Czech pharma sounds alarm over EU wastewater directive costs – Euractiv

Report on the Implementation of the EU Urban Wastewater Treatment Directive in Czechia and its Alignment with Sustainable Development Goals

Introduction: Balancing Environmental Protection and Economic Sustainability

The Czech Republic is preparing to implement the revised European Union Urban Wastewater Treatment Directive, a legislative measure designed to advance key environmental targets. This report analyzes the directive’s implications, focusing on its alignment with the Sustainable Development Goals (SDGs), particularly SDG 6 (Clean Water and Sanitation), SDG 3 (Good Health and Well-being), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 12 (Responsible Consumption and Production). The directive introduces an Extended Producer Responsibility (EPR) scheme, requiring pharmaceutical and cosmetics manufacturers to co-finance the removal of micropollutants from wastewater, a move that presents significant financial and operational challenges to the Czech industry.

Advancing SDG 6: Clean Water and Sanitation

Mandating Advanced Treatment for Micropollutant Removal

The directive’s primary objective is to enhance water quality across the EU, directly supporting SDG Target 6.3, which aims to improve water quality by reducing pollution and minimizing the release of hazardous chemicals. This is to be achieved through the mandatory introduction of a “quaternary” stage of wastewater treatment.

• Extended Producer Responsibility (EPR): Manufacturers in the pharmaceutical and cosmetics sectors will be held financially responsible for the removal of micropollutants originating from their products.
• Technological Upgrades: The legislation necessitates investment in advanced treatment technologies capable of filtering out micropollutants.
• Infrastructure Requirements: Pavel Slanina, Senior Consultant at Life Sciences 4.0, notes that successful implementation requires substantial upgrades to existing primary, secondary, and tertiary treatment stages, adding a layer of complexity and cost beyond the quaternary technology itself.

Challenges to SDG 3 and SDG 9: Economic Viability and Public Health

Financial Projections and Infrastructure Investment

While contributing to SDG 9’s goal of sustainable infrastructure, the financial burden of these upgrades poses a significant challenge. Industry analysis indicates a substantial discrepancy between official estimates and projected actual costs.

1. Underestimated Costs: The European Commission’s initial financial estimates are considered “very much underestimated” by Czech industry experts.
2. National Cost Projection: Czech estimates place the total cost of compliance at approximately CZK 20 billion (€824 million), far exceeding initial EU projections.
3. Industry Support: The Life Sciences 4.0 platform is developing a strategic roadmap to assist affected companies in navigating the new regulatory and financial obligations.

Impact on Pharmaceutical Accessibility and SDG 3

The financial pressure, particularly on the generic drug-dominated Czech market, could create a conflict with SDG Target 3.8, which advocates for access to affordable essential medicines.

• Risk to Generic Producers: The high costs could render the production of low-margin essential medicines, such as metformin and certain antibiotics, unprofitable.
• Potential for Price Increases: Companies may be forced to raise medicine prices to absorb the new costs, though this is constrained by price regulation.
• Production Viability: Slanina warns that if costs increase significantly without a corresponding price adjustment, companies may cease production of critical medicines, impacting public health.

Extended Producer Responsibility and SDG 12: A Question of Fairness

Disproportionate Burden and Industry Response

The directive’s application of EPR, a key principle of SDG 12 (Responsible Consumption and Production), has drawn criticism from the pharmaceutical sector for its perceived inequity.

• Cost Allocation: The proposed model places 80% of the financial burden on the pharmaceutical industry and 20% on the cosmetics industry.
• Exclusion of Other Sectors: Filip Vrubel of the Czech Association of Pharmaceutical Companies argues that the pharmaceutical industry is not the largest source of wastewater pollutants, yet other industrial sectors were not included in the legislation.
• Sense of Injustice: While not opposing the environmental goals, the industry feels it is being asked to shoulder a disproportionate share of the responsibility, undermining the “polluter pays” principle.

Implementation Timeline and Future Outlook

Navigating the Transition Towards 2028

Despite industry opposition and legal challenges, the directive is now in force. The focus has shifted to managing its implementation and mitigating its economic impact, a process that will test partnerships for the goals (SDG 17).

1. Legal Challenges: The directive is currently subject to lawsuits from Poland and the pharmaceutical industry, which aim to adjust the “degree of unfairness” in its application.
2. National Implementation Plan: The Czech Republic must finalize its national implementation plan by the first quarter of 2028.
3. Investment Commencement: Investments into quaternary treatment infrastructure are scheduled to begin in 2028, funded by new levies on the targeted industries.

The successful implementation of the directive hinges on finding a balance that achieves the critical environmental objectives of SDG 6 without compromising the economic stability and public health contributions central to SDG 3 and SDG 9.

Analysis of SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   • SDG 6: Clean Water and Sanitation

     The entire article revolves around the EU’s Urban Wastewater Treatment Directive, which aims to improve water quality by removing micropollutants. This directly aligns with the goal of ensuring the availability and sustainable management of water and sanitation for all.

   • SDG 9: Industry, Innovation, and Infrastructure

     The article explicitly discusses the need for significant investment in infrastructure. It mentions that implementing the directive will require “not only new technologies but also substantial upgrades to existing infrastructure” and the addition of a “quaternary stage of wastewater treatment.” This highlights the connection to building resilient infrastructure and upgrading industries.

   • SDG 12: Responsible Consumption and Production

     The core mechanism discussed is “extended producer responsibility (EPR),” which holds pharmaceutical and cosmetics companies financially responsible for the environmental impact of their products. This is a key policy tool for achieving the environmentally sound management of chemicals and wastes, a central theme of SDG 12.

   • SDG 3: Good Health and Well-being

     The article raises concerns that the high costs of compliance could force companies to “increase medicine prices” or even “stop producing” essential drugs like “metformin or antibiotics.” This potential impact on the affordability and availability of medicines directly connects to ensuring healthy lives and promoting well-being.

   • SDG 14: Life Below Water

     Although not explicitly mentioned, the removal of micropollutants from wastewater is crucial for preventing pollution of rivers and, ultimately, marine ecosystems. The directive’s goal to reduce land-based pollution sources directly contributes to the conservation and sustainable use of oceans and marine resources.

2. What specific targets under those SDGs can be identified based on the article’s content?

   • Target 6.3

     “By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials…” The article’s focus on the “removal of micropollutants” from wastewater through advanced “quaternary stage” treatment is a direct effort to reduce pollution from hazardous chemicals originating from pharmaceutical and cosmetic products.

   • Target 9.4

     “By 2030, upgrade infrastructure and retrofit industries to make them sustainable… with all countries taking action…” The article details the need for Czechia to make “substantial upgrades to existing infrastructure” and invest in “new technologies” for wastewater treatment plants. The estimated cost of “CZK 20 billion (€824 million)” underscores the scale of this industrial and infrastructural upgrade.

   • Target 12.4

     “By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle… and significantly reduce their release to… water…” The implementation of the “extended producer responsibility (EPR)” scheme, making the pharmaceutical and cosmetics industries co-finance the removal of their micropollutants, is a direct application of this target. It aims to manage the lifecycle impact of these chemical products.

   • Target 3.b

     “Support the research and development of… medicines… and provide access to affordable essential medicines…” The article implies a risk to this target. The warning that increased costs could make the production of generic drugs like metformin and antibiotics unprofitable, potentially leading to companies “stop producing” them, highlights a direct threat to the availability and affordability of essential medicines.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

   • Implied Indicator for Target 6.3:

     The primary indicator is the successful implementation and operation of quaternary stage wastewater treatment across Czechia. Progress would be measured by the number of treatment plants upgraded and the subsequent reduction in micropollutant concentration in discharged water.

   • Implied Indicator for Target 9.4:

     A clear financial indicator is mentioned: the total investment in upgrading wastewater treatment infrastructure. The article provides a specific estimated figure for the Czech Republic, “CZK 20 billion (€824 million),” which can be used to track financial commitment and progress towards retrofitting this industry.

   • Implied Indicator for Target 12.4:

     The adoption and enforcement of the Extended Producer Responsibility (EPR) policy is a key indicator. The article specifies the cost-sharing formula (“80% of the cost burden would fall on the pharmaceutical sector and 20% on cosmetics”) as a measurable component of this policy’s implementation.

   • Implied Indicator for Target 3.b:

     An indicator to monitor the potential negative impact would be the price and availability of essential generic medicines, such as metformin and antibiotics, in the Czech market following the implementation of the directive. A significant price increase or a reduction in availability would indicate a negative outcome related to this target.

Summary of Findings

Source: euractiv.com