6 March 2025
WAREG, the association of 34 Water Regulatory Authorities in Europe (www.wareg.org), welcomes the European Commission’s initiative to develop an EU-wide Water Resilience Strategy. Independent national regulatory authorities where they exist in EU Countries play a crucial role in ensuring safe, qualitative and economically affordable water services to all citizens, and at the same time they foster stability of cost-recovery rules, hence encouraging efficient levels of expenditures, investment and water services defined by the public and private stakeholders involved at different stages within each Country, according to its water governance.
Water is a strategic enabler of the European economy, its access must be ensured to all EU citizens, at good quality standards and affordable prices, and in such a way to guarantee full respect by the local providers of water services of the cost-recovery and polluter-pays principles established in the EU Water Framework Directive and in its subsequent European directives and regulations. In this context, WAREG shares the EU objective to “Promote a competitive EU water industry and a clean, water-wise and circular economy” and wishes to contribute to the areas of intervention that the European Commission will propose.
Background of the EU Commission initiative
The European Commission has recognized the urgent need for a coordinated EU-wide strategy to address growing water challenges, including water scarcity, pollution, and climate-induced risks. The upcoming European Water Resilience Strategy, like the EU Commissioner Jessika Roswall recently emphasized, will focus on preserving water quality and quantity, repairing the water cycle, strengthening the water industry’s competitiveness, and driving innovation and financing solutions.
The EU Commissioner also highlighted that water is both essential and undervalued, often treated as an infinite and cost-free resource, despite its critical role in energy production, agriculture, and industry. She warned that business-as-usual is no longer viable due to the increasing pressure from mismanagement, pollution and climate change. Extreme events such as droughts and floods have already caused billions of Euros in damages across EU Countries, hence demanding urgent action to enhance crisis preparedness and resilience.
Recognizing the severity of these challenges, the European Commission has launched a Call for Evidence to shape the EU Water Resilience Strategy. This initiative aims to ensure availability of clean water, protection against water-related risks and economic resilience. The strategy will integrate water considerations across policies and funding mechanisms while strengthening cooperation between key stakeholders, including regulators, local authorities, industries, and citizens.
The Commission has identified five key action areas for intervention:
- Governance and implementation – Strengthening policy coherence and enforcement.
- Infrastructure – Ensuring investment in resilient water systems.
- Finance and investment – Mobilizing public and private funding for water resilience.
- Security – Protecting water supply from disruptions and crises.
- Industry, innovation & education – Promoting a competitive and water-smart EU economy.
A fundamental principle of the strategy is ‘Water Efficiency First’, which prioritizes investment in efficiency, circularity and water reuse to optimize water resource management. The EU Commission underscored that improving water resilience is not only an environmental necessity but also a key driver of the EU’s long-term competitiveness and strategic autonomy.
WAREG position and key recommendations
WAREG welcomes the inclusion of a water resilience initiative among the EU Commission’s 2024-2029 policy guidelines. Water represents a strategic and enabling factor for the European countries for at least two reasons: the need to ensure a resource of adequate quality and quantity for European citizens, and to account for the growing water needs of traditionally water-demanding sectors (industry and agriculture) and new high-tech and energy sectors (e.g. data-center cooling).
In this context WAREG supports the EU Commission objective to “Promote a competitive EU water industry and a clean, water-wise and circular economy” and wishes to contribute to the following areas of intervention:
A) Finance, investments and infrastructure (no EU legislative measure required)
The regulators recall the attention on Water efficiency, through an effective pricing policy and full implementation of the cost-recovery principle. The EU monitoring (2021) shows that at least one-third of EU Member States apply an overly restrictive definition of water services subject to cost recovery, limiting them to drinking water and wastewater services.
Key recommendations:
- Full recovery of economically justified costs and regulatory justified return on investments. The European Commission should identify a common methodological approach, , in order to promote increased cost recovery rates for all water uses, with preliminary monitoring of Full Cost Recovery levels for all uses within the River Basin Management Plan – IV cycle (2027-2033), including:
- Opportunity-costs for alternative uses.
- Environmental costs for ecosystem restoration.
- Financial costs for infrastructure and management.
- Costs related to physical and cybersecurity of water management services.
- Incentive-Based Tariff Structure. Develop tariffs for all uses that:
- Transmit clear price signals to users.
- Encourage water conservation.
- Polluter Pays Principle. Ensure that environmental costs are correctly attributed to polluting entities.
- Water Resilience costs sharing. Ensure that the additional costs of new infrastructures aimed at improving resilience are shared between all users who benefit from that additional resilience.
- Ensuring Sufficient Water Resources. Properly located and designed water reservoirs are indispensable for ensuring adequate water quantity and quality for public water supply, industry, agriculture, and other human activities, as well as for managing hydrological extremes and maintaining river flows. Ensuring a sufficient supply of accessible water resources is a fundamental prerequisite for an economically and water resilient EU. Given ongoing climate change, including prolonged droughts with growing precipitation deficits, the presence of existing and the construction of new multi-purpose water reservoirs can significantly improve this unfavourable situation.
These measures would strengthen the implementation of Article 9 of the Water Framework Directive, promoting more sustainable and efficient use of water resources.
B) Water sectoral targets (EU legislative measures required).
WAREG endorses the proposal of the European Parliament (Draft Report 2024/2104) for a legislative framework that should set binding water efficiency and water abstraction targets.
Key recommendations:
- It is necessary to explore the opportunity to establish a water conservation incentive mechanism similar to systems already established for reducing polluting emissions (Emission Trading System – ETS) or for energy efficiency (negotiable energy efficiency certificates – White Certificates). This system would aim to promote the reduction of water consumption.
- This mechanism should be primarily targeted at non-regulated sectors, especially in cases where utilities already operate under regulatory frameworks addressing water losses and resilience issues. This approach could be complementary to water rights systems, creating a market-oriented approach toward safeguarding water resources and incentivizing sustainable behaviours.
C) Digitalization and innovation
- Harmonizing Key Performance Indicators (no EU legislative measures required). National Water Regulators in WAREG are working at harmonizing key performance indicators (KPIs) in the European water sector based on high-quality data (validated or audited by Regulators), which are essential to understand how water-service providers operate and define targets to be met. In its report of 2023 WAREG identified 425 KPIs used by its members to measure similar parameters. For instance, water losses are measured alternatively according to non-revenue water, unmeasured water or according to real losses. Harmonizing this KPI is particularly relevant considering MS reporting obligation under article 4(3) Drinking Water Directive. This work on water losses KPI is already ongoing on a specific subgroup of DWEG (Drinking Water Expert Group), but other KPIs need to be addressed . Each EU Country is characterised by a wide variety of KPIs, hence generating an opportunity to launch an aggregated analysis of KPIs at European level, that WAREG will start in 2025.
Key recommendations:
- WAREG recommends to extend the experience of specific regulatory mechanisms aimed at improving and incentivising a proactive attitude on resilience, such as Italy’s “M0” indicator, in accordance with the Guidance n. 24 “River Basin Management in a changing climate” published in July 2024.
- WAREG will set a list of indicators according to a “scorecard approach” and contribute to aggregation process for monitoring purposes and to guarantee a minimum quality on data (reliability criteria).
- Regulators can contribute as a reliable source of information including publications of information.
- Balanced approach between nature-based and technical solutions (no EU legislative measures required). Climate change needs more attention on these solutions. Regulators propose creating a platform for exchanging best practices and pay attention to the technology neutrality principle.
- Governance, implementation and cross-border cooperation. The governance arrangements to manage water resources in the EU is highly fragmented for historical, geographical and political reasons. WAREG agrees with the compliance with the EU subsidiarity principle, although the tools to be used for an effective water resilience strategy need more cooperation and support in the EU, especially from a financial perspective.
Key recommendations:
- WAREG suggests that water considerations should be mainstreamed across all EU policy areas. EU policies should consider and promote the role of independent economic regulation under a principle of no one-size-fits-all, to accelerate the transition towards resilient drinking- and urban waste-water sectors.
- It is essential to make a prospective selection of activities based on existing water resources rather than the current predominant approach, which prioritizes activities first and then seeks water sources to support them.
- WAREG suggests to the European Commission the promotion of a water governance model in which the management of water resources in each member state should be carried out by an entity independent of the different uses of water. We believe that this unified and neutral water management will be more likely to achieve sustainability and circularity objectives.
- Water management sector is often overlooked as not a perspective and not competitive enough sector to work in and that causes problems with personnel provision in the sector in the close future. Promoting the sector and education of the next specialists is in the interests of the society but is onlooked as not so important so only those who work in the sector see the criticality of the situation and impact on the continuity of the services.
- Introduction of common guidance on life-cycle asset management in the WSS sectors in EU.
- Introduction of common methodologies for estimation of legal per capita consumption norms in EU.
- Enforcement of metering of water abstracted to be done by the state, not by the users.
- Common cross-national databases on water abstraction licensing regime.
- Enforcement of infrastructure cadastre.
- Water security (no EU legislative measures required). For the water regulatory authorities in Europe, water security, both in terms of quality and physical and economic accessibility to water and sanitation, is also a priority in our regulatory activities.
Key recommendations:
- Since this initiative is based on “the full implementation of the reinforced set of EU rules,” we believe it should incorporate the principles of the regulatory provisions set out in Directives 2022/2555 and 2022/2557 of the European Parliament and the Council of December 14, concerning cybersecurity and the resilience of critical entities. WAREG believes that a European strategy for water resource resilience must incorporate security from multiple perspectives: maintaining quality, ensuring universal physical and economic accessibility, guaranteeing intergenerational sustainability, and protecting these resources against accidents and incidents—specifically, against deliberate acts of contamination of drinking water or the destruction and damage of supply systems.