Screeningskriterier med klimarelevans. Målgruppen er den finansielle sektor.

Delegated regulation on the climate action Technical Screening Criteria (TSC) supplementing the Taxonomy Regulation

EurEau welcomes the new European Commission delegated regulation on the climate action Technical Screening Criteria (TSC) supplementing the Taxonomy Regulation.

We would like to stress our appreciation since the final version of the delegated act reflects some of the suggestions advanced by EurEau and supported by other representatives of the water sector: the TSC have evolved to be applicable in the current and future EU legal framework.

However, EurEau is still concerned that some proposed TSC remain, to a large extent, a “one size fits all” and do not take into account the local circumstances in which water is supplied and returned to nature.

The local geographical factors under which water and waste water utilities operate around Europe are extremely different and we are concerned that these criteria may result in less capital/more expensive capital available for projects in the water and waste water sector and discriminate between water utilities in an unfair way.

Such a scenario would be most unfortunate, considering the pivotal importance that water supply and waste water management plays for the protection of human health and the environment and the huge investment needs that has been identified for the sector. The OECD estimates that investment needs in water infrastructure account at least up to 289 billion by 2030 for EU28.

EUREAU therefore encourages the Commission to:

  • closely monitor the effect that the proposed criteria will have on capital flows to the water and waste water sector, and
  • swiftly react and make the necessary adjustments through the review and revision of the screening criteria in three years.

Our alternative proposal for TSC suggested very specific changes, following a minimalistic approach while recognizing that our alternative criteria were far from perfect.

Having seen the final TSC, we would like give our comments specifically on Annex I so that the European Parliament and Member States are aware of the shortcomings and the Commission will be able to take our views into consideration when reviewing the TCS in three years and when working on the new future delegate act, especially the so called “Taxonomy Four” Delegated act, as well.

5.1 Water supply - Construction, Extension and Operation:

We appreciate the changes that net energy consumption only relates to abstraction and treatment of water and that measures to generate renewable energy can be taken into account.

However, the circumstances under which drinking water is produced in Europe differ widely: from ground water extracted from very deep wells to water taken from rivers undergoing physical and chemical treatment to water flowing by gravitation. Desalination, water softening as well as requirements for removing PFAS or pesticides due to health reasons and in line with the legal requirements have significant effect on energy consumption.

Applying a threshold of 0,5 kWh per cubic meter is a starting point, but we suggest, that in the future revision the energy threshold is refined and diversified so that it takes into consideration the significant differences in geography and production methods.

Furthermore, we suggest applying more indicators to define, whether a project is sustainable or not. In our previously response to the TSC we have introduced energy efficiency defined as hydraulic/mechanical power output divided by electrical power input as an alternative.

Regarding the leakage level we find the changes relevant and appropriate and we support the flexibility to apply other methods than ILI as well as other threshold values. This is indeed in line with the Drinking Water Directive that entered into force on the 12 January 2021.

5.2 Water supply - Renewal:

EurEau supports the approach of focusing on abstraction and treatment as well as applying the concept of net energy consumption.

However, we are skeptical of a required 20% reduction in energy consumption – it appears to be a somewhat arbitrary threshold – and we believe that hardly any single project will be able to generate a 20% reduction in energy consumption in the entire “system”. A suggestion for future changes would be to apply a threshold of 20% (or lower) at project level.

A threshold of 20% energy reduction (or lower) favors investments in utilities with a high level of energy consumption as they have a higher potential. From a sustainability point of view this makes perfectly good sense. However, it may be instrumental in creating the paradox that very energy efficient utilities are deemed less attractive as objects of investments and, hence, will find it harder to attract sufficient and/or cheap capital. We encourage the Commission to address this issue under the review.

As mentioned earlier under 5.1 we do not believe that a single indicator is sufficient to determine sustainability due to the very different and complex nature of supplying drinking water in Europe and we encourage the Commission to engage in a process of identifying more indicators to be included in the TSC when revised.

We are supportive of the flexibility of choice of methods for the calculation of leakage. However, the threshold of 20% reduction in leakage does not seem to be scientifically based, and the specific problems addressed above regarding capital flow and the discrimination of utilities that have already achieved a lower leakage level apply here as well.

Waste water collection and treatment - Construction, Extension and Operation:

Focusing on treatment plants only, and, when addressing energy consumption, taking into account energy generation within the system is a sensible approach that EurEau supports.

Due to economies of scale, introducing different levels of energy consumption based on treatment capacity also seems reasonable, at least as a preliminary approach. However, we are concerned that there is insufficient data behind these levels and categories, and we suggest that for the review the Commission examines if the levels are appropriate and representative – especially when considering the demands for more advanced treatment of waste water due to stricter environmental standards.

Biogas/ biomethane is not mentioned specifically when listing examples of energy produced within the system. However, it is our point of view that biogas / biomethane produced from sludge encourages the circular economy and in this context has a status equal to that of the already listed forms of energy. We hope that this understanding will be applied when the taxonomy becomes operational.

Waste Water collection and treatment - Renewal:

We have noted that the required decrease in energy consumption has risen to 20% in contrast to draft delegated act that indicated 10%. We question the technical rationale for this and we believe - especially when looking at renewal in the collection system - that only very few projects can make such a contribution. This is due to the nature of the projects (mainly replacing pipelines) supplemented with the fact that there are only limited options for generating energy within the collection system.

It is our suggestion that for the revision the Commission consider a more differentiated approach when setting standards for energy reduction. The review should also address methods to handle requirements for more advanced and energy consuming treatment of waste water in order to avoid a conflict between stricter environmental requirements.

We appreciate the inclusion of the possibility to look at project level when renewing the collection system. This approach ought to be expanded to include renewal of treatment plants as well as it is be difficult to envision single projects that can lead to a 20% energy reduction for an entire treatment plant.

Furthermore, we could wish for a clearer definition of the term “project” so there is a clear distinction between the aim of the investment (the project) and the part of the system in which it is carried out.

EurEau’s concerns of a possible negative impact on capital flows to more efficient waste water utilities is the same for the water supply sector as previously mentioned.