Council proposal on integrated water management by Bundesverband der Deutschen Industrie e.V.

Statement

Council proposal on integrated water management

Long title, example: (Arial, 20 Pt, bold)

EU proposal to amend the EU

Draft bill/ Government draft

Act on the modernization of the grid fee structure

Water Framework Directive, the EU Groundwater Directive and the EU Environmental Quality Standards Directive

Federation of German Industries

Status: 21.08.2024

- COM 2022 (549)

Table of contents Introduction .....................................................................................3

1. Rejection Definition of prohibition of deterioration according to ECJ 4

2. Revise the exceptions in Art. 4 para. 7 ...................................4

3. Revise and supplement exceptions in Art. 4 para. 7a and 7b5

4. Delegated acts...........................................................................7

5. Classification of surface water bodies....................................7

6. Extension of the list of substances with limit values for the chemical status of groundwater bodies (GWK)............................9

7. Limit values for PFAS inconsistent.......................................10

8. Art. 7 para. 2, 3 WFD no independent management objective 12

9. Introduction of three further management cycles ...............13

Annex.............................................................................................14

Proposal for Amendments to the Water Framework Directive (2010/60/EU)...................................................................................14

1. Article 4 (4) (c) Water Framework Directive..........................14

2. Article 4 (5) Water Framework Directive ...............................14

3. Article 4 (7) Water Framework Directive ...............................16

COM 2022 (549)

Introduction

On June 19, 2024, the EU Council published a text for the trilogue negotiations with the EU EP and adopted the text in place of the Council. Hungary has already announced its intention to start the trilogue negotiations with the European Parliament in September 2024 as soon as the new EP has been constituted and is operational. With this position, the BDI assesses the changes made by the Council for the trilogue negotiations compared to the Commission proposal.

The Council would like to ensure that Member States retain flexibility in the implementation of water legislation. This has not been achieved. The overall tightening of the water-related directives and the sometimes considerable structural changes to the requirements for water management will lead to implementation difficulties in Germany and consequently to less legal certainty and the amendment or revocation of many permits under water law.

Federal Association of German Industry e.V

Lobby register number R000534

House address

Breite Straße 29 10178 Berlin

Postal address 11053 Berlin

Contact person

Attorney Catrin Schiffer

T:+49 302028-1482

F:+49 30 2028-2482

E-Mail:c.schiffer@bdi.eu

Internet www.bdi.eu

1. Rejection of definition of prohibition of deterioration according to ECJ

The draft directive misses the opportunity to regulate the concept of "deterioration", as defined by case law, in a uniformly binding manner. The Council is in favor of a legal definition of deterioration in the EU WFD that implements the strict ECJ case law (see Art. 3 - Art. 3 (43) new and recital 14 c) on pages 26and 14): "... However, if a quality element is already at the lowest class, any further deterioration of that element constitutes a deterioration of the status of the body of water." The German industry firmly rejects this. As the European legislator, the Council is missing the opportunity to use its leeway and create a practicable definition of deterioration that is, for example, based on the status class theory (no further deterioration is possible if the quality element concerned is already in the lowest status class) or at least includes de minimis thresholds. If the Weser deepening ruling is codified as proposed by the Council, the very strict and impractical definition of deterioration is likely to be set in stone for many years to come

2. Revise the exceptions in Art. 4 para. 7

More detailed explanations and practical regulations are required with regard to the proposed exemptions. The exemptions provided for in the draft will not be helpful for German industry; water law permits for industrial activities will be subject to great uncertainty in the future.

There are still no plans to amend the derogation in Art. 4 para. 7. The same applies with regard to the time periods specified by the directives for achieving good water status. It has been known for a long time and has also been repeatedly argued by the BDI that many water bodies fail to meet the timeframes set out in the directives. Unfortunately, the corresponding requirements in Art. 4 have not been adapted in the new draft either.

Firstly, the current wording of the exception under Art. 4 para. 7 WFD for industrial approval procedures is problematic. It should be made clear that the exemption under Art 4 para. 7 WFD must in principle be open to all industrial activities. In particular, this means that changes to physical and physical characteristics should be subject to the exemption. All changes in characteristics, including chemical, physico-chemical and biological changes in the context of ecological status (Annex V of the Water Framework Directive) and changes in characteristics in the context of chemical status (environmental quality standardsofDirective2008/105/EC)ofbodiesofsurface

Integrated water management - COM 2022 (549)

water as well as all material changes in bodies of groundwater (e.g. as a result of the introduction of substances) must in principle be exempt under Art. 4 para. 7 WFD. The strict exemption requirements of Art. 4 para. 7 a) - d) WFD must still be complied with.

Particularly in light of the planned expansion of Annex I of Directive 2008/105/EC to include many new substances and the introduction of the watch list mechanism in Directive 2006/118/ECG, it must be ensured that exemptions can also be granted in the event of deterioration in chemical status under appropriate conditions. In addition, Art 4 para. 7 should be designed in such a way that, in principle, an exemption can also be granted if the good chemical status of surface waters and groundwater bodies is not achieved.

Secondly, the exemption rule in Art. 4 para. 7 WFD should be designed in such a way that an exemption can also be granted for economic reasons. In the view of German industry, granting exemptions only on the basis of overriding interests does not comply with the principle of proportionality. The amendment to Art. 4 (7) proposed by the BDI would therefore be expedient, opening up the exemption to all material discharges in principle, but linking this to the demanding criteria already enshrined in Art. 4 (7).

The necessary modifications to Art 4 para 7 can be achieved without great effort. A corresponding amendment proposal is attached.

3. Revise and supplement exceptions in Art. 4 para. 7 a and 7 b

The Council seems to be aware that the ECJ rulings and their codification, the newly included substances and the stricter standards make it more difficulttocomplywiththeprohibitionofdeterioration.Inrecital14d),theCouncil itself assumes that the ECJ rulings on the prohibition of deterioration and the addition to the lists of substances and the tightening of standards for existing pollutants will make it much more difficult to comply with the objectives of the EU WFD and that this may hamper the implementation of certain activities and entail a considerable administrative burden for the Member States ("... may hamper the implementation of certain activities and entail a considerable administrative burden for Member States").

German industry shares and supports the Council's view that the WFD is increasingly leading to difficulties in complying with the objectives of the WFD and thus ultimately to licensing risks and that an adjustment of the

Integrated water management - COM 2022 (549)

exemptions in the Directive is therefore necessary. However, it is incomprehensible why special exemptions should only be included in the WFD for the circumstances mentioned by the Council. Such a necessity also exists for industrial activities, otherwise important industrial projects will fail in future due to EU water legislation.

However, instead of providing an appropriate definition of deterioration, the Council proposes two new exceptions in Art. 4 para. 7 a) and 7 b) (page 28/29). A new provision (Art. 4 para. 7 a) is included, according to which "short-term deterioration caused by a project" does not constitute deterioration within the meaning of the WFD. One of the prerequisites is that the effects are no longer detectable after one year or, in the case of biological quality elements, after a maximum of three years following project implementation. Up to now, temporary effects of only short duration and without longterm consequences for the water bodies (e.g. changes to water bodies caused by construction) have also been taken into account. They only do not constitute a breach of the prohibition of deterioration requiring an exception if the nature of these impacts is obviously only minor in terms of their effect on the status of the water bodies concerned. The planned amendment may therefore have a positive impact for some project developers, particularly in the infrastructure and construction sectors. Industrial operations and mining, on the other hand, have few points of contact with this exception.

According to the Council Decision, deterioration due to the relocation of pollutants should be permissible under certain conditions (7 b): "Member States will not be in breach of this Directive when deterioration occurs in the status of a surface water body as a result of relocating water or sediment by human activity within or between surface water bodies, or from a groundwater body to a surface water body, without causing a net increase in pollution, and all the following conditions are met: ..." This is followed by seven different, strict conditions, all of which must be met cumulatively.

This is unlikely to have much practical significance in industry and mining. It is unclear how this new possibility of "relocation", i.e. the transfer of polluted water from one body of water to another, could have any practical relevance in industry. In addition, the conditions to be met are very restrictive, incomprehensible and imprecisely formulated (e.g. the environmental risk must not increase during relocation, the newly receiving water body must already be in poor condition, there must be no alternatives, etc.).

Integrated water management - COM 2022 (549)

Therefore, despite the new specific facts proposed by the Council in Art. 4 para. 7 a) and 7 b), it remains necessary to modify the general exception in Art. 4 para. 7, which has been formulated in a deficient manner to date, in such a way that exceptions can be granted with legal certainty in all factual constellations if the relevant conditions are met - otherwise the imbalance in EU water law would be further exacerbated at the expense of legitimate economic interests and this would contradict the widespread political demand for a "European Industrial Deal"

4. Delegated acts

It is positive that the possibilities of delegated acts have been restricted again and that updates to the substance lists and EQS must be made by means of legislative proposals (see Art. 16 WFD, Art. 8 Groundwater Directive - Directive 2006/118/EC). One of the demands of German industry has thus been implemented. However, a new Art. 4 (2a) of the Groundwater Directive empowers the Commission to draw up a list of relevant and non-relevant metabolites for pesticides by means of a delegated act. Due to the considerable impact that these specifications have on the member states, they must also be restricted.

5. Classification of surface water bodies

Some changes that are particularly relevant from an industrial point of view - and which remain in place - concern the classification of surface water bodies (OWK) and, as a result, the assessment of the project-related deterioration of an OWK in the course of permit/approval procedures.

▪ Amendment of the system with regard to the inclusion of river basin-specific pollutants: The current system, according to which the so-called river basin-specific pollutants are relevant for the classification of ecological status, cf. currently Section 5 (5) in conjunction with Annex 6 of the German Surface Waters Ordinance (OGewV), should also be amended in the opinion of the Council to the effect that compliance with them will also be relevant for chemical status in future. To this end - as in the first Commission draft - a new Annex II of the EQS Directive (2008/105/EC) is to be added, which contains a list of substances for which the Member States should consider setting environmental quality standards. The German OGewV (§ 5, Annex 6) would then have to be adapted accordingly. In addition to the systematic change, an expansion

Integrated water management - COM 2022 (549)

of river basin-specific pollutants cannot therefore be ruled out. The planned changes to the river basin-specific pollutants are still not explained in detail in the legislative proposal and the effects are not sufficiently highlighted. Particularly with regard to potential violations of the prohibition of deterioration and compliance with the target achievement requirement and the trend reversal requirement, further considerations/considerations are required, also taking into account the possibility of project-related exemptions. The systematic changeover will also hinder and delay the achievement of the Member States' objectives.

▪ New management objective for river basin specific pollutants in Art. 4: In a new Art. 4 para. 1a v), a new management objective is included that the MS take the necessary measures to reduce the discharge of river basin specific pollutants. In the first Commission draft, this was integrated into the phasing-out obligation. From the point of view of German industry, this introduces a new management objective. It can be assumed that this objective will be added to the existing management objectives and will thereforebetakenintoaccount morethanbeforewhenapproving projects in the future. Furthermore, the new regulation raises the legal question of how to deal with the fact that the river basin-specific pollutants will consequently become relevant for the chemical status as part of the prohibition of deterioration on the one hand and that their reduction will represent an independent management objective on the other.

▪ Introductionofnewsubstancesforassessingthechemicalstatusofbodies of surface water: As already included in the first draft, the list of substances relevant for the classification of the chemical status of bodies of surface water and the corresponding EQS (Annex I of the EQS Directive) is to be extensively expanded and amended. Some substances have been deleted and some limit values have been adjusted again. The changes will lead to a tightening of the legal situation, the requirements for analysis will increase, the necessary measurement techniques will not be available and the necessary verification procedures as part of the approval process will become more extensive, which in turn will have a delaying effect on planning. It must at least be ensured that only those EQSs and threshold values are defined in the guidelines for which analytical determination is assured.Furthermore,theexpansionofthelistofsubstanceswillalsolead to a significant increase in workload for industry and the public sector, as each substance will also have to be monitored by measurement in future and also taken into account as part of the approval process. German

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industry points out that there would be a threat of acute discharge restrictions for such substances without reasonable deadlines. Against the background of the new requirements of the revised IED, sufficient and realisticdeadlinesforachieving"goodchemicalstatus"areneeded sothat operators/dischargers have sufficient time to react to the new situation

▪ EQS in general for pesticides was deleted again: In the first draft, an EQS was to be included for the first time by amending Annex I of Directive 2008/105/EC in general for pesticides with their relevant metabolites. In the new draft, this is to be deleted again without replacement. This is in response to a demand from German industry.

6. Extension of the list of substances with limit values for the chemical status of groundwater bodies (GWK)

Furthermore, the list of substances with limit values for the chemical status of groundwater is to be extended: The list of groundwater quality standards contained in AnnexIoftheGroundwaterDirective(2006/118/EC)forcertain substances that must be complied with for good chemical status is to be supplemented by new substances with threshold values - as was already the case inthefirstdraft.Theinclusionoflimitvaluesforthenon-relevantmetabolites of pesticides, which was already included in the first draft, therefore remains problematic. A uniform value of 1 μg/l per nrM or 5 μg/l for the sum now applies to the threshold values for non-relevant metabolites. Previously, different requirements applied for defined individual cases (see No. 7 of Annex I Groundwater Directive). The list of relevant and non-relevant metabolites is drawn up by the Commission (see above - Art. 4 para. 2a of the Groundwater Directive).

From the point of view of German industry, it is positive that the Council has not taken up the Parliament's proposed amendment to include sulphate as a candidate for the watch lists under Directives 2006/118/EC and 2008/105/EC. It would be completely inappropriate to assign this ubiquitous substance, which poses no risk to human health, such an exposed position in the text of the directive. In Germany, sulphate is adequately regulated in the Surface Water Ordinance and the Groundwater Ordinance.

7. Limit values for PFAS inconsistent

Furthermore, the limit values for PFAS - already included in the first draftwill be tightened once again: previously, all PFAS in total were not allowed to exceed a value of 0.0044, now it is the sum of 4 PFAS (see Annex III of the amending directive, new Annex I of the Groundwater Directive). Transitional periods are regulated for PFAS and non-relevant metabolites (entry into force of these substances: 22.12.2027, achievement of good status for these substances by 22.12.2039 - see Art. 3 Para. 1 a Groundwater Directive). However, the question is whether the transitional periods - especially for PFAS - are sufficient. There is an urgent need to harmonize the requirements for PFAS at European level. The PFAS values will pose massive problems for the industry because they deviate considerably from the applicable national values, see the following table:

Integrated water management - COM 2022 (549)

PFAS (sum 4)

Pesticides

0.1 µg/l (individual values)

0.5 µg/l (total)

maceuticals

Sulfamethoxazole

0.1 µg/l (individual values)

0.5 µg/l (total)

8. Art. 7 para. 2, 3 WFD no independent management objective

The German industry is calling for clarification to the effect that Art. 7 para. 2, 3WFDis not an independent managementobjectivein orderto createlegal certainty: According to Art. 7 para. 2 WFD, MS shall ensure that each body of water within the meaning of Art. 7 para. 1, i.e. used for the abstraction of drinking water, not only achieves the objectives of Article 4, but that the water abstracted also meets the requirements of Directive 80/778/EEC as amended by Directive 98/83/EC, taking into account the water treatment process applied and in accordance with Community law. According to Art. 7 para. 3, the MS shall ensure the necessary protection of the identified water bodies in order to prevent deterioration of their quality and thus reduce the extent of treatment necessary for the abstraction of drinking water. In this respect, it should be clarified that Art. 7 is not to be considered at the project level in addition to the management objectives in Art. 4.

The question of whether the deterioration requirement contained in Art. 7 para. 3 WFD is also relevant for project approval and when deterioration within the meaning of the regulation is to be assumed was first raised by the preliminary ruling of the VG Cottbus (decision of 29.11.2021) to the ECJ (case C 723/21) and is legally unresolved. The Advocate General responsible commented on this in herOpinion in March 2023 (Opinion of Advocate General Laila Medina of 02.03.2023 in Case C-723/21). In the Advocate General's opinion, Article 7(3), i.e. the prohibition of deterioration in the quality of waters used for the abstraction of drinking water, also constitutes an authorization requirement for approval procedures and must therefore be dealt with accordingly when assessing projects. However, the preliminary ruling procedurewas concluded without adecisionbythe ECJ, as the complaint had previously been withdrawn. There is therefore still no judicial clarification on the subject. However, in the implementation practice of the federal states - following the Advocate General's Opinion - an independent detailed examination of Art. 7 para. 3 is now required (cf. implementation aid from Brandenburg1 (link to implementation aid, p. 72).

In order to create legal certainty and to avoid burdening projects with additional unnecessary review steps and thus delaying them, Art. 7 WFD must be amended accordingly.

1 Legal implementation aid of the Ministry of Agriculture, Environment and Climate Protection for the assessment of water management objectives in approval procedures dated April 24, 2023

9. Introduction of three further management cycles

The introduction of at least three further management cycles within the framework of the existing requirements of the Water Framework Directive will contribute significantly to greater legal certainty and thus to the acceleration of procedures.

The implementation of the WFD in approval procedures now requires very lengthy preparations and studies by the project sponsors. There is a great deal of uncertainty with regard to the achievement of objectives in 2027, particularly with regard to the deviating management objectives and exemptions provided for in the WFD.

Many water bodies will fail to achieve the objectives of the WFD within the specified timeframe. Particularly in view of the fact that many new substances with limit values are now to be included, this can only go hand in hand with an adjustment of the planned periods for achieving the objectives, as the management plans and programs of measures would also have to be adjusted accordingly. A general extension of the possibility of extending the deadline is therefore required. This would also create legal certainty for the applicationoftheimprovementrequirementinthecourseofproject approval. A corresponding amendment proposal to Art 3 para. 4 c) WFD is attached.

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Proposal for Amendments to the Water Framework Directive (2010/60/EU)

1. Article 4 (4) (c) Water Framework Directive

(c) Extensions shall be limited to a maximum of two further updates of the river basin management plan except in cases where the natural conditions are such that the objectives cannot be achieved within this period.

(c) Extensions shall be limited to a maximum of five further updates of the river basin management plan except in cases where the natural conditions are such that the objectives cannot be achieved within this period.

Justification

Many water bodies will fail to achieve the objectives of the WFD within the specified time frame. The introduction of at three further management cycles within the framework of the existing requirements of the Water Framework Directive will make a significant contribution to greater legal certainty and thus to the acceleration of procedures.

2. Article 4 (5) Water Framework Directive

(5) Member States may aim to achieve less stringent environmental objectives than those required under paragraph 1 for specific bodies of water when they are so affected by human activity, as determined in accordance with Article 5(1), or their natural condition is such that the achievement of these objectives would be infeasible or disproportionately expensive, and all the following conditions are met:

(a) the environmental and socioeconomic needs served by such human

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activity cannot be achieved by other means, which are a significantly better environmental option not entailing disproportionate costs;

(b) Member States ensure,

- for surface water, the highest ecological and chemical status possible is achieved, given impacts that could not reasonably have been avoided due to the nature of the human activity or pollution,

- for groundwater, the least possible changes to good groundwater status, given impacts that could not reasonably have been avoided due to the nature of the human activity or pollution;

(d) the establishment of less stringent environmental objectives, and the reasons for it, are specifically mentioned in the river basin management plan required under Article 13 and those objectives are reviewed every six years.

Justification

activity cannot be achieved by other means, which are a significantly better environmental option not entailing disproportionate costs;

(b) Member States ensure,

- for surface water, the highest ecological and chemical status possible is achieved, given impacts that could not reasonably have been avoided due to the nature of the human activity or pollution,

- for groundwater, the least possible changes to good groundwater status, given impacts that could not reasonably have been avoided due to the nature of the human activity or pollution;

The authorities can set less stringent targets for certain water bodies according to Article 4 (5) WFD. This is to be welcomed, but the provision is hardly ever applied in practice and this is mainly due to the condition set out in Article 4 (5) © WFD ("no further deterioration"), which makes the application of this balancing element considerably more difficult. Article 4 (5) WFD

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must play a much greater role in management practice in the future in order to continue to allow economic and industrial activities.

3. Article 4 (7) Water Framework Directive

7. Member States will not be in breach of this Directive when:

- failure to achieve good groundwater status, good ecological status or, where relevant, good ecological potential or to prevent deterioration in the status of a body of surface water or groundwater is the result of new modifications to the physical characteristics of a surface water body or alterations to the level of bodies of groundwater, or

- failure to prevent deterioration from high status to good status of a body of surface water is the result of new sustainable human development activities and all the following conditions are met:

(a) all practicable steps are taken to mitigate the adverse impact on the status of the body of water;

(b) the reasons for those modifications or alterations are specifically set out and explained in the river basinmanagementplanrequiredunder Article 13 and the objectives are reviewed every six years;

7. Member States will not be in breach of this Directive when:

- failure to achieve good groundwater status, good ecological surface water status or, where relevant, good ecological potential or to prevent deterioration in the status of a body of surface water or groundwater is the result of new modifications to the physical characteristics of a surface water body or alterations to the level of bodies of groundwater, or

- failure to prevent deterioration from high status to good status of a body of surface water is the result of new sustainable human development activities and all the following conditions are met:

(a) all practicable steps are taken to mitigate the adverse impact on the status of the body of water;

(b) the reasons for those modifications or alterations are specifically set out and explained in the river basinmanagementplanrequiredunder Article 13 and the objectives are reviewed every six years;

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(c) the reasons for those modifications or alterations are of overriding public interest and/or the benefits to the environment and to society of achieving the objectives set out in paragraph 1 are outweighed by the benefits of the new modifications or alterations to human health, to the maintenance of human safety or to sustainable development, and

(d) the beneficial objectives served bythosemodificationsoralterations of the water body cannot for reasons of technical feasibility or disproportionate cost be achieved by other means, which are a significantly better environmental option.

Justification

Article 4 (7) was certainly well-intentioned, but the wording contains legal uncertainties and is therefore too rarely applied. The wording should be clarified so that it is clear in which situations an exemption can be applied and granted at all under this provision. Particularly against the background of the planned extension of Annex IofDirective 2008/105/EC to includemanynew substances, it must be ensured that exemptions can also be permitted in the case of deterioration in chemical status under appropriate conditions, so as not to jeopardize important projects.

Integrated water management - COM 2022 (549)

About the BDI

The BDI conveys the interests of German industry to political decision-makers. In doing so, it supports companies in global competition. It has an extensive network in Germany and Europe, in all important markets and in international organizations. The BDI provides political support for international market development. And it provides information and economic policy advice on all industry-relevant topics. The BDI is the umbrella organization of German industry and industry-related service providers. It speaks for 40 industry associations and more than 100,000 companies with around eight million employees. Membership is voluntary. 15 state representatives represent the interests of industry at regional level.

Imprint

Federation of German Industries (BDI) Breite Straße 29, 10178 Berlin

www.bdi.eu

T: +49 30 2028-0

Lobby registration number: R000534

Contact person

Attorney Catrin Schiffer

Environment, Technology and Sustainability Officer

T: +49 30 2028-1582

c.schiffer@bdi.eu

BDI document number: D 1982