REGULATORY SCRUTINY BOARD OPINION Revision of the Urban Wastewater Treatment Directive

EUROPEAN COMMISSION
3.6.2022
SEC(2022) 541
REGULATORY SCRUTINY BOARD OPINION
{COM(2022) 541}
{SWD(2022) 541, 544}
Revision of the Urban Wastewater Treatment Directive
Offentligt
KOM (2022) 0541 - SEK-dokument
Europaudvalget 2022
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This opinion concerns a draft impact assessment which may differ from the final version.
Commission européenne, B-1049 Bruxelles - Belgium. Office: BERL 08/010. E-mail: regulatory-scrutiny-board@ec.europa.eu
EUROPEAN COMMISSION
Regulatory Scrutiny Board
Brussels,
RSB
Opinion
Title: Impact assessment / Revision of the Urban Wastewater Treatment Directive
Overall 2nd
opinion: POSITIVE WITH RESERVATIONS
(A) Policy context
The Urban Waste Water Treatment Directive sets rules for the collection and treatment of
waste water from households in urban areas and specific industries. The aim is to ensure a
sufficient level of quality in order to minimise the effects of these discharges on the
environment.
Building on the findings of an evaluation and to respond to new political priorities and
societal challenges, the Commission is revising the Directive.
(B) Summary of findings
The Board notes the changes and additional explanations included in the report in
response to the previous opinion.
However, the report still contains significant shortcomings. The Board gives a
positive opinion with reservations because it expects the DG to rectify the following
aspects:
(1) The report does not present a fully developed and dynamic baseline scenario. It is
neither sufficiently clear how the measures expected from the Member States to
meet their national ‘Fit for 55 targets’ nor how the recent actions under the
REPowerEU package have been incorporated and which overall energy saving
gap would remain in absence of further sector specific action and targets.
(2) The report does not sufficiently demonstrate the need for and value-added of new
sector specific energy neutrality targets over and above the already envisaged
obligations for Member States.
(3) The report does not sufficiently justify the proportionality of individual measures
as well as of the preferred option considering the estimated investment needs.
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(C) What to improve
(1) The report should present a fully developed, dynamic, baseline scenario, which
incorporates the revised ambition and additional actions under the recent REPowerEU
package as well as the measures expected by the Member States to meet their national ‘Fit
for 55 targets’. Assumptions made should be realistic and reflect the mandatory nature of
already envisaged national targets.
(2) The report still needs to better demonstrate the need for and value-added of new
energy neutrality targets in this sector for Member States over and above the already
envisaged target obligations for Member States, including under the Effort Sharing
Regulation. It should more convincingly show how regulatory overlap will be avoided and
sufficient flexibility for Member States on the choice of the most cost-efficient measures in
reaching their overall national climate policy and energy reduction targets will be ensured.
(3) The report should make a greater effort to quantify the costs necessary (by the
Member States) to reach the energy neutrality target, as it will only be possible with
sufficiently robust information to decide whether a sectorial target will provide an overall
additional net benefit. It should clarify to what extent the assumption that actual costs of
additional investments to reach energy neutrality would be compensated by financial
savings due to the production of renewables and better energy savings is shared by the
affected public authorities and industry experts. It should also be clearer on the different
starting positions of Member States (as regards energy neutrality) as well as on the
envisaged 2035 interim targets, including whether these will differ among Member States.
It should explain how and on what evidence base these interim targets will be established.
Any related distributional impacts between Member States should be clearly mapped and
set out.
(4) Expected overall investment needs seem to substantially outweigh monetised benefits.
The report should explain whether it can be reasonably assumed that all Member States
will cover these in a timely manner (including those less reliant on water tariffs). It should
be explicit about whether there are any risks for the implementation of the measures and
for benefits materialising.
(5) The report should better demonstrate the proportionality of the preferred option,
preferablly on the basis of a net present value analysis. When it comes to the
proportionality assessment of the strom water overflow options, the report should better
justify why it did not choose, as preferred option, the one, which provides the highest net
benefits overall, performs best in terms of effectiveness and enforceability and has the
most favourable benefit-cost ratio. When assessing the proportionality of imposing energy
neutrality targets, the report should better reflect the relative small contribution to the
overall monetised benefits and the uncertainty that the targets will be the most cost-
efficient measure among those available for the Member States.
(6) The report should better explain the robustness and validity of the used evidence on
the willingness to pay. It should justify why, in order to extrapolate to EU level, it assumes
10% of the value determined for the case study of Berlin in terms of public willingness to
pay for ecosystem services associated with drainage. As willingness to pay depends on
income, the report should explain why it did not consider a comparison of Germany’s GDP
and the EU average or other means of extrapolating.
(7) The report provides more information in an annex regarding the proposed extended
producer responsibility scheme. It should be explicit about whether there are any choices
for policy makers in this regard and if so, present them in the main report.
(8) The report provides stakeholder views without any numbers (either percentages or
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absolute numbers). This presentation may be misinterpreted as a representative survey
which is not the case. The report should be more specific on the views of particular
categories of stakeholders and Member States, including by explaining why certain
academics, business or Member States authorities were less supportive on some issues.
The Board notes the estimated costs and benefits of the preferred option(s) in this
initiative, as summarised in the attached quantification tables. The report must ensure full
consistency of the figures throughout, in particular between the figures presented in the
main report and these tables.
(D) Conclusion
The DG must revise the report in accordance with the Board’s findings before
launching the interservice consultation.
If there are any changes in the choice or design of the preferred option in the final
version of the report, the DG may need to further adjust the attached quantification
tables to reflect this.
Full title Revision of the Urban Wastewater Treatment Directive
Reference number PLAN/2020/7347
Submitted to RSB on 4 May 2022
Date of RSB meeting Written procedure
ANNEX: Quantification tables extracted from the draft impact assessment report
The following tables contain information on the costs and benefits of the initiative on
which the Board has given its opinion, as presented above.
If the draft report has been revised in line with the Board’s recommendations, the content
of these tables may be different from those in the final version of the impact assessment
report, as published by the Commission.
I. Overview of Benefits (total for all provisions) – Preferred Option - A breakdown per MS is
provided in Annex 7, Table A7.6 (total costs and benefits).
Description Amount Comments
Direct benefits
Improvement of water
quality
€ 6.156.474.955 /year Monetised benefits due to reduced
emissions of Nitrogen, Phosphorus
and BOD in the environment and
willingness to pay for SWOs/urban
run off
Reduction of the toxic
load in receiving
waters
44% reduction of the toxic load rejected
to receiving waters of which 64%
happening in areas at risk (with low
dilution rates)
Benefits mainly for the environment
and public health (notably bathing
and drinking water), for
biodiversity (protection of fauna)
Reduction of GHG € 486.370.454 /year (GHG Monetised benefit due to GHG
4
emissions and energy
neutrality
reduction)
€ 1,49 bn/year (energy neutrality)
emission reduction from improved
process (N2O emissions) and energy
neutrality
Direct savings due to energy
neutrality
Indirect benefits
Improved bathing
water quality
Significant reduction of E. coli
emissions (key parameter for bathing
water quality), impacts on tourism, well-
being in the cities
Improved raw water for
drinking water
Improved protection of the raw water
used for drinking water, reduced health
risks, reduced treatment costs for water
operators
Biodiversity Cleaner water is essential to preserve
biodiversity on the rivers, lakes and
coastal areas. Actions on SWO and
urban runoff will incentivize actions to
‘green’ the cities
Public Health Monitoring COVID-19 and its variants
as well as Anti-Microbial resistance is
providing precious information for
public health
EU water industry New business opportunities. Push for
innovation, modernisation and transition
towards climate neutral industry.
Maintain/amplify of the worldwide
leadership of the EU water industry
Innovation Energy and Climate neutrality as well as
micro-pollutant treatment are new and
will drive innovation. Same for
improved N and P efficiency
Administrative cost savings related to the ‘one in, one out’ approach*
National digitalised
database for reporting
Potential savings for operators
compensated by additional costs due to
reporting more parameters
Better coherence
reporting with E-PRTR
Modest savings
II. Overview of costs – Preferred option - A breakdown per MS is provided in Annex 7, Table A7.6
(total costs and benefits) and in Table A7.5 (detailed costs per MS). Costs are annual costs by 2040
including capex and opex.
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Citizens/Consumers Waste Water operators/
municipalities
National/regional
administrations
One-off Recurrent
€/year in
2040
One-off Recurrent
€/year in
2040
One-off Recurrent
€/year in
2040
SWO
and
urban
run -off
Direct
adjustment
costs
6.446,7
million
372,472
million
Administrative
costs
57,6 million
Small
scale
agglom
eration
s
Direct
adjustment
costs
1.141,23
million
140,41
million
Administrativ
e costs
0,472
million
Nutrien
ts
remova
l
Direct
adjustment
costs
12.129,51
million
2.008,83
million
Administrativ
e costs
No change
Micro-
pollutn
ats
remova
l
Direct
adjustment
costs
8.891,34
million
1.185,51
million
Administrativ
e costs
27,6
million
GHG
and
energy
neutrali
ty
Direct
adjustment
costs
Costs
compensate
d by
savings
Administrativ
e costs
Audits and
monitoring:
98,7
million
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Other
actions
Direct
adjustment
costs
Average
increase of
water tariffs
of 2,26% -
or 1.806
million
Average
increase in
public
budget of
774
million
Administrativ
e costs
No changes 55,7
million
AMR +
COVID-19
+ non
domestic
waters
Neutral
Costs related to the ‘one in, one out’ approach (PCP’s and pharmaceutical industry)
Total
Direct
adjustment
costs
9 billion €
for PRO’s to
cover
investments
for micro-
pollutants
advanced
treatment
Indirect
adjustment
costs
Administrative
costs (for
offsetting)
16,2
million
€/year to be
shared
between
PRO (11,2
million) and
industry (5
million)
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EUROPEAN COMMISSION
Regulatory Scrutiny Board
Brussels,
RSB
Opinion
Title: Impact assessment / Revision of the Urban Wastewater Treatment Directive
Overall opinion: NEGATIVE
(A) Policy context
The Urban Waste Water Treatment Directive sets rules for the collection and treatment of
waste water from households in urban areas and specific industries. The aim is to ensure a
sufficient level of quality in order to minimise the effects of these discharges on the
environment.
Building on the findings of an evaluation and to respond to new political priorities and
societal challenges, the Commission is revising the Directive.
(B) Summary of findings
The Board notes the additional information provided in advance of the meeting and
commitments to make changes to the report.
However, the Board gives a negative opinion, because the report contains the
following significant shortcomings:
(1) The report is not specific enough about the remaining Green House Gas emission
reduction and energy savings gap that the initiative aims to tackle. It is not clear
how the coherence and consistency of the proposed revision will be ensured with
related initiatives, such as the Effort Sharing Regulation, the Energy Efficiency
Directive or the Nature Restoration Law and to what extent these initiatives are
reflected in the dynamic baseline.
(2) The report does not provide a clear evidence base for possible Energy Neutrality
Targets and measures related to Green House Gas emissions. The available policy
choices and details of the envisaged Extended Producer Responsibility scheme for
micro-pollutants are not set out clearly enough.
(3) The report does not sufficiently demonstrate the proportionality of the proposed
measures in terms of their costs and benefits, specifically on storm water
overflows and urban runoff, but also more broadly of the preferred option.
(C) What to improve
(1) The report should be clearer about how the initiative fits in the context of existing
legislation and initiatives. It should explain the coverage of each of these and identify the
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remaining gaps that the revised Directive would be expected to address.
(2) The report should explain clearly the evidence base for considering sector-specific
Energy Neutrality Targets and further measures related to Green House Gas emissions. It
should be specific on the scale of the identified Green House Gas emission reduction and
energy savings gaps under the dynamic baseline, fully reflecting the impacts expected from
the requirements of the Effort Sharing Regulation, the Energy Efficiency Directive and other
relevant ‘Fit for 55’ initiatives. It should explain how the new targets and measures are
expected to interact with the ‘Fit for 55’ initiatives, how double regulation will be avoided and
flexibility for Member States on the choice of the best measures in reaching their overall
reduction targets will be ensured. It should better justify the 2040 time horizon used for the
baseline, given the need to ensure coherence with the 2050 climate neutrality objectives and the
envisaged measures in the adopted ‘Fit for 55’ package.
(3) When it comes to micro-pollutants, the report should further elaborate on the Extended
Producer Responsibility scheme it considers. It should set out the main elements and
present the key policy choices to be made by policy makers (e.g. scope, progressive
expansion) and assess the costs and benefits of available alternatives.
(4) The report needs to strengthen its narrative significantly and the argumentation in
support of the proportionality of the preferred set of measures, in particular on storm water
overflows and urban runoff. It should make an effort to further quantify the expected, most
significant, benefits. Where this is not possible, the report should explain why and provide
qualitative analysis to support the conclusion that the benefits overweigh the costs. It
should provide more convincing arguments to show how the intervention is expected to
bring about the non-monetised benefits and the extent to which this will happen. It should
show the order of magnitude (e.g. case studies, expert estimates, literature) of the benefits
expected to materialise. It should present a more balanced analysis of benefits and costs,
fully reflecting the recurring and the (quite high) one-off investment costs. For ‘one in one
out’ approach, it should only include the costs to businesses and citizens.
(5) The report should show more transparently where the impact is expected to be
different across Member States. It should explain how the financing of the investment costs
will be ensured. In this context, it should be more explicit about the expected use of EU
funding to support the measures envisaged. It should also be more explicit about possible
affordability issues for low-income households and whether this poses any risk for
implementation.
(6) The analysis should report more systematically on the different views expressed by the
consulted stakeholders.
(7) The report should specify when the initiative will be evaluated, and how success will
be measured.
Some more technical comments have been sent directly to the author DG.
(D) Conclusion
The DG must revise the report in accordance with the Board’s findings and resubmit
it for a final RSB opinion.
Full title Revision of the Urban Wastewater Treatment Directive
Reference number PLAN/2020/7347
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Submitted to RSB on 16 February 2022
Date of RSB meeting 16 March 2022