Input to the Commission's Call for evidence on the targeted revision of the Water Framework Directive (WFD)

Remissvar till EU-kommissionen

Input to the Commission's Call for evidence on the targeted revision of the Water Framework Directive (WFD)

Summary

The targeted revision of the WFD should ensure that the directive contributes to water resilience as outlined in the Water Resilience Strategy (WRS), while supporting the EU's strategic autonomy in relation to critical raw materials. This is possible only if the complete metal value chain is considered, and if the more than 25-year-old WFD allows for flexibility and modernization. Note that the thorough fitness check of the WFD carried out in 2018-2019 did not include any impact assessment of the then recently decided EU Weser Ruling from 2015, thus omitting the negative consequences of the current interpretation of the non-deterioration principle.

We therefore ask the Commission to expand the scope of Article 4.7 to explicitly allow exemptions for metal production projects provided they meet strict environmental safeguards. If the Commission’s objective with the proposal is to further CRM projects, it is essential that the whole metal value chain is included in the exemption. Otherwise, a new exemption will not have a significant impact on permitting CRM-projects.

The WFD is a central piece of legislation when it comes to carrying out the WRS. However, the important objectives within the WRS of improving water efficiency, increasing water reuse, innovate and develop techniques cannot be met with the present WFD. That is where the targeted revision of the WFD comes in.

Background

Raw materials, and steel- and metals production are essential for EU’s competitiveness, jobs, clean energy and digital transitions, as well as for its defense, aerospace technology and food security. The geopolitical situation has made it clear that Europe is dependent on countries outside the EU.

It is urgent to strengthen the metal supply chain in Europe, from mining to metal and steel production. Most important is to improve permitting procedures to enable the European industry to focus its resources on innovation, growth, and long-term sustainability, rather than navigating complex and burdensome regulatory frameworks. To make this happen, the Commission needs to find ways to balance interests at stake, while ensuring an adaptation of the Water Framework Directive (WFD) to the current challenges of Europe.

The WFD limits Member States’ capacity to approve environmentally beneficial projects, thereby slowing progress in sectors that are instrumental to the green transition, to European resilience, and for strategic independence. An adaptation of the WFD is therefore needed to allow for sustainable industrial transformation by introducing flexibility. This includes granting Member States the ability to apply clearly defined derogations from the non-deterioration principle, under strict conditions and following a careful balancing of interests; moreover, projects must remain in compliance with Best Available Techniques (BAT) as part of the Industrial Emissions Directive (IED).

The Water Framework Directive is an essential legislation for the Swedish Steel industry through permitting procedures

Jernkontoret is the Swedish iron and steel producers' association. We safeguard the industry's interests within number of areas that are of special importance for the competitiveness of the companies, through working for the best possible preconditions for operations in Sweden.

Jernkontoret is fully committed to the objectives of the Water Framework Directive (WFD). The WFD has been crucial for protecting Europe’s water bodies for the last 25 years of its existence. The current implementation of the Directive has, however, created inconsistencies that now hinder the industrial transformations required for the EU to achieve strategic autonomy. We welcome the European Commission’s recognition of these obstacles and its commitment to conducting a 'stress test' of the WFD through new guidance and targeted revision.

The targeted revision of the WFD should ensure that the directive contributes to water resilience as outlined in the Water Resilience Strategy (WRS), while supporting the EU's strategic autonomy in relation to critical raw materials. This is possible only if the complete metals value chain is considered, and if the more than 25-year-old WFD allows for flexibility and modernization.  Note that the thorough fitness check of the WFD carried out in 2018-2019 did not include any impact assessment of the then recently decided EU Weser Ruling from 2015, thus omitting the negative consequences of the current interpretation of the non-deterioration principle.

The WFD is a central piece of legislation when it comes to carrying out the WRS. However, the important objectives within the WRS of improving water efficiency, increasing water reuse, innovate and develop techniques cannot be met with the present WFD. That is where the targeted revision of the WFD comes in.

The legal implementation of the WFD has failed in meeting its original objective of a system for sustainable water management that protects EU’s waters including addressing the water quantity issue, as shown in the newly launched European Water Resilience Strategy.

A reductionist approach at start has led to a policy framework that, 25 years after its release, is not compatible with the aquatic ecosystems to be protected and is impeding decarbonization measures, economic growth and industrial development. The strict application of the non-deterioration principle in the WFD through the Weser verdict of the European Court of Justice (case C-461/13) obligates Member States to refuse authorization for projects that may cause deterioration, unless a derogation is granted. This has created significant challenges for investments in metals, mining, and steel production, hindering EU’s ability to meet the objectives of the Critical Raw Materials Act, EU climate goals 2040, and a competitive, safe and resilient EU. The recent WFD review also sets this definition in the core of the directive.

In other words, current interpretations of WFD principles have progressively created a 'deadlock' for industrial permitting, affecting both existing plants and cutting-edge projects. This is evidenced by the overly rigid interpretation of the non-deterioration principle following the Weser ruling, whereby even minimal discharges can be blocked if a single quality element is failing. Furthermore, the lack of practical exemptions under Article 4.7 and the 'one-out, all-out' principle, which disregards holistic ecosystem health, have created systematic barriers.

Regulatory predictability is essential for a sector characterized by long investment cycles. The transition to low-carbon steelmaking processes (hydrogen-based processes, electrification) requires billion-euro investments, which depends on regulatory conditions, among others. However, the current implementation of the WFD, and particularly the art. 4.7 and its strict interpretation by the Weser ruling has become a source of uncertainty in the permitting process phase.

As example, plants that are in the process to convert are facing major challenges, for both the plant operator and the responsible authority, due to the challenges with the WFD when requiring a new permit, with the corresponding permit procedure, even for small changes in the discharge of wastewater, such as the relocation of the point at which wastewater is discharged.

Examples from the Swedish steel industry, currently undergoing a transition towards low-carbon steel production show that:

• Permit procedures for new production process are associated with significant additional costs and additional personnel but most importantly, significant uncertainties as to the outcome, leading to high risks of rejection of permit application, due to the prohibition to deteriorate (non-deterioration-principle) water quality if a single quality element is failing.
• The permitting bottleneck identified lies in the interpretation of non-deterioration-principle and lack of workable exemption in Art. 4.7. In addition, the non-deterioration-principle does not consider that current emissions will cease once the transition is finalized.

The examples clearly show that it is not by prohibiting or delaying green transition that compliance with EQS will be reached but rather through transformation of the currently polluting activities from steel industry.

The link between the WFD and the Industrial Emissions Directive (IED)

The WFD and the IED both pursue to protect the environment, however, sometimes overlapping requirements and reporting obligations create challenges for operators and authorities, particularly for the permitting procedures. Installations must comply both with the emission limits derived from the Best Available Techniques (BAT) under the IED and the water objectives, including the so-called non-deterioration requirements, under the WFD. This leads to duplication of the assessments, conflicting requirements and consequent increased administrative burden with uncertainty for the installations. It can happen that projects which comply with BAT may still require WFD assessment and art. 4.7 justification, this can delay permits by months or even years.

In addition to that, because the WFD leaves room for interpretation, overlaps lead to different permitting outcomes for similar projects in different member states, irregular enforcement, and a fragmented single market. We believe that a formal assessment of an installation’s specific contribution to local pollution should be required before conditions stricter than BAT are imposed. Any additional measures should be proportionate to the installation's impact compared with that of other relevant sources in the area.

Key issues with the Water Framework Directive and its interpretation

The one out-all out principle enshrined in the WFD means that water bodies fail chemical and ecological status even if only one quality element does not meet the required status, regardless of the overall water quality, and thus fails to show improvement over time. Consequently, failure to meet the water quality of one single parameter legally results in deterioration of the same water body. This is further exacerbated by the fact that more priority substances (PS) are pollutants (River Basin Specific Pollutants, RBSP) that are being moved from the ecological status to the chemical status in the newly revised WFD.

In environmental permitting processes, the environmental quality standards (EQS) under the WFD have become the most critical issue for the permissibility of the project.  These EQS are based on chemical risk assessments (PS and PHS, Priority Hazardous Substances), ecological risk assessments (RBSP), and the precautionary principle, and the result is that they may be very low. Yet it is not possible to balance the interest of meeting these EQS against other interests. Nor is it possible to consider technical and economic feasibility or cross-media effects. If an EQS is not met, the project is impermissible.

EQS setting has become a legally binding instrument instead of serving as indicative for the environmental objective, as set out originally in the WFD. This has accentuated the issues described above. In addition, recurring introductions of new or stricter EQS result in a moving target for compliance and increasing uncertainty for future operations, permitting, and investments. 

There is limited or no scope for derogation from the objective of good status when it comes to impacts from new industrial projects. The existing derogations mainly target very specific situations and cannot be used to permit, for example, a new industrial project for low-emission steel, if the project results in an increase in concentration of a RBSP in a nearby water body.

The recently negotiated agreement on the revised Water Framework Directive, will exacerbate these challenges by introducing new and lower EQS  - for example for nickel -  without providing any useful possibilities for derogation. Projects that have an impact through the release of metals and other naturally occurring substances are still outside the scope of both the existing and the newly proposed derogations and will still not be permissible if any EQS is exceeded.

A targeted revision of the Water Framework Directive is needed to address these issues, combined with appropriate guidance, as proposed in the Commission´s communication on ResourceEU and Simplification for sustainable competitiveness (Environmental Omnibus).

Guidance on the application of the Water Framework Directive is comprised within the Common Implementation Strategy (CIS). Amendments to these guidance documents (in particular, No 20 on exemptions to the environmental objectives, No 27 on deriving environmental quality standards, and No 36 on exemptions to the environmental objectives according to Article 4(7)) can offer important improvements. However, the challenges related to the non-deterioration principle cannot be resolved through guidance alone. The targeted revision of the Water Framework Directive is thus essential for addressing the shortcomings of the current legislation.

Non-deterioration & Article 4.7 exemptions within the scope of the targeted revision

We ask the Commission to provide more flexibility in the scope of derogations for new modifications and new sustainable human development activities (Article 4(7)). The current derogation is limited in scope and does not permit derogation from the objective of good status due to impacts arising from new industrial activities. Despite being a core WFD feature, exemptions apply narrowly to hydromorphological changes, excluding both biological and physico-chemical characteristics (as part of ecological status), and not applying to the chemical status. This issue was acknowledged in the revision of the Urban Wastewater Treatment Directive (UWWTD) which resulted in its specific exemption. The recent review exercise of the WFD also introduced exemptions for very specific type of activities carried out by certain Member States (short-term impacts or relocation of pollution) – and do not provide adequate room for industrial investments. The current patchwork of narrow derogations should be replaced with a well-defined derogation for new projects.

By preventing the deterioration of a single quality factor rather than considering the overall ecological health of a water body, the framework creates a 'deadlock' for permits. This is particularly problematic as the EU seeks to balance high environmental standards with the need for strategic autonomy and water resilience. For the WFD to remain a functional tool for sustainable development, the regulatory framework must consider the complex technical realities of modern industry.

 

Jernkontoret

Annika Roos, Managing Director

Sophie Carler, Senior Environmental Policy Advisor