The new EU Urban Wastewater Directive focuses on the pharmaceutical industry
On 5 November 2024, the Council of the European Union gave the green light for the new EU Urban Wastewater Directive and published it on 12 December 2024 (Directive (EU) 2024/3019). The aim of the directive is to protect the environment from the harmful effects of wastewater discharges, particularly from industrial sectors such as the pharmaceutical and cosmetics industries.1 The new directive replaces the existing EC Directive 91/271/EEC on the treatment of urban wastewater from 1991.
As a result of the new regulations, the pharmaceutical companies affected are likely to incur considerable additional costs and organisational effort.2 According to a press release issued by BAH, BPI, progenerika and vfa in April 2024, the additional costs over the next 30 years are estimated to amount to more than 36 billion euros – for pharmaceutical companies in Germany alone.
A key component of the new directive are stricter requirements for wastewater treatment in wastewater treatment plants operated by municipalities – in particular stricter limit values with regard to micropollutants.3 These stricter limit values for micropollutants are to be complied with through additional purification processes during wastewater treatment (so-called 4th purification stage). Another key component of the amendment is linked to this: the new "extended producer responsibility"4. This refers to (mandatory) cost sharing by (in particular) pharmaceutical producers for the expansion of the 4th purification stage in wastewater treatment plants operated by municipalities.5 For this to affect a company it does not matter whether companies are based or produce in the EU – the only decisive factor is whether companies place products are on the market in a member state.
Against the background of the new directive, our expert for regulatory law, Dr Andrea Sautter, and our expert for environmental and especially water law, Kris Breudel, LL.M. (Aberdeen), have answered some questions with regard to the companies in the pharmaceutical industry that are significantly affected:
I. Why is the new EU Wastewater Directive relevant for pharmaceutical companies?
The EU Commission assumes that over 90 % of the micropollutants found in wastewater are caused by pharmaceuticals and cosmetics. In order to eliminate micropollutants, the Commission requires the member states in particular to expand wastewater treatment plants so that they can subject wastewater to a 4th purification stage. The costs of achieving the 4th purification stage are to be borne almost exclusively by the producers of pharmaceuticals and cosmetics. The level of cost sharing for the individual companies is determined by the quantity and toxicity of the products placed on the market.
II. Which companies are affected?
In principle, all producers of medicinal products for human use or cosmetics will be obliged to bear the costs.6 To this end, the scope of the directive is particularly broad:
A "producer" is first and foremost any manufacturer, importer or distributor who places products on the market in a Member State on a professional basis.7 "Placing on the market" means making available for the first time on the Union market. The Directive itself does not define what is meant by "making available for the first time".8 A look at other EU regulations shows that "making available" is often understood to mean the supply of a product for distribution, consumption or use on the Union market in the course of a commercial activity for distribution, consumption or use.
Thus, in practice, wholesalers who obtain the medicinal product from the marketing authorisation holder within the European Union may not be considered the responsible "producer" under the directive, but only the marketing authorisation holder who supplies the medicinal product on the Union market for the first time (to a distributor).
The definition of medicinal products for human use corresponds to the definition in the Human Medicinal Products Code, provided they are either prepared commercially or an industrial process is used in their preparation.9
The only exceptions are producers for whom the quantity of "substances" in the products they place on the market amounts to less than one tonne per year or producers who can prove that the products they place on the market do not leave any micropollutants in wastewater at the end of their service life.10
III. What costs should be recognised?
With the extended producer responsibility, the producers concerned are to bear 80 % of the "total costs" for the expansion and operation of wastewater treatment plants, for planned wastewater monitoring measures and costs for the collection and verification of data on medicinal products placed on the market.11 In addition, "other costs" incurred in the context of fulfilling extended producer responsibility are also included. The directive leaves open which costs are to be understood as "other costs".12
IV. How should extended producer responsibility be implemented and what are the implications for the companies concerned?
The directive stipulates that, as a first step, producers must join a "producer responsibility organisation" that is set up specifically with a view to extended producer responsibility.13 Producers are obliged to inform this organisation once a year,
- how many medicinal products they have placed on the market.
- what risk these pharmaceuticals pose to wastewater at the end of their life.
- which of the medicinal products marketed by this producer are exempt from extended producer responsibility.
The directive also provides for the publication of information by the organisation: In particular, it should make public which producer have joined the organisation and what financial contributions the producer concerned make to the organisation.14
Each producer responsibility organisation must have a clearly defined geographical area of responsibility and the necessary financial and organisational resources to fulfil the obligations of producers under extended producer responsibility15. Companies in the pharmaceutical industry are also required to contribute to the costs of this.16 There may also be several producer responsibility organisations in a member state that companies will have to register with.
V. In which member state must a company concerned pay the cost contribution?
A company concerned must fulfil extended producer responsibility in every EU member state in which he places products on the market. Depending on the geographical scope of a producer responsibility organisation, a producer may have to become a member of several such organisations. The limit value of one tonne of "substances" contained in the products placed on the market, however, refers to the entire Union market.
VI. When do the obligations apply to the pharmaceutical companies concerned?
As this is an amendment to a directive, the new regulations it contains are not directly legally binding for pharmaceutical companies, even after the directive enters into force at European level. In order for the new regulations, such as extended producer responsibility, to become legally binding, the national legislator must first take action.17 After it being published on 12 December 2024 the directive enters into effect on 1 January 2025, i.e. the German legislator has 30 months or two and a half years after the directive comes into force to transpose the directive into German law.18 Extended producer responsibility is to take effect three years after the directive comes into force.19 However, the Commission's remaining timetable is ambitious and could exert (further) pressure on the German legislator to act:
The amended directive stipulates that 50% of wastewater treatment plants in municipalities with a population of at least 100,000 must be upgraded to the 4th treatment stage by 31 December 2030.20
In addition, by 31 December 2035
- in municipalities with at least 100,000 inhabitants, all wastewater treatment plants have reached the 4th purification stage and
- in municipalities with 10,000 to 100,000 inhabitants, 50 % of wastewater treatment plants must be upgraded to a 4th treatment stage; however, this only applies if the municipal wastewater is discharged into areas where the concentration or accumulation of micropollutants poses a risk to human health or the environment.21
VII. Can companies take legal action against the EU Urban Wastewater Directive?
The Directive is only binding for the Member States – but not for companies that either have their registered office within a Member State, such as in Germany (see information in Section V above), or offer affected products on the Union market. This means that companies cannot take action against the Directive itself. As soon as the German legislator takes action, affected companies can initially participate in the legislative process at a political level or, once the relevant German laws have come into force, they can take legal action against the laws by means of a constitutional complaint or individual implementation measures (e.g. cost assessments in the context of extended producer responsibility) through an administrative law procedure (e.g. by objecting to the measures taken by the authorities).
The planned special levy for pharmaceutical producers to finance a fourth purification stage in wastewater treatment plants is already being questioned as unconstitutional.22 If the planned special levy turns out to be incompatible with the German constitutional Law, it is unclear what the outcome would be for the companies concerned, as the relationship between European law and the German constitutional Law has not yet been clarified. Although EU law generally takes precedence over national law (including national constitutional law), it is not "above" the German constitutional Law. There is no relationship of superiority or subordination between the constitutional order of the Federal Republic of Germany and the legal order of the European Community. The fundamental compatibility of Union law with the German constitutional Law is laid down in Article 23 of the German constitutional Law (the so-called "Europe Article").
Do you have questions about extended producer responsibility or water law compliance and/or the environmental and other challenges for your company? We look forward to hearing from you.
1 Urban wastewater: Council adopts new rules for more efficient treatment - Consilium (last accessed on 23 November 2024).
2 Press release dated 5 November 2024, available at: https://www.pharmadeutschland.de/newsroom/news/artikel/kosten-fuer-abwasserreinigung-muessen-gerechter-verteilt-werden/ (last accessed on 23 November 2024).
3 See Art. 2 (14) and (8) of the Directive.
4 Art. 9 in conjunction with. Annex III of the Directive.
5 Art. 2 (19) and (26) of the Directive.
6 Art. 9 No. 1 in conjunction with. Annex III of the Directive.
7 Art. 2 para. 26 of the Directive.
8 Cf. for medical devices: "making available on the market" means any supply of a device, other than an investigational device, for distribution, consumption or use on the Union market in the course of a commercial activity, whether in return for payment or free of charge (Art. 2 para. 27 EU Medical Devices Regulation 2017/745); cf. for other devices in the Product Safety Regulation (EU) 2023/98, Art. 3 no. 6 "making available on the market" means any supply of a device for distribution, consumption or use on the Union market in the course of a commercial activity, whether in return for payment or free of charge.
9 Definition according to Art. 1 No. 2b), Art. 2 para. 1 of Directive 2001/83/EC.
10 Art. 9 No. 2 (a) of the Directive.
11 Art. 9 No. 1 (c) of the Directive.
12 Art 9 no. 1 sentence 2 point c) of the Directive.
13 Art. 9 No. 3 of the Directive.
14 Art. 10 No. 1 (c) of the Directive.
15 Art. 10 No. 1 of the Directive.
16 Art. 9 No. 3 (b) of the Directive.
17 Art. 288 (3) of the Treaty on the Functioning of the European Union.
18 Art. 33 No. 1 of the Directive.
19 Art. 9 No. 1 of the Directive.
20 Art. 8 No. 1 of the Directive.
21 Art. 8 No. 4 of the Directive.
22 https://www.pharmadeutschland.de/newsroom/news/artikel/kommunalabwasserrichtlinie-einseitige-belastung-der-arzneimittel-hersteller-waere-verfassungswidrig/ (last accessed on 23 November 2023).
