Energy is highly-regulated in the EU — water, less so

Article from Brussels Morning

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Article from Brussels Morning

By Andrea Guerrini

Brussels (Brussels Morning) Europe boldly leads the world in environmental legislation yet, when it comes to water, EU regulation still shows a relatively light touch. As European water regulators, we believe water and wastewater should be regulated in a similar way to energy. 

This is not about regulation just for the sake of control. On the contrary, it has been shown that regulators are key to building a more sustainable and transparent water system.

Countries with water regulatory authorities demonstrate greater compliance with EU regulation standards and regulators have the in-depth knowledge of both water industry and consumer needs. Water regulators have the access needed to collect and analyse the data required to help the EU more rapidly achieve its net-zero ambitions in the water sector. Moreover, in doing so, they can ensure transparency.

This is why our group supports the idea of a Water Directive, inspired by the Energy Directive. Such a regulation would ensure that the water system is maintained and that citizens get a fair deal. This would be to the benefit of citizens, the water system and the environment. 

At the recent European Forum for the Regulation of Water Services (EFRWS), our members – the water regulators – called for a more harmonised regulation of water and wastewater services in Europe, in line with the circular economy and net-zero principles.

An expanded regulatory framework for water would protect both the environment and consumers since it would ensure that investments in water are made wisely and that tariffs are used in such a way as to incentivise improvements in European infrastructure.

Water shortages caused by drought are already a serious issue in Europe, brought on as they are by climate change and exacerbated by infrastructure issues such as leakage. Sustainable water management should be a priority across the EU as it builds back in its recovery plan. 

We need to ensure that these investments deliver for the environment and for citizens. Investment must be planned wisely and implemented effectively, if they are to deliver the most value for citizens and the long-term stability of the water system. 

As regulators, we have a wide range of tools and economic instruments at our disposal – from tariff-setting and penalties to incentives for innovation and efficiency. These tools aim to ensure long-term investment stability, minimise price fluctuations and, in some instances, to also prevent political interference in the delivery of water services.

It is in everyone’s best interest to have a fair price for water and to provide reliable delivery of water services with environmental protection at the heart of the approach. The EU recovery fund, NextGenerationEU, should protect and benefit citizens. Water regulators can help implement this in a fair and neutral way.