30% of the expenses for water supply and sanitation – the rest (70%) is covered by water tariffs. Water tariffs are usually covering both water supply and sanitation: on average wastewater collection and treatment account for about 60% of the water bill although drinking water represents 40%.

There are large differences between MS: some MS like DK or FI are nearly at full cost recovery through water tariffs. In these MS, the ‘polluter pays’ principle can be considered as respected for households connected to the public network. This is however not the case in other MS, such as IE, LU or CY, where less than 22% of the overall costs is covered by water tariffs (source: OECD, see Annex 10, report 5). According to OECD (see also Figure 19 ), affordability is not a major issue in the EU. The effects of additional requirements set at EU level should nevertheless be carefully analysed.

Contrary to households, the ‘polluter pays’ principle is not applied for non-domestic/ industrial pollution gathered in public networks: so far there is no mechanism to make industrial producers financially responsible for the water pollution generated by the products they place on the EU market. This is the case for instance for pollutants of emerging concern such as micro-pollutants or micro-plastics partly collected and treated in the wastewater treatment plant without any support from the producers/importers.

Figure 10: Sources of financing for water supply and sanitation services – EU 28, Source: OECD (2020) – ref in Annex 10, report 5

2.1.3.2 Not adapted monitoring and reporting

Monitoring requirements set in Article 15 of the Directive have proven effective to drive compliance. However, technological advances allow today for more efficient and accurate monitoring of both existing and emerging pollutants. Information gathered from MS in the context of this IA (Annex 5) shows that there are large divergences among MS in terms of monitoring. Most MS are already collecting more frequent and broader information on more pollutants than what is required by the Directive. 16 Yet, the knowledge on the quality and quantity of wastewaters is insufficient in many instances. Several cases of over dimensioning of facilities but also storage capacities to reduce SWO and urban runoff, leading to excessive costs and inefficient water collection and treatment, could have been avoided with a better understanding of the actual load to be treated.

Reporting requirements 17 set by the Directive could be improved and modernised to ensure a better enforcement of the Directive. Some provisions are by now outdated. This is the case for the bi-annual Commission report required under Article 17: while today most data are accessible in real time, these reports are published few years after the actual monitoring. Also, precise data with the numerical values are available in all MS although only ‘passed/failed’ values are reported. At the same time, the Directive does not request reporting on some key data for instance on remaining sources of pollution.

The bi-yearly requirement to produce national implementation programs under Article 17 might be excessive for those MS which have reached 100% compliance with the Directive. This information remains on the contrary indispensable for the other MS: having a proper investment planning combined with a financing strategy is key to achieve full compliance. Also, the information requested under Article 17 is not fully consistent with the ‘enabling condition’ for EU funding under the Cohesion Policy. 18  

2.1.3.2 Insufficient access to sanitation

Access to sanitation remains an issue preventing the EU to fully implement SDG 6 and its objective of ensuring ‘access to adequate and equitable sanitation and hygiene for all’: the Directive does not require MS to guarantee access to sanitation. In the EU, according to Eurostat , approximately 2% of the population have no access to an indoor flushing toilet. Around 10 million people living in the EU still lack access to sanitation services ( EC, 2020 ). According to EU statistics , 10 to 12 million Roma people are living in Europe, 2.6 million refugees, and 700.000 people sleeping in the rough every night.

During the consultation it appeared that the problem can be split in 3 parts: 1) vulnerable and marginalised people such as homeless ones having no or poor access to sanitation; 2) people living in rural areas with a lack of flush toilets and other sanitation facilities; and 3) cities with insufficient access to public sanitation facilities. 

2.2 How likely is the problem to persist?

The Evaluation has shown that the ‘carrot and stick’ (combination of enforcement and support notably with Regional funds) approach followed by the Commission to ensure the implementation of the Directive has paid off. It had helped to progressively ensure high levels of compliance with the Directive. Yet, in the absence of EU rules combined with possible renewed ways of funding the necessary measures, only poor progress can be expected at EU level in controlling remaining pollution from remaining urban sources, such as SWO and urban runoff, releases from smaller agglomerations, N/P or micro-pollutant releases. Information collected for this IA (see Annex 5) shows that only limited or uneven progress were achieved to limit pollution from these sources.

Urbanisation is expected to progressively modify the needs of wastewater collection and treatment: in line with OECD predictions, the trend of urbanisation - people leaving rural areas to move in urban areas - will continue in the coming years which will have an effect on soil sealing, in turn potentially inducing more urban floods and SWO. These impacts might be mitigated by the implementation of the Biodiversity and the Soil Strategies. Ageing population will lead to an increased use of pharmaceutical products but also to a higher demand for security and control of health risks. With the effects of climate change already seen on rainfall regimes, more frequent heavy rains are expected which will exacerbate the problems linked with SWO and urban runoff.

No major new technological developments are expected in the coming years for the ‘classical’ treatment processes of wastewater. However, digitalisation, permanent automated monitoring and instrumentation, control and automation (ICA) are expected to help in better managing the collection, storage and treatment of wastewater, notably for what relate energy use and related GHG emissions. It could also help to avoid building larger infrastructures, for instance to tackle the issue of SWO and urban runoff, by optimising the infrastructures in place. Digitalisation will also help rationalise and simplify reporting from the local/national authorities to the EU. New testing techniques have the potential to change monitoring and assessment practices and costs in the future. Instead of testing for the presence of hundreds of potentially harmful substances, effect-based monitoring would allow for more targeted monitoring and control measures. This might be particularly relevant, for instance, for micro-pollutants.

In the absence of obligation of energy audits, the lack of understanding of potential for implementing energy saving measures and, to a lesser extent, for producing renewable energies and biogas is expected to persist. Technological developments and experience gained across some MS (see Box 1 below) show that there is a potential for the wastewater treatment sector to become ‘energy neutral’ (see section 5.2.7).

3.Why should the EU act?

3.1 Legal basis

The current UWWTD is based on Article 192(1) of the Treaty on the Functioning of the European Union (TFEU), which states that “Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay”. Action in the field of wastewater management must therefore be taken according to these key provisions and in the respect of the shared competence with the MS. This means that the EU can only legislate with due consideration for the principles of necessity, subsidiarity and proportionality.

3.2 Subsidiarity: Necessity of EU action

The Evaluation confirmed the added value of the Directive and found that EU action was and is necessary to achieve a high level of environmental and human health protection via a sound wastewater management, as the vast majority of MS would have not achieved the same results on their own. This is confirmed by the results of the OPC suggesting that continued action from the EU is considered necessary to ensure further progress. The incentive to reinforce and improve the level of environmental and health protection linked to wastewater management is indeed limited as it is directly linked with additional costs for operators, users and/or national budgets. As explained above, the wastewater sector is mainly responsive to EU legislation on which national legislation is based. Without EU intervention, only modest new progress is expected.

Transboundary rivers cover 60% of the EU – the impacts of discharges in one MS will directly affect the environment in other MS. It is therefore indispensable to ensure simultaneous efforts in all MS with a same level of standards for wastewater collection and treatment. That will avoid that efforts made by some MS are partly jeopardised by the lack of investments in others MS. Such an approach cannot be ensured at MS level alone.

The Evaluation also confirmed that the EU action has ensured and has a potential to further ensure an equal level of environmental and human health protection across all Member States. More than half of respondents to the OPC across all stakeholder categories rated the risk perception of pollution from untreated wastewater as a significant concern. There was consensus among respondents on addressing all contaminants listed in the survey (corresponding to the pollutants addressed in this IA). Over the last 30 years of implementation of the UWWTD, the quality of bathing water sites (hence tourism and recreation), raw water used for the production of drinking water and of water bodies in general has been either preserved or, in several instances, improved (see section 5.1 of the Evaluation of the Directive). Similarly, making sure that key health parameters are tracked in wastewaters will increase the health protection of all EU citizens. Improving access to sanitation but also empowering all EU citizens by ensuring an equal access to information should be ensured: the Evaluation has shown large differences among EU citizens, from that perspective. All MS are facing the consequences of climate change notably on their hydrological regimes and urban micro-climate. Similarly, pollutants of emerging concern such as micro-pollutants or micro-plastics are present in all MS. This is also the case for most of the remaining loads from urban sources which affect water quality in all MS. Also, the drivers for the identified problems are very similar from one MS to another.

3.3 Subsidiarity: added value of EU action

As shown in the Evaluation, EU action remains essential to ensure that benefits from improved water quality of the EU rivers, lakes, ground-waters and seas are optimised. Experts consulted as part of the evaluation agreed on the decisive role that the UWWTD had in establishing collection and treatment infrastructures. EU action ensures that water bodies benefit from the same level of protection at the same time. Without EU action, part of the efforts made by some MS at national and local level could be overridden by lack of progress of the others. This is valid not only for transboundary water bodies but also inside MS as, for most of them, the Directive was the key driver for investing in the required infrastructures.

The Evaluation showed that EU standards were a crucial driver for the development of a globally competitive EU water industry. Since the adoption of the Directive, several major worldwide leaders in the field of wastewater treatment have been created and are exporting their services all around the world. Further modernising the EU standards, for instance with new requirements on micro-pollutants or energy use would further stimulate innovation and ultimately economies of scale. This is also the case if, in line with the objectives of the Green Deal and the EU Climate Law, common efforts are taken to improve energy efficiency, develop renewables and produce more biogas in the sector.

Establishing new rules in application of the “polluter pays” principle particularly for micro-pollutants should be done at EU level to avoid market distortion. Also, given the multiplication of national standards (see section 2.1.1.3), adopting EU standards for IAS will limit barriers to the internal market. Ensuring harmonised approaches for the remaining loads identified in section 2.1 will help develop common approaches, favour the development of new skills and new markets. For instance, applying best practices at EU level for storm water overflows and urban runoffs would lead to better urban planning, the development of nature-based solutions, full use of digitalisation and optimisation of existing infrastructures. This will require new competences and create new market opportunities. This is also the case for other aspects such as energy and GHG reduction.

The recent pandemics has shown the interdependence of the MS in terms of virus circulation. Ensuring an effective, rapid, and harmonised tracking of pathogenic factors in wastewaters can benefit the whole EU. Without EU harmonised and integrated action, the possibilities of tracking new types of viruses but also of surveying other relevant health parameters in wastewaters would only be achieved in a few, most advanced MS.

4.Objectives: What is to be achieved?

4.1 General objectives

The main objective of the initiative is to contribute, in an effective and efficient way, to protecting the environment and human health from the adverse effects of urban wastewater discharges. The aim is to modernise the legislation by adapting it to current and future societal needs while adapting it to the objectives of the European Green Deal and of a Europe fit for the Digital Age. There was a broad consensus amongst the stakeholders regardless their background on the key objectives for this review. The Evaluation highlighted that, according to business and WWTP operators, the Directive does not sufficiently deal with resource recovery and emerging pollutants. Stakeholders also insisted on the necessity to give predictability to the sector with clear legal requirements for the next decades – so that the necessary investments can be planned on due time.

The planned EU intervention would have two main general objectives:

1.To protect EU citizens and ecosystems from the remaining sources of insufficiently treated wastewater;

2.To provide a predictable framework for the sector, improve its transparency and governance and align it to “a Europe fit for the Digital Age”;

and two complementary objectives:

3.To align the sector to the objectives of the Green Deal and the recently adopted Communication ‘Repower EU’, regarding in particular the 2050 goal of climate neutrality in synergy with the ESR, transition to circular economy, zero pollution and a restoration of biodiversity;

4.To use wastewater health related parameters as a support for public health and to improve ‘adequate and equitable sanitation and hygiene for all’ in line with SDG 6.

4.2 Specific objectives

The following achievements should be met in an effective and efficient way:

In relation to objective 1:

·Contribute to identifying and then preventing pollution reaching wastewater treatment plants with particular attention to pollutants difficult to treat in these plants;

·Further reduce pollution from the ‘remaining sources’ (storm water overflows, urban runoff, smaller agglomerations and IAS);

·Further reduce nutrient (N and P), micro-pollutants and micro-plastics pollution from urban sources;

·Reinforce the coherence with key EU water legislations (such as the Bathing Water, Water and Marine Framework Directives and the Drinking Water Directive);

·Encourage investment and innovation in wastewater management.

In relation to objective 2:

·Ensure high level of transparency and access to information;

·Ensure that investments are taking place ‘where it makes sense’ for environmental or health reasons (based on clear criteria);

·Promote a solid financing strategy while ensuring affordability of water tariffs and better applying the ‘polluter pays’ principle besides household users;

·Modernise, simplify and adapt monitoring and reporting obligations.

In relation to objective 3:

·Move towards energy neutrality of wastewater sector;

·Create the conditions for increasing water reuse and better managing sludge and waste, in close synergy with the new Water Reuse Regulation, the Sewage Sludge Directive and the EU waste acquis.

In relation to objective 4:

·Improve access to sanitation particularly for vulnerable and marginalised people;

·Ensure that health relevant information from wastewaters is fully used;

·Improve the dialogue between health and wastewater competent authorities;

·Better monitor the spreading of AMR in wastewaters and prevent its dissemination.

Two main trade-offs between these objectives will require particular attention: (1) additional treatment for micro-pollutants will require more energy and, if this energy is coming from non-renewable sources, this will entail more GHG emissions; (2) increasing our understanding on some key sources of pollution as well as on some key indicators will require additional efforts and might increase the administrative burden related to monitoring and reporting. At the same time, there is a potential to simplify some of the current requirements. These aspects are further discussed in sections 5 and 6.

Respondents to the OPC provided clear indications on the main objectives and topics the revised legislation should address. Better implementing the polluter pays principle was indicated as the most important topic, followed by promoting the monitoring of industrial releases into urban wastewater, reducing nutrient discharge into water bodies, and dealing with SWO and urban run-off through an integrated approach. All are addressed in the specific objectives set for the intervention.

The relation between the problems, their drivers, the objectives and the options are summarised in Figure 11  below although more details on the relation between the problems, drivers, options and their contribution to specific objectives is provided in Figure 14 below.

Figure 11: Links between drivers, problems, objectives and options

5.What are the available policy options?

5.1 What is the baseline from which options are assessed?

The baseline scenario implies the progressive achievement of full compliance by all MS. In designing the baseline, it is assumed that the identified problems would remain, although their scale would be impacted by external trends such as urbanisation, changes in demographics, changes due to climate impacts (e.g. more intense rains and storms), the development of new technologies (see section 2.2). The ‘domestic’ pollution (BOD, N and P, E. coli) is expected to remain globally stable as it is mainly linked to the evolution of the population connected to the network: EU population is expected to slightly increase (0,2%) by 2035 and then decrease (1,36%) by 2050. 19 These changes do not require a significant adaptation of the usually slightly oversized infrastructure. At the local scale, though, there might be needs for adjustment. 

EU actions to limit pollution at source might have an effect on the other (‘non domestic’) pollutants reaching treatment plants and on the quality of the sludge produced afterwards. The impacts might be significant for some substances in case they are fully banned from the EU market. 20 Progress is also expected from the implementation of the 2020 Chemical, Pharmaceutical Strategies and the 2021 Zero Pollution Action Plan. This progress is however difficult to quantify at this early stage. In any event, actions will be required both at source and in wastewater treatment plants, for instance to prevent micro-pollutants to reach receiving waters. Several measures are also envisaged to reduce micro-plastics at source – see Annex 10, report 3. In the absence of final decisions, at this stage, on their exact extent, it has not been possible to quantify their possible effects.

In the baseline, for wastewater treatment in centralised facilities, full compliance was assumed with differentiated dates according to the distance to target of each MS (Table A7-1, Annex 7) 21 . On top of the key support from regional funds, some MS are benefiting from the Technical Support Instrument for their water sector. The Commission with the OECD is also providing tailored support to MS (see Annex 10, report 5).

For Individual and other Appropriate Systems (IAS), the effects of full implementation were included in the baseline: it was assumed that all IAS would have an equivalent level of treatment as required by the Directive. Additional initiatives further discussed in sections 5.2 and 6 would be needed to ensure full implementation. According to the data gathered in the context of this IA (see Annex 4 and 5), today 67% of MS are treating wastewaters from small agglomerations below 2.000 p.e. to the level of secondary treatment, 26% to the level of primary treatment and 7,4% is considered as not treated.

The effects of the baseline are summarised in Table 2 below and illustrated in Figure 1 . Full compliance with the existing legislation would reduce the remaining loads emitted to the environment by 21,4% for BOD, 6,3% for N, 13,4% for P, 21,9% for E. coli and 4,2% for micro-pollutants. The bulk of the effects of the baseline scenario would appear by 2025 (when 23 MS are expected to become fully compliant), with full effects by 2031.

Table 2: Summary of the of the baseline scenario (full compliance) – remaining loads per year emitted to environment – A breakdown per MS is provided in Annex 7, Table A7.6

In terms of energy use and GHG emission reduction, progress could be expected from the combined application of the Fit for 55 package, the EED, the RED II, the ESR and the very recently adopted RePowerEU package (see Annex 8). In the context of this IA, efforts were made to build a dynamic scenario taking into account the potential effects of these legislations and policy packages on energy use and GHG emission reductions:

·The recently adopted RePowerEU Plan aims at rapidly reduce dependence on Russian fossil fuels and fast forward the green transition. Several actions are included in the Plan notably to promote renewables including the production of biogas. No specific quantifies targets per sector are included in the Plan making it impossible to quantify its possible effects on the wastewater sector;

·Under the Fit for 55 package, the EED, the RED II and the ESR, MS have to meet national targets (see Annex 8 for more details) and can choose in which sector efforts will be made to meet these targets. There is no sufficiently detailed data on how MS intends to meet these targets with a sufficient level of disaggregation to identity to what extent the wastewater sector would be included or not in MS efforts. It is therefore not possible to quantify the effects of national based targets on the wastewater treatment sector. A few MS (like DK and NL – see Box 1 below) have well understood the high potential of the sector but so far they remain an exception. The starting position of the other MS is largely unknown in absence of any reporting obligations on energy use and production of renewables from this sector. The potential impacts of these uncertainties are summarised in Table 18 . In summary, those MS using more energy today for their wastewater operations will proportionally benefit more from systematic energy audits and the related investments in energy efficiency and production of renewables. These investments will be more significant in these countries but also more profitable.

·Nevertheless, as detailed in the recast EED, the public sector should lead by example, and therefore a specific mandatory target was introduced for all public bodies which covers the wastewater sector (1.7% per year reduction of energy use starting by 2025).

In the baseline, this mandatory target was therefore applied. As shown in Table 3 below, a reduction of energy use of 1,7% per year from 2025 was included in the Baseline. This would represent a reduction of 25,5% of the energy used by 2040 compared to 2025. This will have a direct effect on GHG emission reduction, which was taken into account in the baseline: around 1,19 million tons of GHG would be avoided thanks to the implementation of the EED. This represents 11,89% of the ‘avoidable emissions’ and will generate a monetised benefits of 118,9 million € per year by 2040. This assumption is based on a (future) legal obligation which is the most solid basis to build a dynamic baseline, but as explained above, there are uncertainties which are further discussed in section 7.1, Table 17 .  

Table 3: Baseline scenario – impacts of the EED on the energy use and GHG emissions

5.2 Description of the policy options

Several policy measures addressing each identified problem have been retained for further analysis. For each problem, different solutions were envisaged, ranging from soft approaches - mainly based on non-binding guidance to MS - up to stricter regulatory measures. There are limited interactions among the proposed solutions, which will be clearly identified in the following sections.

The measures detailed below are based on what is already in place in the most advanced MS 22 . As shown in the Evaluation, having in place enforceable measures was a key element for the success of this Directive. Therefore, too complex measures difficult to control were avoided. Also, in the initial screening, measures which were not broadly supported by stakeholders or identified as good practice were discarded.  

For some problems, the analysis and experience confirmed also by a consensus across the stakeholders groups show that only a limited set of measures is available without real alternatives. This is the case for non-domestic waters, some aspects of governance such as transparency, access to sanitation or public health indicators. For other problems, different options from low to high level of ambition were tested to find optimal solutions. This is the case for SWO and urban runoff, small scale agglomerations, nutrients and micro-pollutants abatement. The lowest ambition options would apply only to a limited number of large facilities or agglomerations although the highest ambition options would apply to more and smaller facilities and agglomerations.

To fix adequate thresholds for the different options, the share of the treated load amongst the different sizes of facilities and agglomerations is an important factor: 81% of the load is treated in 9% of the EU facilities and agglomerations above 10.000 p.e. – see Figure 12 (and Tables A7.3 and A7.4 in Annex 7 for more details). Around 47% of the load is treated in 1.3% of facilities and agglomerations above 100.000 p.e. There are minor differences between the number of facilities and agglomerations 23 which was taken into account when designing the options and assessing their impacts.

A description of the options considered for the individual problems is provided below.

Figure 12: Treated load, number of treatment plants per category (JRC 2022, Annex 4)

5.2.1 Storm water overflows (SWO) and urban runoff

The choice of effective measures to control pollution from SWO and urban runoff during rainfall events depends on the local conditions. 24  Therefore, in line with the principle of subsidiarity and proportionality, imposing detailed EU standards constraining the design of solutions would not be appropriate.

Results of the stakeholder consultation identified ‘integrated urban water management plans’ established at local level as the right instrument to identify and implement the most cost-effective local combination of measures. This approach is already applied in some MS (such as FI, DE, AT or FR).

Different levels of ambition were tested to reduce emissions from SWO and urban runoff in terms of agglomerations that would be covered:

-A low ambition - Option 1, with measures only in agglomerations >100.000 p.e. with a focus on agglomerations ‘at risk’; 25  

-A high ambition - Option 3 applied to all agglomerations above 10.000 p.e.;

-Several ‘in between’ options were modelled of which a representative Option 2 will be presented in section 6 where measures are applied to all ‘at risk’ agglomerations above 10.000 p.e.

The plans would include an analysis of the initial conditions, a definition of the objectives, an analysis of different scenarios to meet the objectives based on an optimisation of the measures to be taken and defined in the plan. The introduction of the plans was generally supported by stakeholders, especially based on the views expressed during the workshops and in the OPC. In the targeted consultation, where respondents had to rate propositions on a scale of 1 to 5, the strategic planning approach was rated high - academia (4.4), citizens (4.2), NGOs (4.7), businesses (4.3), public authorities (3.6). Moreover, there was a consensus amongst stakeholders (academia (4.7), citizens (4.4), NGOs (5.0), businesses (4.5), public authorities (4.1)) on the following combination of measures to be considered in the plans:

-Taking all possible measures to prevent the entry of ‘unpolluted rain waters’ in the wastewater collection network via actions aimed at infiltrating the runoff directly onto pervious surfaces, at removing soil sealing and at increasing the runoff retention also through nature-based solutions (e.g. green roofs, green urban surfaces);

-Measures to buffer polluted storm water flows within the existing treatment infrastructure, by optimizing the use of existing storage volumes e.g. through RTC of their operation and, when necessary, by building additional storage volume;

-Measures to mitigate the impacts from untreated water discharges, such as further treatment through nature-based or mixed systems, including constructed wetlands.

Effective monitoring of the network, linked with a modelling of urban water systems is key in order to optimise new investments, and indispensable for RTC. Very recent information (see Annex 10, reference 21) based on an analysis of several case studies shows that significant costs savings (on average 21,4%) can be made with a combination of real time control and digitalisation of water management in the cities.

Mixed views were expressed by stakeholder on the added value of setting an EU based objective. At least an indicative objective is nevertheless indispensable to give consistency and added values to the integrated management plans. Based on the experiences and objectives in place in MS, but also on expert judgement on what is “as low as reasonably achievable” (see Annex 10, reports 17 and 18 for more details), a maximum load of 1% of the total sewage produced in a catchment served by combined sewers (or 1% of the annual total ‘dry weather’ load) was applied as an EU objective for the model calculations detailed in section 6.1.

5.2.2 Small Agglomerations

To better tackle the pollution from smaller agglomerations, the scope of the Directive could be expanded to include agglomerations below 2.000 p.e. Two different options based on lower thresholds for the agglomerations were assessed (1.000 – Option 1 and 500 p.e. – Option 2).

The thresholds to be tested were identified on the basis of the share of the remaining load according to the size of the agglomerations – see Figure 14 : below 500 p.e., the load is relatively low for a high number of agglomerations, and above 1.000 p.e. the potential pollution reduction would not be too limited in comparison to the baseline.

Figure 13: Agglomerations below 2.000 p.e. and population (P), source JRC, ref in Annex 10, report 10

18 MS have already decided to impose collection and treatment for smaller agglomerations although others are less active in these areas (ref in Annex 10, report 1). As explained in section 5.1, this was taken into account in the baseline. Stakeholders were broadly in favour of covering smaller agglomerations in the Directive.

5.2.3 Loads from individual or other appropriate systems (IAS)

There was a broad consensus among stakeholders on the need to take the following additional measures (without real alternatives) to ensure a full application of the existing Directive (ensuring the ‘same level of treatment’ in IAS compared to centralised facilities):

·Establish clear standards in relation to emissions from IAS compatible with the Directive’s requirements and supplementing the standards defined in the Construction Product Regulation which was specifically supported by academia (4.8). This measure was rated 3.8 by businesses, 4.2 by citizens and NGOs and 3.5 by public authorities);

·Improve the control of IAS at local level, including through a systemic inventory of the IAS, regular inspections of the larger ones, an obligation of maintenance. This measure was rated 4.5 by academia, 3.6 by businesses, 3.8 by citizens, 4.1 by NGOs and 3.2 by public authorities.

5.2.4 N and P releases and eutrophication

Different options to reduce Nitrogen and Phosphorus releases were tested:

-A low ambition (Option 1) in which N/P removal would be systematically imposed only in larger facilities above 100.000 p.e.;

-A high ambition (Option 5) in which N/P removal would be systematically imposed in all facilities above 10.000 p.e. while N/P removal efficiency would be increased;

-A set of medium ambition (Options 2, 3 and 4) in which N/P removal would be imposed to different areas (from the whole territory to only ‘sensitive’ areas subject to eutrophication) for different size of facilities and with different levels of N/P efficiency. The most representative options are discussed in section 6 and more detail can be found in report 15, Annex 10.

These options are in line with the measures identified in the most advanced MS. Also, there was a consensus across the different stakeholder groups on the fact that current N/P standards could be adopted to the performance actually achieved in well operating facilities (data from the MS shows that well-functioning facilities can reach 85% reduction for N and more than 90% for P - see report 15 in Annex 10). In many cases, the plants can be upgraded with limited additional costs or only through better operation achieved with instrumentation, control and automation (ICA). In some limited cases, it would require infrastructural overhauls (all included in the cost assessment - see section 6.4).

Overall, stricter N/P emission requirements were supported by stakeholders. Introducing the obligation to remove N/P to a larger range of UWWTPs was supported by NGOs (4.0), academia (4.0), and businesses (3.1). However, businesses noted that such obligations should only be placed for plants above a certain threshold. Public authorities seemed least in favour of such an option (3.5), and generally showed more support for options on providing EU-level guidance on how to designate sensitive areas (3.8). Stakeholders also supported more clarity on the criteria for the designation of ‘sensitive’ areas subject to eutrophication but also more coherence with the Nitrate and the WFD. This measure was rated 4.5 by academia, 4.1 by citizens and businesses, 4.2 by NGOs, and 3.6 by public authorities.

5.2.5 Micro-pollutants

Based on the share of the load between the different facility sizes and on the dilution rates of the receiving bodies (see Annex 4), the following options were defined:

·a “low ambition” Option 1 requiring treatment only for large plants (> 100.000 p.e.);

·a “high ambition” Option 3 requiring treatment for all plants above 10.000 p.e. when the dilution ratio is 100 or less;

·other ‘in between’ options combining size and dilution rates (Option 2 in section 6).

There was a broad consensus amongst stakeholders on the necessity to address the issue of micro-pollutants from wastewaters. Contrary to some business (PCP’s, Pharmaceuticals), citizens (4.0), NGOs (4.1), academics (3.8), public authorities (3.4) and water-related business support the requirement for larger UWWTPs to remove micro-pollutants based on EU-set performance standards.

Stakeholders were also insisting on the importance of measures to be taken at source but also on the need to better apply the ‘polluter pays’ principle by making the producers financially responsible for the costs linked to the additional treatment required to treat micro-pollutants. The EPR approach received a broad support (regarding feasibility and effectiveness) from the majority of stakeholders (academia (4.5), citizens (4.5), NGOs 4.8), public authorities (4.2), including businesses (3.9) except from the pharmaceutical and chemical industries globally not in favour of such a system, notably on the grounds that the financial responsibility should be either shared by all actors involved in the chain (from industry to consumers) or taken by the public authorities. The feasibility and impacts of a system of producer responsibility was assessed through a specific study (see Annex 10, report 2). To be noted that such a system will de facto lead to a shared financial responsibility as - depending on the decision to be taken by responsible industry - part of the costs will be supported by consumers (see section 6.5).

5.2.6 Non-domestic emissions

As detailed in section 2.1.17, the lack of knowledge of the quality of the incoming waters of the wastewater treatment plants prevents competent authorities to take additional actions to limit pollution at source. To improve the understanding of non-domestic emissions sent in the wastewater collection systems, the following actions were identified based on the consultation and best practices identified in MS:

·Expand the scope of pollutants to be regularly monitored at the inlet and outlet of the wastewater treatment facilities to improve the understanding on the presence of potentially harmful pollutants; the list of pollutants should be aligned with the existing and soon to be revised EQSD and with relevant parameters listed in the upcoming revision of the IED and E-PRTR Regulation;

·Incentivise competent authorities to better ‘track’ pollution at source based on improved monitoring, particularly when sludge and treated water are re-used;

·Ensure the involvement and access to information for wastewater operators in relation to the discharge permits given to business facilities connected to the treatment plants via the public collection network, and ensure full coherence between the IED and the UWWTD to prevent releases of not abated pollutants in the public network.

Stakeholders independently from their category, supported these measures and particularly as regards the necessity to better monitor/understand non-domestic pollution entering the treatment plants (one of the top ranked concerns that needs to be addressed).

5.2.7 Energy

Based on the experience of the most advanced MS (see Box 1) and the inputs provided during the stakeholder consultation, moving toward energy neutrality was identified as a promising avenue for the sector. The wastewater sector has indeed specific characteristics which would justify a specific sectoral target:

·The sector today accounts for 0.8% of the overall energy used in the EU and offers the potential to significantly reduce its own energy consumption, but also to produce renewable energy;

·Wastewater treatment plants are indeed producing a constant flow of sludge which after digestion are producing renewable biogas which can be used as a substitute to natural gas;

·Wastewater treatment plants occupy large surfaces which could be made easily available for the production of renewable energy (notably solar and in a number of locations, wind and hydropower); this is highlighted in the recent RePowerEU package, in which wastewater facilities are identified as good candidates as “go-to-areas”; 26

·As shown in the Evaluation, due to its public/semi-public nature, the sector is mainly if not only reacting to (EU) legal requirements;

Fixing an EU energy neutrality sectoral target in the revised UWWTD ensures that the huge potential of this sector in terms of energy efficiency gains and self-production is effectively captured, in particular considering that this sector is mainly reacting to (EU) legal requirements. It will help MS to ensure that this potential is effectively captured even if this sectoral target, like targets decided for other specific sectors (including for instance car industry or buildings), will partly reduce the flexibility left to the MS to choose the sectors in which efforts should be accomplished. Nevertheless, the cost/benefit analysis displayed in section 6.7 shows that reaching energy neutrality in this sector is particularly relevant. Also, in compliance with the principles of subsidiarity and proportionality, the proposed energy neutrality target would be applied at national level but not for each facility: flexibility would indeed be left to the MS on the choice of the facilities where investments will take place so that an optimisation of the efforts could be achieved. The large facilities can indeed be net producers of energy which is not always the case for smaller facilities.

This specific target would complement and support the attainment of the objectives of the ongoing recast of the EED and revision of the RED (see below section 6.7 and 7.1). As shown in Table 3 in section 5.1, without a specific target, part of the sector potential in terms of energy efficiency and of production of clean energy is expected to stay under-exploited over the next decades: in the baseline scenario it was assumed that energy use from the sector would be reduced by 25,5% by 2040 which is far below the potential of the sector. By encouraging the self-production of EU based biogas, it would also contribute to reduce energy dependency, one of the objectives of the recently adopted ‘REPowerEU’ Plan. This sectoral target would also help moving towards the EU objective of climate neutrality by 2050 and contribute to the implementation of the ‘Fit for 55’ and the ESR (see section 6.7 for more details). In that sense, there is no direct overlap between the existing and forthcoming legislations and this sectoral target, but on the contrary the energy neutrality target will complement the existing or planned legislation.

In practice, energy neutrality can be met through a specific mix of actions combining enhanced energy efficiency (new energy efficient pumps and aeration process, optimization of the process, energy recovery from water falls in the plants), production of renewable energy on site (“go to” areas for solar/wind energy production), and production of biogas from the digestion of residual sludge. The proposed target combined with the obligation of energy audits would push wastewater operators first to better assess their potential in terms of cost-effective energy savings and overall better energy management and then to develop tailored made solutions. As shown in section 2.1.2.1 and 2.1.2.2 each wastewater treatment facility is specific and therefore the optimal path to reach energy neutrality has to be defined for each wastewater treatment facility having regard to its specific process and opportunities.

Box 1 – Actions agreed to meet Climate/Energy neutrality by the wastewater and waste sector in Denmark, the Netherlands, Sofia (Bulgaria) and Scotland – see Annex 10, report 19

The impacts of following measures were therefore explored in section 6.7:

·Improve the sector’s understanding of the level of energy use through new monitoring obligations and the requirement of regular energy audits (which are not required under the revised EED – see section 2.1.1.2). This can help wastewater operators to better understand the potential savings they can achieve and to identify cost effective measures for each facility;

·Progressively moving towards an EU energy neutrality objective (to be applied at national level) for the sector with interim targets up to 2040 to ensure regular progress towards the final objective of energy neutrality. The interim targets would start by 2030 to leave enough time to all MS to make the required investments. They would be identical for all MS as those MS having a less advantageous starting position would gain more benefits than the others. The potential financial direct savings are indeed more important in MS using more energy today for their wastewater sector (see section 6.7 for more details).

As mentioned in section 2.1, the avoidable part of GHG emissions of the sector amounts to 13.03 million tons of which around 46,45% is related to energy use.

The OPC results as well as inputs received during the specific workshops showed that all stakeholder categories broadly support the generalisation of energy audits. There was a general recognition on the necessity to better understand and monitor energy use of the treatment plants so that measures can be taken to reduce energy use and where possible produce energy. On average, the highest rated measure was related to introducing an obligatory energy audit in larger plants (average 3.8), academia (4.2), citizens (4.0), NGOs (4.2), businesses (3.6) and public authorities (3.6). Citizens, NGOs and to a lesser extent academia were supportive on introducing energy related targets while mixed views were expressed by public authorities and business. In terms of stakeholder response patterns, academics (4.3) indicated the most support for the measure relating to setting energy use reduction targets based on UWWTP sizes. This was, on the other hand, businesses least rated option (2.6), with a generally negative perception. Public authorities rated this measure 3.1, citizens 3.5 and NGOs 3.7. More recent contacts with the most important water industry representatives were clearly showing a willingness to improve energy efficiency for all wastewater treatment facilities above 10.000 p.e. and to reach climate neutrality targets for all facilities above 100.000 p.e. by 2035 et for all facilities above 10.000 p.e. by 2040. Some representatives from MS and business pointed out that these targets should be introduced for large UWWTPs only without specifying a specific size of the facilities. Targeting only facilities above 10.000 p.e. seems therefore reasonable and would partly answer to these comments. Most advanced MS were clearly supporting an EU wide target similar to their own target.

5.2.8 Sludge management and water re-use

Several actions considered in this IA will have an effect on sludge management. This is the case with the objective of climate and energy neutrality which will incentivise sludge digestion and production of biogas. Beyond this effect, the proposed actions to better monitor, track and reduce pollution at source (see section 5.2.6) will favour a safe use of treated water (water re-use) but also of sludge in line with the waste hierarchy.

Particular attention should be given to the possible presence of micro-plastics/pollutants and genes/bacteria promoting AMR in sludge, when used in agriculture. This aspect is being specifically tackled in the ongoing Evaluation - and possible subsequent legislative revision - of the Sewage Sludge Directive and in the announced Healthy Soil Directive. Finally, in line with the principle of circular economy, when sludge is incinerated, a minimum level of P recovery should be ensured.

The concept of source control, i.e. targeting substances such as micro-plastics and micro-pollutants at source, was widely supported by stakeholders in order to improve circularity in the wastewater treatment sector. As such, if sludge and/or water is to be reused, stakeholders highlighted that there is a need for tracking and preventing pollution at source.

5.2.9 Wastewater and health

Based on best practices in place in advanced MS notably for COVID-19 surveillance (see Annex 5) and on the March 2021 Recommendation by the Commission, the following measures would be taken:

·Ad-hoc surveillance of COVID-19 and its variants in larger wastewater treatment plants (representing a significant share of the population); the surveillance should be adapted according to the local but also timely needs of the health authorities;

·Regular monitoring of other pathogens with a view to define most effective actions to limit their dissemination;

·Regular monitoring of AMR and when relevant, actions to limit AMR dissemination.

A structural dialogue between health and wastewater competent authorities should also be setup with the aim to (1) ensure a timely transmission of the information to the national health competent authorities; and (2) define the health relevant parameters to be temporarily or permanently followed in wastewaters. Enough flexibility should be left to MS so that health competent authorities together with wastewater competent authorities can decide together the parameters to be monitored, the frequency and the location of the samples to be taken depending on the public health situation in each MS.

Stakeholders stated that if wastewater surveillance were to take place, additional costs associated with it should be covered by several entities, for example health authorities. The preferred manner in which surveillance of wastewater should be incorporated in the Directive is through the means of guidelines for collaboration between UWWTPs and health authorities, as well as establishing EU-wide binding standards on implementation.

5.2.10 Transparency and Governance

Different measures are available to ensure a better transparency of the sector but also to improve the understanding on the actual performances of the operators:

·In line with the best practices already in place in some MS, require from the operators to monitor some key performance indicators in relation to their economic, social, environmental, energy and climate performances; these indicators would be included in the revised Directive on the basis of the OECD work (reference 6 in Annex 10);

·Make this information accessible to the public either via online access or for the most essential information, on the invoices sent to the consumers.

These measures are aligned to similar requirements recently adopted under the revised Drinking Water Directive. They will also help to better implement the principles of the Aarhus Convention notably on access to information and public participation. While expressing concerns regarding the administrative burden for authorities, stakeholders consider that the current provisions on public information and transparency do not reflect current desirable levels of public engagement.

5.2.11 Monitoring and reporting

While improved and simplified monitoring and reporting are one of the objectives of the revision of the UWWTD, the actual measures depend on the selections made under the other options discussed in this impact assessment. As further explained in sections 6.11 and 8, additional monitoring activities will be necessary to ensure compliance with the new proposed requirements: this is the case for instance for micro-pollutants, non-domestic pollution, GHG emissions or SWO/urban runoffs. The existing obligation would be also aligned to the current practices notably in terms of monitoring frequency: continuous monitoring of key parameters needed to check compliance should be envisaged for the larger facilities.

Reporting could be improved and where possible simplified by:

·Removing the obligation for all MS to report every two years to the Commission and for the Commission to publish bi-yearly reports, by replacing it with the requirement for MS to host national standardised data sets which would be regularly updated (at least annually) and to provide access to those by the EEA/Commission. This approach is similar to what was decided under the recently reviewed Drinking Water Directive but also with the recent efforts of the EEA and the Commission to automatize and simplify reporting. During the consultation it was mentioned that some MS are already using databases directly filled by operators;

·Adapt the existing reporting obligation to include actual releases on top to information on compliance (pass/fail) from wastewater treatment plants. To limit administrative burden, this new requirement would apply only for facilities above 10.000 p.e., representing 81% of the total EU load (see Figure 12 );

·Include in the reporting obligations information on energy use, measures taken to reduce SWO/urban runoff, and to improve access to sanitation;

·Require MS to report if more than 2% of their load is collected/treated in IAS in their agglomerations, and to notify to the Commission summary information on the actions taken to respect the standards and ensure proper inspection of such IAS;

·Ensure a full coherence between the UWWTD and the revised Industrial Emissions Portal (former E-PRTR) Regulation to ensure best possible use of the same data, as well as full transparency; 27

·Exempt compliant MS from reporting under current Article 17. For the others, ensure synergies and coherence between Article 17 and the ‘water enabling condition’ for EU funding under Cohesion Policy 2021-2027.

New monitoring obligations were clearly supported by NGOs, citizens and academics and to a certain extent by businesses and public authorities. NGOs noted that many of the substances urgently require monitoring (e.g. micro-pollutants). The importance of aligning new reporting requirements with other EU policies such as the new Industrial Emissions Portal (former E-PRTR) was highlighted. Generally, the pursuit for simpler and more harmonised reporting was supported by all stakeholder groups.

5.2.12 Access to sanitation

In order to improve access to sanitation, and in full synergy with existing measures to improve access to water under the revised Drinking Water Directive , the following measures are considered in this IA:

·Identify vulnerable and marginalised people and require MS to take action to improve their access to sanitation

·In line with the subsidiarity principle, encourage MS to take appropriate measures to improve access to sanitation in large cities based on local conditions and constraints.

The extension of the scope of the Directive to smaller agglomeration is expected to improve access to sanitation in rural areas (see section 5.2.2). In the OPC, stakeholders indicated that access to sanitation for vulnerable and marginalised groups should be required. Part of the respondents felt that flexibility should be left to MS on the way to improve access to sanitation.

5.3 Options discarded at an early stage

The Evaluation and stakeholder consultation results support the argument that withdrawing the UWWTD would have negative consequences. EU citizens would no longer enjoy the same level of protection, as MS would no longer apply the same high standards. Given the overall objective of protecting the environment and public health as well as the reasoning regarding subsidiarity provided in section 3, this option was abandoned at the very beginning of the process. There was also no stakeholder support for this option.

Based on the stakeholder consultation, several options were considered at an early stage but rejected as either too vague or too prescriptive. Generally speaking, options based on guidance documents and soft approaches were not further considered in this IA. Their effects would be too limited and would not allow reaching the objectives described in section 4. As explained in the REFIT Evaluation, because of its specific market condition, this sector mainly adjusts to EU legal requirements. The clarity and relative simplicity of the Directive making it highly enforceable was recognised as one of its main success factors and this feature should be kept in the future.

Some flexibility should nevertheless be kept in order to ensure an optimal use of resources - including EU funding - to reach the objectives. In that sense, the option of banning IAS was rejected at an early stage, because this technique, if well used, might still be justified, depending on local circumstances. Similarly, and as explained in section 5.2.1, imposing detailed EU standards constraining the design of solutions for SWO and urban runoff was considered as not appropriate.

Imposing individual energy efficiency targets for each collection and treatment system was also discarded as this option would not lead to optimising investments at sector level. Similarly, imposing resource efficiency objectives such as minimum percentages of sludge use in agriculture or mandatory anaerobic digestion was rejected as well as the option of introducing minimum rates of water reuse. This is also in line with the subsidiarity and proportionality principles, since the conditions are varying from one MS to another and even from plant to plant. To better apply the ‘polluters pays’ principle, different types of pollutants and related products were considered (see Annex 10, report 2). Possible Extended Producer Responsibility schemes were rejected for all other pollutants than micro-pollutants. Contrary to micro-pollutants, there are indeed at this stage no available technologies to better capture these pollutants in the treatment plants.

Imposing access to sanitation for all and everywhere seems unrealistic and too costly particularly in remote areas. The current scientific knowledge and technological capabilities for wastewater treatment do not support the definition of science-evidence-based threshold for AMR (ref in Annex 10, report 11), hence such an option was discarded too.

Figure 14: Links between drivers, problems, objectives, specific objectives and the main options

6.What are the impacts of the policy options, How do they compare and what are the preferred options? 

As the policy options are quite different according to the identified problems, their potential impacts, their comparison and the choice of the preferred options are discussed together in this section. The assessment of impacts focuses primarily on the economic (costs) and environmental impacts (emission of pollutants). The social impacts, beyond access to sanitation, were addressed from the perspective of affordability of the wastewater services for the low-income households (see section 7).

When alternative options were available, several criteria were used to identify ‘optimal’ (preferred) options: on top of costs/benefits and costs/effectiveness, the contribution to the achievement of the main objectives, the enforceability as well as the potential administrative burden were considered. A summary of the selection criteria applied for each option is provided in Table 12 , at the end of the present section whereas Figure 14 above displays the main options, their contribution to solve the problems and their drivers while delivering on the specific objectives.

The costs and benefits were assessed and presented with a 2040-time horizon: this is indeed the time needed for a realistic implementation of the measures considered in this IA and for a sound planning of the underlying, required investments. Beyond 2040, there would be too many uncertainties on the expected costs and benefits of the envisaged measures. As detailed in section 4, the main objective of this initiative as well as the majority of its expected costs and impacts are related to water collection and treatment and to a lesser extent energy neutrality. This 2040 horizon takes into account the time required for the water-related investments. It also takes into account the lessons learnt from the application of the 1991 Directive (over ambitious deadlines leading to a multiplication of infringement cases – see the Evaluation for more details).

The time needed to achieve energy neutrality was also taken into account: most advanced MS (see Box 1) are indeed expecting to reach energy neutrality by 2025/2030, meaning 10 to 15 years before the proposed EU deadline which therefore would be realistic in the light of the potential gains and incentives related to better energy management but also the available technologies to move towards energy neutrality. The recent evolution of energy prices is providing another powerful incentive for the sector to accelerate its efforts toward energy neutrality. It is also in line with the REPowerEU Communication objective to become less dependent for its energy production. For all these reasons, the 2040 deadline appears to be both realistic and desirable. As detailed below (sections 6.7 and 7.1), reaching energy neutrality by 2040 will contribute to reduce GHG emission from the sector (around 33% of the ‘avoidable emissions) which is compatible with the objectives of the Fit for 55 initiative and the 2050 objective of carbon neutrality.

For comparison purpose, a maximum feasible scenario was built showing what would be the effects of all technically feasible measures without taking into account their cost (see Annex 4). The effects on emissions in waters are summarised in Figure 15 below and in Table 1 above.

Figure 15: Impacts of the current situation, baseline, and maximum feasible scenario on the remaining load

As detailed in Annex 4, the costs were estimated based on reference cost functions (FEASIBLE functions). For the quantification of the benefits, the following shadow price were assumed: GHG emissions € 100 per t CO2e, and for 1 kg of BOD removed from the effluents € 0.05, € 20/kg for N and € 30/kg for P. Additional estimates of the benefits based on willingness to pay were used in the case of SWOs and urban run-off (see Annex 4). The cost and benefit methodologies were reviewed and improved by OECD (Annex 10, report 4).

6.1 Storm water overflows and urban runoff

The expected pollution reduction as well as the costs and benefits of the different options are summarised in Table 3  and Table 4 below. The costs and impacts of the additional investments needed will depend on the local conditions of each urban area. Nevertheless, the costs and effects of different measures were estimated using European hydrological and cost models (see Annex 4 for more details).

Two types of costs were estimated: (1) costs of establishing the urban water management plans including monitoring costs; (2) costs of actual measures included in the plans to limit untreated releases to 1% of the dry weather load (see section 5.2.1).

The average cost of establishing an integrated urban water management plan was estimated at € 0.09/year/p.e. (source: Annex 10, report 1). 28  These plans would allow optimising existing and planned infrastructures leading to potentially significant savings in terms of new investments. Such integrated plans are already in place in some MS (see Annex 5), therefore it was estimated that around 80% of the concerned agglomerations would have to establish such plans. Annual monitoring costs are estimated at € 0.05 per p.e. (including RTC).

The costs of actual measures were estimated assuming that overflows are treated in a constructed wetland before discharge. The effects of the greening of urban areas according to the objectives of the Biodiversity Strategy (Nature Restoration targets) were also taken into account in the modelling (see Annex 4). Potential savings (on average 21,4%) due to real time control, digitalisation and better planning/management of waters in the cities (see Annex 10, reference 21) were applied to the costs estimates.

 Table 4: Annual pollution reduction by 2040 of actions to reduce urban runoff and SWOs – source JRC, ref in Annex 10, report 17

Options 1 and 2 include measures for all agglomerations respectively above 100.000 p.e. (Option 1) and 10.000 p.e. (Option 2) in areas ‘at risk’ where SWO releases represents a risk for the environment. For the calculations of the impacts of these Options, it was assumed that 30% of the agglomerations would require additional investments – which – according to available data from the WFD and the BWD appears to be a conservative approach (see section 2.1.1.2 and Annex 4 for more details).

Table 5: Annual costs and benefits by 2040 of actions to reduce urban runoff and SWOs – source JRC, ref in Annex 10, report 17

Like for the other options, a partial monetisation of the benefits was achieved on the basis of the avoided N, P and BOD pollution. In absence of credible shadow price for micro-pollutants and for micro-plastics (see Annex 4), the benefits related to water quality are nevertheless under-estimated, knowing that SWO and urban run-off are a significant source of these pollutants. Moreover, the monetisation does not account for the short duration, acute effects of pollution due to SWO/urban run-off, which may lead to fish die-off and temporary impairment of the aesthetics and safety of the receiving waters.

A recently published study (April 2022 – see Annex 10, reference 22) quantifies the willingness to pay (WTP) for improved ecosystem services due to a better management of SWO/urban run-off in the city of Berlin (around 100 €/year/person). Based on this, another estimate of the benefits was achieved for all options (more details in Annex 4).

In order to account for the fact that in many cases the perceived benefits can be smaller than in the Berlin case study, and to stay on a very conservative side in the estimation, it was assumed that the benefits would amount to 10% of the WPT as estimated in Berlin. Alternative extrapolation based on the GDP per inhabitant would also lead to an over-estimation of the benefits. 29  

The results of both methods are displayed in Table 4 above. In the context of this IA and to compare the different options, the benefits linked to water quality were added to the estimations of the willingness to pay.

Preferred option:

Requiring all agglomerations above 100.000 p.e. to produce an integrated plan and carry out proper monitoring should be done in any case: it would concern only a limited number of agglomerations (914) representing a significant part of the load. As for the agglomerations between 10.000 and 100.000 p.e., regular monitoring should be in place to identify whether additional action would be needed.

As shown in Table 12 , the three options have similar benefits-costs ratios even if Options 2 and 3 performs slightly better than Option 1. More pollution would be captured with Option 3 but not always in areas where there is an actual risk for the environment. Administrative burden would be higher for Option 3 as more agglomerations would be covered. Option 1 has a slightly lower benefit/cost ratio than Option 2 and 3, while its administrative burden would be lower than for Options 2 and 3. The contribution of Option 1 to the main objectives of this initiative would be lower than with the other Options.

It is therefore proposed to consider Option 2 as the preferred Option. This Option offers the best combination between benefit/cost ratio, with limited administrative burden (around 2.966 agglomerations would be concerned - mainly where there is a real risk for the environment compared to 7.754 with Option 3). Option 3 entails significant investments in all agglomerations above 10.000 p.e. which might be excessive particularly when the receiving water bodies are not ‘at risk’. With Option 2, investments would take place only in areas where there is a risk for the environment as identified by the integrated water management plans leading to optimised measures to be decided at local level. Criteria to define the areas at risk would be included in the revised Directive 30 as well as an indicative target for the water management plans (1% of dry weather loads – see section 5.2.1). Applying an indicative (not legally binding) target would leave enough flexibility at local level on the decisions on actual actions to be taken depending on their local cost/benefit analysis and the local estimates of the ‘willingness to pay’ which differs from one city to another.

With the preferred option, around 9% of micro-plastics released in case of heavy rains would be further captured in treatment plants and as well as potentially significant additional number of larger pieces of plastic (see Annex 4 and report 8 in Annex 10). Finally, these measures are also aligned with the rationale underpinning the EU Climate Adaptation Strategy, the Biodiversity Strategy and the Zero Pollution Action Plan.

6.2 Individual or other appropriate systems (IAS)

The proposed measures are designed to ensure the full implementation of the existing Directive’s requirements. An estimate of the additional administrative costs related to performing regular inspections of IAS and complying with new reporting obligations was based on the Austrian advanced experience: the annual cost of ensuring a regular inspection is estimated at € 82.6 million per year for the EU 27 (see in Annex 10, report 1). The Austrian system is considered as one of the most advanced, meaning that with this level of costs a real performant inspection would be in place in all MS.

As 26 MS have already a legislation in place on IAS and some form of inspection, the total additional cost of improving inspection was estimated at between 20 to 60% of € 82,6 million. Reporting costs would amount to 126.000 €/MS per year. To limit administrative burden, reporting obligation could be limited to MS reporting a high level of IAS in their agglomerations of above 2.000 p.e.: it would concern 13 MS reporting more than 2% (see Figure 2 ). Overall reporting costs would then amount to 1.64 million/year.

Table 6: Costs and benefits by 2040 of measures to ensure full implementation for IAS

As explained in section 5.1, the potential pollutant emission reduction was included in the baseline. Additional emission reductions can be expected if EU standards are developed for IAS, as theses would apply for all smaller facilities placed on the EU territory. As shown in Table 5 , the monetised benefits are estimated at € 566,9 million which is exceeding the additional costs due to additional efforts on inspection and reporting.

6.3 Small Agglomerations

The impacts of reducing the existing threshold of 2.000 p.e. are summarised in Table 6 .

Table 7: Cost and benefits by 2040 of expanding the scope of the Directive to agglomerations of 500 and 1.000 p.e.

As shown in Table 6 , for all options, the costs are lower than the monetised benefits. According to the MS answers to the questionnaire (see Annex 5), in 18 MS the majority of the small agglomerations are already connected to wastewater treatment plants – which was taken into account in the baseline. Therefore, additional reporting work would be needed only for around 40% of the agglomerations or € 747.923 per year 31 at EU level if the threshold is changed to 500 p.e. and € 471.560 for 1.000 p.e. (Annex 10, report 1).

Preferred option: As shown in Table 13 , the benefit/cost ratio is slightly better if the thresholds are reduced to 1.000 p.e. (1,6 compared to 1,46) while administrative costs would be reduced by half. It is therefore proposed to consider this Option 1 as the preferred Option even if Option 2 would have delivered slightly higher pollution reduction. In terms of enforceability, the preferred option scores better as even if the thresholds are very clear for both options, targeting less agglomerations will ease compliance checking and limit administrative burden.

6.4 N and P releases and eutrophication

The impacts of several combinations of measures based on removal efficiency applied to different sizes of facilities were modelled (see Annex 4 and Annex 10, report 15). The impacts of the main following options are summarised in Table 7  below.

Preferred option: As shown in  Table 12 and in  Table 7 , the benefit/cost ratio is positive for all options. Options 2 and 4 are nevertheless scoring better than the others. Option 4 will bring more N/P but also GHG reduction. In that sense, the coherence with the Green Deal as well as the effectiveness in terms of reduced water pollution is higher. Compared to other less ambitious Options, Option 4 will bring limited additional administrative burden as facilities above 10.000 p.e. are already subject to reporting while better contributing to the objectives.

It is therefore proposed to consider Option 4 as the preferred option. With this Option, the obligation to install additional tertiary treatment to remove N/P will be limited to areas subject to eutrophication or at risk of eutrophication as it is the case today but with more clarity and coherence with the WFD, the MSFD and the Nitrates Directive on the criteria to designate sensitive areas. Some areas incontestably subject to eutrophication consistently with the data generated by the MSFD, the WFD but also the Nitrates Directive could be included in the annex of the Directive. 32  

Table 8: Summary of the main impacts by 2040 of measures to reduce N/P

6.5 Micro-pollutants

Table 8  below summarises the model results for a selection of different options as regards the treatment of micro-pollutants (see Annex 4 for details).

Table 9: Impacts by 2040 of measures to reduce micro-pollutants, source JRC - Annex 4 and ref in Annex 10, report 13 and 14

As explained in the glossary, the lower the dilution rate, the higher the risks for the environment. Additional energy would be needed to treat micro-pollutants. In Table 8 an estimate of the related GHG emissions is provided. These additional emissions could be neutralised when energy neutrality will be met in the sector.

Preferred option:

As shown in Table 8 and Table 12 , there is a direct correlation between the reduction of the toxic load and the costs. Compared to Option 1, Option 2 delivers better results in terms of avoided load in areas ‘at risk’, where the dilution rate is below 10. Compared to Option 3, Option 2 is more cost effective as it will allow prioritising the efforts where the risk for the environment is higher. 35  

The administrative burden of Options 2 and 3 is slightly higher than Option 1 – which nevertheless delivers less reduction of the toxic load (both in and outside the areas ‘at risk). All Options are similar in terms of enforceability even if Option 2 will require slightly additional efforts to check that MS did properly identify the areas at risk. Requiring an unconditional advanced treatment for facilities between 10.000 and 100.000 p.e. as in Option 3 would lead to disproportionally high cost when compared to expected reduction of polluting emissions. Balancing all the criteria, it is proposed to consider Option 2 as the preferred Option. With the preferred option, the toxicity of the released waters would be reduced by 44% against the current situation, of which more than 60% would happen in areas ‘at risk’.

To give enough time to plan the required investments, advanced equipment would be installed within a sufficient time period by 2035 (more than 10 years) for all facilities above 100.000 p.e. and 5 additional years would be given for the others. These deadlines are realistic based notably on the experience from Switzerland. 36  

Monitoring costs for the preferred option are estimated around €11 million/ year based on monthly samples (Annex 10, report 1). Reporting costs are considered as negligible as all facilities above 10.000 p.e. are already subject to reporting obligations.

Producer responsibility, application of the ‘polluters pays’ principle:

The feasibility and impacts of covering the additional cost for advanced treatment through a system of producer responsibility was assessed (report 2 in Annex 10). According to the best available data today, and recognising uncertainties on the data gathered 37 , substances used in pharmaceuticals and personal care products (PCPs) represent the majority of micro-pollutants inputs and toxicity in wastewater treatment plants justifying additional investments in advanced treatment for micro-pollutants (see Annex 10 reports 2, 15 and 16). Pharmaceuticals represent 59% of input quantities to wastewater treatment plants (14% for PCPs), 48% of the toxic chronic load (17% for PCPs) and 66% of the total toxic load PNEC- see Glossary (26% for PCPs).

In compliance with the “polluter pays” principle included in Article 191 of TFEU , these sectors should be financially responsible for the additional costs related to additional treatment needed to treat the pollution they generate (€ 1.186 million/year for all micro-pollutants). In practice, and similarly to the EPR schemes in place for several waste streams, those placing PCPs/pharmaceuticals on the EU market would have to pay fees to a central organisation (PRO) based on the quantities and toxicity of their products. The funds would then be used mainly to finance the additionally required treatment through contracts with wastewater operators but also to cover the additional administrative costs. Such system will be in line with the concept of Extended Producer Responsibility as defined under Article 8 of the Waste Framework Directive. More details on the practical organisation, the responsibilities and roles of the different involved actors and their interactions is provided in Annex 9. On top of deciding on whether a producer responsibility system should be applied or not, the main choice to be done at this stage and in the EU legislation are related to the scope of the EPR scheme, the cost coverage of the scheme, the principles on how the fees to be paid will be applied and the level of transparency of the system. In this impact assessment it was assumed that:

·The scope of the EPR schemes would cover pharmaceuticals and PCPs. A review clause could be included in case new knowledge and understanding become available on the products placed on the market generating micro-pollutants and treated with the new advanced treatments.31 

·The same principles in terms of fee modulation/transparency as defined in Article 8 of the Waste Framework Directive would be applied. In other terms, the fees to be paid by those placing PCPs and pharmaceuticals on the market would be linked to the quantities of the products they placed on the market and the potential toxicity of the related residues. This modulation of the fees paid by the producers/importers would be established so that substitution to most toxic substances could be incentivised.

·Similar requirements to those included in the Waste Framework Directive in terms of transparency would be requested from the producers/importers and for their PRO. These costs (administrative costs related to the EPR scheme but also to regular external independent audits were assesses in this IA – see below).

The additional costs related to an EPR scheme is due to administrative costs. These costs were estimated at € 16.6 million per year (less than 1.4%) mainly for the Producer Responsibility Organisation - PRO (€ 11.2 million) and to a lesser extent for the sectors (€ 5 million – declaration of what is set on the EU market). Costs for MS (control of the system – 0.06 million) and for wastewater operators (contracts with PRO – 0.34 million) are more modest. Depending on the decisions taken by each company in the two sectors, the additional costs due to the fees paid to the PRO would be covered either by an increase of products price (estimated at maximum 0,6%, of the annual expenses for PCPs and Pharmaceuticals) or by a reduction of the profit margins (estimated at maximum 0,6 to 0,9%) – see report 2 in Annex 10.

There are several advantages of an EPR scheme including:

·A better application of the polluter pays principle (in line with the recommendation of a recent Court of Auditor report ), entailing an incentive for industrial producers to develop less toxic products;

·Reduced pressure on public budgets and water tariffs while ensuring a stable and reliable financing of the required investments needed to treat micro-pollutants;

·Expected gains in governance through new dialogue and contractual relations between wastewater operators and relevant industrial producers.

The alternative to an EPR scheme would consist in a ‘classical’ financing of the required investments: 1.186 € bn/year by 2040 would have to be covered by water tariffs (€ 0.83 bn/year 38 ) and public budgets (€ 0,37 bn/year). These increases of water tariffs and public budget contribution would come on top of the expected increase due to the other measures identified in the preferred option (see section 7.1). Most of the advantages identified above linked with an EPR scheme would then be lost (incentives for less toxic products, gains in governance) while an occasion to better apply the ‘polluters pays’ principle would be missed despite the obligations included in the Treaty and the recommendation of the Court of Auditors (see section 2.1.3.2.).

6.6 Non-domestic discharges

The average cost of taking samples and make analysis of a large spectrum of substances in the inlets and outlets of the wastewater facilities is estimated at € 5.000 per sample (ref in Annex 10, report 1). At least two samples would be taken each year for the facilities above 100.000 p.e. and one every two years for the facilities between 10.000 and 100.000 p.e. – this would give an overview of the type of pollution coming in and going out the facilities, while keeping the number of samples proportional to the purpose of the exercise. This information can be used then to better ‘track’ non desirable pollution entering the plants and take further measures to limit at source this pollution. The total costs at EU level would amount to € 25,695 million per year.

The additional costs of ensuring more transparency and when required consultation of the wastewater operators on the permits given to facilities connected to the public network is difficult to assess in absence of data on the number of permits. The impact assessment for amending the IED concludes that a better alignment between the IED and UWWTD would result in reduced releases of polluting substance to water and may require a limited number of IED operators to invest into treatment equipment on site.

The benefits of this measure are multiple (but not quantifiable): (1) reducing pollution at source will improve the quality of the sludge but also of the treated water making it available for reuse notably in agriculture; (2) the functioning of the wastewater treatment could also be improved; (3) less pollutants will be released into the environment and more coherence will be ensured with the EQSD. This would help to achieve the objectives of preventing pollution at source and improving the ‘circularity’ of the whole sector. In order to improve the knowledge on micro-plastics releases, regular monitoring should be progressively put in place based on harmonised sampling and analytical methods.

6.7 Energy neutrality and GHG emissions

The estimated costs and benefits to move towards energy neutrality are summarised in Table 9: below. The average cost of establishing energy audit every 5 years was estimated at 4.000 € per audit (ref in Annex 10, report 1). In a first period (by 2030), the audits would be imposed only on the larger facilities above 100.000 p.e. (total costs at EU level of € 0.74 million per year). Average monitoring yearly costs are estimated at € 12 million at EU level (between 8.3 and 15,8 million per year). 39 To meet the 2040 energy neutrality target, audits and monitoring would also be needed by 2035 for all facilities above 10.000 p.e.: 81.4% of the total load (and energy use) would then be covered with 7.527 facilities. The total annual cost by 2035 for all audits would then amount to € 6 million per year and the monitoring costs would reach an average of € 98,7 million (between € 67,5 and 130 million per year). Imposing audits and systemic monitoring on facilities below 10.000 p.e. would be disproportionate (large number of facilities for a limited treated load and related energy use – see Figure 12 ).

Table 10: Costs and benefits by 2040 associated to energy neutrality in comparison with the baseline - € million by 2040

In this IA, an estimate of the costs needed to move towards energy neutrality was calculated based on the solid experience of Denmark (annual cost of 22,65 million € per year to cover investments with between 10 and 40 years of amortization time). An extrapolation of the DK figures at EU level would lead to an annual cost of € 1,561 billion (EU capacity of 517 million p.e. compared to 7,5 million p.e. in DK). The main investments in Denmark were devoted to biogas production from sludge (around 85% of the investments) complemented by intelligent control and management, renew of heat pumps and aeration. No investments in other renewables like solar or wind production were included in the calculation. Reaching energy neutrality would represent a direct financial saving of 2 billion € per year for the whole sector – which is the actual costs of the energy used in wastewater treatment facilities. (ref in Annex 10, report 1). The potential net saving linked with an energy neutrality target would therefore amount to € 0,439 billion per year for the sector. 

The data on the costs to reach energy neutrality provided by Denmark are based on a successful and concrete experience. Their extrapolation to the whole EU is most probably leading to an over estimation of the costs as digestion of the sludge would not always represent the most cost-effective solution to produce renewable energy: the potential for wind or mainly solar production could be more significant in other MS. At the same time, the potential savings (2 billion € per year) were calculated before the recent events in Ukraine having led to a significant increase in energy prices.

In the context of this IA, and in the light of the uncertainties mainly related to the evolution of the energy markets, a very prudent and conservative approach was taken: it was assumed that the costs of additional investments and related administrative costs to reach energy neutrality would be compensated by the financial savings due to increased energy efficiency and the production of renewables. By doing so, it can be assumed that potential savings are under-estimated with energy prices expected to increase in the short/mid- term. These potential savings will contribute to limit the potential increases of water tariffs and public budget intervention (see section 7.1).

Similarly, extrapolating the DK experience shows that the equivalent of around 16.000 GW/h of biogas (similar to the consumption of SE for instance) could be produced in the EU thanks trough sludge digestion. This biogas can be used as natural gas and substitute EU imports of gas which is one of the objectives of the REPower EU Plan.

Other advantages of such a target are summarised in Table 10 below. The contribution of this target to the objectives of this IA (objective 3) but also to the implementation of key EU policies related to climate change, energy including EU independence are compensating the additional administrative burden mainly due to increased energy audits in the sector.

Table 11: Comparison of the pros and cons of an energy neutrality target

The added value of the energy neutrality target is clearly demonstrated in Table 10 and Table 11 . Compared to the baseline, reaching energy neutrality by 2040 would lead to a reduction of GHG of 3.472.218 tons of CO2eq – representing a monetised benefit of € 347,22 million which compared to the baseline without an energy neutrality target represents a clear improvement. The costs to reach energy neutrality would be more than compensated by the expected financial savings due to energy savings and production of renewables. And the production of renewables in particular biogas would contribute to the independence of the EU in terms of energy production.

6.8 Governance – transparency

According to the OECD (see Annex 10, reports 5 and 6), additional costs can be expected at the beginning for operators not having in place a systematic monitoring of their key performance indicators. On the longer run, regularly monitoring of key performance indicators will provide a better understanding on potential operating improvements and savings. Making these key indicators publically available by digital means and on the water bills is expected to increase public willingness to pay but also collective awareness. A better empowerment of citizen might also lead to additional pressure on wastewater operators to improve their performances. The potential concrete effects are difficult to quantify, but as shown in Figure 9 , the margins of progress might be significant.

In the absence of better estimates, it was assumed that the additional costs linked with the regular performance monitoring and with ensuring transparency would be more than compensated by the expected savings for wastewater operators. These new requirements will be fully aligned with the new requirements of the recently adopted Drinking Water Directive in terms of transparency and follow-up of key indicators. This coherence is needed as water bills cover, in most MS, both water supply and sanitation.

The implementation of a possible EPR scheme for micro-pollutants will have a direct effect on governance: wastewater operators will be requested to negotiate and implement service contracts with PRO with clear objectives and performance requirements.

6.9 Wastewater and health

Ensuring a permanent dialogue between public health authorities and competent authorities for wastewater will bring multiple benefits in terms of public health. New pathogens could detected at early stage as well as the spread of different diseases but also other public health relevant parameters.

The potential costs for the establishment of a wastewater surveillance of SARS-CoV-2 virus was calculated on a basis of regular sampling and analyse (twice a week) for around 70% of the population. For the EU 27, the total cost would amount to 20 million € per year (JRC 2020 – estimate made in the context of the Recommendation to the MS). In 2021, the Commission has provided a financial support of € 20 million to MS having applied for a support (26 MS) to accelerate or intensify wastewater monitoring. In all cases, these costs would be by far exceed by the benefits for the society linked with an improved prevention and management of the pandemic.

The same reasoning would apply for other health related parameters including AMR surveillance. For the later, the cost of bi-annual sampling and analyse of AMR in larger water treatment facilities above 100.000 p.e. representing around 46% of the EU population would amount to € 9,74 million per year (€ 5.000 par sample/analyse).

6.10 Access to sanitation

Similarly to the requirements of the revised Drinking Water Directive, MS would be required to first identify marginalised and vulnerable people not having access to sanitation and then take measures to ensure/improve access to sanitation. MS would also be encouraged to ensure/improve access to public toilets in cities for all. The identification of the marginalised and vulnerable people lacking access to sanitation would be very similar to the requirements already in place under the revised Drinking Water Directive. Therefore, no additional major costs are expected.

The costs of the actual measures to improve access to sanitation would have to be defined at local level depending on local conditions. No EU target would be fixed, but just an obligation to take measures based on a proper identification of the concerned people. MS would also be ‘encouraged’ to improve access to public toilets in their cities including for vulnerable and marginalised people, but again without any specific EU target.

In order to enforce the new requirements on access to sanitation, MS would be required to regularly report (every 5 years as in the DWD for access to water) on the actions taken to improve access to sanitation. No estimate of actual benefits could be calculated, however it is likely that the benefits in terms of both public health and welfare would be higher than the costs.

6.11 Reporting

Compared to the baseline, and taking into account all preferred options, the yearly costs and savings related to reporting obligation are summarised in Table 11 and detailed in the report in Annex 10, report 1.

Whilst the overall process of data gathering will be simplified, the revised UWWTD will require that MS collect more data. This would allow assessing compliance for the new requirements regarding SWOs and urban runoff, energy, GHG emissions.

At EU Commission and EEA levels, no major changes are expected: the savings linked with the abandonment of the two years reporting would be compensated by the efforts to regularly verify the national databases and the additional efforts to ensure compliance for the smaller facilities (between 1.000 and 2.000 p.e.).

 Table 12: Reporting costs and potential savings by 2040

Adapting the existing reporting system using a common format would nevertheless imply a one-off IT cost – estimated at € 10 million for the EU. The EEA is already working on improving its reporting system following this approach. This is also the line taken in the revised Drinking Water Directive – which will increase the synergies and coherence between the reporting obligations, ultimately providing more accurate data for the overall Environmental Monitoring Framework as set up under the 8th Environmental Action Programme, and more specifically feeding the bi-yearly Zero Pollution Monitoring Report.

At MS level, the potential savings due to the simplification of the system (national databases directly accessible to operators combined with the abandonment of the 2 year reporting obligations) would be compensated by the additional reporting obligations on micro-pollutants, energy neutrality. 13 MS having less than 5% distance to target would not be obliged to report under Article 17 – representing another limited saving of € 32.032 per year; additional savings can be expected by better aligning Article 17 to the enabling condition under the Multiannual Financial Framework 2021 – 2027 .

At Municipal level, additional costs will arise from the obligation to establish integrated plans on SWO/urban runoff (€37,03 million) plus costs of monitoring (€ 20,57 million). Part of these costs could be shared with operators. As explained in section 6.1, adequate planning and monitoring could save major investments.

At Operators level, additional administrative costs are expected for small agglomerations not currently covered by the Directive (€ 0,471 million). Reporting work for operators above 2.000 p.e. will broadly remain similar to the current work – gains in terms of digitalisation would compensate the additional efforts required to report more data notably on GHG, energy, micro-pollutants and other parameters. Enhanced coherence between reporting obligations under the E-PRTR and the UWWTD may result in limited savings in administrative burden. Monitoring costs are expected to increase for operators: € 11 million will be necessary to monitor micro-pollutants, € 98,7 million for energy and GHG. Assuming that (1) the monitoring costs for micro-pollutants would be covered by the EPR scheme; (2) 40% of the operators are either mixed or private companies (the others being 100% public), the addition administrative costs for the mixed/private sector would amount to € 39,29 million per year. These additional costs will be in any case passed on the competent public authorities having contracts with these operators and be compensated by the gains expected from the application of the energy neutrality target (see section 6.7).

Additional administrative costs of € 16.6 million per year are associated with the new EPR scheme (see section 6.5) mainly for the PRO (€ 11.2 million) and to a lesser extent for the sectors (€ 5 million – declaration of what is set on the EU market).

Table 13: Summary of the selection criteria applied for each option – the preferred Options are in green – all costs and benefits are estimated by 2040

7.Preferred option

7.1 Preferred Option – summary

The main actions included in the preferred option are summarised in Table 1 4 below, which includes indicative deadlines. On top of the actions included in the Table, by 2025 additional monitoring activities would be in place: this concerns non-domestic releases (section 6.6), COVID-19 and AMR (section 6.9), key performance operator indicators together with actions to improve transparency (section 6.8). National and EU databases should be in place (section 6.11) and ‘vulnerable and marginalised people’ should be identified together with actions to improve access to sanitation (section 6.10).

Table 14: Summary of the key actions included in the preferred option

By 2040, the impacts of the preferred options are summarised in Figure 16 and in Table 15 below. Compared to the baseline, the total pollution would be reduced by 4,8 million p.e. (or 105.014 tons) for BOD, 56,4 million p.e. for N (or 229.999 tons), 49,6 million p.e. (or 29.678 tons) for P, 77,4 million p.e. for toxic load of micro-pollutants and 24,8 million p.e. for E. coli. These reductions represent 27% of what is ‘technically feasible’ for BOD, 62% for N, 61% for P, 63% for the toxic load of micro-pollutants and 50% for E. coli. Micro-plastics emissions would be reduced by 9% mainly through actions on SWO and urban run-off.

Figure 15: Preferred option – impacts on emissions (p.e. per year in 2040) – a breakdown per MS is provided in Annex 7, Table A7.7

Table 15: Emission reduction by 2040 – preferred option

With the planed measures to reach energy neutrality, GHG emission would be reduced by 3,472 million tons by 2040 compared to the baseline, or 33,71% of the avoidable GHG emissions. Together with the baseline (assuming GHG emission reduction due to the application of the EED and ESR) and compared to 1990, this would represent a reduction of 62.51% of the GHG emissions - which is compatible with the EU Climate Law and the ‘Fit for 55’ climate package. 40  

The annual costs and the annual monetised benefits of the measures included in preferred options are presented in Table 3 below. Investments costs are displayed in Table 6 . The annual costs include operational and investment costs taking into account a lifetime of the investments of 30 years to which a discount rate of 2.5% was applied (see Annex 4 for more details). 41 As from 2040, the total cost would amount to € 3,793 bn per year (less than 2,76% of the costs of the maximum feasible scenario - € 13,870 bn). Overall, the total costs at EU level (€ 3,848 bn/year in 2040) are below the expected monetised benefits (€ 6,643 bn per year by 2040 – of which 6.157 bn are related to improvements to water quality and 0,486 bn to GHG emission reduction due to better N management and energy neutrality).

Table 16: Summary of 2040 costs and benefits of the preferred option and summary of the investments needs between entry in force and 2040

Proportionality

The preferred option will allow emission reductions contributing to the achievement of the main objective of this review (Objective 1 in section 4) in a cost-effective way. As shown in Table 3 , the benefits are higher than the costs for each individual measure of the preferred option. For energy neutrality as the financial costs are expected to be more than compensated by the financial savings (see section 6.7), only monetised benefits due to GHG emission reduction are taken into account leading to a positive benefit/cost ratio. For micro-pollutants, in absence of monetisation of the benefits (see section 6.5), the preferred option is the most cost effective, leading to the highest reduction of the toxic load in particular in sensitive areas compared to the costs of the action. In summary, the preferred option includes a proportionate package of measures representing the best ‘value for money’ of all possible options: as displayed in Table 10 and in section 6, careful attention was given to find an optimal solution based on:

·the costs and the benefits analysis (or the cost effectiveness analysis in the case of micro-pollutants in absence of monetised benefits): the benefits are higher than the costs for all measures and all MS;

·administrative burden/enforceability - by targeting only a limited number of facilities/agglomerations, significant results can be obtained on key parameters such as pollution reduction, energy use and GHG emissions while keeping administrative burden at a reasonable level and ensuring a high level of enforceability;

·the introduction of a risk-based approach will help ensuring that investments are taking place where they are needed – this is the case for N/P and micro-pollutant reduction, but also for SWOs/urban run-off.

When necessary to reach local optimal solutions, flexibility was left at national or local levels. This is the case for instance to achieve the objective of energy neutrality or to reduce emissions from SWOs.

If the costs are relatively well known and quantified, this is less the case for some benefits: reliable monetised values are only available for a limited set of parameters such as direct savings from energy use, GHG emissions, BOD, N and P emission to water but also recent estimates of the benefits from improved management of SWO and urban run-off (see section 6.1). Some benefits can be quantified but not monetised: this is the case for instance for micro-pollutants and micro-plastics (no available shadow prices) but also reduction of E.coli in waters (leading to more possibilities of bathing areas for instance). Other significant benefits were impossible to quantify due to the lack of proper methodologies: this is the case for access to sanitation and health related parameters (COVID-19 and its variants and AMR surveillance) but also the benefits linked treatment cost reduction for drinking waters producers due to improved quality of surface water.

Costs coverage

The total costs by 2040 would represent an increase of 3,85% of the current total expenditures for water supply and sanitation (around 100 bn € - OECD (2020) – Annex 10, report 5). These additional expenses would be partly covered by the new EPR system – € 1,213 billion/year. The remaining part – 2,64 billion/year - would be covered by a mix of water tariffs and public budgets, depending on the financing strategies applied by each MS. On the basis of the current financing strategies of the MS (see Figure 10), it can be assumed that on average 30% (or € 0,791 billion/year) of the additional costs would be covered by public budgets. 70% (or € 1,848 billion/year) would then be covered by water tariffs. This would represent an average modest increase (2,3%) compared to the overall water billing on the EU (80 billion for water supply and sanitation in 2018 – source OECD, Annex 5, report 6), even if local/national difference might be excepted. EU funds (around 2 bn/year for the water sector) would remain indispensable to cover adjustment costs needed to cover the new requirements including energy neutrality.  

Impacts at MS level

The total 2040 cost and benefits for each MS is displayed in Annex 7, Table A7.8 and 9. Figure 2  shows that – even without taking account of the non-monetised benefits from micro-pollutants reduction - the benefits largely outweigh the costs in all MS.

Figure 16: Costs and benefits of the preferred option

As displayed in Figure 16 , some MS (e.g. DK, IT, MT, CY and PT) would have to make comparatively more efforts per inhabitant (more than 7 €/year/inhabitant by 2040). This is due to a combination of objective factors including the lack of past investments in more advanced water treatment for Nitrogen and Phosphorus, but also geographical circumstances (low dilution rates across freshwater streams increasing the areas ‘at risk’). Although the costs for these MS are expected to be slightly higher, the benefits are nonetheless expected to remain higher than costs in all cases.

Figure 17: 2040 Annual costs and benefits per inhabitants per Member State (excluding costs for micro-pollutant treatment to be covered by the proposed EPR scheme)

Figure 18 displays the 2040 costs of advanced treatment per MS in relation to the reduction of the toxic load from wastewater treatment plants. Differences between MS in terms of additional investment needed can be explained by the presence of more areas considered ‘at risk’ for micro-pollutants (with lower dilution rates).

Figure 18: 2040 costs of advanced treatment vs toxic load reduction (micro-pollutants in waste treatment plants)

Social impacts - Affordability

According to OECD, today the general affordability of water services is not at risk in any country, though in some countries, such as RO and BG, the burden borne by lower income households is slightly higher than in other MS, being above 5% of the disposable household income – see Figure 19 .

Figure 19: Share of water supply and sanitation expenditures in households' disposable income (2011-2015 average) Source: OECD based on Eurostat 43  

Social measures to accompany lower income households are in place in several MS – but not systematically in the whole EU. Nevertheless, particular attention should be paid to some MS (DK, IT, MT, CY and PT) in which annual costs per inhabitants are expected to be higher see Figure 1 8. Affordability is not expected to become an issue in any of these MS: the average expected increase of water tariffs by 2040 due to the preferred option would amount to 1,6 €/year/inhabitant (CY) to 7,26 €/year/inhabitant for DK. As shown in Table 17 below and based on OECD data as displayed in Figure 19 , compared to the lowest 5% income in each country, this would represent a small increase of the budget devoted to water supply and sanitation (between 0,02% for CY and 0.19% for PT). Therefore, the share of expenditures due to water supply and sanitation for households with poorest revenues, would remain below 5% - which is the ceiling considered as acceptable by OECD.

Practical measures to ensure affordability is mainly a competence of the MS but the Commission can organise further exchange of best practices notably on social measures in the water sector in continuation of the seminars co-organised with the OECD and the MS (see report 5 in Annex 10).

Table 17: analyse of affordability in MS with highest cost per inhabitant (source: OECD reference5 in Annex 10 and Figure 25 of the REFIT Evaluation

Implementation

As it was the case with the existing Directive (refer to the REFIT Evaluation), there will be risks of slow or bad implementation of the revised Directive in some MS. These risks would nevertheless be mitigated with the following measures:

·Contrary to the initial Directive, enough time (2040) would be given to meet the targets of the revised Directive. This time horizon will provide legal certainty so that investments can take place on the basis of proper long term planning;

·Interim targets will be included in the legislative proposal for the most important measures. These interim targets are summarised in  Table 1  and will be applied for all MS. They will help MS to plan their investments sufficiently in advance and avoid a situation were most of the actions are taken few years before 2040; the interim target for energy neutrality and for tertiary treatment will take into account the starting position of each MS;

·The expected effects on public budgets and water tariffs (and therefore affordability of the water tariffs) are modest while EU funds would remain available (average of 2 bn/year based on past experience);

·The Commission intends to continue its mixed approach (enforcement combined with EU funds) which has shown its effectiveness in the past;

·Several aspects of the Directive will be clarified with the revised Directive (‘sensitive areas’, measures on SWO/urban run-off, better control of IAS) while the simplicity of the text would be kept (clear and simple requirements with clear deadlines).

In addition, and like it was the case for MS having joined the EU after 2004, those Member States still having difficulties to reach full compliance today will have the opportunity to invest directly in most advanced techniques.

Coherence and added value of the initiative

Implementing the preferred option would contribute either directly or indirectly to the attainment of the objectives of several EU strategies and legislations – see Annex 8 for more details. This is the case for the Zero Pollution ambition (reduction of pollutant releases in the waters), the 2050 EU Climate neutrality objective and the related EU Climate law (reduction of GHG emissions due to energy neutrality), the Circular Economy (better use of resources/sludge, better conditions for water reuse), the Biodiversity Strategy (green infrastructures) and the Pharmaceutical and the Chemical strategy (less releases of pharmaceuticals in the environment, financial incentive for substitution of harmful substances). Reducing nutrient emission will directly contribute to the preservation of the Biodiversity. In addition, direct synergies can be excepted withy the Biodiversity strategy and the application of nature restoration targets in urban areas (nature based solution for better water management in urban areas).

As it was already the case with the existing Directive (see the Evaluation), the revised Directive would directly contribute to achieving the objectives of the Water Framework Directive – namely reaching the good ecological and chemical status of water bodies by 2027. It would also contribute to the planned revision of the EQS Directive: the additional treatment of micro-pollutants would allow the attainment of more stringent EQS in the environment. This also the case for the ongoing review of the Bathing Water Directive: reinforcing the standards of the UWWTD particularly for SWO and urban runoff would contribute to the improvement of the quality of the bathing water. Better controlling pollution at source would help to ensure a safe use of sludge in agriculture and thus support the ongoing review of the Sewage Sludge Directive and the Soil Strategy and the proposal for the Soil Health Law. It will also provide an incentive for more and better re-use of treated water contributing to improve water resilience. Synergies will be fully exploited with the ongoing review of the E-PRTR Directive notably for what relates to reporting for the larger facilities. Coherence between the revised IED and UWWTD will be improved to avoid non desirable industrial releases in public networks.

The energy neutrality target would act in synergy and complement with the revised RED and recast EED by contributing to meet the targets of each of these directives in an optimal way for each wastewater treatment facility combining energy efficiency, use of renewable energy and production of biogas. By encouraging the self-production of EU based biogas, it would also contribute to reduce energy dependency, one of the objectives of the recently adopted Communication ‘Repower EU’. Last but not least, this sectoral target would help moving towards the EU objective of climate neutrality by 2050 and contribute to the implementation of the ‘Fit for 55’ and the ESR (expected GHG emission reduction of 3,472 million tons (33,71% of the avoidable GHG emissions) by 2040 compared to the baseline which assumes the application of the revised EED.

Regular monitoring of COVID-19 and its variants and other health related parameters will help to improve the preparedness of the EU for future possible outbreaks – as detailed in the related Communication and in the Commission recommendation on virus surveillance in wastewaters.

Uncertainties

The main uncertainties are summarised in Table 18 . More details on model uncertainties are provided in Annex 4.

Table 18: Main uncertainties and their potential consequences

The sector is relatively well known, reliable databases are in place on all treatment facilities above 2.000 p.e. including on their level of treatment. The estimation of conventional pollutant loads under the various scenarios, and the related costs are relatively well established and show relatively low variability across Europe. The main uncertainties are related to the estimation of toxic loads conveyed by wastewater and to the sources of pollution not addressed by the current Directive. There are also uncertainties related to the application of the ESR, the RED and the EED current and revised legislations.

7.2 REFIT and “One in, One out”

In line with the Evaluation, several elements of the existing Directive will be clarified and simplified in the legislative proposal on the basis of the elements discussed in this IA. This concerns notably the requirements for SWO and urban runoff and small scale agglomerations (clear thresholds and deadlines), the designation of ‘sensitive’ areas (list of basins placed in the Annex of the revised Directive), clearer obligations to ensure full compliance for IAS, and improved follow-up and transparency of operator’ performances. For the new requirements, a lot of attention has been paid to establish simple, clear, enforceable and affordable deadlines and objectives – the Evaluation has demonstrated the importance of clarity and enforceability of this Directive.

Apart from the expected increase in water tariffs, no additional obligations are expected for EU citizens. This is also the case for business (water industry providing wastewater equipment’s) which will mainly benefit from new business opportunities. The new requirements will represent a driver for innovation and research contributing to maintain and improve the competitive position of the EU water industry. The Pharmaceutical and PCPs sectors would nevertheless be required to organise and finance the new system of producer responsibility to cover the costs related to advanced additional treatment for micro-pollutants (1,185 bn € per year) and the related administrative costs (11,2 million per year – see section 6.5).

The revised Directive will introduce new obligations mainly for wastewater operators. They cannot be considered as ‘business’ as all operators have strong direct links with the public competent authorities – either they are public companies (60% of the operators) or private/mixed companies directly acting for public entities (concessions).

Table 19: Total investments costs linked with the preferred option between entry in force and 2040. To calculate annual costs, a lifetime of the investments of 30 years was applied with a discount rate of 2.5% (see Annex 4 for more details).

Adjustment costs to cover the required investments needed to meet the new standards and to reach energy neutrality will be progressive in time (see Table 14 and Table 16 ): total investment costs are estimated at € 28,6 billion between the entry in force of the revised Directive and 2040 – see Table 19 . In absence of sufficient data on the baseline situation in each MS on energy neutrality, it was not possible to provide a reliable estimation of the investments needs for this measure.

To cover these investments, MS and local competent authorities are expected to continue using a blend of different sources of financing:

·Public budgets, including from the EU (e.g. around 2 billion € per year of EU funds are devoted to water infrastructures, particularly under EU regional policy);

·Loans from commercial or institutional banks (such as the European Investment Bank) – wastewater projects are typically ‘bankable’ as they are covered by stable revenues from water tariffs and/or energy savings;

·Private/public partnerships and/or concessions in which the private partner is financing the infrastructures.

·The investments needed for the additional treatment for micro-pollutants (9 billion € up to 2040 from the total 28,6 billion €) will be covered by the EPR scheme, and more precisely by the Producer Responsibility Organisations (PROs) managing them. As detailed in section 6.5, the PROs will have to establish a solid financing strategy to cover such costs based on the funds gathered thanks to the fees paid by its members.

·The recently adopted REPowerEU Plan will also boost existing funding possibilities to cover the investments needs to reach energy neutrality. This concerns the cohesion policy, large scale innovation calls, loans under Recovery and Resilience Facility. MS already have and will have several possibilities to cover the investments needed to meet energy neutrality target through these EU funds as they all aim at increasing the independence of the EU in terms of energy supply by encouraging energy savings and developing renewables – which is also one of the purpose of the energy neutrality target.

8.How will actual impacts be monitored and evaluated?

As shown in the Evaluation, proper monitoring and reporting is key to ensure the compliance of the Directive. It is therefore crucial to maintain and improve where possible the existing monitoring and reporting obligations so that it will be possible to assess to what extent the general and specific objectives are achieved.

The existing Directive has established a reporting system based on a 2-year report from the MS to the Commission via the EEA. Based on this information the Commission is publishing implementation reports every two years (often based on more than 4 years old data). The Commission is also using this information to launch infringement procedures.

As detailed in sections 5 and 6, this system will be modernised and simplified: national databases to be updated at least once a year will be hosted in each MS with permanent access for the EEA and the Commission. These databases will include actual monitoring results for the parameters covered by EU standards not only for the quality of the treated water but also for the new parameters to be followed such as energy use and GHG emissions. Monitoring frequencies will also be adapted to ensure an appropriate follow-up of the implementation of the Directive but also to simply align the frequencies to current best practices.

As it is the case today, regular compliance checking will be made by the Commission on the basis of the information reported by MS.

Different indicators to measure success can be extracted from MS reports and would be related to:

·The existing compliance rate and distance to target per MS and per treatment level - which provide an excellent overview on the implementation of the Directive;

·The number of facilities equipped with additional treatment for N/P and micro-pollutants; and the related reduction of N/P releases and toxic load at MS and EU levels;

·The energy use by MS and the related GHG emissions;

·The number of agglomerations covered by integrated management plans for stormwater overflows and urban run-off and their compliance with the EU objective;

·The measures taken by MS to improve access to sanitation and better control individual appropriate systems (IAS) and a summary of the main health indicators surveyed in the MS.

Like it was the case in the context of the evaluation of the Directive, other data notably on the water quality of the receiving waters (rivers, lakes and seas) coming from the Water and the Marine framework Directives will be used to concretely measure the impacts of the UWWTD.

More details on possible parameters to be reported for assessing compliance and measure the success of the Directive are provided in Annex 10.

A first in depth evaluation of the revised Directive can be foreseen by 2030 when most investments should have been made in larger facilities (see Table 1 ). This first evaluation would allow assessing the success and remaining challenges linked with the implementation of the revised Directive. If need be, corrective measures could be envisaged to ensure the full implementation of the revised directive. Another evaluation could be considered before 2040 to prepare a possible review of the directive.

Annex 1: Procedural information

1.Lead DG, DEcide Planning/CWP references

The preparation of this impact assessment was led by Unit C2 Clean Water Services and Marine Environment within DG Environment (ENV) with support from DG Joint Research D2 Water and Marine Resources. The file concerns the revision of the Urban Wastewater Treatment Directive. This Directive was evaluated according to Better Regulation guidelines in 2019. The Decide planning number is Plan/2020.7347 – Revision of the Urban Wastewater Treatment Directive.

2.Organisation and timing

The revision of the Urban Wastewater Treatment Directive (UWWTD) is a direct consequence from its REFIT evaluation. It was announced in a number of strategies published under the European Green Deal , such as the Circular Economy Action Plan (CEAP) and confirmed more recently in the Zero Pollution Action Plan . The Inception Impact Assessment Roadmap for the revision of the UWWTD was published on 21 July /2020 with a feedback period until 8 September 2020.

The inter-service steering group (ISSG) for the impact assessment is the same one as for the Evaluation. It is a shared group with other water and pollution related files: the revision of the pollutant lists under the EQSD and Groundwater Directive, the Evaluation of the Sewage Sludge Directive and the back to back Evaluation and impact assessment of the Bathing Water Directive. The ISSG includes members from the following DGs: AGRI (Agriculture), CLIMA (Climate Action), ENER (Energy), FISMA (Financial Stability, Financial Services and Capital Markets Union), GROW (Internal Market, Industry, Entrepreneurship and SMEs), HOME (Migration and Home Affairs), JRC (Joint Research Centre), JUST (Justice and Consumers), MARE (Maritime Affairs and Fisheries), RTD (Research and Innovation), REGIO (Regional and Urban Policy), SANTE (Health and Food Safety), SG (Secretariat General), SJ (Legal Service), TAXUD (Taxation and Customs Union) as well as the EEA (European Environment Agency).

Meetings were organised between June 2020 and January 2022, the final meeting being held on 31st January 2022. The ISSG has been consulted on all major deliverables for this file, including the inception impact assessment, the open public consultation questionnaire, key deliverables for the support study prior to the its submission to the Regulatory Scrutiny Board. The same ISSG has followed the while process having led to the adoption of the REFIT Evaluation of the Directive.

3.Consultation of the RSB

The Regulatory Scrutiny Board (RSB) was consulted on the Evaluation of the Directive.

On 17 July 2019 the RSB meeting on the draft SWD Evaluation was held. The RSB gave a positive opinion on 19 July 2019 and suggested a few improvements which were taken on board before the finalisation and publication of the evaluation.

An informal upstream meeting with the RSB took place on 23 September 2020 on the IA. During the meeting ENV explained that the options will be built into packages that range from less ambitious to more ambitious. The costs and benefits of each package will be assessed as far as possible. They should all aim to meet all objectives of the initiative. RSB suggestions and answers provided in this IA are summarized in Table 7 .

After final discussion with the ISSG, a draft IA was submitted to the RSB on 15th February 2022 and discussed at a meeting with the RSB on 16th March 2022. Following the opinion of the RSB from 18th March 2022, a revised IA was submitted to the Board on 2nd of May. A second ‘positive opinion with reservations’ was issued by the RSB on 3rd of June. Table A1.1 presents an overview of the RSB's comments and how these have been addressed.)

Table A.1.1: RSB comments and how comments have been addressed 

4.Evidence, sources and quality

Besides the stakeholder consultation, the following main sources of information were used to build this impact assessment:

1. Models developed by the JRC: The JRC has developed for several years’ models on water quality and quantity in the EU. These models were adapted to the policy questions related to the impact assessment and to the review of the Directive. They were also used in the context of the REFIT Evaluation of the Directive.

2. Consultation of ad hoc experts: under the co-lead of JRC and DG ENV, a small consortium of experts were consulted on specific policy questions. For each issue, a report was prepared and used directly in the IA or to improve the JRC model. All reports are annexed to this IA (see Annex 7). In particular, the JRC cooperated with experts to assess which micro-pollutants are the most typical to be found in wastewater and what treatment technologies exist to deal with these micro-pollutants. In addition, individual experts provided input through the drafting of short analytical peer-reviewed studies, financed under an administrative agreement with the JRC on the following topics: individual and other appropriate systems, antimicrobial resistance, combined sewer overflows and urban runoff, nutrients, micro-plastics, and greenhouse gas emissions from the wastewater sector.

3. Support from the Organisation for Economic Cooperation and Development (OECD): DG ENV cooperated with the OECD to develop a benefit methodology for the UWWTD IA. This was done, among others, to address methodological shortcomings uncovered in the Evaluation of the UWWTD. Furthermore, the OECD re-assessed the investment gap to reach full compliance with the current UWWTD. OECD also provided analysis of the issues related to transparency and governance.

4. In depth consultation of the Member States: in order to establish a solid baseline scenario but also to gather evidence on the best practices in place in the Member States, a specific consultation of each Member State was organised in 2020. For each country a fiche was pre filled with the hypothesis JRC intended to use in the context of the modelling. Each fiche was about 50 pages long and contained tentative assumptions on how far advance the Member State is in implementing policy measures that go beyond the current Directive. Member States had a 4-6-week period of time to comment on the information and the assumptions. The main assumptions taken per MS are summarised in Annex 5.

5. To support the analysis of the different options, the European Commission awarded two support contracts to external consultants:

·for the general Impact Assessment Support Study, a consortium of consultants comprised: Wood E&IS GmbH (consortium lead) with Trinomics, Ricardo, IMDEA, ELLE and Tyrsky.

·another consortium led by BioInnovation in association with RDC Environment, AirQuality Consultants, VVA Economics & Policy and CETAQUA Water Technology Center assessed the feasibility of an Extended Producer Responsibility System for micro-pollutants.

Further evidence was compiled from the Evaluation report of the UWWTD (2019), the OECD water investment needs study (2020) and a vast variety of background information submitted by stakeholders over the course of the IA. Further information regarding the evidence used is included in each section via footnotes as well as in Annex 10 (references). In addition, extensive consultation of stakeholders was carried out, as detailed in Annex 2. The data used in this IA are those that were available when the calculation model was developed (data from 2016). Data for 2018 were in the meantime available. The difference between the 2016 and the 2018 data set is minimal (less than 0,5% of distance to target) due notably to the long time period needed for the investments to produce their effects. These differences have no influence on the conclusions related to the main and the preferred options detailed in this impact assessment.

Annex 2: Stakeholder consultation (Synopsis report)

The impact assessment accompanying the revision of the Urban Wastewater Treatment Directive was subject to a thorough consultation process that included a variety of different consultation activities, as set out in the Consultation Strategy . The methods selected for consulting stakeholders consisted of semi-structured interviews (speed dates), interactive workshops with the option to send additional feedback after workshop, a broad online public consultation (OPC) to reach a large range of stakeholders on a variety of topics as well as written consultation on factual information and assumptions for modelling. A final stakeholder conference was held to have their views on the different policy options proposed by the Commission and was divided into three main sessions.

1. CONSULTATION STRATEGY & ACTIVITIES

The consultation strategy identified groups of stakeholders and consultation activities. The consultation strategy was developed at the start of the study by DG Environment, assisted by its consultants. 44 The strategy identified groups of stakeholders, consultation activities and mapped these as presented below. Table A2.1 below presents the different groups consulted and the consultation approaches:

Table A2.1 below presents the overview of the stakeholder activities:

2. STAKEHOLDER GROUP

Overall, the consultation activities have been successful in reaching the identified stakeholder groups as defined in the consultation strategy. All Member States and the vast majority of industrial/economic actors were represented. For citizens, the OPC was the primary approach for engagement. While citizens were the second highest group of respondents in the OPC, the number was overall low when considering it in the context of the entire project.

A wide range of stakeholders groups were involved throughout the activities, for example the split of groups involved in the OPC is presented in the figures below. Figure A2.1 below shows the share of the 228 participants by stakeholder type for the OPC.

Although 285 stakeholders participated in the OPC, only 228 of those answered the question about the stakeholder type they represented. In the OPC, stakeholders were asked to indicate the sectors which they represented (by selecting three subjects that were relevant to the representation of their organisation).

Figure A2.2 below illustrates the representation of different sectors in the OPC:

Stakeholders from all EU Member States and third countries were involved in the consultation process. For example, the final conference saw participants from 226 organisations across all 27 Member States. In addition, there were a total of nine non-EU participants representing Iceland, Morocco, Norway, Scotland and Serbia.

3. METHODOLOGY AND TOOLS USED TO PROCESS THE DATA

All feedback submitted through different consultation activities was collated and taken into account in the analysis presented in the impact assessment. Questionnaire responses from the OPC were obtained from the European Commission Survey system. For the final OPC data download, no significant update of formatting/data structure was required. The steps followed were: the raw data was imported and cleaned in an Excel template; no campaigns were identified, but small series of duplicated responses were noted. There were three sets of duplicated responses which were not removed but it has been ensured duplicates are not double-counted the statements in the open-response analysis. It is considered that these duplicates have no impact on the overall results.

Graphics presenting the details of the responses, distinguishing stakeholders’ categories and Member States were created via Excel. Respondents had the option of elaborating on their answers in open text fields or responding to stand-alone open-ended questions. Responses in all languages were analysed after having been translated to English using machine translation. Survey data was then analysed and coded. The aim of the coding exercise was to identify the keywords and themes mentioned by respondents and then attribute these as established “codes” for which a consensus can be built and counted. For instance, if one respondent mentions a need for more transparency, “more transparency” can be coded and then used to count further responses that communicated the same need.

Finally, any attachments, links, or other materials submitted by stakeholders were analysed and incorporated throughout. Qualitative and quantitative data obtained from workshops, interviews and the conference were summarised in respective reports (available on CIRCABC ) and included into the analysis of individual measures in the impact assessment. Feedback from consultation activities has been integrated into the assessment of policy measures per area of improvement, informing recommendations for each area. The MS overviews have been integrated into the final report through a horizontal analysis as well as informing detailed assessment of policy measures per area of improvement.

Overall, the evidence collected throughout the consultation has been compared with other evidence gathered, namely with results of individual consultations as well as the results of the literature review, modelling and data analysis. This triangulation of several research methods helped to identify whether there were any major divergences between different sources of evidence.

4. OPC – GENERAL VIEW

The OPC was divided into five sections. After some initial questions regarding the profile of respondents, sections 2-3 were addressed to all respondents and covered respondents’ understanding of the UWWTD, their views on the problems relating to wastewater pollution, and how to best address water pollution through wastewater treatment processes. Section 4 was targeted at expert respondents and included more in-depth questions on specific measures to address in the revision of the Directive. Finally, respondents could share additional relevant materials/publications and/or information in section 5. As most of the questions were not mandatory, the total number of responses for each question varies throughout the report.

A high number of respondents agreed that wastewater was correctly treated before discharge in their country of residence, particularly respondents from Germany (n=64/77, 83%) and Austria (n=7/8, 87%) who overall showed the most agreement. When asked whether urban wastewater was an increasing source of pollution, stakeholders mostly disagreed with that statement, with 59% (n=159) disagreeing (particularly respondents from Germany, Austria, Spain, and Sweden with 75%, 100%, 79%, and 84% of respondents disagreeing, respectively).

When asked about the risk perception of pollution from untreated wastewater, almost all risks were rated by more than half of respondents (n=152), as a significant concern. The topic ranked of the highest importance to be addressed in the upcoming revision was the improved implementation of the polluter pays principle; where 68% of respondents felt that this was a very important topic. On the importance of monitoring and removal of contaminants, there was consensus among respondents that all contaminants listed required stronger efforts to be addressed. Respondents also indicated that there was a need for receiving more information (e.g. informing the public).

Open text answer analysis showed that businesses/companies and the public authorities were mainly concerned with the details of implementing proposed measures and the potential additional cost burdens. Lastly, the OPC showed all stakeholder groups’ support for measures related to access to sanitation, access to information and more coherence and alignment of the UWWTD with other policies.

Two topics that stood out as particularly important to experts were the introduction of an extended producer responsibility (EPR) scheme to further implement the polluter pays principle and the need to better tackle pollution at-source. However, businesses were the most critical about the feasibility of the EPR, where all votes for ‘not at all’ effective (n=16, 7%) came from this stakeholder group.

45 5. STAKEHOLDERS’ VIEWS ON THE DIFFERENT AREAS

5.1 Storm water overflows and urban runoff

Issues relating to the improved management of SWO and urban runoff were considered of high importance to all stakeholders.

During the workshop, strong support from participants for the increased use of Integrated Management Plans was identified, whilst support for target values for SWOs and urban runoff received the lowest support from participants. Similarly, the OPC results indicated that a strategic integrated planning approach for management and prevention was highly supported. OPC respondents were also strongly supportive of NBS playing an increased role in managing urban wastewater, with 71% of respondents (n=185) rating this as either very important (5) or important (4). Expert stakeholders were asked about the appropriateness of various measures to minimise pollution through SWOs and urban runoff. The most positive response from all respondents was for the statement that a combination of measures is required to achieve the needed results. Mandatory reporting of overflows was considered the least appropriate measure, particularly by public authorities and businesses (average scores 2.9 and 3.2, respectively).