10 big challenges 
for the water sector in the next 10 years

1. Protecting water as a vulnerable resource

Safe drinking water at the tap and appropriate waste water treatment are a prerequisite for human health and a healthy water ecosystem. The quality of surface and ground water is of great importance to the European water operators. They are committed to delivering drinking water which is safe, wholesome and clean in Europe and returning treated waste water to the environment that protects public health against epidemic diseases and preserves nature. The capacity of both the drinking water and the waste water sectors to address current and future challenges must be strengthened.

It is hard to think of any economic activity and daily consumers’ behaviours that do not somehow affect either the quantity or the quality of water resources. The protection and management of water resources need to be mainstreamed into other sectorial policies. In particular, water protection measures should be integrated and implemented in relevant European policies such as the Common Agricultural Policy (CAP), energy policy and chemicals legislation (REACH, rules governing the authorisation of pesticides, biocides and pharmaceutical products) as well as tourism, recreational activities policies and also the use of waterways for transportation (maritime and inland). Although EU water legislation features many success stories, a lot remains to be done in order to ensure that European water resources are effectively protected now and in the future. Fully implementing existing rules, effective policy coordination with other areas, appropriate funding and good governance are key success factors. Existing legislation needs to be assessed in order to determine whether it is fit for purpose and adapted to the integrated approach on water.

2. Building an effective strategy to minimise the presence of micropollutants in the environment

Micro-pollutants originating from the use of substances such as pharmaceutical products for human use, veterinary drugs, personal hygiene products or household chemicals, microplastics (from textiles, car tires etc.), nano-particles and pesticides may represent a risk for water resources. Although observed concentrations in water resources are currently very low for most of them, adverse impacts on the aquatic ecosystems have been observed. At current concentration levels, there is no definite scientific evidence of adverse effects on human health yet, but, as their use increases, micro-pollutants might represent a challenge for water resources and for water services once they enter the water cycle. In line with the precautionary principle and the EU Treaties, pollution should be prevented and controlled as much as possible at the source. Extended producer responsibility must apply and end-of-pipe solutions should be considered as a last resort.

3. Increasing the public understanding of the water sector

The water sector must continue to engage effectively with its customers and other stakeholders to ensure there is a greater understanding of the many ways ‘water matters’. Customer and stakeholder engagement are fundamental in achieving an understanding of mutual priorities and needs. This implies, amongst others, more cooperation and support with agriculture and cities.

4. Responding to the growing impact of climate change on water

Extreme weather events are becoming more frequent. Severe floods and droughts are regular occurrences in Europe.

Climate change remains a serious challenge for the water sector. We have to minimise its impacts and enact mitigation and adaptation measures, while controlling costs and complying with legislation. It is therefore essential that water service providers develop long-term plans and that the water sector’s efforts are coordinated, wherever possible, with other sectors’ mitigation and adaptation measures with the support of EU, national and local policies.

5. Valorising water in the circular economy

Waste water (and its by-product sludge) contains valuable resources such as energy, phosphorus, nitrogen, other nutrients and cellulose that can be recovered and reused in a circular economy with the aim to save scarce or depleted nature-mined resources (and the associated negative impacts) and  to foster economic growth and job creation. Treated waste water can be re-used under certain conditions. European legislation should be a driver for innovation and allow for the development of good practices to recover these resources. Incentives to channel recovered resources into the market, in a sustainable manner, should be put in place. The sector should link with the needs of agriculture.

At the same time, control at source measures must be reinforced to avoid that toxic substances end-up in waste water and threaten the potential recovery of resources.

6. Increasing the resource efficiency in the water sector

Responsible use, appropriate allocation and efficient delivery of water are fundamental to ensure an efficient use of a valuable resource. Water services are undertaking significant efforts to be more energy efficient, generate green energy and wisely use chemical substances in water treatment processes in order to be as sustainable as possible in their operations.

7. Fostering sustainable economic growth and creating jobs

Water services are net contributors in terms of added value and employment. The total turnover of the water sector (collection, treatment, supply, sewerage) reached €82 billion – i.e. 0.5% of the total EU28 GDP - in 2016.

In the past ten years the employment levels in the water sector have remained fairly stable. This is a major strength of the sector and highlights its stabilising role in periods of economic crisis and recession since jobs cannot be delocalised. The water sector employs 542,000 people in the EU28, and does not include the number of jobs created indirectly by water supply and sanitation in fields such as construction, research and technological development and equipment manufacturing.

An improved competitiveness of the European water sector worldwide will also contribute to the creation of jobs and growth in Europe, as water services are also sources of technological and organisational innovation that can be exported to non-EU countries.

Water services will have to secure the development of appropriate skills and opportunities for young professionals through apprenticeships, traineeships and training programmes.

8. Setting the right price for water services

The price consumers pay for water services must strike the right balance between the affordability of the services, on one hand, and the need to recover the cost for water services and ensure the necessary investments to build, maintain and renew the infrastructure of water services on the other.

Against this scenario, the water sector supports greater transparency of water bills so that customers can understand the real costs of supplying drinking water and treating waste water.

In fact, the affordability of water services is crucial to realise the human right to water and sanitation and both water operators and public authorities should pay full attention to this principle. However, if the price for water services is kept artificially below costs, the costs of maintaining the infrastructure will have to be covered through taxes or transfers or further postponed. This leads to substantial impacts on the sustainability of the water sector as determined by the post-2015 UN agenda.

9. Managing long-term assets in a fast changing environment

Traditionally water services look at the long term when planning and constructing their water works, distribution networks, collection systems and treatment plants. Some parts of the water infrastructure last for 50 years or more. The water sector has to balance its long term approach with an appropriate level of flexibility, allowing infrastructure to be responsive and adapt to a fast changing environment and innovative solutions. The biggest part of capex comes from tariffs. That is why it is crucial for the water sector to have an efficient long-term planning. It is also important to complement investment needs on the basis of the 3Ts, which include tariffs, taxes and transfers from other sources or budgets such as funds for regional development or international aid.

10. Reinforcing the resilience of water services to security risks

The security situation in Europe has deteriorated and the risk of malicious acts is present across the continent. The water infrastructure is considered as critical infrastructure in almost all countries. The sector must strive to analyse any security-related vulnerabilities and take effective measures to mitigate them. Consideration must be given to cyber-security and interdependencies with other sectors (power, telecommunication etc.).

Mitigating security-related risks should build on synergies with managing other risks, i.e. natural disasters and climate change-related.

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