On 26 October 2022, the European Commission published two
legislative proposals (Directives) to update the EU's water
legislation regarding: (i) urban wastewater treatment and (ii) surface and groundwater pollutants. The
proposal on urban wastewater treatment provides that companies
placing cosmetic and pharmaceutical products on the market should
be liable for the costs incurred by Member States in upgrading
urban water treatment plants. This is the very first time that an
EPR scheme is proposed by the EU in the field of EU water
policy.
And EPR is catching on in other places – while not included
in the Commission's initial proposal on surface and groundwater
pollutants, the European Parliament voted, at its plenary session
on 12 September 2023, to support a new provision requiring the
Commission to investigate the possibility of introducing EPR for
substances subject to monitoring requirements under that
legislation.
EPR in the field of water policy – What's the
big deal?
The introduction of EPR schemes in the field of water policy
represents a major evolution in their use. Up until now, EPR
schemes have mainly been used by the EU to manage the post-consumer
stage for packaging, batteries, and waste electronics.
However, EPR schemes aimed at addressing water pollution are
significantly more complex. This is because of the wide array of
potential sources of water pollution, the fact that pollutants are
identified at the chemical level (which are subject to variations
and transformations) and the difficulties in tracing
responsibility. There is also scope for a much wider range of
products placed on the EU market to be caught.
Given the additional financial and administrative burdens EPR
schemes represent for industry, and the potential business
opportunities to switch to substances perceived as less harmful, we
strongly recommend that affected companies follow these
developments closely.
(i) Urban Wastewater Treatment Directive
(UWWTD)
Under this proposal, companies placing cosmetic and pharmaceutical
products on the market would be liable for the costs incurred by
Member States in introducing quaternary treatment at urban
wastewater treatment plants.[1] Quaternary treatment is an
additional level of water treatment, intended to address the
presence of micro-pollutants in wastewater before it is released
into the environment.
What does EPR mean for affected
companies?
While the details of the EPR initiative are left up to the Member
States, producers (including importers and distributors) would be
required to form/join producer responsibility organisations in each
Member State where they place such products on the market.
Such producers would also be required to report the quantities of
products that they place on the market annually, as well as their
hazardousness in wastewaters, and make a financial contribution
based on those factors. The way in which contributions are
calculated would be intended to create incentives for producers to
switch to more environmentally favourable substances, when
designing their products.
Exceptions from EPR are nevertheless foreseen for: (i) producers
placing less than two tonnes of product on the market annually and:
(ii) products that do not generate micro-pollutants in wastewaters
at the end of their life.
Will companies be required to cover the full costs of
upgrading to quaternary treatment?
In an interesting and recent development, the European Parliament
voted, at its plenary session on 5 October 2023, to support the
introduction of EPR, while at the same time taking the view that
industry should not necessarily bear the full costs of upgrading to
quaternary treatment. The amendments adopted by the European
Parliament, foresee that EPR schemes may be complemented by a
maximum contribution of 20% from national funding. The motivation
for this leeway is to try to avoid any unintended consequences on
the availability, affordability, and accessibility of vital
products, in particular medicines.
The amendments adopted also foresee the possibility for producers
to be exempted from the EPR obligation if they can demonstrate that
their products are rapidly biodegradable in wastewater, or the
substances in their products are rapidly biodegradable in aquatic
conditions.
Could sectors other than cosmetics and pharmaceuticals
be potentially caught in future?
The Commission's decision to restrict the scope of EPR to
cosmetics and pharmaceuticals has been a major source of
controversy. According to the Commission, 92% of micro pollutants
found in receiving waters come from pharmaceuticals and cosmetics.
However, the pharmaceutical and cosmetic sectors, and also
environmental groups, have been quick to raise concerns about the
exclusion of other sectors (such as pesticides, biocides and
textiles) apparently generating appreciable amounts of
micro-pollutants.
The European Parliament agrees with the decision to restrict EPR to
pharmaceuticals and cosmetics but has also introduced a new
amendment expressly requiring the Commission to prepare a report by
1 January 2030 and every five years thereafter, assessing the need
to extend its scope, in particular, to products containing
microplastics and Per-and Polyfluoroalkyl Substances (PFAS) (taking
into account any restrictions on PFAS).
(ii) Surface and groundwater pollutants
The Commission proposes to make several amendments to the Water
Framework Directive (WFD), the Ground Water Directive and the
Environmental Quality Standards (EQS) Directive. Among those
amendments is the introduction of revised lists of chemical
pollutants in groundwater and surface water. Several new substances
are added to these lists for the first time, including PFAS, and
several pesticides, biocides and pharmaceuticals.
Member States are obliged to continuously monitor and report on the
presence of listed substances and take any necessary measures to
meet accompanying EQS (maximum concentration limits) set for each
substance.
What role may EPR play?
On 12 September 2023, the European Parliament voted in favour of
the ENVI Committee's Report, which foresees the Commission
presenting, within one year of the legislation's entry into
force, an impact assessment and legislative proposal (if
appropriate) on the introduction of EPR.
EPR would be intended to ensure that producers that place on the
market products containing any of the substances or compounds
listed in the WFD's priority substance list, as well as
substances of emerging concern included in the WFD's watch
list, contribute to the costs for monitoring programmes.
What companies may be impacted by such a
proposal?
Producers of hundreds of thousands of diverse products could
potentially be affected, including those containing widely used
substances like nickel and PFAS, as well as different pesticides,
biocides, and human and veterinary medicinal products. Given the
sheer scale of products and producers concerned, there is an
obvious risk that the administrative costs of adhering to and
managing an EPR scheme for all substances concerned could quickly
become disproportionate. The scope and design of any scheme would
need to put those concerns front and centre, and provide clear
de minimis thresholds.
Next steps
The Council has yet to finalise its position on either the recast
UWWTD and revisions to the WFD and Groundwater Directive. Once this
occurs, interinstitutional negotiations (trilogues) are expected to
take place with a view to agreeing on a final legislative text for
each Directive, most likely sometime in the first half of
2024.
If you need legal advice assessing the ongoing legislation against
your product portfolio, and how to potentially mitigate any risk,
do not hesitate to reach out to us.
Footnote
1 See Articles 9 and 10 of the proposal.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.