EUROPEAN COMMISSION Brussels, 1.2.2018 SWD(2017) 449 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the quality of water intended for human consumption (recast) {COM(2017) 753 final}

{SWD(2017) 448 final}

{SWD(2017) 451 final}



Table of Contents 1.Introduction 1.1.Context 2.What is the problem and why is it a problem? 2.1.Specific problems related to the current DWD identified in the Evaluation 2.1.1.Regulatory failure - Outdated parameters 2.1.2.Regulatory failure - Outdated approach 2.1.3.Obstacle to internal market - Materials and products in contact with drinking water 2.1.4.Information failure 2.2.Part of the population has no access to drinking water- problem identified in the ECI 2.3.Ranking of the problems 3.Why should the EU Act 3.1.Right to act 3.2.Subsidiarity 4.What should be achieved 4.1.General policy objective 4.2.Specific objectives 5.What are the various options to achieve the objectives 5.0.Baseline scenario – How would the problem evolve?

5.0.1.Baseline assumptions 5.0.2.Expected baseline impacts on health 5.0.3.Expected baseline impacts on affordability of drinking water for EU citizens 5.1.Set of options to achieve Objective 1: Updating the list of parameters 5.2.Set of options to achieve Objective 2: Simplifying the approach 5.3.Option to achieve Objective 3: Removing obstacles to the internal market 5.4.Set of options to achieve Objective 4: Ensuring transparency and information to the consumer 5.5.Set of options to achieve Objective 5: Improving access to drinking water 5.6.Synopsis sets of options 5.6.1.Options not further pursued 6.Analysis of impacts 6.1.Health Impacts 6.1.1.Acute Health risks 6.1.2.Chronic health risks 6.1.3.Associated health benefits in monetary terms 6.2.Economic Impacts 6.2.1.Economic situation/baseline 6.2.2.Comparison of economic impacts of each option 6.2.3.Impacts on SMEs and on innovation 6.2.4.Macro-economic impacts

6.2.5.Impact on employment 6.3.Social Impacts 6.3.1.Affordability and social inclusion 6.4.Environmental impacts 6.4.1.Water Pollution 6.4.2.Resource efficiency 6.4.3.Energy 6.4.4.Bottled water 6.5.Administrative Burden Reduction Impacts 7.Comparison of options 7.1.Health Protection versus Costs 7.2.Ranking overall 7.3.Who will be affected? 7.4.Presentation of possible policy packages 8.Monitoring and evaluation 9.Annexes 9.1.Annex 1 Procedural information concerning the process to prepare the Impact Assessment report and related amendment 9.2.Annex 2 Synopsis report on the stakeholder consultation 9.3.Annex 3 Who will be affected by the preferred policy packages and how? 9.4 Annex 4 Development of the analytical model for the assessment of the options, underlying assumptions of the options and impacts assessed through application

9.5. Annex 5 Monitoring 9.6.Annex 6 Glossary 1.Introduction The revision of the Drinking Water Directive (DWD) is included in the Regulatory Fitness and Performance Programme ( REFIT ). The preceding REFIT evaluation contributed to identifying the strengths and weaknesses of the Directive. This Impact Assessment report builds on the evaluation results. It analyses several options aimed at updating and simplifying the Directive in order to ensure that its objectives can be reached in a more effective and efficient way. Furthermore, the revision is also one of the follow-up actions to the first successful European Citizens' Initiative Right2Water. 1.1.Context Safe drinking water is essential for public health and well-being. Defects in quality and quantity cause high social and economic costs. The DWD is the main piece of EU legislation in this regard. The DWD regulates the quality of water intended for human consumption. Its overall objective is to protect human health by ensuring that drinking water at the consumer tap is wholesome and clean. Drinking water in the EU stems from around 11 000 large water supplies and 85 000 small supplies serving around 80 % and 20 % of the population, respectively. EU legislation on drinking water has existed for about four decades. The original Directive was replaced in 1998 by the current DWD. The DWD provides a general framework and sets concrete minimum quality standards in the form of maximum parametric values. The Directive lists a total of 48 parameters that must be monitored regularly. If the standards are exceeded (non-compliance), remedial measures are required. The selection of those is left to the Member States' discretion. The DWD also requires that Member States ensure the provision of appropriate information to consumers. While the DWD regulates water quality at the consumer's tap, the EU Water Framework Directive (WFD) regulates the abstraction of drinking water and the protection of water bodies intended for this purpose. Article 7 of the WFD requires Member States to identify bodies of water for the abstraction of drinking water and to protect them, so that the treatment regime will result in drinking water which meets the DWD requirements. 2.What is the problem and why is it a problem? The EU has already achieved significant results through its efforts to ensure the provision of high drinking water quality. Before the changes to the DWD introduced in 1998, drinking water compliance with the majority of the parametric values was just over 90 %. In 1998, compliance rates rose on average to around 95 %, but varied between Member States. Recent data shows that compliance continued to increase, from 97 % in 2005 to over 99 % for most parameters, and compliance became more homogenous across the EU. The latest Implementation report based on around 30 million analyses shows sustained high compliance. The reporting results and the REFIT Evaluation confirmed that the Directive is well implemented in the Member States, and is generally achieving its objective of protecting human health from the adverse effects of contamination. The evaluation and the results of stakeholder consultations confirmed that the DWD is a relevant tool to ensure that the quality of the water consumed in the EU is good, and that it fulfils its basic purpose to enable the enforcement of drinking water monitoring and the restoration of quality to the required level in the event of non-compliance. However, the evaluation was subject to several limitations, most importantly that, although the compliance rates are high, it is difficult to establish whether the existing parameters adequately reflect all possible (including emerging) health risks. Stakeholders also argued that it is difficult to quantify the impact of the DWD on drinking water quality in comparison with other influences that might have led to improvements in drinking water quality. The evaluation concluded that the following four areas leave room for improvement and represent weaknesses of the current DWD: (1) the list of drinking water parameters and values has not been revised in the past 19 years, and could be partly not relevant anymore and not fully take account of changed or emerging pressures according to the latest scientific knowledge, (2) risk-based elements are not sufficiently considered in the DWD, (3) provisions related to materials in contact with drinking water constitute a burden and lead to non-recognition of such materials on the internal market, and (4) the availability of information to consumers is uneven, sometimes inadequate and insufficiently transparent. The results of the public consultation, and of targeted stakeholder consultations, confirmed the finding that, despite the generally good outcomes of the DWD implementation, some aspects of the Directive are in clear need of improvement. The four areas of improvement outlined above represent the main problems to be tackled. Additionally, the ECI 'Right2Water' identified as a distinct problem the fact that part of the population has no access to drinking water. Since the adoption of UN Agenda 2030, this problem is subject to EU Member States' obligation to implement Sustainable Development Goal (SDG) 6. Figure 1 depicts how these areas of improvement or problems are related to underlying drivers and what consequences they entail. 2.1.Specific problems related to the current DWD identified in the Evaluation 2.1.1.Regulatory failure - Outdated parameters

The list of parameters and values has not been revised in the past 19 years. The evaluation found, correspondingly, that although compliance with the existing parametric values is high, some are not relevant anymore, and they do not fully take account of changed or emerging pressures according to the latest scientific knowledge., The results of stakeholder consultations confirm that there is general agreement among Member States and industry experts that the parameter list is insufficient. This could mean that health risks are higher than currently accounted for. 2.1.2.Regulatory failure - Outdated approach The DWD method to regularly monitor water quality at the consumer's tap is not optimal as it is not comprehensive enough. This was underlined by some stakeholders, who raised the issue of risks to health from, e.g. legionella, which are currently not monitored. The DWD does neither require systematic preventive safety planning nor systematic risk assessments. Instead, the current DWD requires monitoring at regular intervals independent of the level of risk. Such an approach is outdated. Although the practice on the ground may in many, or the majority of the cases, be adequate, emerging risks might bypass the matrix of the current parameter list which constitutes a too uniform and generic monitoring approach. Furthermore, current requirements do not address the microbiologically-related challenges, such as legionella and somatic coliphages. Under these circumstances an EU level playing field is not ensured. The current approach also does not promote cost-effective source control measures, even though the prevention of water pollution at source generally has a very high cost-benefit ratio in comparison to water treatment. Therefore, the current approach has led to more treatment than needed, leading in turn to higher costs for consumers. Moreover, the current fixed monitoring approach is burdensome and was therefore not always properly applied. An alternative method for monitoring called the "risk-based approach" (RBA) is already implemented to a certain extent in a few Member States such as Hungary, the Netherlands, and the UK. As the water supply sector is rather conservative and the RBA still considered a new concept, it has not been taken up as much as one would expect given its expected benefits. Prior to the revision of Annexes II and III of the DWD in 2015, the application of the RBA was under the current end-of-pipe approach of the DWD only possible to a very small extent in EU Member States. Now the RBA can be taken up by Member States in their legislation on a voluntary basis since 2015 and meetings with Member States showed that overall the RBA has been very positively received and the majority will take up this voluntary approach in their transposition of the Annexes. However, even with this revision of Annexes II and III, the RBA remains restricted to the monitoring Annexes and hence is not fully integrated into the Directive, limiting its potential. 2.1.3.Obstacle to internal market - Materials and products in contact with drinking water One international manufacturer with a strong presence in Europe selling products in contact with drinking water in 47 countries has to deal with more than national 1300 approvals and more than 40 quality marks, and has to spend annually between EUR 1.8 and 3.6 million to keep the approval process alive, including double and tripling tests because of cross-border non-acceptance of existing test results and certificates, additional costs and delayed market introductions. This example is representative for all manufacturers in the EU and therefore gives a good indication of the (cross-border) dimension of the problem. Box: Product Approval A third problem identified and often raised by various stakeholders concerns materials in contact with drinking water. Inappropriate materials can contaminate drinking water. An obstacle to the internal market arises from the non-recognition of national product approvals between different Member States causing high administrative burden. The evaluation of the DWD concluded that Article 10, which imposes that Member States take all necessary measures to ensure that materials in contact with drinking water do not reduce the protection of human health, does not work well. The provision represents a problem of legal uncertainty as interpretations diverge between Member States and provide too much flexibility, and therefore constitutes a long-term challenge to the provision of clean and healthy drinking water in the EU. Many materials in contact with drinking water are construction products that can be harmonised under internal market legislation, in particular under the Construction Products Regulation (CPR), but standardisation efforts have so far been unsuccessful due to the complexity of the materials and products, unclear mandates and low priority attached to developing them. Most affected by this are the manufacturers of such materials. As demonstrated in the representative example on product approval for manufacturers, the costs incurred by businesses through the inefficiency of Article 10 lead to clear obstacles for manufacturers in the internal market. More evidence is provided by a specific study. 2.1.4.Information failure Preferring bottled over tap water has many underlying reasons, among others this preference can be explained by cultural habits, convenience, access as well as clever and attractive marketing promoting the purchase of bottled water. Although tap water is highly regulated to ensure its quality, many consumers fear pollution (63 % of the Americans in a recent Gallup study) and consequently choose bottled water instead of tap water as argued by Business Insider (2017) "16 facts that show why bottled water is one of the biggest scams of the century". A fourth problem identified in the evaluation of the DWD is the very heterogeneous level of (mostly passive) information made available to consumers. The open public consultation showed that only 58 % of the EU citizens feel that they are well informed on issues relating to drinking water. This is mainly due to the vague and passive DWD wording, which provides that 'Member States shall take the measures necessary to ensure that adequate and up-to-date information […] is available…' This has led to significantly different information practices among Member States and also among water suppliers. This lack of information can lead to consumers turning away from tap water. The confidence in tap water is rather low: only 19 % of the respondents to the public consultation agreed that the quality of tap water is acceptable at EU level. Many consumers do not trust tap water and rely partly or exclusively on more expensive bottled water. To be able to make an assessment of the options that are suggested to address this low confidence, this Impact Assessment uses the purchase of bottled water in the EU as a simplified indicator to estimate the level of non-confidence. The 2015 average is 106 l of bottled water/ capita/ year, up to 170 to 180 l/ capita/ year in some Member States including Germany, Italy and Malta. Poor knowledge about tap water contributes to the low confidence shown by citizens, and to their failing to participate more actively in water management decisions, as well as to scrutinize the efficiency and quality of supply services as well as water and energy savings. The evaluation also found that the current reporting provisions providing outdated compliant values are of no avail and do not tap the potential of modern information technology and data management for swift und multiple use of information. Providing adequate information to consumers is an issue also identified as important by the European Court of the Auditors. 2.1.4.1 Lack of awareness of leakages In Herford, Germany (64 000 citizens) in Summer 2015: Caused by two pipe bursts following a settlement close to an aerator/exhauster surface water could enter into the drinking water pipes during heavy rain events. It took several weeks to find the cause and to solve the problem. In addition further disinfection plants were installed. Box: Health problems caused by leakages Another issue identified that is outside the scope of evaluation by the Commission was that the public lacks awareness of water leakages that can lead, to a certain extent, to health problems but are mainly indicators for a general underinvestment in maintenance and renewal of the drinking water infrastructure, . This underlying driver of lack of investment can be strongly seen in the elevated leakage rate of treated water during its distribution: 23 % of treated water is lost in public water supplies in Member States, with large differences between Member States., 2.2.Part of the population has no access to drinking water - problem identified in the ECI The current DWD does not include any provision on access to water or an obligation to supply drinking water to every citizen. The ECI 'Right2Water' supported by more than 1.8 million signatories, invited the Commission inter alia "to propose legislation implementing the human right to water and sanitation, and promoting the provision of water […] for all" to ensure that all inhabitants enjoy the right to water. The Commission replied officially to the European Citizens’ Initiative ‘Right2Water’ via a Communication recalling the principle of neutrality in relation to national decisions governing the ownership regime for water undertakings. Whilst the Union cannot regulate this system of ownership nor the means chosen by Member States for the provision of drinking water services, the Commission invited "the Member States, acting within their competences, to take account of the concerns raised by citizens through this initiative and encourages them to step up their own efforts to guarantee the provision of safe, clean and affordable drinking water and sanitation to all." (p. 13). The human right to water corresponds to SDG 6 in the UN Agenda 2030, which also concerns the availability of water and sanitation for all. Furthermore, lack of access to water is also a problem from a health perspective. It is in this general context that this problem and possible options will be assessed in this Impact Assessment. This additional issue was not in the scope of the evaluation of the Directive. "Does the human right to water help the poor and people that are not connected to a system? We are arguing for more public spending to extend water and sanitation services to the poor. The human right to water obliges governments to ensure that everybody has (clean, safe, affordable, accessible) water and sanitation. That is contrary to a market-based approach that demands that people pay first for access to the service. You cannot ask the poor to pay upfront for connection to a water system. Putting the human right first helps the poor, a market for water doesn’t." (ECI Right2Water: http://water.tttp.eu/node/45/ ) Box: ECI Right2Water In the ECI it is argued that there are "still around 2 million people in Europe that do not have proper access to water or sanitation". Based on Eurostat data this Impact Assessment estimates that currently 23 million people or 4.5 % of the total EU population are not connected to Public Water Supply (PWS) systems for a variety of reasons: on the one hand many temporarily or sporadically used dwellings, secondary residences and holiday homes are not connected because there is no need. On the other hand homeless people, Roma and nomadic communities often have no possibility to be connected to the system. Consequently, it can be said that the underlying drivers of this problem are diverse, ranging from no need, over the remoteness of some areas to social exclusion and poverty. Connection rates to PWS systems in Member States range from 57 % (Romania) to 100 % (Belgium, the Netherlands). The continuous support to the topic was visible in the open public consultation for which supporters of legislation implementing the right to safe water and sanitation, among others, submitted 186 times the same text to the survey and provided 41 position papers with the same text to substantiate their position. 2.3.Ranking of the problems In terms of the Directive's main objective of health protection the outdated parameter list combined with the outdated end-of-pipe approach to monitoring are certainly the most urgent problems. These two issues are closely interlinked and need to be viewed together when thinking about solutions. Key is the anticipation of emerging issues such as new types of pollutants (e.g. pesticides, pharmaceuticals) that are more and more frequently found in raw water sources used for the production of drinking water. The other identified problems – lack of transparency and lack of information, lack of harmonisation of the materials in contact with drinking water, limited access to drinking water for some parts of the population – have an important but more indirect impact on citizens' health. These issues are however crucial in terms of efficient governance and cost effectiveness of the sector, especially from a long-term and resource efficient perspective.

3.Why should the EU Act 3.1.Right to act The proposed legislation is not a new intervention. It is based on Article 192(1) TFEU. This provision was the legal basis of the current DWD, and will serve as a legal basis for the revised measure. The EU has shared competence with Member States to regulate environment and health in the field of water. This means that the EU can only legislate as far as the Treaties allow it, and with due consideration for the principles of necessity, subsidiarity and proportionality. 3.2.Subsidiarity The current DWD was designed in accordance with the principle of subsidiarity, and recognised the natural and socio-economic differences between the regions of the EU. The Directive sets EU minimum standards and the legal frame, but leaving most decisions on monitoring, analysis and remedial measures to be taken at a local, regional or national level. Concrete actions (remedial actions, actual monitoring programmes, etc.) are left to the Member States. Concerning more specifically aspects related to access to water, the revision was originally triggered by the ECI 'Right2Water', supported by more than 1.8 million signatories. In its reply to the initiative, the Commission underlined the importance of the human rights dimension of access to safe drinking water, whilst respecting as outlined above the subsidiarity principle and the EU's neutrality in regard to national, regional and local levels concerning provision of water services. Action at EU level was also demanded by the European Parliament in its response to the initiative. Moreover, the EU's commitment to the UN Sustainable Development Goals (SDGs) requires the Commission to consider new approaches to drinking water. However, any considerations on access to water will have to respect the Treaty principles of subsidiarity and neutrality, according to which the Treaties in no way prejudice Member States' rules governing the system of property ownership of water undertakings, and other legislations in this regard such as the Concessions Directive and Services Directive, which excludes the application of the cross-border freedom to provide services for water distribution and supply. In addition, the provision of water services is generally the responsibility of local authorities, which are the closest to the citizens and their concerns. With water catchment areas and groundwater reservoirs being cross-boundary, an EU-wide approach is utterly important to ensure that all EU citizens benefit from the same level of health protection. Also, the REFIT evaluation confirmed the added value of the drinking water legislation at EU level, achieving significant harmonisation of water quality over time across Europe. In stakeholder consultations on the evaluation and the quality of drinking water, Member States and businesses have called upon the EU to set and maintain up-to-date EU-wide common drinking water quality standards. Most Member States, particularly smaller ones that do not always have the resources and specific expertise, expect the EU to continue to set the essential chemical and microbiological parameters and values. Moreover, many stakeholders see EU measures as best placed to address emerging health hazards from water. Establishing EU harmonised approaches for materials and products in contact with drinking water can contribute to improving the functioning of the internal market, whereas national approaches currently create obstacles to the internal market. Finally, the lack of transparency on prices and leakage affecting consumers is also to be addressed at EU level, to ensure a similar level of protection of consumers across the Union. In light of the above, it is clear that the objectives of the DWD and of the different options considered in this Impact Assessment, namely protection of human health and of the environment, removal of obstacles to the internal market, improving and promoting access to water and sustainable management of water distribution, cannot be sufficiently achieved by Member States on their own, but can rather, because of the scale of the actions to be taken, be better achieved at Union level. There is, therefore, a clear demand and justification for action at EU level. 4.What should be achieved 4.1.General policy objective The general objective of the revised initiative is to contribute in the most effective and efficient way to the protection of human health from the adverse effects of any contamination of water intended for human consumption by ensuring the continued high quality of drinking water in the long term in a cost effective way. The aim is also to modernise and simplify the current legislation - where this is feasible and without impairing the overall objective of the protection of health - and to move from an 'end of pipe' to a more preventive and integrated approach. By also using the possibilities offered by new technologies, the initiative also aims to lower the administrative burden for small supplies and to increase transparency for EU citizens. 4.2.Specific objectives Five specific objectives were defined in response to the problems identified in section 2, taking into account the need to meet the principal health objective and to avoid excessive costs and excessive impacts on affordability (Annex 4). 1.Update the parameter list in line with technical and scientific progress; 2.Simplify the approach and target the focus of monitoring and treatment to those contaminants that present health risks; 3.Remove obstacles to the internal market in relation to materials and products in contact with drinking water; 4.Increase transparency on water related topics that can be of interest to the consumer and increase the availability of, and improve the access to, up-to-date information on drinking water; 5.Improve the access to drinking water. 5.What are the various options to achieve the objectives This section screens the possible options for meeting the objectives outlined above. The choice of possible options has been done through an iterative process. At the very beginning of the process, two far-reaching options were discussed, namely repealing and discontinuing the DWD, or replacing it by a Drinking Water Regulation. A regulation would have the advantage that the same parameters and values would apply to all EU citizens. The repeal option could refer to the voluntary but comprehensive WHO Drinking Water Guidelines. However, the evaluation, further supported by the 2015 comitology process to amend Annexes II and III of the DWD as a first step towards a risk-based approach, as well as the various stakeholder consultations (Annex 2), suggested that these options should be discarded upfront. The evaluation firmly underlined that the DWD is a relevant legislative tool that works well. The amended Annexes II and III already pave the way towards a more risk-based approach which intrinsically gives Member States and suppliers more flexibility to address risks that matter. This approach is well-suited to an EU Directive, setting the frame for all, but leaving specific measures up to the local level.

A specific stakeholder consultation on possible policy options was held including a stakeholder conference on 8 December 2015. The options considered in this document were broadly supported, while other options, e.g. on a Safe Drinking Water Label or on Responsible Service Operators were rejected because judged unrealistic. 5.0.Baseline scenario – How would the problem evolve? 5.0.1.Baseline assumptions The baseline scenario assumes that the current DWD with its amended annexes will continue to be applied. The baseline considers certain changes that will take place in Europe between today and 2050. The changes are linked to climate change, general socio-economic developments, the uptake of innovative technologies, or migration linked in particular to war or changes in the political situations of countries that are geographically or economically connected to the EU. Some of these changes will affect directly or indirectly the functioning of the 'drinking water system' (Annex 3). Potential change in consumer behaviour regarding the purchase of drinking water is based on expert knowledge. This entails, the effects of the various options can be (slightly) under- or overestimated. Quality of raw water resources depends on the effectiveness of other water legislation such as the WFD, for which the assessment of the river basin management plans is yet to be conducted. Emerging substances in the domestic sector are accounted for, but as the name indicates it remains to be seen which substances emerge and how hazardous they are to human health and which treatments are existent or to be developed to tackle these. Other uncertainties related to the development of technologies regarding monitoring and data management in drinking water services. With fast developing technologies in nearly all sectors, it can only be assumed in the model how these account for costs in 2050. Box: Inherent uncertainties in the assessment of future health and cost implications Potential change in consumer behaviour regarding the purchase of drinking water is based on expert knowledge. This entails that, the effects of the various options can be (slightly) under- or overestimated. Quality of raw water resources depends on the effectiveness of other water legislation such as the WFD, for which the assessment of the river basin management plans is yet to be conducted. Emerging substances in the domestic sector are accounted for, but as the name indicates it remains to be seen which substances emerge and how hazardous they are to human health and which treatments are existent or to be developed to tackle these. Other uncertainties related to the development of technologies regarding monitoring and data management in drinking water services. With fast developing technologies in nearly all sectors, it can only be assumed in the model how these account for costs in 2050. Box: Inherent uncertainties in the assessment of future health and cost implications The main changes that are expected in key parameters and variables affecting the drinking water system between now, 2030 and 2050 concern inter alia changes in population and behaviour, in the quality of raw water resources, in emission of emerging substances by the domestic sector, in an increase of nitrogen losses, in the management of drinking water services, and in better monitoring and data management. An important assumption for the baseline concerns the RBA. This assumes that changes in the management of drinking water services will take place independently of the implementation of the DWD. It is assumed that the number of water suppliers implementing a RBA will continue to increase, but at an uneven manner across the EU. This is triggered by the revision of Annexes II and III of the DWD, and also promoted by the WHO and other national and water suppliers’ initiatives. It is expected that in 2050 74 % (2015: 47 %) of the EU population will receive drinking water from suppliers that have implemented the RBA. Data and assumptions for the current situation and the projections until 2050 are listed in Annex 4. Another important assumption for the baseline concerns the very slow development of the internal market for products in contact with drinking water and the stagnation on standardisation work. Due to the sensitive health issue some Member States insist on having their own high level approval systems, whereas many others refrain from establishing such systems at all. Apart from a four-Member State initiative, no significant progress towards a fully-functioning mutual recognition system has been made. Therefore, the baseline does not assume that positive developments on mutual recognition via product passports or in other sectors will spill over onto these products, but assumes that the current status quo in the baseline in 2030 and in 2050 will remain as it is now. 5.0.2.Expected baseline impacts on health The Evaluation already pointed at the difficulties for establishing direct causal and statistical relations between drinking water quality and risks to human health. This is particularly difficult for emerging pollutants. Therefore, health issues in this Impact Assessment have been addressed through a specifically developed indicator named ‘Population Potentially at Health Risk’ (PPHR). What is PPHR? This indicator serves as an estimate of the share of the population that could potentially suffer from health problems because of the presence of contaminants in drinking water. In summary, five levels of risk have been defined (no risk, marginal, low, medium, high) depending on the quality of the water consumed. Different assumptions have been made regarding the quality of the water depending on whether the RBA is applied or not, the origin of the water (bottled/ tap water), and whether or not there is a connection to the public water system. The quality of the water was estimated on the basis of the possible contamination by substances included in the DWD or outside its current scope (emerging pollutants). For the baseline and for each option having a health impact, the indicator PPHR was calculated. This calculation was then verified by available data on causal sickness cases attributed to: Cryptosporidiosis, Campylobacteriosis, E.coli, Giardosis, Shigellasis, Legionella - which are typically present in unsafe drinking water. This verification has shown a good correlation between the PPHR and data on diseases due to unsafe drinking water (Annex 4). According to the PPHR indicator, it is estimated that in 2015 22.7 million people were potentially at health risk due to non-safe drinking water, equivalent to 4 % of the EU population. In 2015 the societal cost of the estimated 17 000 cases of getting sick from drinking tap water in Europe was equal to EUR 220 million or EUR 0.43 per EU citizen and EUR 9.6 per person at risk (Annex 4). Using the PPHR for the baseline calculation, the number of people potentially at health risk is expected to decrease by 2050, but the number of people potentially at risk will remain significant. Overall, 20 million people will potentially be at health risk due to drinking water quality problems, equivalent to 3.8 % of the EU28 population in 2050. In absolute terms, the large majority of Member States will see their situation (marginally) improve. The highest potential risk is likely to be observed in, among others, Bulgaria, Greece, and Lithuania. 5.0.3.Expected baseline impacts on affordability of drinking water for EU citizens The evaluation of the DWD has assessed the cost-effectiveness of drinking water policy. In different Member States there are different approaches on how water is paid for, for instance via tariffs or taxes. In general it is assumed in this Impact Assessment that water operators transfer all costs to the consumer and that only those consumers that are connected to the PWS in each Member State pay for the costs. In 2015, the average annual cost per household was estimated at EUR 229, which represents an EU average of 0.73 % of the disposable income., Figure 3 shows for each Member State how much of the income of a household is spent on water services. This is assessed by comparing the share of spending on water services to average incomes (green bars) and to the incomes of the lowest income group of the Member State (violet bars). For instance, in Romania drinking water is assumed to require a share of 1.8 % of the disposable income, which is more than twice as high as the EU average. Bulgaria, Latvia and Lithuania also experience comparatively high figures with over 1.2 % of their disposable income being spent on drinking water, whereas in Finland, Malta and the United Kingdom the figure is only around 0.5 %. The impact on the lowest quintile of the population is in comparison to the impact on all income groups higher and averages at 1.01 % for the EU ( Figure 3 ). Looking at individual Member States, in 2015 for Romania the spending of disposable income on drinking water is as high as 7.4 % for the lowest income group. In Bulgaria, Hungary and Lithuania, the level is above 2.0 % for the lowest income group. Under the baseline scenario, the average EU household spending is forecast to decrease to EUR 228 by 2050.

The assessment found that costs to the consumer in the baseline scenario remain stable. The cost-effectiveness in achieving the objectives of the current DWD will slightly improve in the longer-term as a result of the progressive application of the RBA. As stated in the problem definition, the Commission is bound by the principle of neutrality when it comes to water pricing. Detailed cost estimations and a cost breakdown can be found in Annex 4. The baseline scenario includes further an assessment of people currently without access to water services. The EU average population connected to a PWS (currently 95.5 %) is expected to increase by 18.5 million people (mainly due to increase in population size). The expected average connection rate in 2050 will be 95.9 %. 5.1.Set of options to achieve Objective 1: Updating the list of parameters The evaluation and the stakeholder consultations identified the need to amend the list of parameters of Annex I in line with latest scientific and technical developments and evidence. There were in particular suggestions from the public consultation that substances used in consumer products, pharmaceuticals and endocrine disrupting substances should be included. For a detailed review, a cooperation project with the WHO Regional Office for Europe was launched in December 2015 with the aim to integrate the most recent scientific knowledge and to support the revision of Annex I of the DWD. The objective of the project was to provide policy-relevant, science-based, advice to inform the revision of the parameters and the limit values in the DWD, as the DWD standards should generally be based on the WHO Guidelines (see Recital 4 of the Directive) that are amended every two to three years. The project was concluded in summer 2017. Table 11 , in Annex 4, illustrates the results of this work. For each parameter a fact sheet that justifies the proposed changes is being developed. Three options with different levels of ambition are presented to address this objective. Option 1.1 is a simple update of the existing list of parameters on the basis of the latest WHO updates. Option 1.2 extends further than option 1.1 the list of parameters, in particular through additional microbiological reference parameters, perfluorinated compounds or endocrine disrupting compounds. These additional parameters or stricter requirements under option 1.2 are based on the precautionary principle, and may be stricter than what is recommended by the WHO. This option 1.2 assumes the use of advanced treatment for instance with activated carbon adsorption. Option 1.3 reduces the list of parameters (Annex 4). 5.2.Set of options to achieve Objective 2: Simplifying the approach As identified in the problem definition, the current DWD method, based on a rigid one-size-fits-all monitoring approach, is not sufficiently comprehensive on the one hand, nor sufficiently flexible on the other. Preventive safety planning and risk-based elements are so far under-exploited, leaving room for (new) hazardous substances to remain undetected. A new concept introduced in 2004 by the World Health Organization (WHO), the risk-based approach (RBA), would address these issues. The RBA is efficient, both from a health- and a cost perspective. The current approach in comparison to the RBA is especially for microbiological challenges not sufficient ("too little" and "too late") and the RBA presents an opportunity to move from an end-of-pipe approach to a holistic and modern management of water supply. The RBA is a comprehensive approach, from abstraction area to distribution. These options therefore cover the introduction of a mandatory RBA which offers opportunities for simplification to concentrate time and resources on risks that matter, on cost-effective source measures, and to avoid effort (including analyses) on non-relevant issues without compromising a very high level of health protection., Upholding very high levels of health protection will also be ensured through keeping a core list of parameters that always need to be monitored. Nevertheless, the overall reduction of the level and frequency of required analyses and the treatment can be adapted to real risks identified by the RBA and thereby reduce administrative burden for national authorities and save resources for water suppliers. Under the RBA, Member States and/or water suppliers are required to conduct preventive risk assessments, based on minimum requirements set at EU level, encompassing a hazard assessment of the abstraction area, a supply risk assessment, and also a risk assessment of the domestic distribution system. The RBA needs to be transposed and integrated in Member States' national legislations, whilst leaving some degree of flexibility on how the RBA is implemented and who is responsible to conduct it. The baseline already considers a voluntary take-up of the RBA, which was triggered especially through the amendments of Annex II and III in 2015. As noted above, this objective is therefore not counteracting a negative development, but rather supporting and accelerating a positive one. Additionally, these options lead to stronger coherence with the WFD, which under Article 7 requires the protection of water bodies used for drinking water abstraction, in order to ultimately reduce the level of purification treatment needed for the production of drinking water. The difference to the baseline is that the RBA is mandatory and provides for uniform risk assessment across all Member States. Option 2.1 entails a compulsory RBA for large water suppliers (LWS). Option 2.2 goes further and entails a compulsory RBA for large and small water suppliers (SWS). Option 2.2, however, takes into account that a suitable time frame is needed for its implementation for small suppliers. 5.3.Option to achieve Objective 3: Removing obstacles to the internal market This foresees replacing the ambiguous Article 10 provisions (see chapter 2.1.3.) by concrete provisions related to the wider domestic distribution risk assessment. In addition, the development of product requirements and standards should be launched, for instance under the Construction Products Regulation, to overcome the non-functioning mutual recognition and stagnant standardisation work so far in that area. Position papers by business associations and industry representatives have shown strong support for harmonization and standardisation in this context. In the IA study, an option assuming full mutual recognition ensuring market access for such products that are not subject to EU harmonisation was considered. This option was not taken over in this Impact Assessment, against the background that (1) the baseline with Article 10 did not ensure a fully-functioning mutual recognition system and (2) a related 4 Member States initiative to recognise their approval schemes was, despite some technical progress, not yet successful after 10 years of cooperation. Due to the sensitive health issue, also simpler mutual recognition options introducing product passports to guarantee that any product lawfully sold in one EU Member State can be sold in another one, even if the product does not fully comply with the technical rules of the other Member State, have also been discarded as they are not perceived as acceptable by Member States. Consequently, option 3 entails the removal of an obstacle to the internal market facilitating the development of harmonized standards for products in contact with drinking water outside the scope of Drinking Water Directive. 5.4.Set of options to achieve Objective 4: Ensuring transparency and information to the consumer These options are derived from the results of the open public consultation which showed that the overwhelming majority of citizens wishes more up-to-date information on their tap water and that their level of confidence in safety of water supply is relatively low. In addition, options under this objective aim at raising consumers' awareness and civil society's influence to address consumer concerns in the water sector. As consumers pay through their water bills for the water supply infrastructure, awareness of leakages and the state of the infrastructure can trigger citizens to pressure their water supplier or political parties to take action. Obliging water operators to provide information to their consumers on water leakages entails that they will have to regularly check their water supply systems and thereby acquire better knowledge about it. This is already practice in some Member States (see Box), , showing that an approach via information sharing and transparency requirements can be successful. Option 4.1 entails simplified automatic electronic reporting, combined with a very substantial reduction of the data to be reported, to the Commission. This option identifies simplification possibilities, for instance with the use of on-line database (e.g. Eionet), which the Commission and the European Environmental Agency (EEA) could consult, in line with the REFIT principles, and the results of the Fitness Check of Monitoring and Reporting. There would not be direct reporting to the Commission as Member States would simply need, with for instance the help of the EEA, to update their databases. In addition, the actual information to be included in the dataset would be reduced, by limiting it to cases of exceedances of parametric values. In the UK and in Denmark both governments use the relation between consumers' awareness and investment needs on the side of the water operator to reduce water leakages in the system. For instance, in the UK, the national regulator Ofwat uses 'naming and shaming' practices to pressure water suppliers to reduce leakage rate. In Denmark heightening the consumer's awareness of leakages is used to increase the consumers' acceptance of higher bills as the revenue is used for addressing infrastructure problems. Box: Dealing with leakages through information provision. Option 4.2 requires basic online information on water quality to consumers, and option 4.3 advanced online (and/or via water invoices) access to a wider range of information for example on sources used, water quantity, water price, waste water treatment and components of water pricing, overall performance of the system in terms of efficiency, leakage rates and actions taken to improve the infrastructure, energy use, or additional advice. For both options (4.2 and 4.3) the size of the water supplier would be taken into account when it comes to frequency and level of detail of information requirements, in order to avoid overburdening small water suppliers. Both options will also trigger the market penetration with better digital solutions and smart metering technologies. Transparency of water prices contributes to the implementation of the principle of cost recovery (Article 9 WFD), and considers the right of the individual to obtain adequate information (Annex 4). 5.5.Set of options to achieve Objective 5: Improving access to drinking water The current DWD has no provisions on the obligation of supply or access to water. Choices on those are currently fully left to the Member States. Any options to achieve Objective 5 must respect the principle of neutrality and the Treaty as noted above. Options under Objective 5 therefore suggest approaches to improve access to water, whilst leaving the specificities of measures to the Member States. The possibility to include provisions on access to drinking water has been explored in line with the outcome of the ECI 'Right2Water' and the adoption of Agenda 2030, which includes Sustainable Development Goal 6. To assess the problem to the widest extent possible, this Impact Assessment has taken as a starting point the share of the population not connected to the PWS (baseline 4.1 % or 23 million people). By doing this, it may have overestimated the extent of the problem to be solved, but this conservative assumption allows a very credible assessment of the maximal possible costs at the higher end of probability. No detailed data is available to analyse exactly the make-up of non-connected people.

On the basis of those conservative assumptions, two options for addressing the lack of access to water for parts of the population are considered in this Impact Assessment. Both options aim to promote access to drinking water and to support Member States' commitment to implement the SDGs. Option 5.1 envisages full connection of all EU citizens to the PWS systems and to extend the PWS everywhere as an EU level obligation. The means used by Member States to implement this option would be entirely left to national decision (in-house, public system, public-private partnership, procurement, etc.). Option 5.2 concerns a set of various measures to improve access to water including, (a) the provision of access to water to non-connected citizens with self-supply systems or alternative solutions, (b) other appropriate measures to provide access to more specific groups such as remote, vulnerable or marginalised groups, (c) promotional measures to encourage the use of tap water, and (d), other measures to promote access to water for instance in public places. This option would consequently entail an obligation addressed at Member States to provide access to vulnerable and marginalised groups. Given the heterogeneous nature of non-access issues, it is foreseen that although Member States would have to meet the objective of providing non-connected citizens with solutions, it would be up to them to decide which approaches and technologies would be best suited to their national situations. For the purposes of this assessment, calculations have been based on the conservative assumption that half of the non-connected citizens would be provided with individual solutions. It was not possible, in the context of this Impact Assessment, to exactly assess the potential impacts of other measures because of the lack of data on the causes of non-connection, but also because it is not possible to anticipate all potential measures to improve access to water of the Member States and because the conditions in different areas are too heterogeneous. Overall, the assumption underlying option 5.2 is considered as very representative for assessing the total potential cost of possible measures (specific measures targeting more specific groups, such as remote, vulnerable or marginalised group, or promotional measures to encourage use of tap water) taken under this heading. 5.6.Synopsis sets of options The different options described in the above Sections are summarised in Table 1 , already indicating some preliminary effects. Following the initial assessment potential options beyond the baseline were maintained. These are options BL (Baseline), Option 1.1, 1.2, 2.1, 2.2, 3, 4.1, 4.2, 4.3, and 5.2. Options 1.3 and 5.1 are discarded from further analyses as discussed in the following section. Detailed descriptions of the assumptions can be found in Annex 4. Annex 4 also contains tables where all assumptions of these options are listed. Option Short name BL Baseline 1.1 Updated Parameter List 1.2 Extended Parameter List 2.1 RBA Mandatory for large water suppliers 2.2 RBA Mandatory for large and small water suppliers 3 Harmonization of contact materials' standards 4.1 Simplified reporting 4.2 Basic online information to consumers 4.3 SMART information 5.2 Alternative self-supply systems and/or measures to improve access to water 5.6.1.Options not further pursued Under the objective of protection of human health and the aim of doing so cost-effectively, two options of two different set of options can already at this point be discarded from further analysis. A short analysis of Option 1.3 of the set of options to achieve the objective of improving the current parameter list shows that this option does not comply with the overarching aim of achieving a high level of protection of human health. Quantitative assessments show that this option only very marginally supports the reduction of people at health risk but far below achievable rates in comparison to Options 1.1 and 1.2. Furthermore, water suppliers and Member States strongly opposed a reduction of parameters during stakeholder consultations. Consequently, Option 1.3 is discarded from all further analysis. Option 5.1 of the set of options with the objective of improving access to water is discarded for a variety of reasons: first of all, a compulsory connection for millions of citizens including those who do not need nor demand it (e.g. remote secondary residences, remote residencies with own sources) does not make sense. Furthermore, it would be technically impossible to connect all non-connected parts of the population to the PWS because of the remoteness of the area or other technical problems making the connection not feasible. Alternative locally based solutions are more effective than a systematic connection to PWS (see Option 5.2). "Affordability is also a key element because it relates to effective access to water services for all. The EU has no role in the setting of water prices, which are determined at national level. EU water-related environmental legislation does, however, establish some basic principles for water pricing policies in the Member States. The Water Framework Directive requires Member States to ensure that the price charged to water consumers reflects the true costs of water use. This encourages the sustainable use of limited water resources. EU water policy is based on the principle that affordability of water services is critical. National authorities are competent for taking concrete support measures safeguarding disadvantaged people and tackling water-poverty issues (e.g. through support for low-income households or through the establishment of public service obligations)". Box: Communication from Commission on ECI Right2Water, March 2014 Secondly, from an economic point of view, and as also stated by the ECI and the Commission's response to it (see Box), affordability is a very important aspect when considering how to improve access to water. An affordability analysis shows that household costs would substantially increase in many Member States – with some of them being the host to large numbers of vulnerable and marginalised parts of the population. With an EU average increase of the household costs by EUR 21.40 per year, Option 5.1 would be financially particularly demanding for the lowest income groups. In general, the assessment shows that in Member States in which the PWS connection rate is rather low, the impact on household costs would be substantial ( Figure 5 ). For instance, in Romania Option 5.1 would entail an increase in household costs of EUR 94 per year, and in Lithuania and Latvia an increase of above EUR 66 per household per year. The adoption of Option 5.1 alone would already mean that the share of disposable income spent on drinking water increases from 0.73 % (baseline 2050) to 0.77 % and to 1.06 % for the average income groups and for the lowest income groups respectively. On the basis of these reasons, Option 5.1 is therefore discarded from further analysis. 6.Analysis of impacts

This analysis of impacts is based on the methodology for Impact Assessments provided in the Commissions' Toolbox for Better Regulation. As a first step, all the possible impacts have been screened, and several of them have been identified for a more detailed analysis. Table 13 in Annex 4 presents a synopsis of the impact categories that have been screened along with the outcome of this screening process. 6.1.Health Impacts 6.1.1.Figure 6: Difference of the PPHR as comparison to the baseline (% in 2050)Figure 6: Difference of the PPHR as comparison to the baseline (% in 2050)Acute Health risks To recall, the share of the population that potentially suffers today (2015) from health problems due to non-safe drinking water, according to the PPHR methodology, is estimated at 22.7 million inhabitants (or 4 % of the EU28 population (Section 5.0.2). Considering the baseline scenario, the PPHR in 2050 is estimated at 20 million inhabitants (3.8 % of EU28 population), thus the health situation with no policy change would improve, but only slightly. Figure 6 presents the PPHR under the different options in 2050 in comparison to the baseline. It represents directly the difference between each individual option in percentage of the baseline situation. Furthermore, it shows that the highest reduction of health risks occurs through option 1.2 'Extended parameter list', which reduces the PPHR by 73.5 % to 5.3 million inhabitants (1 % of EU28 population). This can be explained by the high number of substances that would be monitored and treated under this option, which consequently leads to a significant improvement in drinking water quality. The second most effective option to limit negative health impacts on populations is option 4.3, followed by 4.2 and 1.1, with a reduction in the number of inhabitants accessing polluted drinking water to almost 8 million at the EU28 scale by 2050 as compared to the baseline (reduction of 39 % compared to the baseline). All other options contribute significantly less to reducing negative impacts on human health. 6.1.2.Chronic health risks In addition to the potential short or mid-term health risks related to drinking water expressed by the PPHR, which considers in its methodology low, medium and high levels of risk, each option will also influence some possible chronic long-term health effects due to changes in water quality (e.g. through carcinogenic substances). The assessment of these non-acute risks is, however, both hard to measure and, if measurable, hard to causally relate back to the consumption of drinking water. Nevertheless, a variation of the PPHR data allows approximating such chronic long-term health effects. The methodology allows identifying the population potentially facing not a high, medium and low risk, but just a marginal risk related to drinking water. This population is probably not facing health problems in the short or mid-term (e.g. becoming sick), but this share of the population could suffer from chronic effects of drinking water that is not completely safe. For 2015 the population potentially facing a long-term health risk related to drinking water (i.e. the marginal risk indicator) is estimated to be 105 million of the EU inhabitants. In 2050, this population would increase up to 131 million inhabitants. Compared to the baseline scenario, Figure 7 shows how the options would impact long-term health effects. Comparing the information in Figure 6 with Figure 7 allows seeing that concerning long-term health effects variations, options are not ranked in the exact same order as for PPHR (corresponding to short and mid-term health risks). However, the options with the highest reduction of health risks remain ranked in the same order. Option 1.2 is still the most effective. It leads to the highest reduction of potential long-term health problems for the population. Option 1.1 would be less effective. This can be explained by the fact that the extended parameter list provides in the long-term a better protection against chronic effects than just an updated list. Option 4.2 and option 4.3 rank significantly better than option 1.1. Thus, appropriate consumer information leads to a more effective reduction of potential long-term effects as compared to their impacts on short- and mid-term risks, and also relatively to options other than 1.2. 6.1.3.Associated health benefits in monetary terms Based on the 2008-2012 average number of illness cases, the actual number of reported people falling sick as a result of contaminated drinking water is 31 500 per year. Based on these figures, the hospital and/ or general healthcare costs and the cost due to loss of production or productivity have been assessed, as well as the impact of the options. Option 1.2 (to recall: PPHR reduction of 15 million people at risk) will have an annual healthcare benefit of EUR 153 million, making it the option with the highest benefits, followed by Option 4.3 of EUR 92 million, Option 4.2 of EUR 80 million, and Option 1.1 of EUR 69 million in 2050. All other options have significantly lower impacts (Annex 4). Due to methodological challenges, no monetary benefits arising from the reduction of chronic illnesses are assumed, although they could be considerable. 6.2.Economic Impacts 6.2.1.Economic situation/baseline The Evaluation estimated the total annual cost for supplying drinking water in the EU in 2015 at roughly EUR 46.3 billion of which 18 % (EUR 8.3 billion) can be attributed to the implementation of the DWD. The Impact Assessment has re-calculated these total annual costs that will increase from EUR 46.3 (2015) over EUR 47.1 (2030) to EUR 47.9 (2050) billion (Annex 4). The baseline for bottled water consumption assumes a decrease in bottled water consumption from 106 litres/ person/ year in 2015 to 100 litres/ person/ year in 2050 (approximately – 6%). In the EU water supply sector, employment is relatively stable. For 2015 it has been estimated that there are 413 000 people working in the water supply industry. Within the baseline scenario the number of people employed by the water supply sector is forecasted to slowly decrease to 409 000 in 2030 and 404 000 in 2050, in line with the forecasted total market value of the sector. The main reason for this minor decrease in employment is efficiency gains. There is a large difference between the number of employees per 10 000 inhabitants in the Member States (for example high: Bulgaria, Hungary and Slovakia, low: The Netherlands, Germany and Austria). 6.2.2.Comparison of economic impacts of each option

The economic impact assessment of each of the options was done by calculating the set-up cost (which were then amortized on the expected life time of each investment) and the increase in operating cost at EU28 level (Annex 4). In summary, as shown in Figure 8 , Option 1.2 will lead to the largest increase of annual costs of EUR 3.1 billion. Option 3, Options 2.1 and 2.2 lead to some savings. The cost of Option 4.1 is with EUR 0.2 million much lower. (For pure set-up cost for each option see Table 2 below). 6.2.3.Impacts on SMEs and on innovation It needs to be emphasized that water is not a commercial good, but a natural and regenerative resource. Thus all economic users of this source benefit from it. The economic effects of the options on small and medium sized companies (SMEs) on innovation and on the sector’s competitiveness have been assessed. As water suppliers have a monopoly position, they can pass costs on to the consumers – even if in several Member States water regulators are in place to control the water prices, take no market risks and are eventually overall economically not affected. The financial sources of the water sector are Taxes, Tariffs, Transfers, the '3Ts' referred to by the OECD. The most important economic sectors that depend on the PWS are notably the food industry and the tourism sector. The quality of water supplied by public systems can be an important feature for these companies. Although no statistics are available on the shares of SMEs in the Member States, it can be assumed that SMEs have a greater reliance on public water systems. It is assumed that the effects of the options will be similar for all sizes of enterprises. In terms of possible impacts on trade, small increases of imported testing equipment, appliances for treatment or services stand opposed to important export opportunities for EU firms which successfully developed new treatment technologies for example in membrane filtration and disinfection. Handling the pesticide metaldehyde under the risk-based approach in the UK: The water operator Anglian Water found the pesticide metaldehyde in its treated drinking water and failed to meet the DWD limit value for the indicated pesticide threshold. Treating for metaldehyde would have costed 612.4M, entailing a 21% increase in consumer bills. As an alternative to treating the water, Anglian Water used financial incentives to address the cost barriers to farmers to use an alternative to metaldehyde. This alternative costs the consumer 16.6M, which is only 3 % of treating the water. It is expected that Option 1.1 and in particular Option 1.2 will be innovation-friendly and increase R&D expenditures on new water treatment technologies of facilities specialised in developing new treatment technologies. This type of research is carried out at EU or global level and increases in employment will be small, typically not more than a few hundred jobs. However, for those technologies that can be successfully applied, the potential for exports to other countries will be important and thus secondary employment effects can rise to 500 to 1 000 jobs. With particularly Options 2 referring to source protection and to measures at the source, this option is unlikely to have a negative effect on SMEs and other companies using water, except if they are affected by new measures established to reduce specific water pollution, or to contract consulting services. As the RBA demands more effective management and open potentials for tailoring treatments to local threats, Options 2 are assumed to be innovation-friendly. Option 3 is expected to have a positive impact on manufacturers of materials in contact with drinking water, including their material suppliers. Among these manufacturers are many SMEs, and the whole installation sector is dominated by SMEs. It is assumed that the cost for certifications and approvals, which constitute up to 1-2 % of the turnover of companies, will be reduced significantly if product approvals are harmonised, and SMEs are expected to have somewhat higher benefits. Option 3 will have a positive impact on intra-EU trade, as current barriers to trade through national approval systems will disappear. Furthermore, Option 3 will reduce barriers to innovation and accelerate access to markets, as the slow and complicated approvals so far discouraged companies to develop new products and to approach new markets. Options 4.2 and 4.3 are assumed to be innovation-friendly as new information platforms and systems will need to be developed. Both options will also lead to a small positive economic impact for those SMEs involved in setting-up of new IT systems needed for these options (service companies involved in communication, web design, and the development of smart apps). In general, better information will lead to better functioning of the markets as consumers will make better informed decisions. Option 5.2 will offer some small opportunities for SMEs involved in installing new connections, or in developing self-supply systems. Option 5.2 can be seen as innovation-friendly as alternative and possibly low-cost water supply systems would be demanded. 6.2.4.Macro-economic impacts The value added of the whole water supply sector is 0.7 % of the EU28 economy. Thus, relatively small changes in this sector are not expected to have a significant macro-economic impact. Most important would be the macro-economic impacts of Option 1.2, as in 2050 these efforts sum up to an additional EUR 3.1 billion or on average EUR 14.90 per household per year. A further important impact will be on the industry supplying materials and products in contact with drinking water. It is expected that through Option 3 some Member States will gain a competitive advantage as their industry complies already with the rules of the system. The bottled water industry may experience some challenges through the decrease in bottled water consumption, incited by Option 4.3 and 5.2. Moreover, the European Federation of Bottled Water (EFBW) highlighted always that bottled water is supplementary to tap water, and not in competition. One aspect, which is easily overlooked, is that knowledge on water safety planning under Option 2 can be exported to third countries. This will mainly be beneficial for companies active in advisory/ implementation work and directed not only to underdeveloped, but also to more developed countries that already have a high level of drinking water quality. 6.2.5.Impact on employment Each option will impact employment in the water sector to a different extent. Figure 9 shows the effects of the options on employment, compared to the 2050 baseline. The employment impacts displayed in Figure 9 show that mainly option 1.2 will boost employment. The figures differ strongly per Member State. Each option will impact employment in the water sector to a different extent. The figures differ strongly per Member State. Options that incite a move from bottled water consumption to tap water are heavily based on assumptions regarding changes in consumer behaviour. Consequently, a quantification of impacts on individual industries, including whether a tangible change in consumer behaviour might cause negative impacts on e.g. the consumer packaged goods industry, was perceived as highly hypothetical and therefore with a limited added value to this Impact Assessment. 6.3.Social Impacts

The main social impacts of the suggested options concern information to consumers, consumers’ trust in drinking water quality, behavioural changes like shifting from bottled water consumption to tap water consumption, cost and affordability of drinking water, and social inclusion. Option 4.2 and 4.3 are the options which are providing the most significant improvements in terms of information provided to consumers. These options will bring a significant increase of information on water quality across EU28 as compared to the baseline. In some Member States (Belgium, France, Portugal, UK) the information level is on average already relatively high. The most significant increase will be in countries with the lowest level of information in the baseline scenario, such as Latvia, Lithuania, Ireland, Hungary, Poland and Romania. Although the social impact for the citizens are evident, stakeholder consultations showed that these options were not well received by some public and private water operators arguing that these options are conflicting with complex water services governance systems established by the national administrations, for example in relation to water pricing. Moreover, some associations raised doubts on the real possibilities for citizens to participate in water supply decision-making. The confidence people have in tap water quality is one main driver of tap water consumption compared to bottled water consumption. Studies have shown that consumer decisions to purchase bottled water are predominantly driven by sensorial information regarding taste and odour, and the associated health risk concerns. Thus, the level of confidence among consumers is mostly linked to the perception on the water quality and to the access of information on water quality. Increased awareness and enhanced transparency through options 4.2 and 4.3 is expected to bring about higher trust in the overall quality of the drinking water and of drinking water services. The decrease of bottled water is expected to be proportional to the level of information provided. Together with the general trend in decrease of bottled water consumption, option 4.3 is expected to result in a reduction of the share of bottled water consumption by 17 % in 2050 as compared to baseline 2015. The consumption per capita/year would decrease from 106 litre/ capita in the baseline scenario to 88 litres/ capita as the EU28 average, saving on average EUR 2.90 per household per year. Options 2.1 and 2.2 in conjunction with options 4.2 and 4.3 would induce behavioural changes and not only influence consumers, but also water suppliers' behaviour to improve water quality. Empowered citizens would follow and participate more actively in the water management decisions, creating a sense of ownership among the local community and provide incentives for protecting and improving their water supply. The local community can then facilitate the identification, the access and the management of the risks and hazards in the area, and balance the importance of safe water supply against other competing needs, such as housing and education. The impact would be more significant under option 2.2 as it would include all water suppliers, not only the large ones as is the case in option 2.1. 6.3.1.Affordability and social inclusion In general the impact of the options on affordability of water services for the average EU households are very low, and affordability figures continue to range between 0.85 - 1.1 % of the disposable household income. The 'expensive' option 1.2 has a comparatively strong impact on the consumers' disposable income as it increases household cost on EU average by EUR 14.90 per year. The social inclusion impact is mainly related to option 5.2 on the improvement of access to safe drinking water. Expanding the current objective of the Directive to demand from Member States the provision of alternative self-supply systems or access to water in publicly accessible places or other relevant measures to improve access to water would have significant positive social impacts, as a larger number of people would get access to safe drinking water, especially vulnerable and marginalised parts of the population. As a consequence of better social inclusion and better health of the population, benefits include productive days gained per year for the working population and time-savings (working days gained). Option 5.2 using conservative assumptions (see section 5.5) would increase costs on average in the EU by EUR 2.5 per household/per year and has consequently a much lower impact on affordability than the discarded option 5.1 whilst still achieving a considerable improvement with regards to access to drinking water. On household level it is assumed that especially option 4.3 but also option 5.2 will lead to a decrease in the consumption of bottled water. Option 4.3 would lead to a decrease due to an assumed change in behaviour which will take place based on the availability of information on tap water. Options 5.2 would decrease the need for buying bottled water, as citizens would have the possibility to drink tap water instead. Savings are assumed to be EUR 2.90 (4.3) and EUR 0.40 (5.2) per household per year. 6.4.Environmental impacts 6.4.1.Water Pollution The main environmental impacts from the suggested options include: the quality of water resources, reduction of pollution at source for water resources abstracted, improvement of water resources where waste water is discharged (following lower levels of pollutants in drinking water), energy consumption, environmental externalities of consumption of bottled water, which also contribute to reducing the amount of riverine and marine litter, resource efficiency; and biodiversity. Drinking water is influenced by the quality of fresh water bodies: simultaneously the requirements for high drinking water quality are also drivers that influence the protection and thus the quality of fresh water bodies. Due to these interactions, impacts are difficult to attribute. It is assumed that in the baseline 2050 fresh water bodies' quality will keep on improving notably because of the effective implementation of the existing water related directives. It is assumed that the chemical status of surface and ground water bodies will improve by 10 percentage points by 2050 for all water bodies, and by 20 points where an RBA has been implemented. Options addressing objective 1 will lead to reductions of pollutants in drinking water. More relevant pollutants will be monitored, which would allow suitable interventions and thus to remove potential risks for the environment. Option 1.2 would have a more significant environmental impact than option 1.1 since it would cover also emerging substances. Option 1.2 has thus the potential for the largest reduction in pollution loads. Options addressing objective 2 will have through their integrated risk reduction a positive environmental impact, as risk assessments have the influence and the possibility to improve water quality across all options. It will have in particular a potential to enforce measures at source. The level of contribution depends on the individual cases. It includes the prevention of industrial and pharmaceutical pollution, and different characteristics of the farming such as the crop rotations, intensity of cultivation, integration or not of livestock production as well as type of livestock production, addressing fertilizers, tillage, irrigation, green manuring and liming, reducing monoculture. All these characteristics have a bearing on the quality of water bodies in the area, and changes in these characteristics due to options 2.1 and 2.2 might therefore significantly reduce the level of harmful environmental impact. The positive effect of implementing measures addressing option 3 will lead to less 'toxic/harmful' contact materials itself, both for metallic and plastic materials, and also reduce the leaching of contaminants into the water cycle. Also, options addressing objective 4 will have a small but positive environmental impact, as consumers will have better information on water quality, and might require further stricter and precautionary measures to limit risks to a minimum. With regard to option 5.2, it will open up additional catchments and require additional measures at source, which might have positive local impacts on fresh water quality through reduced pollution loads. The biggest impacts would be in areas with currently low connection rates to PWS. The most affected countries are Romania, Lithuania and Latvia. Reducing the amounts of pollutants in drinking water by unlisted and emerging substances would have a positive environmental impact on water bodies, water ecosystems and organisms. The benefits on the status of aquatic ecosystems and related ecosystems will thus also have a positive effect on biodiversity, as well as on the recreational value of ecosystems. The increased measures at source following options 2.1 and 2.2 will to a large extent include changing agricultural practices that have a significant impact on water bodies, soil quality as well as biodiversity. When farmers are adapting their practices to reduce pollution at source, this can have positive impacts on biodiversity/ landscape in the areas where changes in farm practices take place. 6.4.2.Resource efficiency

Option 4.3 provides consumers and suppliers with strong incentives to improve water and resource efficiency. Smart information will empower the consumers to hold suppliers accountable for managing leakage rates at acceptable levels. This will lead to early leakage detection, fixing and decreased water use, and will contribute to reduce leakages from water supply networks, that currently remain on EU average at 23 %. Measures addressing leakage problems in distribution systems would in general reduce water consumption as well as lead to energy savings. Due to its technical complexity, for example to consider unavoidable losses, it was not possible to estimate the impacts of the options on potential leakage rate reductions. Regardless, reduced water consumption would have a significant environmental impact on water ecosystem and related ecosystem services, especially in already water stressed areas. 6.4.3.Energy Drinking water supply by water pipes is in comparison to all other transport modes very energy-efficient. The energy needed for distribution to provide each citizen with about 50 000 l/ year equals the energy needed to produce three litres of bottled water. The total energy consumption relates to the energy consumed in the process for producing drinking water, which varies greatly due to differences in the size of the water systems, pumping requirements between geographic locations, and raw water characteristics and quality. The overall greenhouse gas (GHG) emissions of the EU drinking water supply are roughly 6 million tonnes CO2 eq.. Reduced energy consumption will also bring associated reduction in GHG emissions. Energy consumption for treatment represents 50 % of total energy consumption for the EU drinking water supply, followed by abstraction, whereas distribution represents on average only 5 %. Thus options that reduce the need for treatment, by for instance applying measures at source, would result in energy savings. Options 2.1 and 2.2 will thus have a positive energy impact. Option 1.2 that will require an increased treatment estimated by +30 % will thus have a negative energy impact. Also option 5.2 will require more treatment for alternative supplies and source measures, which will increase their energy demand by 50 % (estimates). Overall, estimates show that 30 % energy savings could be achieved from improving water efficiency, to which in particular options 2.1, 2.2, 4.2 and 4.3 contribute, which will very likely overcompensate additional energy consumption induced by options 1.2 and 5.2. 6.4.4.Bottled water This Impact Assessment has also analysed the bottled water consumption in EU28, as this is related to social but also environmental effects. Through better availability of information to consumers an improvement in confidence in drinking water would be achieved, which in turn would lead to a reduction of use of bottled water. Reduced consumption of bottled water would result in a reduction of the associated use of resources, energy consumption, emissions and waste generation from the production and transport of plastic and glass bottles. Options 4.2 and 4.3 would therefore lead to improvements in resource efficiency. An average EU citizen currently consumes 106 litres of bottled water per year, in some Member States like Germany, Malta, Italy up to 170 l. Option 4.3 for which a reduction against the baseline from 100 to 88 litres per year is estimated by 2050, would already reduce GHG emissions by 1.2 million tonnes CO2 eq. This represents 20 % of the total energy demand of the whole EU drinking water supply (Calculation/ Assumptions in Annex 4). Thus options, such as option 4.3, that contribute to reduce bottled water consumption have a significant positive energy and climate change impact. Stakeholders were however vocal about using the bottled water as an indicator for consumer confidence in tap water and pointed out that that the reduction potential of a few litres per consumer and year is low, whereas the bottled water industry is important for local employment and for diversified choice of drinking water. 6.5.Administrative Burden Reduction Impacts The evaluation did not identify provisions that cause high administrative burden. The tasks done by health authorities that relate mainly to monitoring and surveillance are marginal in comparison to the work of water operators. No substantial changes to these costs are expected to occur except for options 2.2 and 4.1 (Annex 4). Positive economic aspects related to administrative burden-reduction will mostly be achieved through adoption of option 4.1. This option identified the simplification - by very substantially limiting reporting to the Commission to useful information and data - and automation potential of the reporting. A reduction of reporting requirements to the most important data on exceedances and significant incidents is assumed to significantly reduce administrative burden for Member States and the Commission. The set-up cost amount to EUR 2.9 million in comparison to the baseline 2050 and relate mainly to developing the software and linking of systems. After these initial investments, annual savings on reporting provisions are estimated at EUR 0.35 million, visible in the reduction of the operating costs for reporting. Whether the simplified reporting can be at the same time interlinked with the European electronic reporting tool under Water Information System for Europe (WISE), or a new reporting tool in the follow-up of the Fitness Check of Monitoring and Reporting, remains to be seen. For options 2.1 and 2.2 the main challenge for administrations and national authorities will be the change of approach to set up risk assessment systems. This is expected to lead to set-up investment costs of EUR 6.25 million in comparison to baseline 2050. More knowledge and other resources are needed for these options, as the risk-based approach requires a different way of thinking and of administrative procedures than current approach via fixed monitoring intervals. Thus, the first years will require learning, training and guidance. This will probably initially be considered as a new burden by those who have to implement these changes. In the beginning, difficulties are expected in monitoring the effectiveness. All this will be in particular an issue for countries with a significant share of small water supplies and SMEs involved. Therefore, option 2.2 foresees sufficient time to putting the RBA in place. Experience with the RBA has shown that over the years this new system will reduce unnecessary administrative burden and analyses significantly. On the longer run, administrative burden reduction can be expected by the reduction of the number of parameters to be monitored and reported. The challenges faced by Option 3 are more of a regulatory nature. It is interesting to note that most of the administrative costs are spent on conformity assessment procedures and testing (75 %) concerning materials and products in contact with drinking water. Smaller cost components include the design of products, their production processes (15 %) and the awareness raising effort for companies (15 %). The annual burden reduction potential for manufacturers has been estimated at EUR 669 million, assuming that in the future materials in contact with drinking water are fully recognised within an internal market without obstacles. 7.Comparison of options 7.1.Health Protection versus Costs As the objective of the DWD is the protection against adverse health effects from drinking water, the main question to be answered in this Impact Assessment is how effective the different options contribute hereto, and how efficient they are. In terms of potential health impacts, the best health impact, largest reduction in PPHR by 2050 is obtained with option 1.2 (full list of parameters) followed by Option 4.3 (smart-information on water quality and water services performances). In terms of costs, option 1.2 is the most expensive one. On the opposite side of the spectrum, option 3, options 2.1 and 2.2 lead to some (although limited for these two last) benefits (cost savings) as compared to the baseline scenario. Option Change in PPHR as compared to baseline (millions of inhabitants) Total set-up costs in addition to baseline 2050 in million EUR Operating costs in addition to baseline 2050 in million EUR Change in household costs to the consumer 1.1 -6,6 1 965 437 + 2.60 1.2 -14,7 5 895 2 842 + 14.90 2.1 -1.2 22 -76 - 0.35 2.2 -1,5 25 - 96 - 0.40 3 -0.9 0 - 669 - 3.20 4.1 0 2.9 - 0.352 + 0.001 4.2 -6,6 4.2 876 + 4.20 4.3 -7,9 5.6 933 + 4.50 5.2 -0,6 1 411 60 + 2.50 7.2.Ranking overall Table 4 provides a ranking of the options in comparison. The assessment of the ranking is based on the findings and analysis described in Sections 5 and 6, as well as in Annex 4. The ranking is based on quantitative and qualitative factors derived from the analysis. The scale outlined in Table 3 shows how "+" and "-" are attributed to positive and negative impact expectations. As each category in Table 4 has different indicators, Annex 4 (Section 8) can be consulted for an overview of ranges and cut-off points for each quantified category. Very large negative impact Large negative impact Medium negative impact Small negative impact No impact Small positive impact Medium positive impact Large positive impact Very large positive impact - - - - - - - - - - +/- + ++ +++ ++++

The "overall ranking" of each option is determined through the accumulation of "+" and "-". In the accumulation positive impacts for the reduction of the PPHR have twice the weight as other positive/negative impacts to acknowledge the Directive's overarching aim of protecting human health. As the aim is to address all four/ five areas of improvement that were uncovered in the Evaluation of the Directive, options are always chosen in comparison to other options in their set. Through this, it will be ensured that all areas of improvement are covered through the amended Directive. As the revision of the DWD is part of the REFIT programme, option 4.1, which entails simplifications of reporting requirements to the Commission, is part of all combinations. As it does not have significant effects on many of the categories outlined in the table, it was chosen – also for readability purposes – to not include option 4.1 in the table. It should be noted that in the table below options addressing the same objective are being compared. Since the revision of the Directive aims at addressing all above identified and outlined problems, it is now important to identify from each set of options the best one to build an efficient policy package that address all current issues. Option 1.1 Option 1.2 Option 2.1 Option 2.2 Option 3 Option 4.2 Option 4.3 Option 5.2 HEALTH IMPACT Reduction of PPHR at short/mid-term ++ (- 33 %) ++++ (- 74 %) + (- 6 %) + (- 8 %) + (- 4.2 %) ++ (- 33 %) ++ (- 39 %) + (- 2.8 %) Reduction of PPHR at long term + (-3 %) ++++ (-15 %) +/- (0 %) + (-1 %) +/- (0 %) ++ (- 5 %) ++ (- 6 %) +/- (0 %) ECONOMIC IMPACT Increase/ decrease in annualised set-up and operating costs (€million) - (+ 535) - - - - (+ 3 137) + (- 74) + (- 93) ++ (- 669) - - (+ 876) - - (+ 934) - (+ 530) Impact on SMEs and R&D + ++ + + + + ++ ++ Internal market impact + ++ + + +++ +/- +/- ++ Change in employment + (+ 4 112) ++ (+ 24 353) +/- (- 674) +/- (- 883) - (- 8 525) + (+ 3 889) + (+ 2 128) + (+ 8 926) Change in health cost ++ (- 68) ++++ (- 152) + (- 14) + (- 17) + (- 14) ++ (- 80) +++ (- 91) + (- 9) SOCIAL IMPACT Change in costs per household (€/ year) - (+ 2.60) - - - (+ 14.90) + (- 0.35) + (- 0.40) - (- 3.20) - (+ 4.20) - (+ 4.50) - (+ 2.5) Increase in confidence in water quality + + + ++ +++ ++ ++++ + ENVIRONMENTAL IMPACT Improvement of water quality + ++ ++ +++ ++ ++ ++ ++ More treatment of pollution at source + ++ ++ +++ +/- + + + Energy savings - - - ++ +++ +/- - - - - OVERALL RANKING Points 14 + 3 - 31 + 9 - 14 + 0 - 20 + 0 - 14 + 2 - 17 + 4 - 21 + 4 - 12 + 4 - Accumulated result 11 22 14 20 12 13 17 8 7.3.Who will be affected? The analysed options of amending an existing Directive affect citizens, water operators and authorities in a rather moderate way (see Annex 3 for more details). The main impacts of the options for an EU citizen will be for EU citizens through the reduction of the probability of being at risk (PPHR) combined with a reduction of potential chronical effects; and with regard to the affordability of drinking water. Water suppliers could be most affected by costs for monitoring and additional treatment, and through the requirements to develop and apply a risk-based approach even though mid-term financial benefits are expected. Manufacturers of products and materials in contact with drinking water will be affected through changes in product standards and approvals. Public authorities will also be challenged on how to control the risk-based approach and apply the principles of transparency. 7.4.Presentation of possible policy packages The Impact Assessment has identified five problem areas, defined five corresponding objectives with each objective having a set of options. The ranking of the options along a variety of categories can be found in section 5. To cover as effectively and efficiently as possible all four identified problem areas of the Evaluation of the Directive, three 'feasible' packages of options have been developed with each package containing options from all four objectives. The packages have, however, different levels of ambition in terms of health outcomes. For these packages, and in line with the main objective of the Directive, the reduction of health risks has been given high priority. For the ambitious packages only the very positive ranked options 1.2, 2.2, 3 and 4.3 were chosen from Table 4 . In order to analyse only 'feasible' packages, options with excessive costs and limited impacts on health protection were not selected for the analysed policy packages. In summary, the three packages, combining different options were further investigated, are: ·Package 1 (less ambitious) = 1.1 + 2.1 + 3 + 4.1 + 4.2 ·Package 2 (medium) = 1.2 + 2.2 + 3 + 4.1 + 4.3 ·Package 3 (advanced) = 1.2 + 2.2 + 3 + 4.1 + 4.3 + 5.2 The modelling assumptions are included in Annex 4. Figure 11 shows the health impacts of the remaining options plus the three combinations. It is assumed that the options cannot just be added up to each other, as also already noted in Section 2 the problems and consequently also the options addressing them interact/synergize and should not be seen in isolation. Synergetic effects of combinations of options are assumed to deliver higher health benefits whilst reducing the overall costs. Consequently, "packaged" options are assumed to be less expensive than individual options. The synergy effects have been considered by including specific assumptions for the calculations at Member State and EU level (Annex 4). The main synergetic effect occurs under the simultaneous adoption of options from set 1, 2 and 4.

For the ambitious policy packages this means: whereas option 1.2 ensures that a vast number of substances is covered in general, option 2.2 allows the individual water supplier to opt out for individual parameters, if it is clear that these are not to be found in the supplier's catchment area. Consequently, the large positive health effects of 1.2 are not endangered, but costs can be reduced as the water supplier will only need to apply a tailored treatment to the specific substances found in the specific catchment area. Furthermore, option 2.2's holistic approach will lead to more treatment at source and preventive measures, which entails overall cleaner raw water, which needs less treatment. Consequently, fewer substances will be found in the water, only a shorter list of substances needs to be monitored and treated for, and costs can therefore be reduced. This positive interplay is supported by option 4.3 that entails an enabling framework to empower the consumer. An empowered consumer is expected to pressure the water supplier for efficient management whilst maintaining highest standards of the water quality. This will also entail a reduction of leakages, which means that less treated water is lost – and therefore overall less water needs to be treated. As can be seen in Table 5 individual options such as 1.2 achieve significant health benefits by reducing the PPHR to 1.01 % - however, the option does so whilst costing more than EUR 3 000 million. Assuming that the synergetic effect of combining option 1.2 with 2.2 and 4.3 achieves reductions in, for instance, treatment needs by about 10 % to 15 %, policy packages that contain both will have significantly lower costs than only option 1.2 alone. Comparison individual options and packages Remaining PPHR in 2050 under individual options Costs (annualised set-up and operating cost) in comparison to baseline 2050 (€/million) Baseline 2050 3.81% 0 Option 1.1 2.56% 535 Option 1.2 1.01% 3 137 Option 2.1 3.59% -74 Option 2.2 3.52% -93 Option 3 3.65% -669 Option 4.1 3.81% 0.23 Option 4.2 2.56% 876 Option 4.3 2.32% 934 Option 5.2 3.71% 530 PP 1 (1.1+2.1+3+4.1+4.2) 1.60% 253 PP 2 (1.2+2.2+3+4.1+4.3) 0.90% 1 647 PP 3 (1.2+2.2+3+4.1+4.3+5.2) 0.79% 2 177 Assessment of policy packages Figure 11 shows that package 1 would reduce by 2050 the PPHR by 58 % or a reduction of 11.6 million people at risk, package 2 by 76 % or 15.3 million and package 3 by 79 % or 15.9 million. The cost of drinking bottled water to consumers will decrease by respectively EUR 336 million (package 1) and EUR 610 million (package 2 and 3). As previously indicated, the current costs for supplying drinking water in the EU in 2015 amount to EUR 46.3 billion (see Section 5.0) and are assumed to be 47.9 billion in baseline 2050. In comparison to baseline 2050, the assessments of the costs of the three policy packages show that they will lead to an increase in annual costs of EUR 0.3 billon (PP1), EUR 1.6 billion (PP2) and EUR 2.2 billion (PP3) respectively, see Figure 12 . For 2050 the pure total set-up costs in comparison to baseline 2050 would amount to EUR 2 billion (PP1), EUR 5.9 billion (PP2) and EUR 7.3 billion (PP3) ( Table 6 ). The combination of the PPHR and cost indicators helps assessing the cost-effectiveness of each policy package, as illustrated in the figure below, which compares the cost-effectiveness ratio of the three policy packages as compared to the ratio of individual options. Overall, while package 3 delivers the highest effectiveness in terms of reduction of the indicator PPHR, package 2 is more cost-effective than package 3. Package 1 involves fewer costs but has a more limited effect on the main objective of public health. With regard to affordability, policy package 1 will increase the total cost per household (baseline: EU28 average 2050: EUR 228) by ca. EUR 1.20 euro per year (+ 0.5 %). For policy package 1 an increase can be observed for instance in Finland from EUR 263 per year in the baseline 2050 to EUR 264.80 per year. At the same time in some Member States, such as in Croatia the costs per household could slightly decrease from EUR 149.80 per year in the baseline to EUR 149.30 per year. Policy