Reflecting on the successful convening of the European Forum on the Regulation of Water Services, the EFRWS23 Water Regulation Insights offer an in-depth look at the collaborative advancements and pivotal discussions led by industry regulators. This summary delves into the critical role these discussions play in enhancing environmental sustainability and the strategic impact of regulatory bodies within the water sector. Join us as we navigate through the key takeaways from this landmark event.
by Andrea Guerrini, WAREG President and ARERA Board Member
In his opening speech at EFRWS23, Andrea Guerrini emphasised the progress in complying with EU water legislation due to the role of water regulators. He noted improvements in water service quality and the emerging challenges from EU climate change policies, stressing the need for effective regulatory tools for environmental sustainability. Guerrini discussed the impact of the energy crisis, particularly from the Ukraine conflict, on the water sector. He highlighted the revision of the Urban Waste Water Treatment Directive, focusing on pollution reduction, energy neutrality, and transparency. Additionally, Guerrini spoke on the importance of climate neutrality, the water-energy nexus, and the role of regulators in achieving decarbonisation goals. He announced the WAREG’s report on Key Performance Indicators, underscoring the need for standardisation in measuring utility performance. Lastly, he called for an integrated European policy for water resilience, combining various water sources and uses for effective policy formation.
Ricardo Mourinho Félix, Vice-President of the European Investment Bank (EIB), in his speech at EFRWS23, focused on the EIB’s commitment to climate and water sector development. He highlighted the EIB’s alignment with the Paris Agreements, with significant investments directed towards climate action and environmental sustainability, especially in the waste and water sectors. The EIB aims to mobilise 1 trillion euros by 2030, acknowledging water’s crucial role in reducing greenhouse gas emissions and climate change adaptation. He emphasised the importance of regulatory compliance in the water sector, noting the challenges it poses, especially for smaller project promoters with technical skills gaps. Mourinho stressed the need for just, affordable transitions and bankable, socially sustainable projects. He also discussed the EIB’s role in private capital mobilisation, maintaining a balance in investment and operational costs, and the importance of efficient regulation in the sector.
Session 1 EU’s New Wastewater Directive: Impacts on Customers and Industry
“The EU proposal for a recast urban Wastewater Treatment Directive: Potential impacts on tariffs in EU Member State“
by Vera Eiró, President of the Board of Directors of ERSAR.
In her keynote presentation at EFRWS23, Vera Eiró, President of the Board of Directors of ERSAR, discussed the economic impacts of the proposed Urban Wastewater Treatment Directive (UWWTD). She emphasised the Directive’s goals to reduce urban pollution and achieve energy neutrality by 2040, highlighting potential financial implications, including anticipated cost increases and rising water tariffs. Eiró presented a WAREG study showing variability in the Directive’s impact across EU member states, with potential tariff increases exceeding initial estimates. She stressed the importance of regulators in policymaking, calculating tariffs, and considering the financial feasibility of implementing the Directive. The study’s findings underscored the need for detailed estimations in different countries, reflecting the varied impacts on consumer tariffs.
Session 1 EFRWS23 – Panel:
Each speaker provided their perspective on the challenges, roles, and potential solutions in the context of the new Urban Wastewater Treatment Directive, focusing on governance, financing, and the need for innovation and systemic approaches to water management:
- MEP Maria Gracia Carvalho: Stressed the importance of information in policymaking and compared water sector regulation with the energy sector. She advocated for research and infrastructure development, highlighting Horizon Europe’s role in fostering innovation in water research.
- OECD Xavier Leflaive: Discussed the unique role of economic regulation in water management, emphasising the importance of data sharing and consumer awareness in improving utility performance and tariff-setting processes.
- EurEau Olivier Loebel: Focused on pollution control at the source, expressing concerns about weakening related legislation. He emphasised the role of Extended Producer Responsibility (EPR) in reducing financial burdens on taxpayers.
- EIB Vania Paccagnan: Talked about financing and implementation challenges, advocating for systemic thinking and operational efficiency. She highlighted EIB’s role in innovative financing mechanisms and the importance of involving private capital and regulators for sector efficiency.
Session 2 EU Vision for Climate Neutrality and the Water-to-Energy Nexus
In her presentation at EFRWS23, Maria Salvetti shared preliminary results from a research project by the Florence School of Regulation for WAREG. The focus was on the role of water regulators in achieving energy neutrality in the wastewater sector. She discussed energy efficiency and neutrality, as well as climate neutrality, emphasising these as progressive steps in water management. Salvetti highlighted the fragmented governance of the wastewater sector across different levels, from the EU to local entities, and the need for coordination among them. She reviewed national energy and climate plans, citing Denmark as a unique example of national and local coordination. Salvetti also explored how regulators promote energy efficiency and neutrality through KPIs and tariff methodologies. Additionally, she noted that utilities are often ahead of regulations, moving towards energy and climate neutrality. Salvetti concluded by analysing technical, legal, policy, and investment challenges in achieving these goals.
Session 2 EFRWS23 – Panel:
- EC DG ENV Michel Sponar: Acknowledged the energy demands of wastewater treatment processes, especially for removing micropollutants. Despite the challenging circumstances in various regions, he emphasised the need for energy neutrality in the sector. He stressed the importance of stimulating market providers of wastewater technology to focus on efficient and sustainable practices.
- Water Europe Hans Goossens: Discussed how efforts to improve water treatment operations could lead to increased energy consumption. He suggested focusing on operational improvements, water savings, and smarter grids to reduce specific energy consumption.
- Nature Water Fabio Pulizzi: Highlighted the potential for scientific innovations to achieve energy and carbon neutrality in water treatment. He mentioned research on low-energy pollutant degradation, lithium recovery, and photocatalytic water splitting for hydrogen fuel production.
- IAWD Lyubomir Filipov: Emphasised the importance of incentives for energy efficiency and innovation from regulators. He suggested that funding from EU sources could support energy neutrality efforts and stressed the need for cooperative efforts across governments and operators.
Session 3 Climate Resilience and Adaptation of Water Services in the EU and EU Neighbouring Countries
“How do economic regulators measure quality and efficiency of water and sanitation services? Performance monitoring of water resilience“
By Ivaylo Kastchiev, Director, Energy and Water Regulatory Commission of Bulgaria and WAREG Vice President
Ivaylo Kastchiev’s presentation at EFRWS23 highlighted the critical role of economic regulators in addressing water scarcity in Europe. He focused on the importance of monitoring and improving the quality and efficiency of water and sanitation services. Key points included the persistent issue of water scarcity affecting a significant portion of EU territory, the need for effective performance monitoring using Key Performance Indicators (KPIs), diverse governance and regulatory models across European countries, and the challenges in benchmarking due to varied methodologies and data quality issues. Kastchiev emphasised that economic regulators play a vital role in data collection, analysis, tariff setting, and service quality evaluation, contributing to better water scarcity management.
Session 3 EFRWS23 – Panel
- EC DG ENV Claudia Olazabal: Highlighted the EU’s ongoing efforts in water management, dating back to the 2000 Water Framework Directive. Discussed the European Drought Observatory’s role in monitoring and forecasting droughts. Mentioned the upcoming Water Resilience Initiative aimed at enhancing water resilience by 2050. Emphasised a holistic approach, integrating marine and freshwater management.
- Aqua Publica Europea Bernard Van Nuffel: Presented successful strategies for managing water resources from Aqua Publica Europea members. Stressed the importance of long-term planning and identifying alternative water sources. Underlined the need for collaborative governance, integrating public authorities and stakeholders.
- World Bank Raimund Mair: Described the World Bank’s International Benchmarking Network for water and sanitation utilities (IBNET). He emphasised the importance of data for utility management and performance benchmarking. Mair discussed capacity building, including training and support for water utility associations.
- IWA Elisabeta Poci: Focused on challenges in the Western Balkans, including non-revenue water and wastewater management. She highlighted initiatives for capacity building and skill development in the water sector. Poci discussed the impact of EU integration processes on regional water management practices.
Closing Session EFRWS23 Insights
Andrea Guerrini, WAREG President and ARERA Board Member
In his closing remarks, Andrea Guerrini provided a wrap-up of the key messages coming from the three sessions. Highlighting the importance of maintaining the UWWTD EPR schemes to lighten the burden of implementation costs on consumers and the role of regulatory authorities in successfully implementing these schemes in the waste sector. Guerrini appreciated the introduction of energy neutrality goals and called for a mandate to entrust Regulators to give rewards and penalties to water utilities for achieving climate neutrality and energy neutrality goals. He announced that WAREG will continue to publish data concerning KPIs and water leakages. Finally, Guerrini stressed the importance that EU institutions play in standardisation and the willingness of WAREG to keep collaborating and providing useful data to the European Commission.
Veronica Manfredi, Director, DG ENV C, European Commission
In her closing speech at EFRWS23, Veronica Manfredi reflected on 2023 as a pivotal year for water management, emphasising collaboration and public attention on water-related issues. She noted significant political momentum, including a dedicated UN Water Summit and President Von der Leyen’s announcement of a water resilience agenda. Manfredi highlighted 2024 milestones, including the World Water Day and the European Green Week, that will be focused on water resilience. She stressed the importance of integrated water management approaches, covering pollution prevention, biodiversity loss, and prosperity. Key legislative developments like the Industrial Emission Directive and Ecodesign for Sustainable Product Regulation were mentioned, emphasising their role in water management. Manfredi concluded by underlining the need for improved economic governance in water regulation and the importance of investment, information, institutions, savings, storage, and solidarity in achieving water resilience.