Hazardous substance proposals cause concern

Water companies and their regulators are critical of EU proposals for a Directive on hazardous substances in water. They say caveats should be included where measures would be too costly or technically impossible, and that the Environment Department (DEFRA) must improve its cost-benefit analysis.

The proposals on hazardous ‘priority substances’ are contentious and potentially expensive for the water industry. Estimates of compliance costs run into billions of pounds.

The plans were issued by the European Commission in July 2006 and will take the form of a daughter Directive to the water framework Directive (ENDS Report 379, p 48 ). They may require water companies to install end-of-pipe treatment at sewage works to reduce metals, pesticides, biocides and other toxic chemicals in effluent discharges.

DEFRA issued a partial regulatory impact assessment of the proposals for consultation last December (ENDS Report 384, p 38 ).

The proposals set environmental quality standards for 33 priority substances which must be met as the chemical element of the framework Directive’s overall goal of ‘good ecological status’. The standards are to be set as annual average levels and maximum admissible concentrations.

Twelve priority substances are also designated priority hazardous substances (PHSs), discharges of which will have to be phased out by 2025. The proposals are of great concern to the water industry because of the potentially high cost of removing trace quantities of ubiquitous contaminants such as cadmium, polyaromatic hydrocarbons and nonyl phenol.

  • Feasibility and expense: Article 4(4) of the water framework Directive allows the timetable for achievement of good ecological status to be extended on the grounds of "technical infeasibility" or "disproportionate expense". Whether these will apply to the daughter Directive is the key issue for Water UK and the Agency.

    The Agency notes that the meaning of the water framework Directive’s phrase "ceasing or phasing out emissions, discharges and losses" of PHSs remains unclear. Some are naturally occurring while others are by-products of combustion.

    It is also not clear whether source-control measures such as existing bans on chemicals will achieve phase-out of discharges.

    Ofwat points to the impracticality of treating thousands of tonnes of sewage effluent to remove quantities of contaminants perhaps as low as a few grams.

    The Agency firmly concludes that article 4(4) must apply or the hazardous substances rules risk being disproportionate.

    Yorkshire Water first raised the issue of the costs of end-of-pipe treatment in 2004. It commissioned a study which concluded that PHS rules could be "the largest investment driver the industry has ever seen" (ENDS Report 355, p 10 ). The capital investment and running costs of treatment such as sand filters or granular activated carbon filtration, it said, amounted to £10 billion for the industry nationally over 25 years.

    DEFRA’s impact assessment came up with a figure of "around £1 billion", which was not explained in detail. UK Water Industry Research is completing a report on the proposals which will put the costs at £1-7 billion, Water UK says.

    EQSs for priority substances lead and nickel have yet to be finalised but the decision will be crucial. Water UK is concerned that the technical guidance suggests they will be "overly precautious", requiring expensive extra treatment of sewage effluents.

    The Agency adds that end-of-pipe solutions may not address diffuse pollution sources, will not satisfy the ‘polluter pays’ principle or achieve satisfactory pollution control in catchments.

    Water UK also warns that the proposals would generate extra sewage sludge - much of which would need to be burnt - and that they will increase the sector’s carbon dioxide emissions by 3%.

  • Lack of data: Ofwat in particular complains about the lack of data in the impact assessment, noting there is little sound data on costs and the details on the legislation’s benefits are not well developed. "The very limited information available so far indicates there is potential for very significant costs to arise," it suggests.

    Moreover, "it is not clear whether moving from the current position to the proposed EQS would provide environmental benefits in line with the potential costs of either source control or end-of-pipe," Ofwat concludes. This lack of data on benefits will be a problem for companies because Ofwat will expect them to justify investment plans in the 2009 and subsequent price reviews.

    Water UK expresses "disappointment" at the impact assessment’s lack of benefits estimates and points out that, for many substances, "the benefits will be purely precautionary." The costs are unknown in many cases, it says, because the technology for removing some hazardous substances has not been developed.

    It notes that all options considered in the impact assessment view end-of-pipe treatment as a "primary measure", with source control as a back-up if these fail. It argues that treatment at sewage works is "not a true solution" and source control should be given priority.

  • Monitoring costs: The Agency is concerned about the proposals’ monitoring costs. They will need it to step up its marine monitoring programme and also obtain data to show a "progressive reduction in discharges and emissions and losses" of priority substances, in line with article 4 of the water framework Directive.

    A further requirement is to demonstrate that there is no increase in levels of priority substances in sediments and biota, as required by article 2 in the proposed daughter Directive.

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