Parliament calls for a "Stop-the-Clock" on Extended Producer Responsibility

The implementation of the Urban Wastewater Treatment Directive (UWWTD) remains politically dynamic. The revised Directive sits at the intersection of environmental, industrial and health policy, raising increasingly important questions about how environmental objectives can be reconciled with security of supply and industrial competitiveness. At its core lies the question of who should bear the costs of enhanced wastewater treatment in the future and what implications this may have for medicine prices, the supply of generic medicines and, potentially, statutory health insurance systems.

Background: The Polluter Pays Principle and the Fourth Treatment Stage

The original Directive, adopted in 1991, was comprehensively revised between 2022 and 2024 to improve the protection of water bodies from micropollutants. Since entering into force on 1 January 2025, it provides for the gradual introduction of a quaternary treatment stage at larger municipal wastewater treatment plants to remove pharmaceutical residues, hormones, antibiotics and microplastics. Implementation will take place progressively until around 2045.

For the first time, the Directive introduces Extended Producer Responsibility (EPR). Pharmaceutical and cosmetics companies will be required to finance at least 80% of the costs of removing product-related micropollutants. This is based on the European polluter pays principle. According to the European Commission, pharmaceutical and cosmetic products account for around 92% of the relevant micropollutants found in urban wastewater. The industry's financial contribution is scheduled to apply by the end of 2028.

Parliament Increases Political Pressure

On 18 June, the European Parliament adopted a resolution in Strasbourg on the implementation of the Urban Wastewater Treatment Directive, calling for a temporary suspension ("Stop-the-Clock") of the implementation of the Extended Producer Responsibility provisions. The proposal is driven by concerns that requiring the pharmaceutical and cosmetics industries to finance the fourth treatment stage could affect the availability and affordability of medicines. The resolution was adopted by a narrow margin, with 294 votes in favour, 245 against and 28 abstentions. Amendments tabled by the EPP and ECR groups strengthened the text compared with the original draft. Parliament now calls on the European Commission to present a new independent study on the costs of removing micropollutants and on the allocation of producer responsibility. Until this assessment has been completed, Parliament proposes suspending the industry's payment obligations.

The resolution is not legally binding. However, the Commissioner for Environment responsible for the Directive, Jessika Roswall, announced that the Commission would continue to work closely with Parliament, the Member States and stakeholders to ensure the smooth implementation of the Directive.

The Debate Reaches Health Ministers

The Directive was also discussed by the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) on 16 June at Germany's initiative. German Federal Minister of Health Nina Warken argued that the European Commission's supplementary study did not sufficiently assess the potential impact on the supply of medicines and on healthcare systems. Several Member States voiced similar concerns, particularly regarding possible consequences for generic medicines and critical medicines. Greece and Bulgaria explicitly called for a postponement of implementation. Commissioner for Health and Animal Welfare Olivér Várhelyi acknowledged these concerns but reaffirmed the objectives of the Directive, while encouraging Member States to closely monitor any potential effects on the supply of medicines.

Directive in Force – Impacts Should Be Closely Monitored

In its assessment of the implementation of the Urban Wastewater Treatment Directive, the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband) emphasised the need to consider environmental protection and public health together, to uphold the polluter pays principle, and to closely monitor any potential effects on the supply of medicines. As the Directive has already entered into force, there are strong arguments for a measured approach. Planning certainty for municipalities, wastewater operators and industry is just as important as carefully monitoring any effects on the availability and affordability of medicines. Based on the evidence currently available, a suspension of the Directive does not appear to be justified. Instead, the review and adjustment mechanisms already provided for in the legislation should be used.