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 Term Explanation Agglomeration According to the Urban Wastewater Treatment Directive (UWWTD): ‘Agglomeration’ means an area where the population and/or economic activities are ‘sufficiently concentrated’ for urban wastewater to be collected and conducted to an urban wastewater treatment plant or to a final discharge point. (Article 2(4)). An agglomeration can be a city or municipality, but it can also be a number of smaller cities or towns clustered together. Anti-microbial Resistance (AMR) AMR occurs when e.g. fungi and bacteria transform over time and no longer respond to medications (WHO, 2022). The main drivers of the development of drug-resistant pathogens are misuse and overuse of anti-microbials e.g. antibiotics, antivirals, antifungals and antiparasitics. AMR has been declared as one of the top 10 global public health threats facing humanity by the World Health Organization (WHO). Biochemical oxygen demand (BOD) According to the UWWTD: in the wastewater discharge, biochemical oxygen demand (BOD) needs to be reduced to 25mg/l of Oxygen or a minimum reduction of 70-90% needs to be achieved. (Annex I). BOD is ‘the amount of dissolved oxygen used by micro-organisms in the biological process of metabolising organic matter in water. The more organic matter there is (e.g. in sewage and polluted bodies of water), the greater the BOD. And the greater the BOD, the lower the amount of dissolved oxygen available for higher animals such as fishes. The BOD is therefore a reliable gauge of the organic pollution of a body of water. One of the main reasons for treating wastewater prior to its discharge is to lower its BOD — i.e., reduce its need of oxygen and thereby lessen its demand from the streams, lakes, rivers, or estuaries into which it is released.’ (Britannica, 2019a). BOD is most commonly expressed as milligrams of oxygen consumed per litre of samples over 5 days of incubation at 20°C – this is called BOD5 (Sawyer et al., 2003). In this text “BOD” means “BOD5”. Chemical oxygen demand The UWWTD states that chemical oxygen demand (COD) in the wastewater discharge needs to be reduced to 125mg/l O2. Alternatively, a minimum reduction of 75% needs to be achieved. COD ‘is a second method of estimating how much oxygen would be depleted from a body of receiving water as a result of bacterial action. While the BOD test is performed by using a population of bacteria and other micro-organisms to attempt to duplicate what would happen in a natural stream over a period of five days, the COD test uses a strong chemical oxidising agent (potassium dichromate or potassium permanganate) to chemically oxidise the organic material in the sample of wastewater under conditions of heat and strong acid.’ (Woodard & Curran, 2006). Collecting system The UWWTD defines this as a system of conduits which collects and conducts urban wastewater. (Article 2(5)). Combined sewers Combined sewers are defined as ‘Systems that carry a mixture of both domestic sewage and storm sewage’. Combined sewers typically consist of large-diameter pipes or tunnels, because of the large volumes of storm water that must be carried during wet-weather periods. They are very common in older cities but are no longer designed and built as part of new sewerage facilities.’ (Britannica, 2019b). Contaminants of emerging concern The UWWTD does not include a reference to contaminants of emerging concern. According to the Organisation for Economic Co-operation and Development (OECD) “Contaminants of emerging concern” (CECs) comprise a vast array of contaminants that have only recently appeared in water, or that are of recent concern because they have been detected at concentrations significantly higher than expected, or their risk to human and environmental health may not be fully understood. Examples include pharmaceuticals, industrial and household chemicals, personal care products, pesticides, manufactured nanomaterials, and their transformation products’ (OECD, 2018). The Environmental Quality Standards D irective explains pollutants of emerging concern. Recital 26 states that ‘emerging pollutants … can be defined as pollutants currently not included in routine monitoring programmes at Union level but which could pose a significant risk requiring regulation, depending upon their potential eco-toxicological and toxicological effects and on their levels in the aquatic environment.’ Dilution rate In the context of this IA, the dilution rate refers to the ratio between the flow of released wastewater from a treatment plant and the flow of the receiving body (river). A dilution rate of 10 means that 1 litre of released wastewater from the treatment plant is diluted in less than 10 litres in the river. Lower dilution rates represent more risks for the environment but also for potentially for public health. Distance to target ‘Distance to target’ reflects the remaining efforts to be made to collect and treat the load generated in accordance with the requirements of the Directive. For instance, in 2018, 98% of the generated load is collected, across all Member States, in line with Article 3 of the Directive, meaning that, for this goal, the EU average distance to target is 2 %. Eutrophication UWWTD definition: The enrichment of water by nutrients, especially compounds of nitrogen and/or phosphorus, causing an accelerated growth of algae and higher forms of plant life to produce an undesirable disturbance to the balance of organisms present in the water and to the quality of the water concerned. (Article 2(11)). E. coli Indicators of faecal contamination are commonly analysed in treated wastewater prior to discharge or reuse. Escherichia coli (E. coli) is one of the most commonly adopted indicators for the determination of the microbiological quality in water and treated wastewater since it is considered a good indicator of this type of contamination. It is also easily detectable, almost exclusively of faecal origin and its presence is linked to the presence of pathogens. Due to this, E. coli is used in most regulations regarding the microbiological quality of treated municipal wastewater (Vergine et al, 2017; Annex 10, report 1). Fourth treatment Fourth treatment consist of micro-pollutant removal notably via ozonation and/or filtering with activated carbon or advanced techniques like nano-filtration, membranes. It comes after tertiary treatment (Nitrogen treatment in particular) – which is a pre-requisite to ensure an optimal functioning of the 4th treatment. So far there is no obligation in the UWWTD to treat micro-pollutants. Individual or other appropriate systems (IAS) The UWWTD states that ‘where the establishment of a collecting system is not justified either because it would produce no environmental benefit or because it would involve excessive cost, individual systems or other appropriate systems which achieve the same level of environmental protection shall be used.’ (Article 3(1)). This covers simple facilities such as sceptic thanks up to more sophisticated small facilities. Micro-pollutants Emerging micro-pollutants are defined as synthetic or natural compounds released from point and nonpoint resources and end up to the aquatic environments at low concentration - typically µg/L or less ( Barbosa et al., 2016 ) Pollutant which exists in very small traces in water ( Source: E EA). Most micro-pollutants are considered as “Contaminants of emerging concern” (see above). In this IA and in the context of the study on EPR, a more specific definition focusing on organic substances was used (See report 2, Annex 10). Micro-plastics According to the European Chemicals Agency (ECHA), ‘the term “micro-plastic” is not consistently defined, but is typically considered to refer to small, usually microscopic, solid particles made of a synthetic polymer. They are associated with long-term persistence in the environment, if released, as they are very resistant to (bio)degradation.’ Population equivalent (p.e.) UWWTD definition: ‘1 p.e. (population equivalent)’ means the organic biodegradable load having a five-day biochemical oxygen demand (BOD5) of 60 g of oxygen per day.’ In this IA, one p.e. includes on average 11.18 g/day for total Nitrogen, and 1.68 g/day for Phosphorus. It also includes a range of micro-pollutants (around 1.300 chemicals were considered in this IA) each having a specific load – see Annex 4. In summary, 1 p.e. describes the average pollution load release by one person in one day. PRO – Producer Responsibility Organisation ‘PRO’ are organisations set up by the sectors subject to a producer responsibility. Their role is to implement the legal obligation in the name of their Members. PRO’s are usually requested by law to establish self-control mechanisms controlled by regular independent audits for both their financial management and the quality of collected and reported data. In the case of micro-pollutants, PRO would collect the required funds based on their members’ declaration (quantities placed on the EU market and toxicity). They would then finance wastewater operators for more stringent treatment. Primary treatment According to the UWWTD, ‘Primary treatment’ means treatment of urban wastewater by a physical and/or chemical process involving settlement of suspended solids, or other processes in which the BOD of the incoming wastewater is reduced by at least 20% before discharge and the total suspended solids of the incoming wastewater are reduced by at least 50% (Article 2(7)). Secondary treatment UWWTD definition: ‘Secondary treatment’ means treatment of urban wastewater by a process generally involving biological treatment with a secondary settlement or other processes in which the requirements established in Table 1 of Annex I are respected (Article 2(8)). Tertiary treatment More stringent treatment or tertiary treatment is the third stage of treatment and can consist of nutrient removal, chemical or physical disinfection. In the UWWTD, table 2 in Annex I lays down the thresholds for nutrient reduction. Toxic load In the context of this IA an indicator of the toxic load was built on the basis of a set of micro-pollutants found on the wastewaters (pollutant quantity weighted by toxicity of individual substances more details are provided in Annex 4. PFAS Per- and polyfluoroalkyl substances (PFAS) are a large family of thousands of synthetic chemicals that are widely used throughout society and found in the environment. They all contain carbon-fluorine bonds, which are one of the strongest chemical bonds in organic chemistry. This means that they resist degradation when used and also in the environment. Most PFAS are also easily transported in the environment covering long distances away from the source of their release. PFAS have been frequently observed to contaminate groundwater, surface water and soil. Cleaning up polluted sites is technically difficult and costly. If releases continue, they will continue to accumulate in the environment, drinking water and food (Source: ECHA ). PNEC The ‘Predicted No Effect Concentration’ is the concentration of a substance, below which exposure is not expected to cause adverse effects. E.g., a concentration of a pharmaceutical for which no pharmacological effect is expected to occur for a specific organism. Separate sewers The UWWTD allows for the use of combined and separate sewers. Separate systems: “New wastewater collection facilities are designed as separate systems, carrying either domestic sewage or storm sewage but not both. Storm sewers usually carry surface runoff to a point of disposal in a stream or river. Small detention basins may be built as part of the system, storing storm water temporarily and reducing the magnitude of the peak flow rate. Sanitary sewers, on the other hand, carry domestic wastewater to a sewage treatment plant. Pre-treated industrial wastewater may be allowed into municipal sanitary sewerage systems, but storm water is excluded.” (Britannica, 2019c). Storm Water Overflows (SWO) A footnote in Annex I to the UWWTD states ‘…during situations such as unusually heavy rainfall, Member States shall decide on measures to limit pollution from storm water overflows. Such measures could be based on dilution rates or capacity in relation to dry weather flow or could specify a certain acceptable number of overflows per year.’ As mentioned under combined sewers, these systems carry wastewater and storm water. According to Britannica, ‘because wastewater treatment plants cannot handle large volumes of storm water, sewage must bypass the treatment plants during wet weather and be discharged directly into the receiving water. These combined sewer overflows, containing untreated domestic sewage, cause recurring water pollution problems and are very troublesome sources of pollution.’ (Britannica, 2019b). Surface water Water Framework Directive definition: inland waters, except groundwater; transitional waters and coastal waters, except in respect of chemical status for which it shall also include territorial waters. (Article 2(1)). (Total) nitrogen Total nitrogen is defined in the UWWTD as ‘the sum of total Kjedahl nitrogen (organic and ammoniacal nitrogen), nitrate-nitrogen and nitrite-nitrogen’. The UWWTD requires a reduction of total nitrogen in wastewater discharges to concentrations of 15 mg/1 N (in agglomerations with 10.000 – 100.000 p.e.) and 10 mg/1 N (in agglomerations with more than 100.000 p.e.) (Annex I of the Directive). Nitrogen is, together with phosphorus, one of the main nutrients in wastewater. Nitrogen becomes ammonia/ammonium, creating an additional oxygen demand. This can lead to excessive plant and algae growth, which can then prevent other organisms from living and growing. (Total) phosphorus The UWWTD requires a reduction of total phosphorus in wastewater discharges to concentrations of 2 mg/1 P (in agglomerations with 10.000 – 100.000 p. e.) and 1 mg/1 P (in agglomerations with more than 100.000 p.e.) (Annex I). Together with nitrogen, phosphorus is one of the main nutrients in wastewater. Phosphorus becomes ortho-phosphate, creating an additional oxygen demand. This can lead to excessive plant and algae growth, which can then prevent other organisms from living and growing. Urban runoff Urban runoff consist of storm water from city streets and private or commercial properties that contains litter, as well as organic and bacterial waste (EEA glossary). Depending on local conditions, urban runoff can be collected in combined or separate networks. Urban wastewater The UWWTD defines ‘urban wastewater’ as domestic wastewater on its own or domestic wastewater mixed with industrial wastewater and/or runoff rain water. (Article 2(1)). Water resilience ‘Resilience’ is the quality of being able to return quickly to a previous good condition after problems . (Source: Cambridge Dictionary ). ‘Water resilience’ refers to those characteristics in a water system (droughts, floods, water pollution).



Abbreviations Term or abbreviations Meaning or definition AMR Antimicrobial resistance BWD Bathing Water Directive BOD Biochemical oxygen demand COD Chemical oxygen demand CJEU Court of Justice of the European Union CSO Combined sewer overflow DWD Drinking Water Directive ECA European Court of Auditors ECHA European Chemicals Agency EEA European Environment Agency E-PRTR European Pollutants Release and Transfer Register EED Energy Efficiency Directive EPR Extended Producer Responsibility EQS Environmental quality standards EU European Union GHG Greenhouse gas GWh Gigawatt hour IAS Individual or other appropriate system IED Industrial Emissions Directive IPCC Intergovernmental Panel on Climate Change JRC European Commission Joint Research Centre MSFD Marine Strategy Framework Directive N Nitrogen ND Nitrates Directive NVZ Nitrates vulnerable zones OECD Organisation for Economic Cooperation and Development OPC Open Public Consultation P Phosphorus PFAS Perfluoroalkyl chemicals p.e. Population equivalent PNEC Predicted No Effect Concentration PRO Producer Responsibility Organisation RBMP River basin management plan REACH Registration, evaluation, authorisation and restriction of chemicals REDII Proposal of revision of the Renewable Energy Directive RTC Real time control SME’s Small and medium-sized enterprises SSD Sewage Sludge Directive SWO Storm water overflow UWWTD Urban Wastewater Treatment Directive WFD Water Framework Directive

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.) 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. 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 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, 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). BOD (p.e.) Nitrogen (p.e.) Phosphorus (p.e.) E. coli (p.e.) Micro pollutants (p.e.) (1) Remaining load from 191,8 million p.e. from SWO/urban runoff, small agglo., and IAS 39.395.928 57.159.194 54.993.361 51.224.149 105.766.283 (2) Remaining load from 517 million p.e. sent to centralised facilities after treatment 26.752.894 133.967.530 93.607.423 19.886.613 158.360.974 (3)Total remaining load (1) + (2) 66.148.823 191.126.725 148.600.784 71.110.762 264.127.257 (4) Remaining load if maximum feasible treatment is applied 34.239.042 88.219.608 47.658.013 5.736.591 130.837.224 (5) % of the remaining load which is ‘treatable’((3) –(4))/(3) 48,24% 53,84% 67,93% 91,93% 50,46% 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. 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. 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). 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 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, 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. 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, 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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 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. 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. 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. Drivers Problems Objectives Options Climate change and urbanisation Increasing pollution from SWO/urban runoff To protect EU citizens and ecosystems from the remaining sources of insufficiently treated wastewater To align the wastewater sector to the objectives of the Green Deal (climate neutrality in 2050, transition to circular economy, zero pollution and restoration of biodiversity) To provide a predictable framework for the sector, improve its governance and full use of digitalisation To improve access to sanitation and to use wastewater health related parameters to prevent and manage public health issues SWO and urban runoff ·Set of measures applied from large agglomerations above 100.000 pe (low ambition) to lower agglomerations 10.000 pe (high ambition) ·Measures includes integrated management plans and monitoring Small agglomerations ·Review of the threshold (from 500 to 1.000 pe) Individual Appropriate System ·Better control of the IAS combined with EU clear standards Nutrients ·Set of options from low ambition (N/P removal applied only to facilities above 100.000 pe) to high ambition (N/P removal above 10.000 pe combined with stricter standards for N/P removal) ·Clarified criteria for designating sensitive areas Micro-pollutants ·Set of options from low ambition (micro-pollutant removal applied only to facilities above 100.000 pe) to high ambition (all facilities >10.000 pe) ·Medium option based on risk assessment (dilution rates) ·Application of the Extended Producer Responsibility Non domestic emissions ·Improved monitoring of incoming waters in the treatment plants GHG and Energy ·Energy audits and monitoring ·Energy neutrality by 2040 leading to GHG emission reduction Governance ·Monitoring performance indicators ·Increased transparency for water users Monitoring & Reporting ·Digital monitoring/reporting ·Adaptation of monitoring requirements to remaining sources of pollution ·Simplified reporting Access to sanitation ·Identification of marginalised and vulnerable people ·MS to improve access to sanitation Health ·Sampling & analysis COVID-19 and its variants/AMR Small agglo out of the Directive, unclear requirements and unjustified use of IAS in large agglo Remaining pollution from small agglo and non-compliant IAS Unclear criteria for ‘sensitive areas’ and outdated standards for N & P High level of N & P releases leading to Eutrophication Ageing population and Increasing use of pharmaceuticals and personal care products Increasing releases of micro-pollutants Insufficient control of non-domestic pollution Poor actions to reduce pollution at source, limited sludge/water reuse Poor awareness/understanding on GHG emissions and energy potential savings High energy use with high costs and high GHG emissions Captive market, no incentives to ‘do better’ Diverging operator performances No tradition of producer responsibility schemes for water pollution Insufficient application of the ‘polluters pays principle‘ Inadequate monitoring Lack of knowledge on remaining sources of pollution, poor data on actual performances Non digitalised reporting Outdated reports, admin burden Access to sanitation not in the scope of the Directive Poor access to sanitation for some EU citizens contradict SDG 6 Poor coordination between public health and wastewater competent authorities Under use of health indicators (notably on Covid and Anti- Microbial Resistance - AMR) 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. 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. 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). 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. BOD N P E. coli Micro-pollutants Current (p.e.) 66.148.823 191.126.725 148.600.784 71.110.762 264.127.257 Baseline (p.e.) 51.966.775 179.087.499 128.621.614 55.510.146 252.954.625 Current situation (Tons/year) 1.448. 659 779.711 91.122 - - Baseline (Tons/year) 1.138.072 730.802 78.871 - - 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 . Emissions of GHG (million tons CO2e/year per year) Expected energy savings (based on 1,7% reduction per year) GHG emission reduction (million tons CO2e/year) % of avoidable GHG emissions Monetised benefits (million €/year) Current situation 34.6 - - - - Baseline 33.34 25,5% 1.188.477 11,85% 118,9 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. 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 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.

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. 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’; -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.

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”; ·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 im