EUROPEAN COMMISSION Brussels, 28.5.2018 SWD(2018) 249 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on minimum requirements for water reuse {COM(2018) 337 final}

{SEC(2018) 249 final}

{SWD(2018) 250 final}



Table of content Introduction 1.Problem definition 1.1.Policy context 1.2.Problem definition 1.2.1.Scope of the present impact assessment 1.3.What are the underlying causes of the problem? 1.3.1.Factor 2 – Legal frameworks for water reuse exist only in few Member States resulting in a perceived health risk and environmental risk 1.3.2.Factor 3 – Possible trade barriers, i.e. trade bans for food products irrigated with reclaimed water 1.3.3.Factor 4 – Reuse perceived as more risky than beneficial 1.4.How will the problem evolve, all things being equal? 1.5.Who is affected and how? 2.Why should the EU act? 2.1.Competence 2.2.Subsidiarity 3.Objectives – what should be achieved? 3.1.General objective 3.2.Specific objectives

3.3.Operational objectives 4.Policy Options 4.1.Baseline – “No new EU action” 4.2.Design of policy options 4.2.1.Minimum quality requirements for water reuse to ensure health safety of agricultural products irrigated with treated waste water 4.2.1.1."One-size-fits-all" approach 4.2.1.2."Fit-for-purpose" approach 4.2.1.3.Implementation of the requirements 4.2.1.4.Minimum quality requirements: regulated at EU-level or recommended by an EU Guidance document 4.2.2.Minimum quality requirements to ensure protection of local public health and of the environment – Risk Management Framework 4.2.3.Key Risk Management Framework principles included in a legal instrument 4.2.4.Risk Management Framework recommended by an EU Guidance document 5.Analysis of Impacts 5.1.Baseline 5.2.Analysis of the impacts of the policy options for water reuse in agricultural irrigation 5.2.1.Economic impacts 5.2.2.Environmental impacts 5.2.2.1.Adapting to climate change and preserving the quality of natural resources 5.2.2.2.Fostering the efficient use of resources 5.2.2.3.Sustainable consumption and production

5.2.2.4.Minimising environmental risks 5.2.3. Social impacts 6.Comparing the Options 6.1.Effectiveness of the policy options 6.2.Efficiency of the policy options 6.3.Coherence of the policy options 6.4.Nature of the instrument 6.5.Preferred option 7. Monitoring and Evaluation Annexes Annex 1 – Procedural information Annex 1a – Water reuse in impact assessment of Blueprint (excerpt) Annex 2 - Synopsis report on consultation activities Annex 3 - Who is affected by the initiative and how Annex 3a –SME test Annex 4 - Analytical models used in preparing the impact assessment Annex 5 - Problem tree Annex 6 - The purposes and benefits of reusing water - situation in selected Member States Annex 7 - JRC Technical Report on the development of minimum quality requirements for water reuse in agricultural irrigation and aquifer proposed Annex 7a - Non-technical summary of JRC technical report on the development of minimum quality requirements for water reuse in agricultural irrigation and aquifer proposed

Annex 8 - Assessment of impacts on Research and Innovation Annex 9 - Assessment of territorial impacts Annex 10 - International trade dimension Annex 11 – Subsidiarity assessment of potential EU-level regulation of water reuse for aquifer recharge Annex 12 – Comparison of impacts per policy options and per different group of Member States Annex 13 – Abbreviations and Glossary Introduction Water is already a limited resource, with one third of Europe experiencing water stress. The growing needs of populations and climate change will make the availability of water in sufficient quantity and quality even more of a challenge in Europe in the future. Water scarcity is no longer confined to a few corners of Europe, and is already a concern across the EU with significant environmental and economic consequences; projections suggest that the situation will become much more pronounced in the coming years. To respond to this problem, Europe's water resources should be managed more efficiently. In addition to water savings, securing the supply of good quality water can help address water scarcity in the context of an integrated approach to water management. Reusing water after treatment constitutes an effective and sustainable alternative water supply, and so can be a useful tool for managing water resources. For example, this can involve a treatment plant receiving waste water from domestic uses and then treating it separately and providing it by pipe to farmers, instead of returning it directly to a river. It extends its life cycle, thereby helping to preserve water resources as part of an integrated approach to water management and in full compliance with the circular economy objectives. Today, whilst water reuse in the EU could obviously never by itself solve water scarcity problems, it falls far below its full potential. The Commission has been considering the issue of water reuse for a number of years and has documented its findings to date in several steps. In the 2012 Communication "A Blueprint to Safeguard Europe's Water Resources" (COM(2012) 673) water reuse for irrigation or industrial purposes was found to have a lower environmental impact and potentially lower costs than other alternative water supplies, whereas it is only used to a limited extent in the EU. A Fitness check of EU Freshwater policy (SWD(2012) 393) published in November 2012, as a building block of the Blueprint, assessed the performance of the measures taken, both in environment and in other policy areas, in achieving the objectives already agreed in the context of water policy. It also identified the major gaps to be closed in order to deliver environmental objectives more efficiently. In relation to waste water reuse, the Fitness Check concluded that "alternative water supply options with low environmental impact need to be further relied upon" in order to address water scarcity. A particular issue emphasised by stakeholders in the public consultation of the Fitness Check was the lack of EU common quality requirements for reuse of waste water in irrigation. Several policy options to promote water reuse were considered in the impact assessment of the Blueprint (SWD(2012) 382) A number of actions to promote water reuse were included in the Communication "Closing the loop – An EU action plan for the circular economy" (COM(2015) 614), and in particular a legislative proposal on minimum requirements for reused water for irrigation and groundwater recharge. This proposal has also been included in the European Commission's 2017 Work Programme as it contributes to the political priorities set by the Commission to promote a more circular economy. In addition, it may complement the planned future modernisation of the Common Agricultural Policy. Finally, the initiative could contribute to the EU's implementation of the Sustainable Development Goals (SDGs) and in particular SDG 6 on Clean Water and Sanitation, which sets a target of substantially increasing recycling and safe reuse globally by 2030. The intention to address water reuse with a new legislative proposal was noted with interest by the Council, in its conclusions on the Commission's Communications on the Blueprint and on Circular Economy and in its conclusions on Sustainable Water Management (11902/16). Furthermore, the European Parliament, in its Resolution on the follow-up to the European Citizens’ Initiative Right2Water in September 2015, encouraged the Commission to draw up a legislative framework on water reuse, as well as the Committee of the Regions, in its opinion on "Effective water management system: an approach to innovative solutions" in December 2016. The present document addresses the problem of a too limited application of water reuse in order to contribute to alleviating water scarcity and analyses the modalities of creating an enabling framework for increasing the uptake of water reuse, in particular for agricultural irrigation and aquifer recharge. Setting appropriate minimum requirements together with a risk assessment approach would ensure a level playing field for those engaged in water reuse and those affected, ensure health and the environment are protected and thereby also increase confidence in the practice of water reuse. Acting now by putting in place an enabling framework would contribute to alleviating water stress where it is already a reality today in the EU and also prepare operators and farmers to be ready to act also in those parts of the EU which will experience increasing water stress in the coming years and decades. 1.Problem definition 1.1.Policy context This impact assessment analyses the potential of an EU initiative on water reuse in the context of water scarcity being a serious problem today and a great concern amongst EU Member States. Europe's freshwater resources are under increasing stress, with a mismatch between the continuously increasing demand for, and the limited availability of, water resources across the whole EU (EEA, 2012). Water over-abstraction, for irrigation purposes but also for industrial use and urban development, is one of the main threats to the EU water environment, while availability of water of appropriate quality is a critical condition to growth in water-dependent economic sectors and society in general. Empirical studies find significant macroeconomic affects which vary with the assumed duration and severity of the drought or water scarcity . Water stress already affects one third of the EU territory all year round (EC, 2012). This is no longer only an issue for arid, densely populated regions that are prone to increasing water stress; temperate areas with intense agricultural, tourism and industrial activities also suffer from frequent water shortages and/or expensive supply solutions. While during summer months this is more pronounced in Southern European basins, water scarcity and droughts are no longer issues confined to southern Europe. Regions in northern European countries, including the United Kingdom and Germany, also face seasonal water stress. As an effect of climate change, the frequency and intensity of droughts and their environmental and economic damages have drastically increased over the past thirty years: between 1976 and 2006 the number of areas and people affected by droughts went up by almost 20% and the total costs of droughts amounted to EUR 100 billion (EC, 2012). A concrete example related to the droughts of the summer of 2017 may further illustrate the dimensions of economic loss; the Italian farming sector alone was predicting losses of EUR 2 billion. This trend is expected to continue, i.e. the average volume of water annually available as streamflow is expected to decrease significantly in the South of Europe, to slightly increase in the North, with a transition zone in between, where it is expected to remain approximately stable (see Annex 4 for details on the assessment). However, the temporal variability of available water is generally expected to increase, consistent with the general increase in drought and flood hazards projected for Europe (Forzieri et al., 2014; Forzieri et al., 2016) . So, even in the North of Europe there will be a need to better manage water resources and to enable more tools. As shown in Figure 1, even conservative climate scenarios would subject large parts of the EU territory to significantly reduced quantities of water in rivers. Figure 1: Water scarcity under a 2 degree climate scenario (Water Exploitation Index, WEI+ is the ratio of consumed water versus availability; in the red areas more than 40% of all annual renewable freshwater is consumed). Source: Bisselink & De Roo, 2017 [6]

Today's situation can be illustrated using an indicator of water stress due to possible over-abstraction; the ratio of water demand to water availability. Using this indicator, Figure 2 shows how Europe’s rivers are already subject to significant pressure from abstractions (see Annex 4 for details on the assessment). The indicator highlights that the challenge is not limited to Southern Europe, but is also an issue in more central parts of Europe. Figure 2: Water demand divided by water availability. Source: Bisselink & De Roo, 2017. Farmers needing water for irrigation are obviously affected by this water pressure. Farmers seeking reliable sources of water all year round may have several options for alternative water supplies. These can, for example, include investment in water storage devices, using groundwater reserves, desalination or transferring water from other river basins. In theory alternative water supply options, especially desalination, can deliver unlimited amounts of water. In practice, all the options have a lot of limitations in terms of costs and negative economic, environmental and social impacts. These alternatives have been assessed within the impact assessment of the Blueprint (see Annex 1a for details). In some countries, farmers may also receive treated waste water from urban waste water treatment plants, which can provide a reliable source of water, less dependent on precipitation and in a quality adapted for this water to be reused for various purposes, e.g. for agricultural irrigation. Water reuse generally has a lower environmental impact than other alternative water supplies and offers a range of environmental, economic and social benefits (Annex 6). While the evidence demonstrates the seriousness of water stress and its expected evolution, the policy context for water reuse as a contribution to its alleviation has only started to be developed. Another important angle is the impact of water scarcity in one Member State on other Member States via the Internal Market. The differences in concepts, principles and procedures between the water reuse laws of different Member States may impede the free movement of agricultural products irrigated with treated waste water, create unequal conditions of competition, and may thereby directly affect the functioning of the Internal Market. Water reuse has already been identified and encouraged in provisions of two existing EU instruments, however, these instruments do not specify conditions for the reuse of treated waste water: ·the Water Framework Directive (2000/60/EC, WFD); its Annex VI, part B mentions water reuse as one of the possible supplementary measures; ·the Urban Waste Water Treatment Directive (91/271/EEC, UWWTD): its Article 12 stipulates, as part of the condition on wastewater discharges that "treated waste water shall be reused whenever appropriate. Disposal routes shall minimize the adverse effects on the environment.". In the WFD, water scarcity is a key aspect of water management. This legislation sets inter alia a central goal of attaining good status for Europe's waters by 2015. It requires Member States to characterise the situation of their water in terms of pressures from human activities and set 'programmes of measures' to achieve the good status objective. Those are part of River Basins Management Plans, to be reviewed every 6 years. In 2007, the EU policy on water scarcity and droughts (COM(2007) 414) (WS&D) elaborated on the integration of water scarcity planning into River Basins Management Plans, including the use of appropriate water pricing and ecological requirements for river flows. It spelled out the hierarchy of measures Member States should consider in managing water scarcity and droughts, with priority for water saving and efficiency measures, and with additional water supply infrastructures only to be considered as an option when other options have been exhausted, including effective water pricing policy and cost-effective alternatives. Water reuse is to be considered within such an integrated water management approach. The Circular Economy Action Plan included a number of actions on water reuse (one of which is subject of this impact assessment), including also Guidelines on integrating water reuse into water planning and management in the context of the WFD which were completed in 2016 and are expected to positively contribute. In 2012, the Commission conducted a series of assessments to check the adequacy of the water legislation and its implementation. A 'Fitness Check' of freshwater policy looked into the relevance, coherence, effectiveness and efficiency of water policy. A major evaluation of the implementation of the WFD was carried out, assessing Member States' River Basin Management Plans (RBMPs). A gap analysis of the Commission's 2007 policy on Water Scarcity and Drought was also carried out, together with an assessment of how vulnerable water resources are to climate change and other man-made pressures such as urbanisation and land use. This included also an assessment of measures introduced by Member States in different River Basins to address water scarcity and droughts. Such measures were, for example, the development of drought management plans, considering additional water supply infrastructure (including water reuse projects) and fostering water efficient technologies and practices. The results showed that the legislative framework was largely complete and fit for purpose. However, the overall objective of the WFD – good status for Europe's waters by 2015 – has not yet been fully achieved, neither the WS&D overall policy objective – to revert the WS&D trends. Furthermore, better implementation and closer integration with other related policies were clearly required, as well as the development of additional tools related to water demand management and water availability. The few identified gaps were discussed in the Communication "A Blueprint to Safeguard Europe's Water Resources" (COM/2012/0673). As regards the alleviation of water scarcity and reduction of vulnerability, the Impact Assessment of the Blueprint (SWD(2012) 382) assessed a number of measures improving water efficiency and availability (e.g. desalination, water transfers, rainwater harvesting, etc.). Beyond water efficiency measures, water reuse was identified for its cost-effectiveness and its lower environmental impacts compared to other supply options; the need for an EU action to address the barriers to its further development was supported in public consultations (see Annex 2). As a result, the Commission announced in the Blueprint it would consider developing a regulatory instrument setting EU-wide minimum requirements for water reuse to improve the uptake of this alternative water supply while maintaining health and environment safety. A Fitness Check of EU environmental monitoring, which was carried out and presented by the Commission in June 2017, includes an action plan to streamline environmental reporting to be implemented in the coming years . Monitoring needs for the present initiative have been elaborated according to the principles highlighted in this Fitness Check (see more details in Section 7). The Commission has been discussing water reuse with Member States and stakeholders on an ongoing basis for the last number of years, both on the policy aspects and the development of minimum requirements, taking account of existing national requirements and international practice. The need to address the issue at EU level in the context of alleviating water scarcity is broadly recognised and supported, including by the agricultural sector (see Annex 2). 1.2.Problem definition The problem this initiative seeks to address is that although the practice of water reuse, in particular for agricultural irrigation and aquifer recharge, could contribute to alleviating water stress in the EU (see projections in Section 1.1), the uptake of water reuse solutions remains limited in comparison with their potential, which remains largely untapped. The problem is relevant for the EU now due to the important consequences of the growing scarcity affecting EU waters for the environment, the economy and society in general. There is an important dimension related to the proper functioning of the Internal Market for agricultural products irrigated with treated waste water.

Several factors contribute to the situation concerning water reuse today and any proposed solution to the problem should be seen against this background. Firstly, existing water resources in Europe are not always managed efficiently. There are many situations where access to conventional water resources is insufficiently controlled by public authorities resulting in both over allocation (abstraction permits going beyond available resources, incl. situations where no maximum amount is set in permits) and illegal abstraction (when permits are not enforced in particular because of no monitoring of actual abstractions). The same conventional resources are generally under-priced, as fees imposed on self-abstractions generally do not reflect the environmental and resource cost; the water price in collective systems hardly covers infrastructure costs (cf. below Figure 3). Both issues can be considered as an implementation failure as they contradict WFD provisions regarding the setting of controls on permits, abstractions and water pricing. They can be addressed with e.g. compliance and enforcement actions as appropriate, ensuring a proper implementation of the WFD in Member States . These failures frequently result in a market failure: subsidised uses of water are being practiced, even more detrimentally in situations of water scarcity, which does not reflect their actual cost, leading to a reduction of the economic attractiveness of water reuse projects (if only the latter are considered at their full cost, or if all available options are not compared on equal terms). As a consequence, improper investment decisions made by water users and decision makers in terms of actual costs incurred and environmental impacts, despite water reuse being more advantageous than other measures (e.g. use of drinking water, desalination, lengthy water transfers, on stream storage facilities) in terms of costs incurred and environmental impacts. Figure 3: Cost-recovery levels in reviewed countries where irrigation water tariffs are in place, and in other southern EU Member States (EEA, 2013) Secondly, despite the existing provisions in both the WFD and UWWTD, water reuse has not been systematically and sufficiently considered in integrated water management planning: a) either as a practical solution in the broader water management or in the elaboration and implementation of River Basin Management Plans or b) in the design and location of waste water treatment plants. Cost of adaptation of existing plants and conveying water to places of reuse is generally higher than if taken into consideration at the initial stage of building waste water treatment plants and conveyance networks. The second public consultation identified the distance between treatment plant and irrigation fields and the insufficient consideration for water reuse in integrated management amongst the highest barriers (see Annex 2). The Regulation on the Hygiene of Foodstuffs (EC) No 852/2004 refers to the concept of clean water but does not include water quality requirements. An accompanying Guidance specifies, amongst others, the use of treated waste water for irrigation; it includes examples of parametric values to ensure the protection of health but their application is voluntary. Potential environmental risks associated with the use of treated waste water for irrigation are not addressed. Current water reuse practices diverge widely across Member States. In some, water reuse is considered an integral and effective component of long-term water resources management due to severe water scarcity (e.g. Cyprus, Greece, Italy, Malta, Portugal and Spain), while in other Member States water reuse is not practised or water reuse projects are rather limited. An overview of the current situation of water reuse in the EU Member States is provided in Annex 6. In 2015, the total volume of reused treated waste water in the EU was estimated at 1,100 million m3/year (BIO, 2015), accounting for 2.4% of the total volume of treated effluents produced or 0.4% of annual EU freshwater withdrawals (237,660 million m3/year in 2011). The European countries with the highest reuse rates are presented in Figure 4a. However, as presented in Figure 4b, rates even for water scarce Italy, Greece and Spain are much lower than in a number of third countries which have invested a lot in this technology over the last decades. The highest rate is Israel where 87% of treated waste water is presently reused, with a target by 2022 of 90%. This confirms that overall in Europe and even in most European countries with water reuse being an integral and effective component of long-term water resources management, the potential of water reuse is far from being exploited. Figure 4a: Effluent reclamation in Europe (Mekorot, 2017) Country Cyprus Malta Italy Greece Spain Overall in EU Effluent reclamation rate 89% 60% 5% 5% 12% 2,4% Figure 4b: Effluent reclamation in third countries (Mekorot, 2017) Country China USA Australia Singapore Israel Effluent reclamation rate 14% 14% 15% 35% 87% Compared to the current practice as summarised above, the potential for water reuse in the EU is estimated to be much larger: a volume in the order of 6,000 million m3/year by 2025 might be achieved in the presence of a better enabling framework and suitable financial incentives at the EU level (BIO, 2015). Reusing the total volume of treated wastewater in Europe could cover nearly 44% of the agricultural irrigation demand and avoid 13% of abstraction from natural sources (Defra, 2011) and could significantly contribute to alleviating water scarcity The problem as set out above is resulting in an opportunity lost for EU citizens on the whole and economic sectors such as agriculture, tourism, industry, energy and transport (see footnote 2). This may in turn affect economic growth (in the case of reduced production due to water scarcity) or competitiveness (in case of disadvantaged farmers due to differences in input costs or due to unsafe products reaching the markets). The effects of water scarcity in one Member State are also felt in others via the Internal Market and the tightly interconnected European economies through impacts on trade in goods and services as well as investments. This concerns in particular trade in agricultural products irrigated with treated waste water. The important differences in relation to concepts, principles and procedures between the water reuse laws of different Member States, these differences may in particular impede the free movement of agricultural products irrigated with treated waste water, create unequal conditions of competition, and may thereby directly affect the functioning of the Internal Market. As the intra-EU share of trade in agricultural products by far exceeds the extra-EU share, this aspect is significant. For fruits and vegetables, this amounted to EUR 33.4 billion in intra-EU trade as compared to EUR 4.7 billion in extra-EU trade in 2015. Furthermore, technology providers in this sector are EU-scale companies. However, differences in standards among Member States can prevent companies benefitting from economies of scale and standardisation, which would support innovation and the development of systemic solutions at lower costs. This was confirmed by the specific consultation of experts in research and innovation (see Annex 8). 1.2.1.Scope of the present impact assessment The scope of this impact assessment includes water reuse for agricultural irrigation and aquifer recharge; the source of water for such purposes is limited to treated waste water covered by the UWWTD.

This reflects the priority areas as set out in previous Commission documents. In the 2015 Communication ‘Closing the loop – An EU action plan for the Circular Economy’ (COM/2015/614) and subsequently in the Inception Impact Assessment of the EU water reuse initiative at hand, agricultural irrigation and aquifer recharge were identified as main potential sources of demand for reclaimed water having the greatest potential in terms of its higher uptake, scarcity alleviation and EU relevance: agricultural irrigation as the biggest user of treated waste water and the links with the Internal Market and aquifer recharge due to the potential cross-border nature of many aquifers. Beyond the uses analysed in this impact assessment, treated waste water may be used for a wide variety of other purposes. For reference, these are also briefly summarised below and set out in more detail in Annex 6. Agricultural irrigation is by far the largest application of reclaimed water worldwide and in Europe (Annex 6) and a significant use of water in Europe, overall accounting for around a quarter of total freshwater abstracted. Abstraction for irrigation accounts for about 60% of total freshwater abstraction in Southern and South Eastern Europe, and up to 80% in certain River basin districts (RBDs). Water reuse in agriculture therefore has the highest potential for an increased uptake of water reuse, and thus contributing to the alleviation of water scarcity in Europe. Artificial aquifer recharge aims at increasing the groundwater potential and it can help prevent saline intrusion in depleted coastal aquifers. The lack of scientific and technical knowledge (including lack of clarity of ownership and liability), coupled with low perception of this kind of technique being an important water management instrument, contribute to the low uptake at present (Escalante, 2014). The risks to health and the environment from pollutants such as bacteria, viruses and emerging pollutants and priority substances such as those already detected occasionally in discharges from water treatment plants (and in high concentrations) are also perceived as an obstacle (Estévez et al., 2016; Estévez et al., 2012). In the first public consultation, aquifer recharge was one of the uses for water reuse most frequently mentioned that stakeholder found appropriate, in particular in order to prevent saline intrusion (see Annex 2). Therefore water reuse for aquifer recharge has been analysed for potential regulation at the EU level but the case for an EU intervention is not deemed proportionate, as set out further in subsequent sections. Whilst agricultural irrigation and aquifer recharge are in scope, a number of other areas are outside the scope and so not considered further because of various reasons (e.g. they are already covered by other legislation; the risks are being managed effectively and/or are not linked to the internal market). In terms of investment opportunities, water reuse projects currently suffer from a limited economic attractiveness which is exacerbated by the unclear regulatory framework applying to them and today, the level of investment into water reuse in the EU is limited and far below its potential. This issue is being addressed in the Circular Economy Action Plan which commits to maintain and increase the visibility of existing financial support to investments in water reuse, e.g. with European Structural and Investment Funds. Therefore this topic will not be pursued further in this IA. A number of actions on improving implementation and enforcement of existing water legislation will be taken independently of this initiative as they are not specific to water reuse. Additionally, in the Circular Economy Action Plan, the Commission committed to develop a series of non-regulatory actions to promote safe and cost-effective water reuse in 2016-2017 (see above). Water reuse for municipal/landscape uses (e.g. irrigation of public parks, recreational and sporting facilities, street cleaning, fire protection systems etc.) is outside the scope of this Impact Assessment. Local conditions determine both the opportunities and risks, and no significant health or environmental risk has been identified with current practices in the Member States. The risks to the environment are generally very local and they are regulated to a large extent by the existing EU legislative framework (e.g. WFD and UWWTD). Given the visibility of this use to the public, often associated with access restrictions in urban areas where water reuse is practised, the public perception of these risks needs to be adequately managed (see the supporting studies of BIO and AMEC), taking into account the local specificities of these uses. Therefore, authorities in the Member States need some flexibility within the existing framework and no need for further legislative action has been identified. Direct reuse of waste water from industrial sources for agricultural irrigation is outside the scope of this impact assessment. The quality of industrial waste water is in general very different from domestic waste water in terms of nature and magnitude of pollutants, in particular chemicals. Because of the diversity of pollutants and of the potential harmful effects to both health and the environment of some of these pollutants, these effluents pose specific challenges in terms of safety and treatment technology. As regards the discharge of industrial waste water into the environment, the Industrial Emission Directive only imposes detailed quality requirements (emission limits) on large-size firms in a number of selected sectors. Reuse and recycling of waste water from industrial sources are generally limited to those for industrial purposes in the same or another industry; the conditions for such reuse or recycling are very sector-specific. Best Available Techniques Reference Documents (BREFs) developed under the Industrial Emissions Directive (2010/75/EU) address water use and reuse for most sectors where this is relevant (29 out of 31; e.g. Food, drink and milk industries, Industrial cooling systems, Rearing of poultry and pigs). The drafting of the EU Action Plan on Circular Economy already considered that further promotion of water reuse in the manufacturing industry will be more effectively addressed in the context of the development and review of these BREFs for the relevant sectors. Reuse of treated urban waste water for industrial purposes is not addressed by the present initiative as its potential for a higher uptake is relatively modest (Annex 6) and rather a local issue that requires a sufficient degree of flexibility at Member State level; therefore, at this moment, any EU level action would not be proportionate. The reuse of rainwater and grey water is also not included in the scope of this impact assessment. The issue has been addressed in the impact assessment for the Blueprint (see Annex 1a), which pointed out that environmental impacts related to the need of construction and maintenance of the necessary infrastructure for rainwater harvesting may lead to negative energy/treatment/GHG impacts. For water harvesting in agriculture the same negative effects should be taken as those identified for water storage (dams and reservoirs). Furthermore, a previous study conducted in preparation of the Blueprint Communication concluded that EU policy on certification to promote rainwater harvesting and reuse in buildings could lead to significant water savings but would be applicable only for major renovations or new buildings. Therefore, it was found more appropriate to include such promotion in an integrated manner in the development of Best Environmental Management Practices (BEMPs) and in the context of the sustainable buildings policy . As a result the source of water to be reused considered in this impact assessment is only the waste water covered by the UWWTD, that is to say urban waste water defined as "domestic waste water or the mixture of domestic waste water with industrial waste water, subject to the relevant pre-treatment and/or run-off water". 1.3.What are the underlying causes of the problem? The overall problem of "low uptake of water reuse compared to its potential resulting in a suboptimal contribution to alleviate water scarcity" is the result of four factors discussed below: (1) limited attractiveness, (2) environmental risks and perceived health risks due to varying existing quality requirements or the lack thereof, (3) possible trade barriers and (4) the resulting general view of risks outweighing benefits. However, this initiative is going to address only factors 2 and 3, while factors 1 and 4 are not directly addressed by this initiative. The problem's underlying drivers and consequences as described in the present section are displayed in a problem tree below. Both this section and the problem tree take as a point of departure the problem definition in the impact assessment of the 2012 Blueprint (see Annex 1a) which already found that: "The main barrier to expansion of water re-use is the lack of common standards at EU level, in particular in agriculture. While guidelines for agricultural water re-use have been defined by the World Health Organisation, and by different countries, such as the USA and Australia, a uniform solution for Europe is lacking. Establishing standards for the functional operation of the single market is an appropriate EU level response, taking into account EU Health, Agriculture and Energy policies. […] The lack of common health/environmental standards threatens farmers using re-used water to irrigate crops for export within the single market and prevents industry from making long-term investment decisions. It also constitutes a barrier for innovation." The second public consultation identified as the main barriers associated with legislation the insufficient clarity in the regulatory framework, administrative burden for water operators, users and public authorities, stringent national quality requirements, and, to a lesser extent, the absence of national requirements for water reuse. The low price of freshwater compared to the price of reclaimed water and the high cost of treatment were also identified among the highest barriers (see Annex 2). 1.3.1.Factor 1 – Reused water is less attractive than freshwater

The WFD, in its Article 9, provides the legal definition of pricing water services and stipulates the principle of cost recovery (including environmental and resource costs) as well as the polluter-pays principle. The available evidence suggests that, at best, tariffs only take account of the financial costs of water treatment and distribution and that few Member States apply direct charges to polluters for the purification of their waste water as well as other activities that impact on water quality, while charging for the resource costs of water abstraction is rare (EEA, 2013). Furthermore, in agriculture, the rather low levels of cost recovery (up to 80% but sometimes as low as 20%) point to heavy subsidisation of freshwater use, even in water-scarce Mediterranean countries (EEA, 2013). Prices are frequently too low to provide an adequate incentive to the efficient use of both freshwater and reused water. There are measures being undertaken to improve the implementation of Article 9 of the Water Framework Directive so as to achieve better cost recovery. Therefore, the underlying drivers of illegal abstraction and subsidised water prices for freshwater are outside of the scope of the initiative and are not addressed in this impact assessment. As demonstrated in the Impact assessment of the Blueprint, in areas where water is scarce, reclaimed water can be a cost-effective solution compared to other supply options, especially when all economic and environmental costs are considered. However, even in these cases, reclaimed water is generally found less attractive than conventional water resources. 1.3.2.Factor 2 – Legal frameworks for water reuse exist only in few Member States resulting in a perceived health risk and environmental risk A range of potential risks is associated with reused water which is likely to contain pollutants (organic, microbiological, chemical, etc.). These risks differ by type of reuse and entail contamination of the environment (water resources, soil) and people (direct exposure, ingestion of food products irrigated with reclaimed water, etc.). Health risks are partially addressed by existing legislation concerning agricultural product safety, i.e. the Regulation on the Hygiene of Foodstuffs; however, this legislation does not specify the requirements for treated waste water used for irrigation of agricultural products. Environmental risks associated with water reuse must be considered as well, e.g. chemical contaminants from inorganic salts, nutrients, heavy metals and detergents can negatively affect the environment. For heavy metals there are concerns that these substances can build-up in the soil over time. Salinity of the water is also a risk to the environment and crops (in case of irrigation). There are also growing concerns over the fate of the wide variety of compounds of emerging contaminants (CECs), e.g. pharmaceuticals, which are present in sewage, often at trace levels, and often unmonitored. Evidence remains limited as to how well treatment processes deal with these pollutants. In general such risks can be addressed by applying suitable barriers, the most important barrier being treatment of waste water and applying a risk based approach. As displayed in Figure 5, these risks can be split into 2 categories associated with water reuse in agricultural irrigation: -the health risks to consumers of agricultural products irrigated with reclaimed water and placed on the Internal Market; this category of risk includes those to health of animals consuming crops irrigated with reclaimed water; -the health risks to humans exposed to reclaimed water (workers, bystanders and residents in nearby communities) and risks to the local environment (surface waters and groundwaters, soil and depending ecosystems). Figure 5: Health and environmental risks associated with water reuse in irrigation in the EU Currently only 5 Member States (Cyprus, Greece, Spain, France and Italy) have developed legislation that sets specific requirements on the reuse of waste water; Portugal has developed non-regulatory standards on water quality. Some other Member States are interested in enabling more reuse of water, but are wary of public perceptions seeing this as a "dirty" technique and so are reluctant to take the initiative on their own to develop a legislative framework. Informally, a number of Member States have indicated an interest in having such a framework, and await to see it developed at European level as announced in the Blueprint as it would be seen as having more standing. Furthermore, whilst 60% of river basins are international, so far, rather countries that do not share river basins as well as those suffering most from water stress have developed their own frameworks. In the Member States currently with requirements, these vary significantly in their level of stringency as illustrated in Figure 6; none of these national requirements are the same. While there are local specificities, Figure 6 shows that different national approaches and methodologies have been used to arrive at defining requirements to protect consumers' health. In addition to these quality standards to address the potential health risks for consumers, some Member States also apply to some extent a risk assessment approach (see Annex 6 – Overview of MS requirements), however, environmental risks are not addressed adequately and consistently in these existing frameworks. It is to be noted that a risk assessment approach has been introduced on a voluntary basis in the amendment of the Annex of the Drinking Water Directive in 2015 and some Member States (Hungary, the Netherlands and the United Kingdom) have implemented it. The Commission's proposal for a Recast of the Drinking Water Directive introduces the risk assessment approach on a compulsory basis. This means that the same type of food product (e.g. a tomato), depending on where in Europe it is grown, faces very diverging requirements as to the kind of reclaimed water allowed for irrigation. Nevertheless, these tomatoes are traded across borders in different Member States and are consumed throughout Europe. There is a lack of clarity on how food products are irrigated, resulting in a health risk perception in large parts of the population / consumers / the general public as confirmed by the public consultation outcome (see Annex 2). Figure 6: Differences in maximum limit values for selected parameters considered in national quality requirements for water reuse Parameters Cyprus France Greece Italy Portugal Spain E coli (cfu/100ml) 5-103 250-105 5-200 10 - 0-10,000 Faecal coliforms - - - - 100-104 - TSS 10-30 15 2-35 10 60 5-35 Turbidity (NTU) - - 2-no limit - - 1-15 Biochemical oxygen demand (BOD 5) (mg/l) 10-70 - 10-25 20 - - Chemical oxygen demand (COD) (mg-l) 70 60 - 100 - - Total nitrogen (mg/l) 15 - 30 15 - 10 Source: Reproduced from JRC, 2014. ‘-‘indicates that there is no value set for the parameter in the national legislation Moreover, there is a risk for the health of workers: those working on farms and workers in the reclaimed water industry. While the workers may be exposed to potential contaminants over longer periods than the public, the risks are not necessarily higher due to better awareness and the implementation of risk control measures (e.g. protective equipment). The literature does not report cases of occupational diseases caused by exposure to treated waste water (BIO, 2015). However, general statistics show that there is an increasing trend occurrence of one or more work-related health problems in the sector of agriculture, hunting and forestry, namely 8% of the workforce in 2007 compared to 5% of the workforce in 1999. In conclusion, even the few existing national quality requirements only attempt to address the health risks to consumers, the second category of risks depicted in Figure 5 (health risks to humans exposed to reclaimed water and risks to the local environment) are not being addressed in an adequate manner. Therefore, in the Member States where no quality requirements for water reuse are in place, there is a lack of clarity in the regulatory framework to manage health and environmental risks that need to be taken into account when issuing permits for reuse projects. However, in Member States that have set such requirements, especially in terms of management practice, stakeholders say that in practice the conditions are difficult to implement (e.g. conditions on wind force or access control) or too stringent considering the intended use. This also means that investors find diverging conditions to invest into water reuse production or technology development across Europe, even as regards its use in growing the same type of product, e.g. a tomato. According to the United Nations World Water Development Report 2017, the absence of suitable legal and regulatory frameworks is a critical barrier, creating market uncertainties and discouraging investment into water reuse. This is particularly true as regards irrigation in the EU for which:

·some national legislation requires water quality similar to drinking water whatever the sensitivity of the crop and associated risks are; ·other sources of water used for irrigation (e.g. rivers, private wells) are not subject to mandatory quality requirements. 1.3.3.Factor 3 – Possible trade barriers, i.e. trade bans for food products irrigated with reclaimed water As identified in the second public consultation, stakeholders in the agriculture sector and the food industry are concerned about potential trade barriers for agricultural goods irrigated with reclaimed water and put on the Internal Market. The Internal Market issue is already significant. In 2015, the EU internal trade flows for fruits and vegetables was seven times bigger in terms of value than external trade: EUR 33.4 billion vs EUR 4.7 billion. Farmers thus depend crucially on intra-EU trade and will not use reused waste water as a source for irrigation unless they know they will be able to sell their products on the Internal Market. The current regulatory framework does not provide a way of demonstrating credibly that risks are properly managed across the Internal Market. The most extreme form of such a trade barrier would be in the form of a trade ban, when a Member State bans the imports from another Member State of a certain agricultural product irrigated with reclaimed water. This situation arises from diverging regulatory frameworks in place in the different Member States, and also from a certain distrust about safety of reclaimed water (see also the section below). The one case that such trade barriers have been formally imposed within Europe for European producers, was the case of accusations in 2011 regarding possibly contaminated cucumbers from Spain as the cause of a deadly E. coli outbreak (see Box 1 for details). This risk of a trade barrier is considered as an actual and critical risk by a vast majority of stakeholders as shown in particular by the results of the second public consultation, see Annex 2. Furthermore, some studies suggest that farmers might face market restrictions due to requirements from certification bodies, e.g. Quality Safety Association (QSGmbH) for fruits, vegetables, and potatoes that are irrigated with treated waste water. In addition, some Member States have on several occasions raised the issue of potential market restrictions of agricultural products irrigated with treated waste water, applied by retailers and/or supermarkets. In other words, perceptions about water reuse are claimed to lead some retailers to disadvantage agricultural goods irrigated with reused water. The Internal Market issue is triggered partially by the problem of low public acceptance. Box 1: E.coli outbreak and accusations regarding cucumbers from Spain in 2011 The case of the E.coli outbreaks which affected 16 countries in Europe and North America in 2011, with more than 4000 reported cases and 53 deaths in Germany, is an example of this situation. The outbreak was blamed on cucumbers irrigated with treated wastewater imported from Spain and several Member States, including Austria, Belgium, the Czech Republic, Denmark, Germany and the UK blocked or restricted the import of Spanish products over concerns that these would have been contaminated during irrigation. It was subsequently proven that the source of the E.coli contamination was not the cucumbers but rather sprouted seeds from a German farm, and the fenugreek seeds involved were sourced from Egypt . It was estimated that this event cost Spain EUR 200 million per week as orders were cancelled and contributed to cut agricultural income from the Murcia region by 11.3 percent for the 2010-2011 growing season . This has been deterring investment in processing food products irrigated with reclaimed water. 1.3.4.Factor 4 – Reuse perceived as more risky than beneficial There are several risks associated with water reuse as shown in chapter 1.3.2. No evidence so far could be found of significant pollution/contamination at large scale due to present practices of wastewater reuse in the EU. However, as identified in the Impact Assessment of the Blueprint and confirmed in further consultations on water reuse, there is low public acceptance of reuse solutions and even strong opposition to allowing reclaimed water as a source for drinking water. This is due to misconceptions on what ‘reclaimed water’ means and a lack of knowledge about actual health and environmental risks. The absence of a clear regulatory framework is also seen as a cause for a lack of confidence in the health and environmental safety of water reuse practices. There are existing regulatory standards concerning agricultural product safety, however, they do not explicitly regulate requirements for treated waste water for agricultural irrigation, hence there is still a sense of unease amongst consumers about food that has been irrigated with reused water. Findings from the literature on the acceptability of water reuse amongst producers and consumers are mixed. There are many factors which play a role in its acceptance, the most important of which are the extent of “disgust” over the concept, the use for which recycled water is intended, perceptions of risk from recycled water, the sources of recycled water, choice between recycled and fresh water, trust of authorities and knowledge, attitudes towards the environment, the cost of recycled water and sociodemographic factors (Po et al., 2004). Furthermore, the degree of public acceptance is affected by many factors including the political context of a country (Marks, 2005), local history, the recycling terminology used with the public, the degree of public involvement in strategy development, the threat of alternatives, such as dams, river development or ocean outfall, the degree to which potable recycling is pushed as the primary option, the “not in my backyard” phenomenon, the degree and nature of education provided (Queensland Government, 1999). The perceptions of risks from the water reuse related to health, foremost among peoples' worries are the safety of their children (Sydney Water, 1999). Water recycling can be more easily accepted in areas with water shortages (Dishman et al., 1989). The acceptability of recycled water decreases as the use moves from public areas (e.g. irrigation of parks) to house (gardening) or to more personal uses, due to risk perception (ACIL Tasman, 2005; Hurlimann, 2005). Socio-demographic factors appear to provide important information as to which demographic groups are most likely to accept recycled water usage. McKay and Hurlimann (2003) predicted that the greatest opposition to water reuse schemes would be from people aged 50 years and over. Such findings on age are also reported by Tsagarakis and Georgantzis (2003) who also found that educated people were more willing to use recycled water. At the same time both the general public and regulators appear to be insufficiently aware of the benefits of water reuse. In addition to the most obvious benefits (mitigation of economic risks related to water scarcity, conservation of the aquatic environment, cost savings for utilities), there are a host of indirect benefits that stakeholders seem rather unaware of (e.g. energy and carbon savings, reduced costs and environmental impacts associated with synthetic fertilisers, local economic development). The second public consultation provided evidence for the lack of consumers' trust in water reuse as it identified this phenomenon as one of the most significant barriers (85% of the respondents perceived this barrier as at least medium and 63% as high). At the same time a large majority of respondents considered that treated wastewater is at least as safe as river water as a source of water for agricultural irrigation or for aquifer recharge (30% even considered it safer; see Annex 2). Furthermore, results of the second open public consultation demonstrate a significantly larger share of respondents from Southern EU Member States consider reused water as at least as safe, independently from the source of water it is compared with. ·In comparison to groundwater: 65% of respondents from Southern EU Member States also consider reused water as at least as safe, while 70% of respondents from Northern and Eastern EU Member States consider reused water as less safe than groundwater, ·In comparison to rivers: 80% of respondents from Southern EU Member States perceive reused water as at least as safe (with half of them considering it even safer), compared to 55% of respondents from Northern EU and only a third of respondents from Eastern EU Member States. There is larger consensus between respondents from Northern and Eastern EU Member States about the opinion that reused water was less safe than groundwater, in comparison to water sourced from rivers, which remains more controversial within each of these EU regions (see Annex 2).

Figure 7: Safety perception – comparison between Southern EU, Northern EU and Eastern EU Member States in the reuse of water for agricultural irrigation As a result, this information failure leads to reluctance to consider reuse as an alternative water supply option when relevant and cost-efficient. The Impact Assessment of the Blueprint already identified this issue as well as the opportunity to develop awareness raising campaigns and advisory services. A number of actions committed by the Commission in the Circular Economy Action Plan (e.g. promotion of safe and cost-effective water reuse, including support to research in further characterisation of emerging risks and to innovation with demonstration projects) and a communication campaign are expected to improve the provision of reliable information and rectify misperceptions of benefits and actual risks by stakeholders and citizens. Additionally, studies show that public trust in water reuse is strongly affected by personal experiences and trust in water reuse organisations and regulatory authorities ; it is in general specific to the local situation of water resources and management and better addressed at Member State level. Complementary to the above actions, there are ongoing national or local information campaigns that inform about the water reuse practice, e.g. in Spain, when a park is irrigated with treated waste water the relevant information is available to the public at the park entrance. This information failure will not be addressed in this initiative, apart from providing information to the public on water reuse. However the absence of a clear regulatory framework is addressed, which is an underlying driver and a cause of this lack of confidence in the health and environmental safety of water reuse practices. 1.4.How will the problem evolve, all things being equal? The current situation and future projections for water availability are set out in section 1.1 above; while water stress is present in many parts of Europe already today, the past trends in water scarcity are expected to increase in frequency and intensity of droughts and their environmental and economic damages are expected to continue. This later trend is mainly due to climate change. At the same time, the current state of a mix of absent and un-coordinated national legislation and approaches would continue, resulting in the continuation of related barriers and little incentive to apply water reuse. An improved implementation of the existing EU water policy framework, especially as regards water pricing and control of abstractions, could positively influence the uptake of water reuse, however, very likely much below its potential for development and benefits to the economy and the environment (BIO 2015). According to the Blueprint, which was based on the 2009 River Basin Management Plans, only 49% of these Plans intend to change the water pricing system to foster a more efficient use of water. The barriers to water reuse related to inadequate water pricing are therefore unlikely to change significantly. It is likely that additional Member States would adopt their own water reuse standards in the near future (e.g. Malta already has plans to develop its own standards). In those Member States, such new standards are expected to provide more clarity to the stakeholders on the required measures to manage health and environmental risks associated with water reuse. However, in the absence of further EU action specific to water reuse, uncertainty on how to apply the existing EU water legislation to manage risks of water reuse projects would persist in the other Member States, while in the countries with the highest stringency of water reuse standards (France and Italy), the situation is likely to remain unchanged in future years, i.e. very few new water reuse projects. Water reuse technologies are evolving relatively quickly, therefore a number of the technical barriers identified are likely to be solved within the next ten years, either as a result of research and development work conducted by the water industry or of publicly funded research programmes. The evaluation and management of risks associated with emerging pollutants is, however, a very complex issue and may require more significant efforts. Finally, it is unlikely that national regulators can co-ordinate a harmonisation of their regulatory requirements. A risk of potential trade barriers for food products irrigated with reclaimed water would continue to persist hand in hand with the low public acceptance of water reuse solutions. Consequently, the problem of the low uptake of water reuse would intensify, and in particular in areas of Europe where water scarcity increases (see projections of water scarcity in Section 1.1). 1.5.Who is affected and how? The currently limited uptake of water reuse affects in particular the environment, economic sectors, national/regional/local authorities, and European citizens and consumers. Concerning the environment, increasing trends in water scarcity exacerbated by climate change together with a low uptake of water reuse affect water resources which are over-exploited by abstractions, in particular for irrigation, and also water-dependant ecosystems which are not left with the necessary amount for them to thrive. In particular, coastal areas of water-scarce regions where treatment plants discharge their effluents to the sea are affected by the wastage of limited freshwater resources. However, it has to be stressed that discharge of treated waste water to rivers can be a major component of river flows in dry seasons, up to 80% in extreme cases (Drewes, 2017). In these cases reuse can also result in reducing the flow beyond critical limits and have a negative impact on the river and associated ecosystems, despite the fact that unplanned reuse takes already place de facto. The quality of water resources is also affected by unnecessary discharge of nutrients into rivers. In addition, the removal of nutrient in treatment plants, even though it is necessary in sensitive areas to prevent eutrophication of water resources, is energy intensive, hence resulting in higher GHG emissions and the same holds true for the production of chemical fertilizers for agriculture. The lack of a consistent methodology to apply the risk assessment approach results in a potential deterioration of the environment due to potential contamination of soils with metals, CECs, etc. These environmental impacts clearly have a local dimension, however, 60% of the EU's rivers run across borders of Member States (and non-Member States). If waters are low in an upstream Member State, less water will reach any downstream Member State. Action taken by a single or few Member States is therefore not sufficient in relation to quantitative aspects of water management and so these environmental problems can be cross border. A number of economic sectors are highly dependent on water supply, in terms of availability and quality, such as agriculture (see also Annex 3a SME test), the food industry, the power generation industry (e.g. for cooling processes and hydropower), tourism and the recreational industry (e.g. golf courses), chemical, textile, pulp and paper industries and mining. A lack of water reuse in the regions affected by water scarcity and related restrictions, e.g. bans to use freshwater for certain types of uses like agricultural irrigation, both negatively affect their production and increase costs. The water industry and their technology providers are affected through foregone business opportunities in the area of treated waste water reuse. These opportunities appear large as the global market for water reuse is expected (Global Water Intelligence, 2015) to be fast-growing in the coming years. Between 2011 and 2018 capital expenditure on advanced water re-use was estimated to have grown at a compound annual rate of 20% as the global installed capacity of high quality water re-use plants grows from 7 km³/year to 26 km³/year. The limited uptake of water reuse technology negatively impacts the potential for further innovation, demonstration and market development for innovative technological and non-technological (organisational, managerial, governance) solutions for water reuse whose market uptake can be negatively affected by the present legislative framework. From the perspective of National/regional/local public authorities, as alternative supply options are generally more costly (considering both capital and operating costs, see Figure 8), the limited development of water reuse tends to render more costly the reduction of water scarcity and implementation of the River Basin Management Plans. It also represents missed cost saving opportunities, e.g. by reducing drinking water supply production needs and associated costs. Figure 8: Cost comparison of different water scarcity solutions

For European citizens and society at large, the inefficient management of water resources results in reduced water availability which, in areas of water scarcity and drought, has a direct negative impact upon the EU economy and citizens. The free movement of safe and wholesome food is an essential aspect of the Internal Market and contributes significantly to the health and well-being of citizens, and to their social and economic interests. When there are important differences in relation to concepts, principles and procedures between the water reuse laws of the Member States, these differences may impede the free movement of agricultural products irrigated with reused treated wastewater (see above Box 1 on the E. Coli outbreak), create unequal conditions of competition, and may thereby directly affect the functioning of the Internal Market. Furthermore, a 1% increase in the area affected by drought can slow a country’s gross domestic product (GDP) growth by 2.7% per year (Brown et al., 2013). For consumers, the lack of European minimum requirements for water reuse leads to mistrust and misunderstanding about how agricultural products are irrigated and whether they are safe if irrigated with reclaimed water. 2.Why should the EU act? The problem this initiative sets out to address is relevant at EU-level, as concluded in the analysis in section 1 above. With this initiative, EU action would aim at enabling a cost-effective waste water reuse for agriculture, while ensuring a high level of protection of health and the environment and contributing to the well-functioning of the Internal Market. Thereby, the main problem drivers (diverging requirements in Member States, resulting in potential trade barriers for agricultural products irrigated with reclaimed water, as set out in the problem definition, section 1.3) would be addressed. Acting now by putting in place an EU-level enabling framework would allow contributing to alleviating water stress where it is already an important reality today in the EU and preparing operators and farmers to be ready to act also in those parts of the EU which are expected to experience increasing water stress in the coming years and decades, thereby helping prevent the situation from deteriorating. 2.1.Competence The EU competence to take action on water management derives from Article 191 of the Treaty on the Functioning of the European Union related to the protection of the environment: “Union policy on the environment shall contribute to pursuit of the following objectives: ·preserving, protecting and improving the quality of the environment, ·protecting human health, ·prudent and rational utilisation of natural resources, ·promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change.”. Since in particular environmental risks of water reuse are not addressed by the Member States, and there is a clear EU dimension to these risks, moreover the issues at stake are directly related to the inefficient use of a natural resource and adapting to climate change, the legal basis for a possible new EU legal instrument would therefore be Art. 191. In addition, the EU competence to take action on safety of agricultural products irrigated with reclaimed water is linked to Article 169 of the Treaty on the Functioning of the European Union related to consumer protection: "1. In order to promote the interests of consumers and to ensure a high level of consumer protection, the Union shall contribute to protecting the health, safety and economic interests of consumers, as well as to promoting their right to information, education and to organise themselves in order to safeguard their interests. 2. The Union shall contribute to the attainment of the objectives referred to in paragraph 1 through: (a) measures adopted pursuant to Article 114 in the context of the completion of the internal market; […]" This initiative is also expected to contribute to the free movement of goods in the Internal Market.

2.2.Subsidiarity Any new EU initiative on water reuse needs to comply with the principles of proportionality, taking due account of subsidiarity considerations. Concerning environmental protection, EU-level action on water management is also justified because 60% of EU river basins are international, shared by between 2 and 19 countries (Danube); action taken by a single or few Member States is therefore not sufficient, for instance in relation to quantitative aspects of water management and cross border water pollution. Moreover, if Member States act alone, the technical barriers to water reuse and associated costs are likely to be unnecessarily high. EU intervention on water reuse in particular for agricultural irrigation is justified to prevent that different requirements in individual jurisdictions negatively affect the level playing field (e.g. between farmers and growers) and cause obstacles to the Internal Market, especially for primary agricultural products. Additionally, different requirements may also be used as an argument to restrict the import of food products from Member States suspected of having lower requirements, as exemplified in the E. Coli outbreak mentioned above (see Box 1). The current situation does not guarantee a level playing field between food producers of different countries; the current EU regulatory framework does not yet address the specific modalities of agricultural products irrigated with treated waste water. Addressing such barriers is an appropriate EU level response, taking into account EU food safety, health, agriculture and energy policies. EU action is further justified because different and changing requirements in individual jurisdictions are a barrier to the creation of a level playing field for investments in innovation and for water reuse. It is unlikely that national regulators can coordinate a harmonisation of their regulatory requirements as the number of Member States involved is too large and increasing. The present document seeks to address the overall problem of a too limited application of water reuse resulting in a suboptimal contribution to alleviating water scarcity and analyses the modalities of creating an enabling framework for increasing the uptake of water reuse for agricultural irrigation. Therefore as already defined by the Blueprint in 2012 in order to ensure the safety of water reuse practises minimum requirements are developed, which would need to be met if water reuse was practised in a Member State. Given the environmental legal basis of a potential future instrument on water reuse, the instrument would allow those Member States with more stringent national standards than the EU minimum level to keep them in place or those wishing to introduce higher national standards to do so. In this context, at the practical level, it should be noted that the proposed EU minimum criteria have been developed together with Member States, stakeholders and the scientific community over the past years and are broadly supported. It is worth noting that in addition to the targeted discussions between the Commission, Member States and stakeholders over the past years, also the public consultation activities showed strong support for EU measures. In the first public consultation this was considered by almost all of those who expressed an opinion as a legitimate component of EU action. More than 90% of respondents from Member States with quality requirements for water reuse indicated that legally binding EU level minimum requirements would be effective or very effective for ensuring environmental and health safety of water reuse. The second public consultation confirmed a very strong support to defining minimum requirements for water reuse in agricultural irrigation and aquifer recharge, going much beyond Member States and stakeholders in regions where this is currently a developed practice (see Annex 2). A proportionality analysis of potential EU action on aquifer recharge demonstrates that there is a clear local relevance of this practice, with a very limited cross-border dimension across the EU territory. In addition, the Internal Market dimension which has been identified as a crucial aspect for agricultural irrigation is lacking in the case of aquifer recharge. Finally, the conclusions of the JRC technical report suggest that no minimum requirements at EU level could be developed (see Annex 7). On this basis, this analysis leads to the conclusion that an EU intervention would not be proportionate. The development of an EU Guidance is proposed, however, legally binding intervention in this area should remain the competence of the Member States. A more detailed analysis is included in Annex 11. 3.Objectives – what should be achieved? 3.1.General objective The general objective is to contribute to alleviating water scarcity across the EU, in the context of adaptation to climate change, by increasing the uptake of water reuse for agricultural irrigation wherever this is relevant and cost-effective while ensuring the maintenance of a high level of public health and environmental protection. This general objective corresponds to the overall problem which motivates this initiative (see section 1.2). Clearly, water reuse will not by itself solve water scarcity, but the purpose of this initiative is to make sure that it can be more widely used and is safe. This general objective is fully in accordance with the 7th Environmental Action Programme and, at the global level, the United Nations’ 2030 Agenda for sustainable development and the achievement of the sustainable development goal n°6 "Ensure access to water and sanitation for all", in particular as regards the two following targets: ·By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally; ·By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity. 3.2.Specific objectives The specific objectives aim at managing water resources more efficiently through creating an enabling framework for and establishing a common approach to water reuse in agricultural irrigation across the EU. They relate to the concrete factors 2 and 3 that together drive the overall problem (see section 1.2). The goal is to promote water reuse as one of a range of measures to alleviate abstraction pressure on vulnerable water resources in the context of adaptation to climate change and integrated water management by setting a common methodology so as: ·To ensure that water reuse practices in the EU are safe both to health and the environment; ·To promote water reuse as a way of providing a secure source of water for irrigation where it is economically advantageous to do so; ·To provide clarity, coherence and predictability to market operators who wish to invest in treated wastewater reuse in the EU under comparable regulatory conditions;

·To stimulate business and innovation in water reuse by EU companies for internal and external markets; ·To provide clarity and confidence to consumers regarding safety of agricultural products irrigated with reclaimed water within the EU; ·To prevent trade barriers for agricultural primary products irrigated with reclaimed water within the EU and thereby facilitating the free flow of agricultural goods. There are strong inter-linkages between the environmental, trade and public health elements of the objectives. In particular the Internal Market component is a key element of the initiative and a key to its success. Farmers depend crucially on intra-EU trade and will not use reused waste water as a source for irrigation unless they are confident that they will be able to sell their products. 3.3.Operational objectives The operational objectives are to define common minimum quality requirements for reused water for agricultural irrigation together with a risk assessment framework, complementing existing agricultural product safety standards, which ensure maintenance of a high level of protection and address the risks of water reuse to: ·consumers of agricultural products irrigated with reclaimed water, ·workers and other public exposed to reclaimed water, ·the environment, in particular water resources and dependent ecosystems and soils. These objectives are strongly supported by the public. Respondents to the second open public consultation considered that specific objectives to be addressed by EU minimum quality requirements for water reuse in agricultural irrigation should be safety of agricultural products placed on the EU market (87% of respondents), protection of water resources and dependent ecosystems (80%), protection of human health of public directly exposed to reclaimed water (75%), protection of wider environment (75%). Other objectives, such as protection of agricultural productivity are by far less supported (see Annex 2). Such a policy would complement and be coherent (not lowering the applicable levels of environmental protection) with the existing EU legislative framework on: ·water, notably the WFD, the Groundwater Directive, the Nitrates Directive, the Environmental Quality Standards Directive (EQS) and the UWWTD, ·food safety, notably the Regulation on the Hygiene of Foodstuffs. 4.Policy Options 4.1.Baseline – “No new EU action” Under the baseline, the EU would not develop any new regulatory or non-regulatory action specific to water reuse. Consequently, the current state of a mix of absent and un-coordinated national legislation and approaches would persist. The barriers to and lack of proper incentives for water reuse, as described in the problem definition, would largely remain in place, as well as a potential risk of trade barriers to agricultural products irrigated with treated waste water. This scenario includes, however, a number of actions to improve the implementation and enforcement of existing legislation on water that will be taken independently of the initiative assessed in this Impact Assessment since they are not specific to water reuse (especially as regards water pricing and control of abstractions). Furthermore, a series of non-regulatory actions to promote safe and cost-effective water reuse in 2016-2017 are committed by the Commission in the Circular Economy Action Plan . These actions aim at improving implementation and enforcement of existing legislation with a specific focus on water reuse. They include Guidance on the integration of water reuse in water planning and management (adopted in June 2016), improved consideration for water reuse in the industry in relevant Best Available Techniques Reference documents (BREFs ), and increased visibility for support to innovation (through European Framework Programmes and R&I networks) and investments (e.g. European Structural and Investment Funds). The baseline will serve as benchmark for the other policy options defined in this section.

4.2.Design of policy options This Impact Assessment assesses policy options for agricultural irrigation (Ir), as set out in section 2 above. All policy options directly translate the set of specific objectives of this initiative, as set out in section 2.2 above, into a concrete operational instrument for their attainment. They are all designed to establish comparable regulatory conditions for water reuse projects across the EU and to ensure the maintenance of a high level of public health and environmental protection (see section 3 above), as well as contributing to the proper functioning of the Internal Market by setting minimum requirements. The policy options considered do not set any mandatory waste water reuse targets; the aim is, therefore, to develop an instrument that would enable uptake of treated waste water reuse across the Member States if and when they decide to adopt such a practice. All options define a common methodology so as to address the two categories of risks described in the problem definition and Figure 5, in the following way: 1)The health risks to consumers of agricultural products irrigated with reclaimed water: These are translated in the options into minimum quality requirements in form of standards and 2)The risks to the local environment (surface waters and groundwater, soil and depending ecosystems) and to humans (workers, bystanders and residents in nearby communities) exposed to reclaimed water: these are translated in the options into minimum quality requirement in the form of a Risk Management Framework. These two categories of risks are different in nature; however, the policy options propose to address them together in setting minimum quality requirements for water reuse for agricultural irrigation. The variation in the policy options considers the level of stringency of the minimum quality requirements for the safety of agricultural products ('one-size-fits-all' or 'fit-for-purpose') and legislative nature of the proposal (mandatory legal instrument versus voluntary guidance (see for details chapter 4.2.2). All policy options considered include the Risk Management Framework as the only means to address the risks to the local environment and to humans exposed to reclaimed water (see for details chapter 4.2.3). The options for analysis assume either a new EU legal instrument or an EU-level Guidance. The consideration of the latter non-regulatory approach has been based on thorough consultations with Member-States and stakeholders, and taking into account the recently published Guidance related to the Regulation on the Hygiene of Foodstuffs and international practice. While the mandatory legal instrument (option Ir1 and Ir2) would include only the Key Risk Management Principles as compulsory and an accompanying Guidance would be elaborated with Member States to provide details on the practical application, option Ir3 would include a full Risk Management Framework. These different combinations are summarised below in Figure 9. Figure 9: Policy options analysed Options Description Baseline No new EU action Policy options for agricultural irrigation Ir1 Legal instrument ensuring safety of agricultural products with a "one-size-fits-all" approach (the most stringent minimum quality requirements set regardless of the food crop category and irrigation technique) and protection of local public health and of the environment (the Key Risk Management Framework Principles) - an accompanying Guidance on the implementation of the Key Risk Management Principles to be elaborated together with MS Ir2 Legal instrument ensuring safety of agricultural products with a "fit-for-purpose" approach (minimum quality requirements set depending on the food crop category and irrigation technique) and protection of local public health and of the environment (the Key Risk Management Framework Principles) - an accompanying Guidance on the implementation of the Key Risk Management Principles to be elaborated together with MS Ir3 Guidance document on safety of agricultural products with a "fit-for-purpose" approach (minimum quality requirements set depending on the food crop category and irrigation technique) and protection of local public health and of the environment (the Risk Management Framework) 4.2.1.Minimum quality requirements for water reuse to ensure health safety of agricultural products irrigated with treated waste waterm which are placed on the Internal Market The current EU regulatory framework does not yet in particular address agricultural products irrigated with treated waste water, apart from the limited voluntary requirements set in the Guidance on the Hygiene of Foodstuffs. Potential trade barriers of agricultural products irrigated with reused water are associated with claims and perceptions of health risks to their consumers. The prevention of undue use of trade bans within the EU calls for common requirements set at EU level on the quality of reclaimed water, designed to ensure the safety of the relevant consumer products throughout Europe. This requires a legal instrument setting: ·Minimum quality parameters for water to be reused; ·Monitoring frequencies for these parameters; ·Limit values for these parameters to be complied with at the outlet of the (advanced) treatment plant. The definition of quality parameters (and their associated limit values and monitoring frequencies) can follow two approaches resulting in a different stringency level. This can be captured in two alternative approaches which can be included in the policy options, the "one-size-fits-all" and the "fit-for-purpose" approach, further detailed below. → Justification of the stringency of the quality criteria The JRC report included in Annex 7, namely Tables 2, 3, 4 and 5, defines technical parameters on water quality which need to be respected to a certain minimum level in case treated waste water is reused for the purposes of agricultural irrigation. These minimum requirements were developed in a comprehensive and inclusive process involving Member States and stakeholder experts as well as the scientific community. During the development of the proposal, a tiered approach for consultation was applied by the JRC. In the first tier, the JRC invited a group of selected experts from academia, the water sector and WHO to provide input and comments on the drafting work. In a second tier, Member States were formally informed through the CIS Ad-hoc Task Group on Water Reuse and their comments were taken into account. In the third tier, the specifically requested scientific opinions of the independent Scientific Committee on Health, Environmental and Emerging Risks (SCHEER) and the European Food Safety Authority (EFSA) have been taken into consideration. Wherever the approach diverges from their advice, a justification has been provided. Experts have been consulted to provide comments and input through critical discussion on the JRC document along the process. The internationally widely accepted approach to develop minimum quality requirements for the safe use of reclaimed water for agricultural irrigation and aquifer recharge is the risk management framework, as recommended by the World Health Organization WHO (2006). These guidelines inter alia establish the level of “tolerable risk” of incurring a disease through water consumption, which has been the basis for standards defined in the Drinking Water Directive (98/83/EC amended by Directive 2015/1787). This risk management framework is already applied in the water acquis; it is included in the Drinking Water Directive (Directive 2015/1787 that amends Directive 98/83/EC on the quality of water intended for human consumption). Although the management of health risks is context-specific, the WHO guidelines consider that the overall levels of health protection should be comparable for different water-related exposures. Consequently, this “tolerable risk level” has also been taken into account for JRC’s definition of the technical parameters reflecting the minimum quality requirements on reclaimed water used in agricultural irrigation (detailed information in Annex 7, in section 4.3.1 and the technical background in section 4.4.2). Annex 7 also provides an account of then monitoring requirements as well as of the exclusion of compounds of emerging concern and the sensitivity analysis. It is important to note that no risk assessment has been performed specifically for the establishment of the minimum quality requirements and that the JRC bases its proposal on the validity of the risk assessment conducted by the reference documents taken into consideration, namely the Australian Guidelines for Water Recycling being internationally accepted as a key reference also for the specific EU situation. 4.2.1.1."One-size-fits-all" approach

This approach requires the same quality for any reclaimed water to be used for irrigation of agricultural products. It responds to the perceived health and environmental risks with the most stringent approach without distinguishing between different needs of food crops and irrigation technique. This approach implies that the required water quality has to be the most stringent in order to prevent any risks of contamination even in the worst-case scenario. This approach is the one adopted in the Italian legislation. This option is based on the quality requirements, as detailed in Annex 7 for the most critical situation (quality class A - food crops consumed raw produced with sprinkling irrigation). 4.2.1.2."Fit-for-purpose" approach This approach consists in setting reclaimed water quality requirements that will provide the appropriate level of safety for the crop to be irrigated. It considers contamination pathways from irrigation water to the agricultural products, i.e. to which extent contaminants potentially present in the treated effluent are likely to be transferred to the crop and eventually to affect the consumer of the product. These contamination pathways differ according to crop types and to irrigation methods. Indeed, several factors linked to the use of water in agriculture may influence the risk of microbial contamination of the crops, such as: source of water; type of irrigation (drip, sprinkler irrigation, etc.); whether the edible portion of the crops has direct contact with irrigation water; application of a water treatment by the grower; the timing of irrigation in relation to harvesting; possible access of animals to the source; etc. Water of inadequate quality has the potential to be a direct source of contamination and a vehicle for spreading localised contamination in the field, facility, or during transport. Wherever water comes in contact with fresh produce, its quality impacts the potential for pathogen contamination. In particular, food crops more or less consumed raw (e.g. tomatoes, strawberries) require a more stringent water quality to avoid microbial contamination (e.g. strawberries) than food crops which will be cooked (e.g. potatoes) or crops which are not intended for human consumption (e.g. pastures or energy crops). Similarly, irrigation methods interfere in this contamination pathway as e.g. drip irrigation in orchards does not entail a direct contact of irrigation water with fruits in contrast to sprinkling irrigation. This approach is the one adopted in most of the existing regulations in Member States and international guidelines. This option, like the other options entailing setting some form of minimum quality requirements, is based on the JRC technical report (Annex 7) that was developed to set minimum quality requirements for water reuse. All options would result in a common methodology with minimum quality requirements differentiated against crop categories and irrigation methods; detailed provisions of the options would be developed on this technical basis. 4.2.1.3.Implementation of the requirements Under both approaches, quality requirements would complement, but not decrease, the ones laid down by the existing legislation, in particular the UWWTD and relevant European Case-Law in particular as regards the quality of discharge effluents. Regardless of the approach chosen, also when complying with the proposal (either legal instrument or Guidance), reclaimed water at the outlet of the treatment plant would need to respect the criteria of "clean water" as defined by the Regulation on the Hygiene of Foodstuffs (852/2004). So consistency with other relevant legislation is ensured in either approach. More information is provided in Annex 3. The proposal would define a common methodology and set minimum requirements, and any Member State (Member State B in Figure 10) could still adopt or retain more stringent legislation for water reuse in its territory. This proposal would contribute to the proper functioning of the Internal Market through the minimum harmonisation of the requirements and the methodology for undertaking the risk management. Consequently, no trade barriers could be feasible for food products irrigated with reclaimed water complying with the minimum requirements set by the proposal ( Figure 10). Figure 10: Trade of agricultural products irrigated with reclaimed water within the EU 4.2.1.4.Minimum requirements: regulated at EU-level or recommended by an EU Guidance document The EU can introduce the minimum requirements in a legal instrument rendering them compulsory to water reuse projects in the EU, or, alternatively, the Commission can develop a Guidance document recommending these minimum requirements for water reuse for irrigation based on the JRC technical report (Annex 7) and would suggest a "fit-for- purpose" approach on a voluntary basis. The Guidance document would build on the international guidelines and long experience developed in third countries (e.g. California, Australia, Israel, USA), and adapted to the specific context of the EU in terms of environmental and social conditions and legislation; in particular it would take stock of experience and best practices developed in the Member States. Such a Guidance document would be developed directly by the Commission, in consultation with Member States and stakeholders (CIS). 4.2.2.Minimum quality requirements to ensure protection of local public health and of the environment – Risk Management Framework Risks to humans exposed to reclaimed water (e.g. farmers, workers on the fields) and to the local environment are very specific to the local conditions and the design of the reuse scheme; they vary greatly both in their nature and extent according to: -Hazard, e.g. the quality of raw effluents discharged to the collecting system and entering the treatment plant, mixing with other irrigation sources of different quality, additional contamination during conveyance and storage; -Exposure, e.g. distance from crop to waterways (especially if these are sensitive areas) or to public spaces, irrigation method, crop type; -Vulnerability, e.g. to what extent ecosystems, soil and plants are sensitive to pollutants Because of their intrinsic site-specific nature, these risks cannot be addressed only with a generic set of minimum quality parameters valid for any reclaimed water to be used for agricultural irrigation in the EU. An effective management of these risks has to include a site-specific assessment of those risks, and this assessment would form the basis for the selection of the most appropriate mitigation measures, e.g. additional requirements necessary to ensure a high level of protection of human health and the environment. Despite potentially diverging additional requirements, the methodology to derive these would be harmonised at EU level, thus ensuring a consistent approach across the EU, hence providing ensurance for internal market operators. The implementation of such a risk management framework is already recommended in some Member States as well as numerous international guidelines and standards (e.g. by the World Health Organisation, the International Standardisation Organisation, the USA Environment Protection Agency). They have been developed in different socio-economic contexts and without taking into account the existing EU legislative acquis which already sets a number of requirements regarding the protection of the environment and health. Therefore, Annex 7 presents the key principles of such a risk management framework both consistent with these international guidelines and adapted to the European context. With a view to defining comprehensive policy options in this Impact Assessment, two approaches are considered regarding the implementation of such risk management framework:

-The key Risk Management Framework principles included in a legal instrument and thus made compulsory for operators and other relevant parties involved in water reuse for agricultural irrigation (e.g. competent authorities in Member States, treatment plant operator, farmers) and an accompanying Guidance that would be elaborated with Member States to provide details on the practical application of the key RMF principles; -The Risk Management Framework recommended in the form of an EU guidance document, based on the key RMF principles. 4.2.3.Key Risk Management Framework principles included in a legal instrument The first approach would consist of including the key principles of a risk management framework in a legal instrument, as part of the authorisation procedures and conditions of granting permits to any water reuse project in the EU (as described in Annex 3). The key principles would cover the different steps and operators of the water reuse system (urban waste water collection and treatment, additional treatment if any, distribution, storage if any and irrigation at farm level). In practice, the legal instrument would foresee that, before such a permit can be authorised, the applicant of the permit has to perform a thorough identification and assessment of risks specific to the project and its environment. Key requirements for this risk assessment would be laid down based on description of the risk management framework in Annex 7 (page 29). The legal instrument would foresee that water reuse projects in the EU are regulated within a risk management framework and would set the key principles to be complied with in the permitting procedure. However, competent authorities in the Member States will retain the responsibility of -Ensuring and checking that the risk assessment carried out by the applicant is appropriate considering the nature of the project and its environment, and -Reflecting the outcome of the risk assessment in the permit conditions. In order to ensure a common understanding on the detailed implications of the risk management framework and a consistent implementation across the EU, the Commission would develop a Guidance to translate the key principles into practise and to assist Member States in sharing experiences and best practices, in the existing framework of the Common Implementation Strategy for the WFD (CIS). 4.2.4.Risk Management Framework recommended by an EU Guidance document As an alternative to making the key risk management framework principles compulsory to water reuse projects in the EU, the Commission could develop a Guidance document on implementation of the full-fledged risk management framework in the existing framework of the Common Implementation Strategy for the WFD (CIS). The Guidance document would bu