European Commission DG ENV 03/07767/DL July, 2005 Assessing

Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

European Commission DG ENV

03/07767/DL

July, 2005

ECOLAS Content 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

CONTENT

CONTENT...... I LIST OF ABBREVIATION S ...... V LIST OF TABLES ...... VII EXECUTIVE SUMMARY ...... I 1 OBJECTIVE ...... 1 2 POLICY OPTIONS...... 3 2.1 “No action” scenario ...... 3 2.2 Scenario 1 ...... 3 2.3 Scenario 2 ...... 4 2.4 Overview ...... 4 3 METHODOLOGY ...... 7 3.1 Economic assessment framework ...... 7 3.2 the major steps ...... 7 3.2.1 Data collection and analysis ...... 7 3.2.2 Design of questionnaires and evaluation of answers ...... 8 3.2.3 Case study approach ...... 8 3.2.4 Case study prioritisation and selection ...... 9 3.2.5 Ov erview of emissions ...... 9 3.2.6 Identification of potential measures ...... 9 3.2.7 Assessment of Direct Costs ...... 10 3.2.8 Economic Evaluation ...... 10 3.2. 9 Data gaps and uncertainties ...... 11 4 RESULTS OF QUESTIONN AIRES ...... 15 4.1 Questionnaires to EU -25 Member States ...... 15 4.1.1 Response rate ...... 15 4.1. 2 Overview of the information provided ...... 19 4.1.3 Data gaps ...... 26 4.2 Questionnaires to industry sectors ...... 26 4.2.1 Response rate ...... 27 4.2.2 Data gaps ...... 29 5 PRIORITISATION AND S ELECTION OF CASES ...... 31 5.1 Expected economic impact on the Substance level ...... 31 5.2 Significance of the type of sources ...... 34 5.3 Number of relevant pollutants in the industry sector ...... 35 5.4 Data availability ...... 37 5.5 Selection of cases ...... 37 6 CASES ...... 45 6.1 Chlorine production ...... 45 6.1.1 Scenarios ...... 45

i ECOLAS Content 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive 6.1.2 Economic Assessment ...... 45 6.1.3 Summary ...... 48 6.2 Iron & Steel ...... 49 6.2.1 Scenarios ...... 49 6.2.2 Economic assessment ...... 50 6.2.3 Summary ...... 52 6.3 Non -ferrous metals...... 53 6.3.1 Scenarios ...... 53 6.3.2 Economic assessment ...... 53 6.3.3 Summary ...... 57 6.4 PVC conversion ...... 58 6.4.1 Scenarios ...... 58 6.4.2 Economic assessment ...... 58 6.4.3 Summary ...... 60 6.5 Refineries ...... 61 6.5.1 Scenarios ...... 61 6.5.2 Economic assessment ...... 61 6.5.3 Summary ...... 63

6.6 Short chain chlorinated paraffins (C 10 -C13 -chloroalkanes)...... 64 6.6.1 Scenarios ...... 64 6.6.2 Economic assessment ...... 64 6.6.3 Summary ...... 67 6.7 Production & formulation pesticides ...... 68 6.7.1 Introduction ...... 68 6.7.2 Literature review and analysis ...... 68 6.7.3 Transfer ...... 69 6.8 Use of plant protection products ...... 74 6.8.1 Introduction ...... 74 6.8.2 Scenario A: Measures to prevent losses of pesticides to surface waters ...... 74 6.8.3 Scenario B : Removal of pesticides from drinking water ...... 78 6.8.4 Summary ...... 81 LITERATURE ...... 83 ANNEXES ...... 89 1 QUESTIONNAIRE FOR ME MBER STATES ...... 91 1.1 Contact persons ...... 93 1.2 List of priority substances, including priority hazardous substances (*) and priority substances under review (**) ...... 94 1.3 Industry sectors under consideration ...... 97 1.4 Current emission situation ...... 98 1.5 Emission reduction measures and associated costs ...... 103 1.6 treatment of urban waste water ...... 105 1.7 Current Chemical Status of surface waters ...... 106 2 QUESTIONNAIRE FOR IN DUSTRY SECTORS ...... 109 2.1 Contact persons ...... 111

ii ECOLAS Content 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive 2.2 List of priority substances, including priority ha zardous substances (*) and priority substances under review (**) ...... 112 2.3 Industry sector and substances under consideration ...... 114 2.4 composition of industrial sector and economic data ...... 116 2.5 Current emission situation ...... 117 2.6 Emission reduction measures and associated costs ...... 118 2.7 other contacts ...... 119

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ECOLAS List of abbreviations 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

LIST OF ABBREVIATION S

AAQ S Annual Average Quality Standard

BAT Best Available Technology

BEP Best Environmental Practice

BREF BAT Reference Document

EAF Expert Advisory Forum

ELV Emission Limit Value

EPER European Pollutant Emission Register

EQS Environmental Qual ity Objectives

PHS Priority Hazardous Substance

PPP Plant Protection Product

PS Priority Substance

SCCP Short Chain Chlorinated Paraffins

UWWTP Urban Waste -Water Treatment Plant

WFD Water Framework Directive

ECOLAS List of tables 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

LIST OF TABLES

Table 2.1.1: Total discounted cost over 20 years (negative net present value or –NPV), annualised cost and cost per tonne produced for EU25; range from 12% discount rate (lower bound) to 4% discount rate (upper bound ) ...... V

Table 2.4.1 Overview of the key element of the different scenarios and the related quantitative reduction goals...... 5

Table 4.1. 1: Overview of the response rates to the questionnaire for MS ...... 16

Table 4.1.2: Response rate of the questionnaire for MS on the use, production and emission, discharge and release of P(H)S ...... 17

Table 4.1.3: Response rate of the questionnaire for MS regarding emission data of P(H)S ...... 18

Table 4.1.4: Overview of the productio n, use, discharge, emission and release of the PS, PHS and PS under review in the EU -25 Member States as reported in answers to the questionnaires ...... 19

Table 4.1.5: Overview of the presence of i mportant activities in the different EU -25 Member States as reported in answers to the questionnaires ...... 21

Table 4.1.6: Current emission situation (from point sources to surface water) in severa l MS as reported in answers to the questionnaires ...... 23

Table 4.1.7:. Current emission situation (from point sources to surface water) in several MS (cont.) ...... 24

Table 4.2.1: Overview of the industry sectors which received a questionnaire ...... 27

Table 5.1.1 : Results of two previous economic assessments on the reduction of emissions of priority substances and priority (hazardous) substances ...... 31

Table 5.3.1 : Number of compounds for which release in a certain industry sector was found to be important ...... 36

Table 5.5.1 : Overview of cases and relevant pollutants ...... 38

Table 5.5.2 : Specific scenario conditions for each case...... 39

Table 5.5.3 : Assessment of the various cases against the applied selection criteria ...... 40

Table 5.5.4 : Checking of the additional sectors against the selection criteria ...... 42

Table 6.1.1: Direct costs to the chlorine industry of replacing mercury cells five years earlier ...... 46

Table 6. 1.2: Mercury plants in the EU ...... 47

Table 6.2.1: Direct costs to the European steel industry (million Euros) ...... 50

Table 6.3.1 Direct costs to the European Primary Aluminium Production (million Euros) ...... 54

Table 6.3.2 Direct costs to the European Primary and Secondary Copper Production (million Euros) ..... 54

vii ECOLAS List of tables 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive Table 6.3.3 Direct costs to the European Primary and Secondary Zinc, Lead and Cadmium Production (million Euros) ...... 56

Table 6.3.4 Direct costs to the European Primary Nickel Production (million Euros)...... 56

Table 6.4.1: Direct costs of measure 1 (End of pipe treatment at processing site) to the European PVC conversion industry (million Euros)...... 59

Table 6.4.2: Direct costs of measure 2 (Substitution of DEHP) to the European PVC conversion industry (million Euros) ...... 59

Table 6.5.1: Direct costs to the refining industry ...... 62

Table 6.5.2: Price increase for gasoline and diesel due to the reduction scenarios ...... 62

Table 6.6.1: Aggregate direct costs in EU -25 due to a ban on SCCP use (million Euros) ...... 65

Table 6.6.2: Direct costs to the EU -15 metalworking industry due to a ban on SCCP use (million Euros) 66

Table 6.7.1 : Potential economic impacts of the progressive reduction of PS and the phase out of PHS in the production and formulation of pesticides ...... 71

Table 6.8.1: Direct costs of measures to reduce discharges of pesticides into surface waters ...... 78

Table 6.8.2 Contamination of raw surface water resources with pesticides ...... 79

Table 6.8.3 : Water abstracted by public water supply companies in the EU25 (2002) ...... 80

viii ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

EXECUTIVE SUMMARY

Background

In the context of Article 16 o f the Water Framework Directive (WFD), the European Commission is required to present environmental quality standards and specific control measures to prevent pollution of water coming from individual pollutants or group of pollutants presenting a signific ant risk to or via the aquatic environment, including such risks to waters used for the abstraction of drinking water. To achieve this goal, the European Commission is required to propose environmental quality standards and specific measures to progressive ly reduce the discharges, emissions and losses of priority substances, and for priority hazardous substances phasing out or cessation of discharges, emissions and losses within 20 years of the adoption of the proposals (cf. Article 16 (6), (7) and (8)). Re garding the pollution control measures, the European Commission shall identify the most appropriate, cost-effective and proportionate level and combination of product and process controls for both point and diffuse sources. Such a proposal on the basis of Article 16 (also called Daughter Directive) shall be made for the 33 priority and priority hazardous substances as adopted by the Council and the European Parliament in November 2001 (Decision 2455/2001/EC).

Objective of the study

The general objective of the study is to identify and evaluate the ‘additional’ costs of the above - mentioned proposal for a Daughter Directive on environmental quality standards and pollution control of priority substances (also called the Proposal). Such ‘additional costs’ should be put in relation to the WFD and other existing Community instruments and other commitments such as voluntary agreements or in some cases international conventions. Such an assessment should also look at the economic and other impacts (e.g. employment) a ssociated with these additional costs. A main purpose of this economic assessment is to gather - through questionnaires and other means - as much additional relevant information as possible and to synthesise it with information that is already available. T he resulting assessment can serve as a basis for a stakeholder discussion that may lead to a deeper understanding of the socio-economic impacts of the Proposal and ultimately to a cost-effective and proportionate legal act. The study was carried out as the main contribution in the preparation of the Impact Assessment which is associated with the Proposal and which is prepared by DG Environment.

It should be noted that the presented study is by no means meant to be the ultimate economic assessment. To achiev e this goal, much more data would be required some of which are currently not available neither at the European Commission nor with the Member States. The results also need to be considered in the perspective that no assessment has been done of the impact that innovation can have on reducing costs of reduction. In addition, this economic assessment was not designed to be a comprehensive cost-benefit analysis. Assessment of benefits linked to improved water quality is a challenging task in itself. According to DG Environment, a report on compliance with environmental quality standards (EQS) and benefits from achieving these EQS was prepared by a parallel study which should be seen as complementary to this report.

Methodology

The economic assessment identi fies and evaluates differences in costs between three scenarios. Scenarios 1 and 2 are based on assumed programmes of measures that are suited to meet the goals of each scenario.

The design of scenario 1 was similar to the initially proposed provisions in a draft directive which was circulated widely in June 2004 for external consultation. However, it should be noted that any assumptions on measures made in this study are merely assumptions taken for the sake of carrying out

I ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive the economic impact assessment. In particular, assumptions on measures do not imply that the Member States or the European Commission consider to require the implementation of these measures. Designing the actual programs of measures will ultimately be the responsibility of the Member States.

Furthermore, the study has not considered the possibility for Member States to apply exemptions foreseen under Water Framework Directive in Article 4 (in particular paragraphs 4, 5, 6, and 7). In general, such exemptions would be able to extend the deadlines, lower the environmental objectives (in the case of priority substances this means not achieving the EQS or the cessation target) and take account of accidental pollution on the basis of a clear set of criteria including technical feasibility an d disproportionate costs. In other words, should Member States come to the conclusion that specific measures to reduce pollution from priority substances would not be possible on the basis of the given criteria in the Article 4 exemptions, the measures wou ld not need to be taken. Therefore, the calculated costs in this study may not necessarily apply.

Finally, the costs of scenarios 1 and 2 are assessed, as far as possible, relative to a “no action” scenario.

Scenario 0 : The baseline scenario or ‘no acti on’ scenario is based on the assumption that no Daughter Directive is proposed by the Commission, so that the ‘safety -net’ requirements of the WFD apply (cf. Article 16 (8)). In addition, the full implementation of other existing EU legislation is being a ssumed. It should be noted that it is difficult to predict the reduction effect of those measures which have recently been taken or which are currently under discussion and may be implemented anyway. Actually, several relevant measures are under discussion in Council and Parliament (e.g. marketing and use restriction for trichlorobenzene ( COM(2004) 320 final of 28.4.2004 ) or have been adopted in the meantime. Such baseline uncertainties imply uncertainties in the cost estimates of the policy scenarios 1 and 2, as these are estimates of the costs that are incremental with respect to the baseline. In consequence, some costs associated with scenario 1 or 2 may actually incorporate parts of the implementing costs of other EU legislation, however, care has been take to avoid this “double counting” wherever possible.

Moreover, choosing a “no action” scenario as the baseline implies an overestimation of the impact s of the Proposal , as “no action” is not a realistic assumption in absence of the Proposal. The Member S tates would have to act unilaterally, formulating environmental quality standards (EQS) and pollution control measures which would differ between Member States (cf. Article 16 (8)). However, determining the EQS for each Member State for the baseline would at this stage be pure guesswork. The assumed stringency for the unilateral EQS would become the single most important assumption to determine the results of the economic assessment. It is much more illustrative to compare the scenarios that correspond to t he Proposal to a “no action” scenario. Member States can compare the resulting economic impacts to those of any unilateral approach which they may have in mind.

Scenario 1 represents a modest course of action that allows for some time and flexibility in ac hieving the objectives of the WFD’s Art. 16. This scenario corresponds to the implementation of community -wide Environmental Quality Standards. The introduction of measures going beyond BAT for IPPC companies, as far as this can be determined at the moment , and BAT -based measures for non -IPPC companies for all direct discharges through point sources to water represents a major step in attaining the environmental quality standards. Although additional measures aiming to reduce input from diffuse sources or i ndirect pathways (deposition) may be required to fully meet the EQS in all watercourses.

The time frame for the phase-out of PHS corresponds to the maximum given in the WFD, i.e. 20 years. In practice, the attainment of environmental quality standards thr ough the Proposal will be achieved through the implementation of a programme of measures. This needs to be translated to quantitative reduction goals in order to be able to execute an economic assessment. In this assessment, it is assumed that adoption of the programme of measures will lead to a 50% reduction by 2015 for PS. An 80% reduction by 2021 for PS covers the requirement for progressive reduction beyond 2015. The quantitative reduction goals are then used further during the course of the study to de fine the reduction measures and its application rate to achieve them. For PHS, reduction measures are defined to achieve a phase-out

II ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive by 2025. Naturally, PHS should meet as well the EQS set for 2015, which is assumed to lead to a reduction of 50% , and the 8 0% reduction target for 2021 . This scenario corresponded largely with the initial proposals for pollution control as circulated by DG Environment for consultation in June 2004.

Scenario 2 represents a more stringent regulation, which is based on detailed c ommunity -wide emission limit values. In principle, these are assumed to be at the level of the draft proposed EQS. In practice, it is assumed that the ELV’s will lead to the adoption of more stringent programs of measures. Reduction measures are defined d uring the course of the study which will lead to higher reduction goals and meeting the EQS by 2015 for PS. The time frame for the phase-out of PHS for “known” point sources is set to 10 years. This leaves the following 10 years for achieving a phase-out for diffuse sources and “unknown” point sources. This scenario is thus still in line with the 20 year time frame of the Directive. As scenarios 1 and 2 correspond to different levels of abatement, they can only be compared in terms of absolute costs, not in terms of cost-effectiveness. This means that the superiority of a scenario can only be assessed in conjunction with a valuation of the environmental benefits of each scenario.

Information gathering

To obtain the necessary information, questionnaires h ave been designed and sent to representatives of the affected industrial sectors and of all EU member states. The evaluation of the questionnaires has been complemented by consultations with stakeholders. Existing studies have been used to complement the i nformation obtained from the questionnaires. Data bases have been consulted extensively to evaluate socioeconomic impacts on the basis of detailed sector information.

Quality of data received – limitations of the study

Despite the extensive consultation an d data gathering, there are serious data gaps. These relate to different issues: First, data gaps exist on the release of some priority substances and priority hazardous substances (with the exception of PAH and the metals) from the relevant sources.

Seco nd, for the cost of technical emission reduction measures, use was made as much as possible from data for various sizes of equipment in order to be able to take into account economies of scale effects.

Third, there are almost no data on the removal effic iency of technical (end -of -pipe) measures for priority substances. In all cases a conservative estimate of the removal efficiency was made. Often, several measures can be applied for achieving the same goal. Which measures would be used to what extent dep ends not only on the costs of the measures, but also on other technical and economic considerations or constraints. Finally, information on technical constraints that would inhibit the use of a measure under certain circumstances is sparse, which makes it difficult to assume a realistic composition of measures. Often, a least-cost approach was used which may lead to an underestimation of costs, as in practice more expensive measures may be applied for various reasons.

In general, the level of completeness and certainty of information has not been sufficient to determine the most concrete, targeted and cost-effective measures on a European scale.

Data are more prevalent for the EU15 while this assessment concerns EU25. For many sectors, production and capaci ty data for the new member states has not been provided. In some cases, this information had to be retrieved from internet resources, although it stayed difficult to assess the reliability of such data.

Even more difficult than finding out about current p roduction and capacity levels is the prediction of the future development of sector capacity and output in the baseline scenario. For many sectors, assessments about the future development of the sector are missing or, at best, qualitative. For any economi c calculation that concerns a time period of several decades, the discount rate greatly influences the results. Due to differing profit margins, financing opportunities, risk cultures and institutional settings,

III ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive different sectors (and companies within the same sector) use different discount rates. These discount rates typically belong to a company’s confidential information. In addition to the 4% discount rate that is recommended for impact assessments in the Commission, we present the results for two alter native discount rates (8%, 12%). These may be closer to the discount rates used by many private companies.

Another piece of information that is typically confidential is a company’s cost function. For this reason, total costs of production are usually unk nown and market prices are used to illustrate the magnitude of the incremental costs. Without reliable information on contribution margins, however, market prices are only a very rough (and volatile) reflection of the costs of production. Due to the descri bed data gaps, impacts on upstream suppliers and downstream users, including consumers, are mostly assessed in a qualitative way.

Case study approach

Due to considerable data gaps, a case study approach has been adopted. This approach has the objective of assessing costs and impacts in real -life situations for different sectors and different situations. They are targeted to cases that are most relevant and representative. Following cases have been selected regarding scenario 1 and 2: chlorine production, iron and steel production, non -ferrous metals production, PVC conversion, refineries, short chain chlorinated paraffins, production and formulation of pesticides, use of plant protection products. For the latter two cases, meta -studies have been conducted, meaning a transfer on basis of formerly executed studies.

It should be noted that one of the selection criteria for case studies is data availability, and the cases do not attempt to assess the total cost of the proposal, but to give representative examples of likely economic impacts. Many of the cases refer to measures for point sources. It should be noted that considerable emission reductions for point sources have already taken place over the last 20 years. ( see e.g. Umweltbundesamt, Berlin, UBA Report 54/ 20 02 on h eavy metal emissions to surface waters in Germany) . In consequence, the incremental costs for further emission reductions increase and point source controls may not necessarily be sufficient or cost-effective to achieve the objectives of the WF D. To the contrary, measures to reduce diffuse sources at source are often the most cost-effective ones .

Summary of outcome of the case studies

In the following table, a summary is given of the total discounted cost (negative net present value, neg. NPV), the annualised costs (annuity), and where possible, the supplementary cost per tonne produced for the different industry cases. As the discount rate greatly influences the cost figures, we present the results as ranges that comprise the calculations for t he three discount rates used throughout this study (4%, 8%, 12%). This means that the lower figure corresponds to a 12 % discount rate (which may be close to the discount rates used by industry), while the higher number has been calculated with a 4 % disco unt rate (as recommended for impact assessments by the Commission). As an exception, in the Chlorine case the lower number corresponds to the lower discount rate and the higher number to the high discount rate. All figures are also presented with a “lower than” because of the possible overestimation of the costs for the reasons mentioned above. For details, refer to the specifics of this case (see section 6.1 ). It is clear that all of the figures are estimations and should be treated as such.

IV ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

Scenario 1 Scenario 2

-NPV Annuity Cost €/tonne -NPV Annuity Cost (million €) (million €) produced* (million €) (million €) €/tonne (total (annualised (total (annualised produced* discoun ted cost) discounted cost) cost) cost)

Chlorine # - - - -< 295 – 163 -< 98 – 140 -< 20 – 28

Iron & steel < 461 – 1 < 59 – 122 < 0.32 – 0.67 < 6 460 – 22 < 824 – 1 423 < 4.49 – 911 228 7.75

Non ferrous < 148 – 961 < 20 – 61 - < 1 510 < 56 – 97 -

PVC EoP < 58 – 247 < 7 – 16 < 1.2 – 2.7 < 340 < 12 – 22 < 2.0 – 3.7

PVC subst. < 306 – 1 < 39 – 88 < 6.6 – 15.0 < 1 899 < 62 – 122 < 10.5 – 381 20.6

Refineries < 1 084 – 4 < 138 – 312 < 0.19 – 0.43 < 14 138 < 502 – 905 < 0.70 – 872 1.26

SCCP < 416 – 2 < 53 – 131 - < 2 449 < 80 – 157 - 047

* per tonne produced chlorine (chlorine), liquid steel (iro n & steel), plasticised PVC (PVC), crude oil (refineries).

# for Chlorine, the negative numbers correspond to the results for a 4% discount rate while the upper bound corresponds to a 12% discount rate.

Detailed analysis of the sector results gives a very different view for each sector.

Due to the commitment of the chlorine production industry to phase-out production in mercury cells by 2020, scenario 1 is equal to the baseline scenario and has thus no incremental cost. Even without considering environmen tal benefits, scenario 2 is highly beneficial using the discount rate of 4%. With the market price of chlorine oscillating approximately between 60 and 250 €/tonne, it results in major cost savings in chlorine production of 28 €/tonne and leads to an inves tment impulse due to the installation of membrane cells. In contrast to this general view, affected chlorine producers that use industry -like discount rates in the two digit range perceive a major economic burden and may reduce output. A part of the burden may be passed on to downstream users of chlorine and eventually to consumers of the associated end products.

The direct costs related to the reduction measures for the iron & steel sector are relatively low under the first scenario, but high under the sec ond scenario. The costs of 0.67 and 7.75 €/tonne for scenarios 1 and 2 respectively can be compared to market prices of steel, which have risen to approximately 400 to 600 €/tonne (Oct. 2004), depending on the type of product. Due to intense international competition, the second scenario is likely to have a negative impact on the output of European steel producers with negative consequences for employment and profits in this sector. These consequences may also affect

V ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive upstream suppliers. Downstream users of steel will be affected to a much lesser extent, a possible exception being users of specific high quality products. The sectors that deliver the treatment equipment benefit under both scenarios. In contrast to the non ferrous metals case, a complete phase-out is not considered under scenario 1 which explains lower costs under this scenario.

The non ferrous metals industry is quite differentiated. For that reason, the scenarios and their costs have been calculated for primary aluminium production, primary a nd secondary copper production, primary and secondary zinc, lead and cadmium production, primary and secondary nickel production. In the cases of aluminium, copper and nickel, the unit costs of both scenarios are low if compared to current high market prices of the products. For scenario 1, the ratios of incremental unit costs to prices are 0.06% for nickel, 0.10% for copper, and 0.12% for aluminium. Scenario 2 is somewhat more expensive with ratios of incremental unit costs to prices of 0.10% for nickel, 0 .16% for copper, and 0.18% for aluminium. In the case of zinc, lead and cadmium production, the required investment is large if compared to the size of the industry. The annualised direct costs to the industry represent 0.60% of total turnover for scenario 1 and 0.94% of total turnover for scenario 2.

For the PVC conversion industry, two different measures have been taken under consideration, end of pipe treatment at processing site and substitution of DEHP. Effectiveness of both measures cannot be compared . At production site, an efficient removal of DEHP can be achieved while substitution does also prevent later emission in the use phase (which is significantly higher). Total absolute costs are lower for the PVC conversion in comparison to other industry s ectors. When comparing both measures in the PVC conversion industry, the net present values and annuities are about 25% lower for the end of pipe treatment than substitution. Substitution of DEHP is however a far more cost effective measure when using the cost per tonne DEHP reduced instead of cost per tonne produced.

Although the absolute direct cost numbers of both scenarios are high for refineries , the measures are unlikely to have a negative effect on profit margins or employment at refineries, as refineries are able to pass on most of the cost burden to downstream users. The resulting increase in fuel prices is almost negligible for scenario 1, but may be between 0.2 and 0.5 Eurocent per litre for scenario 2, resulting in negative impacts on downstream users, notably on transportation and the users of transportation services. The distributional effect of such a price increase is potentially regressive, provided that it is not compensated through tax rate adjustments. The negative impacts associated with the price increase are partly compensated by the investment impulse due to the installation of the treatment equipment as well as by the employment associated with maintenance and operation of that equipment.

The large firms producing SCCPs are not affect ed negatively by a large decrease or even cessation of SCCP use. They are likely to shift into the production of alternative products without experiencing any considerable negative effects. Scenarios 1 and 2 should pose only minor problems to leather proce ssing, sealants and adhesives, and textile and rubber industries. The metalworking industry faces impressive incremental cost under both scenarios, as it is the main SCCP -user. However, SCCPs affect only a minor input of production and there are only few o bstacles to substitution. Furthermore, metalworkers represent a very large number of companies, which have already banned to a great extent SCCPs out of their activities. So, overall effects on profits and employment are expected to be low or even negligible.

Due to the large data -gap with regard to production & formulation of pesticides , the best way forward for assessing the economic impacts with regard to this sector is by transferring results from similar studies. In the beginning of the 1990’s, the US EPA was developing new legislation targeting a reduction of the discharge of active ingredients to water from both pesticide manufacturing (active ingredient synthesis) and pesticide formulation, packaging and repackaging (Tudor, 1992 and Tudor, 1994). Th e aim was to come to a reduction of the discharge of active ingredients in the watercourses by point sources. A total of 272 active ingredients were targeted with this new legislation. Two possible ways to reach this reduction were taken into considerati on, the emission limit value option and the zero discharge option. Following conclusions can be transferred to this study: costs associated with a phase out of discharge of active ingredients, designated as priority hazardous substance and that are still

VI ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive produced in the EU, can be significant for the production facilities in question. In case the active ingredient under consideration also faces a ban under Directive 91/414/EEC, the impacts relating to the ban under 91/414/EEC will be predominant. Costs associated with a phase out of discharge of active ingredients, designated as priority hazardous substance and that are still formulated in the EU, are acceptable if the reuse option for the rinsing water is used. Costs associated with a progressive reduction of the discharge of active ingredients, designated as priority substances, are acceptable for both the pesticide manufacturing and the pesticide formulation industry.

Based on the results of the Impact Assessment for the Sustainable Strategy on Pesticides and some other data available in literature, several measures to reduce the impact of losses from the use of pesticides in the aquatic environment were evaluated. These measures could be grouped in two scenarios: scenario A includes different measures at s ource, whereas scenario B comprises an end -of - pipe treatment of surface water that is abstracted to produce drinking water. Although the costs of the measures at sources vary considerably, the costs of some measures are feasible, especially when their sign ificant reduction effect is taken into account. This is the case for the measures ‘loss-minimizing spraying equipment’ and to a certain extent also for the measure ‘creation of buffer strips along river banks’. Compared to the costs of the measures at sour ce considered in scenario A, the costs of the end - of -pipe treatment technique of scenario B seem relatively low. However , the two scenarios are not directly comparable in terms of their environmental impact. Scenario B only achieves part of the protection objectives of the WFD, notably human health via drinking water, while it is not designed to mitigate the negative effects of elevated pesticide concentrations on aquatic ecosystems. Furthermore, a part of the costs of scenario A may be attributable to the Nitrates Directive rather than to the proposal.

Overall economic analysis of the Proposal gives a very different view on the potential impacts depending on the sector. Overall, implementing Community -wide environmental quality standards (scenario 1) will b e the more cost-effective and economic approach this creating less socio-economic impacts whilst guaranteeing a comparable and high level of environmental protection . This reflects in part the lower stringency of the regulation, but it is also due to cost savings that come with greater flexibility for the Member States. When considering the adoption of environmental limit values, and assuming this would lead to more stringent measures (i.e. scenario 2) , there is a general cost increase which is quite differ ent depending on the sector. The cost increase ranges from very small (such as SCCP) over a moderate increase (such as non -ferrous and refineries) to a major increase (such as iron & steel). The costs identified in this study have to be interpreted with ca ution. On one hand, there is a lack of data to carry out a comprehensive analysis of the total costs of the Proposal and on the other hand the estimated costs may reflect the “worst-case” situation because some costs may actually be attributed to the implementation of other policies and because of the additional flexibility that the Water Framework Directive provides to Member States. The scenario 1 was largely comparable to the initial ideas proposed by DG Environment in June 2004. The findings of this stu dy, however, will contribute to the finalisation of the Proposal with the aim to improve cost-efficiency of the proposed measures.

VII ECOLAS Executive summary 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

VIII ECOLAS Objective 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

1 OBJECTIVE

In the context of Article 16 of the Water Framework Directive (WFD), the European Commission is required to pre sent environmental quality standards and specific control measures to prevent pollution of water coming from individual pollutants or group of pollutants presenting a significant risk to or via the aquatic environment, including such risks to waters used f or the abstraction of drinking water. To achieve this goal, the European Commission proposes specific measures to progressively reduce the discharges, emissions and losses of priority substanc es, and for priority hazardous substances phasing out or cessati on of discharges, emissions and losses within 20 years of the adoption of the proposals. The European Commission shall identify the appropriate cost-effective and proportionate level and combination of product and process controls for both point and diffus e sources. This regards 33 priority and priority hazardous substances as adopted by Council and EP in Decision 2455/2001.

The general objective of the study is to identify and evaluate the ‘additional’ costs of the Proposed Daughter Directive (also called the Proposal) in relation to the WFD and other existing Community instruments and other commitments such as voluntary agreements or in some cases international conventions , and the economic impacts associated with these additional costs. Costs which are ex clusively linked to the WFD implementation, are not part of this study. It is not the aim to assess the costs for specific measures per se. The results also need to be considered in the perspective that no assessment has been done of the impact that innova tion can have on reducing costs of reduction. For many reasons, this economic assessment is not meant to be a full cost-benefit analysis. Assessment of benefits linked to improved water quality is a complete challenge on itself. Consistent benefit assessme nt would need detailed information from the member states regarding the environmental quality standards, the actual quality status and the related benefits to environment and health. These benefits would differ a lot depending on the regional population, t he state of the environment, recreational practices and potential, etc.

Art.4. of the WFD furthermore introduces the possibility for a prolongation of the time period foreseen for reaching environmental quality standards, based on considerations such as m easures are not technically feasible in the timescale, the costs to comply with the timeline would be disproportionately high , and the natural conditions do not allow timely improvements (WFD Art. 4.4) . In addition , less stringent EQS can be determined sho uld the achievements of the Community wide objectives be infeasible or disproportionately expensive , provided that, for surface water, the highest ecological and chemical status possible is achieved and no further deterioration in the status of the affecte d body of water occurs. Subject to a number of requirements, temporary deterioration in the status of bodies of water is allowed under circumstances of unforeseen and extreme natural causes or accidents. Member States must however pro vide evidence to suppo rt their case, to ensure these derogations are not misused. Th ese option s, only meant in the spirit of the WFD as an exemption, are not taken under consideration in this economic assessment , since key information necessary for such an assessment has not be en made available by Member States .

ECOLAS Policy options 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

2 POLICY OPTIONS

The economic assessment identifies and evaluates differences in costs between three scenarios. Scenarios 1 and 2 are based on assumed programs of measures that would be suitable to meet the goals of ea ch scenario. Designing the actual programs of measures will however be the responsibility of the Member States. It should be noted that any assumptions on measures made in this study are merely assumptions taken for the sake of of carrying out the economic impact assessment. In particular, assumptions on measures do not imply that the Member States or the European Commission consider to require the implementation of these measures. The costs of scenarios 1 and 2 are assessed relative to a “no action” scenar io. Note however that t he "combined approach" of Article 10 WFD could not be considered in the study in scenario 1 and 2, as there is no accurate information on compliance rates of EQS. The combined approach clarifies that measures beyond BAT are only relevant when not achieving the environmental objectives (cf. Art. 10 (3)). In consequence, the larger the compliance rates of EQS, the smaller the "real" investment costs in technologies will be .

2.1 “NO ACTION” SCENARI O

The baseline scenario or no action scena rio is based on the assumption that no Daughter Directive is proposed by the Commission, so that only the requirements of the WFD apply and other existing legislation. Abatement measures are based on the Water Framework Directive and other existing legislation such as the Urban Waste Water Directive (91/271/EEC), the Plant Protection Product Directive ((91/414/EEC) and Biocides Directive (98/8/EC), the Integrated Pollution Prevention and Control Directive ((96/61/EC), the Marketing and Use Directive (76/769 /EC), the Seveso Directive (96/82/EC) and the Directives related to emissions to air and waste. This scenario also includes continued implementation of the ‘daughter Directives ’ to Directive 76/464/EEC (including for sectors not explicitly mentioned in thi s Directive) , as listed in annex IX of the WFD for nine of the priority substances, and the continued implementation of Directive 76/464/EEC until 2013 (including for sectors not explicitly mentioned in this Directive) for the other priority substances. Th e list of other measures is non -exhaustive, and is further expanded upon in each case study. It should be noted that it is difficult to predict the reduction effect of those measures which have recently been taken or which are currently under discussion an d may be implemented anyway. Such baseline uncertainties imply uncertainties in the cost estimates of the policy scenarios 1 and 2, as these are estimates of the costs that are incremental with respect to the baseline.

Note that choosing a “no action” scen ario as the baseline implies an overestimation of the impact of the Proposal , as “no action” is not a realistic assumption in absence of the Proposal. The Member States would have to act unilaterally, formulating Environmental Quality Standards which would differ between Member States. As the Proposal is based on community -wide Environmental Quality Standards, a correct measurement of the Proposal’s impact would have to take into account the difference between community -wide and unilateral EQS. However, det ermining the EQS for each Membe r State for the baseline would at this stage be pure guesswork. The assumed stringency for the unilateral EQS would become the single most important assumption to determine the results of the economic assessment as it largely determines the measures that would be implemented in the absence of the Commision’s Proposal. It is much more illustrative to compare the scenarios that correspond to the Proposal to a “no action” scenario. Member States can compare the resulting economic impacts to those of any unilateral approach which they may have in mind.

2.2 SCENARIO 1

3 ECOLAS Policy options 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive Environmental Quality Standards. The introduction of measures going beyond BAT for IPPC companies and BAT -based measures for non -IPPC companies for all direct discharges through point sources to water represents a major step in attaining the environmental quality standards, although additional measures aiming to reduce input from diffuse sources or indirect pathways (deposition) may be required to fully meet the EQS in all watercourses. The time frame for the phase-out of PHS corresponds to the maximum given in the WFD, i.e. 20 years. In practice, the attainment of environmental quality standards through the Proposal will be achieved through the implementation of a programme of measures. This needs to be translated to quan titative reduction goals in order to be able to execute an economic assessment. In this assessment, it is assumed that adoption of the programme of measures will lead to a 50% reduction by 2015 for PS (and attaining the EQS for these substances by that dat e). An 80% reduction by 2021 for PS covers the requirement for progressive reduction beyond 2015. This does not imply that th is is a quantitative goa l set or even considered by the Commission. The quantitative reduction goals are then used further during t he course of the study to define the reduction measures and its application rate to achieve them. For PHS, reduction measures are defined to achieve a phase-out by 2025. Naturally, PHS should meet as well the EQS set for 2015 , which is assumed to lead to a reduction of 50% , and the 80% reduction target for 2021 .

2.3 SCENARIO 2

Scenario 2 represents a more stringent regulation, which is based on detailed community -wide emission limit values . In principle, these are assumed to be at the level of the draft propos ed EQS In practice, i t is assumed that the ELV’s will lead to the adoption of more stringent programs of measures . Reduction measures are defined during the course of the study which will lead to higher reduction goals and meeting the EQS by 2015 for PS. The time frame for the phase-out of PHS for “known” point sources is set to 10 years. This leaves the following 10 years for achieving a phase-out for diffuse sources and “unknown” point sources. This scenario is thus still in line with the 20 year time frame of t he Directive. As scenarios 1 and 2 corre spond to different levels of abatement, they can only be compared in terms of absolute costs, not in terms of cost-effectiveness. This means that the superiority of a scenario can only be assessed in conjun ction with a valuation of the environmental benefits of each scenario.

2.4 OVERVIEW

The follow ing table shows the key element for each scenario and the related quantitative reduction goals which are assumed to be reached when adoption measures conform to eac h scenario.

4 ECOLAS Policy options 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

Table 2.4.1 Overview of the key element of the different scenarios and the related quantitative reduction goals

Scenario 0 1 2

Key element EQS* by Member Community wide EQS*, whic h Community wide EQS*, which States by 2015 means the adoption of means the adoption of programme s of measures that programme s of measures that will lead to: will lead to:

PS - meeting EQS by 2015 - meeting EQS by 2015

- progressive reduction - reach ing ELV’s** for point sources (by 2015?) - 50% reduction by 2015 (assumed in this stu dy to be - progressive reduction by more meeting EQS) - 80% reduction stringent measures than in by 2021 scenario 1 by 2015

PHS - no phase-out - 50% reduction by 2015 - phase-out by “known” point - 80% reduction by 2021 sources in 2015 (10 years) - phase-out by 2025 (20 years) - phase-out for diffuse sources and “unknown” point sources over the following 10 years

* Environmental Quality Object ive ** Emission Limit Value

Following timelines have been taken under consideration. Environmental Quality Standards should be met by 2015 for the priority substances as well as for the priority hazardous substances. The programme of measures that will be installed to meet these EQS should be established in 2009 and operational from 2012 , and revision of that programme shall be operational in 2018. The period for reaching phase-out of PHS starts at 2006 (assuming the proposal is adopted by European Parliame nt and the Council in th at year ), meaning that a 20 year duration ends at 2026, a 10 year duration ends at 2016. In this analysis these timeframes have been set at respectively 2025 and 2015 which will only have negligible consequences on analysis and conc lusions.

ECOLAS Methodology 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

3 METHODOLOGY

3.1 ECONOMIC ASSESSMENT FRAMEWORK

It must be noted that the economic assessment is a partial analysis in at least two ways:

Firstly, the benefits of the improvement in environmental quality that is associated with the Proposal are gene rally disregarded. Benefits of reduction measures are taken into account if they are connected to the provision of technical equipment and services or to reductions in production costs. Also, regulatory benefits (e.g. related to competition) from EU -wide h armonisation are considered. As t he largest part of the Proposal ’s benefits are associated with a reduction of risks to human health and with ecosystem protection, the economic assessment can by no means be regarded as an attempt for a cost-benefit analysis.

Secondly, costs which are exclusively linked to the implementation of the WFD , such as regulatory and monitoring costs to government, are not considered in the impact assessment as they are part of the baseline scenario (WFD implementation) and the stud y evaluates only the additional costs of the Proposal to industry and consumers .

The Proposal directly affects a large number of industrial sectors. Within any realistic time restriction, it is impossible to accurately quantify all the costs for each of th e (sub -)sectors in each member state. A main purpose of the economic assessment is thus to gather - through questionnaires and other means - as much additional relevant information as possible and to synthesise it with information that is already available. The resulting assessment can serve as a basis for a deeper understanding of the socioeconomic impacts of the Proposal and ultimately to a cost-effective and proportionate legal act.

3.2 THE MAJOR STEPS

3.2.1 Data collection and analysis

A first step is the collec tion and analysis of existing literature and data which are relevant to the economic assessment under consideration. Following studies and data have been used as a starting point:

• EAF(7) – 05/01/ENV, Concept paper on the control of emissions, discharges a nd losses of priority substances and priority hazardous substance – version 2, DG ENV.D.2 , developed in cooperation with Member States experts, environmental NGOs and industry associations , including :

o Source screening sheets for individual substances - L imited release of fact sheets on CIRCA

o Existing and future controls for priority substances under the WFD , Measures tables for the individual substances – version 3

• DG ENV.B1, Extended Impact Assessment – Proposal for groundwater daughter Directive

• Exten ded impact assessments for other proposed Community regulation, specifically with regard to the Strategy for sustainable use of plant protection products

• BREFs & BAT studies in the framework of the implementation of the IPPC Directive (96/61/EC)

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• RPA (2000) , Socio-Economic Impact of the Identification of Priority Hazardous Substances under the Water Framework Directive, Study on behalf of DG ENV, 18 pp. + Annexes

• Haskoning, Fact sheets on production, use and release of priority substances in the WFD

• Sector -specific economic reports (for details, see literature list)

• AMADEUS data base (annual accounts)

• DEFRA (2002), Regulatory Impact Assessment - Priority List of Substances Under Article 16 of the Water Framework Directive

• EPER database

• Ökopol (2003), Substitu tion of hazardous chemicals in products and processes, Report on behalf of DG ENV.

Although these studies do provide supporting data for the economic assessment, the specific objective for assessing additional costs related to the Proposal, cannot be met w ith these studies. The supplementary stakeholder consultation is therefore crucial in providing further evidence for the different member states with regard to the status of the environmental quality, the presence of industries, the emissions and discharge s to water, the costs related to the implementation of measures, etc. Next to this, the Expert Advisory Forums on Priority Substances (EAF PS) delivered also relevant information during the course of the study.

3.2.2 Design of questionnaires and evaluation of an swers

To obtain the necessary information, questionnaires have been designed and sent to representatives of the affected sectors and of all EU member states. The questionnaires which have been sent out to the member states and to the industry sectors are i ncluded as annexes 8 and 9 respectively. The evaluation of the questionnaires has been complemented by consultations with stakeholders. Existing studies have been used to complement the information obtained from the questionnaires. Data bases have been con sulted extensively to evaluate socioeconomic impacts on the basis of detailed sector information.

The relevant sectors were selected mainly on the basis of the source screening sheets. Additional validation was done through consultations with the EAF and different Commission Services .

3.2.3 Case study approach

A full economic assessment would start from an extensive dataset for each sector at least detailing quantitative reduction goals, measures to be implemented and marginal costs of these measures. As will be seen later during the description of the results of the questionnaires, only limited information became available. That’s why has been chosen for a case study approach by which some sectors have been studied in detail. The case study approach has the obje ctive of assessing costs and impacts in real -life situations for different sectors and different situations. They are targeted to cases that are representative. Selection of cases is thus important to have a widespread view on the possible economic impacts that may occur. It is not the aim, nor possible, to extrapolate these sector cases to other sectors on the European level. On the other hand, conclusions that will be drawn from the cases should reflect the general conclusions that may be drawn for the ec onomic assessment of the Proposal , although it is clear that the overall costs of the Proposal could not be estimated .

Building case studies makes it possible to make more detailed bottom -up analyses. As a consequence, the policy options, defined as scena rios are translated for each case to a set of specific conditions which correspond as much as possible to the definition of the scenarios. These set of conditions are explained

8 ECOLAS Methodology 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive in each case. A scenario starts from a policy perspective, such as introducing EQS by 2015 for PS. This will correspond to the adoption of a programme of measures to meet these EQS. This adoption will lead to a progressive reduction of PS and PHS, in scenario 1, a reduction of direct discharges of the relevant priority (hazardous) substances with 50 % by 2015 and with 80 % by 2021. The main challenge for each case is finding corresponding measures which will lead to a likewise reduction as foreseen in the scenario. In some cases, difficulties arise when PS and PHS will be reduced to a same extent by a measure, although reduction goals will be quite different. In these cases, adjustments have been done to the set of conditions and assumptions, in order to have a realistic view of the case as much as possible. This means for instance tha t PS and PHS are treated the same way in reaching strict reduction goals under scenario 2, as reduction measures will have the same impact on them. These assumptions are explained in the specific cases. Two case studies are built as a meta -study.

3.2.4 Case stu dy prioritisation and selection

The prioritisation and selection of case studies for the economic assessment of the Proposal was done on substance and sector level. For each of these levels, a starting point is to obtain a balanced view on the impact of t he Proposal. This means that cases are addressed where significant impacts may be expected, as well as cases where moderate to negligible impacts are expected. Prioritisation on substance level started from the conclusions of 2 economic studies with regard to these impacts (RPA, 2000 and UK DEFRA RIA). Prioritisation on sector level started from the source screening data. In a first step, those sectors were short -listed having the highest number of relevant PS and PHS. In a second step, the pollutants that, based on the findings on release mainly through dispersive use and on the results of the two previous economic assessments, were found to be either better controlled through other legislation or for which economic impact was judged to be low, were elimina ted from this list. Upon the selection of cases, priority was given to those sectors having the largest amount of substances being of concern to this sector. Another criteria for the selection of cases was data availability, which may be associated with a risk for bias, however in an unknown direction. The selection of the cases based on these criteria is discussed after the analysis of the results of the questionnaire.

3.2.5 Overview of emissions

The emission situation of the relevant pollutants for the case un der co nsideration is mapped. Useful data sources, used in nearly all cases, were: • EU BREF document for the sector under consideration, • EU Risk Assessment Reports and Risk Reduction Studies, • EPER data base, • Haskoning data sheets. • Concept paper and source s creening tables.

For some cases, additional emission data were collected through the questionnaires, al though the latter source in most cases only yielded limited additional information.

3.2.6 Identification of potential measures

Potential emission reduction mea sures and the associated investment and operating costs were selected from the following data sources: • EU BREF document for the sector under consideration, • Horizontal EU BREF document on common waste water and waste gas treatment / management systems in th e chemical sector (JRC, 2003), • UK DEFRA study on economic instruments for water pollution discharges (UK DEFRA, 1999),

9 ECOLAS Methodology 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

• WASS technical sheets (WASS, 2004), • Data collected through questionnaires, • Internet search for emission reduction measures for the corres ponding substances and sectors.

For technical emission reduction measures, only proven technologies were used. In case of transfer of a proven technology from one sector and/or pollutant to another sector and/or pollutant, applicability and efficiency of the technology were assessed by expert judgement. Existing Community measures with impact on the reduction of PS and PHS were identified in the different cases and are of course considered to belong to the baseline scenario.

3.2.7 Assessment of Direct Costs

To assess the case-related direct costs, the scenarios have to be specified in the context of the cases, for example by defining specific environmental quality standards or emission limit values for the relevant sectors as well as the timeframe for their appl ication. In a next step, measures are identified that allow compliance with the EQSs or ELVs. As the assessment is scenario-related, not measure -related, the attribution of measures does not imply a regulation which would prescribe these measures. Rather, the cost assessment has to be based on some assumption regarding the measures that are likely to be employed to reach compliance with the EQSs or ELVs.

The identified measures are usually associated with a one -time investment cost and with yearly costs for operation and maintenance (possibly reduced by operational revenues). These costs, which are expressed per unit of throughput or output, have been estimated by experts and companies. Intensive search has been done on potential operational revenues of envi ronmental investments (savings in raw materials and energy, reduction of spill-overs, etc.).

Throughput or output figures for EU -25 have been collected, which allows to calculate the cash flow that is associated with the assumed measures for the relevant sector on the EU -25 level. From this cash flow, the net present value is calculated using the discount rate of 4%, which is recommended for impact assessments. The negative net present value is interpreted as the total direct cost of the respective scenari o.

To show the magnitude of the direct costs, they are also expressed as unit costs, i.e. costs per unit of production. To this end, the costs are spread over the time horizon (usually 25 years) using the annuity formula. The thus calculated yearly costs are divided by the annual output of the relevant sector.

Throughout the calculation, uncertainties, data gaps and the assumptions for closing them are clearly indicated. As the discount rate has a major influence on the cost figures, results are also presen ted for two alternative discount rates (8%, 12%), which may be closer to the discount rates used in some industrial sectors.

3.2.8 Economic Evaluation

The assessment of socioeconomic impacts does not end with estimating the direct costs of abatement measures to the sectors that have to pay for them in the first place. Companies usually react to a cost increase by changing output prices and quantities as well as quantities of intermediate and factor inputs. In some cases, production in the EU may be ceased and pos sibly relocated – within or outside the company in question – to a non -EU country. All these reactions have the objective to mitigate the impact of the cost increase on a company’s profits and ultimately on the income of its shareholders. Without it being the original purpose, these reactions also affect others, often in a negative way: consumers and downstream producers face higher prices, some upstream producers achieve lower prices and/or face a decrease in demand, workers may become unemployed and tax revenues may fall.

10 ECOLAS Methodology 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive By raising output prices, a company may pass on part of the burden to those who demand the product, be it consumers or other companies. The more difficult it is to substitute away from the product, the better are the chances for a company to pass on a substantial part of the burden to the demand side. The extent to which a company is able to shift the burden to others also depends on the shape of the cost curve and on the market structure, which the shape of the cost curve has a major infl uence on. In general, industries that exhibit substantial economies to scale – and as a consequence also a high degree of concentration – have better opportunities to compensate for a cost increase by decreasing production and raising output prices.

Changes in the overall quantity and in the composition of intermediate inputs affect companies that are upstream in the production chain. They are especially likely to be confronted with lower output prices if there are close substitutes for their product on th e market and if their marginal cost of production increases steeply with output. The impact is especially large if the abatement measure entails the substitution to or from a product produced by the respective company. While most of the time some upstream suppliers are negatively affected, others benefit from abatement measures, notably the sectors that provide the related technical equipment or services.

Changes in factor inputs affect capital and labour markets. The effect on employment has the highest social impact, but is most difficult to quantify as a change in output does not necessarily imply a proportional change in employment. The magnitude of the effect also depends on the elasticity of substitution between labour and other inputs in the respective industry, on the overall competitiveness of that industry, on the availability of workers with the qualification in question and to a large extent on labour market regulations.

Finally, any changes in market quantities or prices have consequences on tax payments and thus on tax revenues.

3.2.9 Data gaps and uncertainties

There are only few data on the release of some priority substances and priority hazardous substances (with the exception of PAH and the metals) from the relevant sources. Most sources rely on data available through European Risk Assessment Reports and the Haskoning fact sheets. In the absence of measured data, European Risk Assessment Reports also estimate emissions based on the prescribed default emission factors. For some substances, indivi dual data can be found in the literature. In these cases, it is not known whether these data are representative for the entire sector and can be used as a basis for extrapolation.

Regarding cost of technical emission reduction measures, use was made as mu ch as possible from data for various sizes of equipment in order to be able to take into account economies of scale effects. If data for only one size of equipment were available, up - and or downscaling of costs was performed using the determining variabl e (often flow rate) in combination with an exponent 0,67 (engineering rule of thumb).

There are almost no data on the removal efficiency of technical (end -of -pipe) measures for priority substances. In all cases a conservative estimate of the removal effic iency was made, if available taking into account removal efficiencies for similar compounds.

Often, several measures can be applied for achieving the same goal. Which measures would be used to what extent depends not only on the costs of the measures, but also on other technical and economic considerations or constraints. Information on technical constraints that would inhibit the use of a measure under certain circumstances is sparse, which makes it difficult to assume a realistic composition of measures. In the absence of information on additional constraints, choosing the least-cost measures is in line with the assumption of optimising behaviour which is common in economics. However, using a least-cost approach often leads to an underestimation of costs, as in practice more expensive measures may be applied for various reasons (least-cost approach has been applied for cases iron & steel,

11 ECOLAS Methodology 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive refineries and chlor -alkali.). For other cases, the choice of the measures to be applied was more straightforward and di d not lead to making these assumptions (cases of non -ferro). One of the more complex cases needed an optimisation for choosing the most cost-efficient set of measures. In this case, an optimisation model was made in GAMS for the case of SCCP. Whenever the cost of measures was expressed as a range with a minimum and maximum, a weighted average was used in further calculations.

In general, the level of completeness and certainty of information has not been sufficient to determine the most concrete, targeted and cost-effective measures on a European scale.

EC -BREF documents usually contain data for EU15. As this assessment concerns EU25, some way has to be found to assess the costs for the new member states. As specific cost data for these countries is usually not available, we use the same unit cost data as for EU15. This implies a tendency to overestimation of costs, mainly for the following two reasons: (1) On average, labour costs in the new member states are lower than in EU15, which may lead to somewhat l ower unit costs. (2) On average, sources in the new member states will have to make a larger effort than EU15 sources to comply with the BAT -related baseline requirements. Achieving a larger reduction in one step is often cheaper than doing the same reduct ion in two steps. This may reduce the incremental cost of the measures that have to be applied to comply with the Proposal in the new member states as compared to the EU15 cost figures. EC -BREF documents generally provided little information on the substa nces under consideration, except for some metals.

For many sectors, production and capacity data for the new member states has not been provided. In some cases, this information had to be retrieved from internet resources. Although we have tried to use onl y data from sources that seemed trustworthy, it is difficult to assess the reliability of such data.

Even more difficult than finding out about current production and capacity levels is the prediction of the future development of sector capacity and output in the baseline scenario. For many sectors, assessments about the future development of the sector are missing or, at best, qualitative. Unless there is trustworthy information on the development of a sector that suggests a dynamic baseline, we assume a stable level of output.

For any economic calculation that concerns a time period of several decades, the discount rate greatly influences the results. Due to differing profit margins, financing opportunities, risk cultures and institutional settings, differ ent sectors (and companies within the same sector) use different discount rates. These discount rates typically belong to a company’s confidential information. In addition to the 4% discount rate that is recommended for impact assessments in the Commission , we present the results for two alternative discount rates (8%, 12%). These may be closer to the discount rates used by many private companies. In most cases, higher discount rates lead to lower cost estimates.

Another piece of information that is typical ly confidential is a company’s cost function. For this reason, total costs of production are usually unknown and market prices are used to illustrate the magnitude of the incremental costs. Without reliable information on contribution margins, however, mar ket prices are only a very rough (and volatile) reflection of the costs of production.

The confidentiality of cost figures imposes another constraint: If measures trigger price changes which imply an incremental cost to downstream users, the share of the c osts of the relevant intermediate input in total production costs is important to assess the impact to the respective downstream user. In most cases, however, such cost shares can only roughly be estimated, usually in a qualitative way.

Whether prices cha nge and to which extent depends on the shape of the supply and demand functions. Supply and demand elasticities have been estimated in the literature for some of the most important products of the economy. For all other relevant markets, the market structu re gives a rough indication regarding the cost curve, while qualitative information on substitutability helps to roughly evaluate the

12 ECOLAS Methodology 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive price elasticity of demand. Due to the described data gaps, impacts on upstream suppliers and downstream users, including consumers, are mostly assessed in a qualitative way.

ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive

4 RESULTS OF QUESTIONN AIRES

In the initial phase of the project, questionnaires were addressed to all EU -25 Member States (MS) as well as to representative industry sectors. The processing of the answers is therefore done separately for member states at the one hand and industry sectors on the other.

4.1 QUESTIONNAIRES TO EU -25 MEMBER STATES

The questionnaire, added in Annex 1, was send out to all EU -25 MS: Austria (AU), Belgium (BE), Czech Republic (CZ), Cypr us (CY), Denmark (DK), Germany (DE), Estonia (EE), Greece (EL), Spain (ES), Finland (FI), France (FR), Hungary (HU), Ireland (IR), Italy (IT), Latvia (LV), Lithuania (LT), Luxembourg (LX), Malta (MT), The Netherlands (NL), Poland (PL), Portugal (PT), Slova kia (SK), Slovenia (SI), Sweden (SW), United Kingdom (UK). Also Norway (NO) and Switzerland (CH) and the Accession countries Bulgaria (BU) and Romania (RO ) received a questionnaire.

The aim of this questionnaire is to gather information on: • the production and use of priority substances (PS), including priority hazardous substances (PHS) and priority substances under review; • the presence of specific activities (industry sectors); • the current emission situation; • emission reduction measures and associated costs; • the treatment of urban wastewater; • the current chemical status of surface waters

The general response rate as well as a response rate for specific questions is given in the following sections. The most important data gaps and the information provided is described.

4.1.1 Response rate

Initially, a summary is given of the response rate to the questionnaire. To correctly interpret the data, next to a general response rate to the questionnaire, a specific response rate for the most important questions is given. Wh ere necessary, a more detailed description of the response rates is given in the following chapters.

15 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive

Table 4.1.1: Overview of the response rates to the questionnaire for MS

Section Topic Response rate In number of EU - In percentage of 25 MS the 25 EU MS (%) General Questionnaire as a whole 18 72 2 Production, use, discharge of P(H)S - Production 18 72 - Use 18 72 - Discharge to water (point -sources) 18 72 - Discharge to water (diffuse) 16 64 - Emission to air 14 56 - Release to soil 12 48 3 Industry sectors under consideration 18 72 4 Emission situation - general response rate 12 48 - average of the response rate per substances 4 16 5 Emission reduction measures - application of BAT in industry 12 48 - ELV being imposed 16 64 - availability of technical/economic study of ELV 16 64 - availability of studies on further risk reduction 13 52 measures: - EQS being imposed 15 60 - availability of economic assessment study on 13 52 impact of imposing EQS 6 Treatment of wastewater - Connection rate of industry 12 48 - Connection rate of the population 14 56 - Configuration of UWWTP 15 60 - Share of separate sewage systems 13 52 7 Current chemical status - Percentag e of water bodies exceeding AAQS 7 28 - Tendency of concentration in water bodies 1 4 - Substances not measured 7 28

Note that Table 4.1 .1 only gives an overview of the response rate. For some questions, a large portion of th ese responses are ‘we do not have any information on this topic ’. Whenever figures were used in this report , only relevant responses are considered. The number of relevant responses may be lower than Table 4.1 .1 implies. The informati on given in the questionnaires is shown in chapter 4.1.2 of this report.

16 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive

4.1.1.1 General response rate

From the EU -25 MS there is a response rate of 72%. Answers to the questionnaire were received from 18 countries: Austria (AU), Belgium (BE), Czech Republic (CZ), Cyprus (CY), Denmark (DK), Germany (DE), Greece (EL), Spain (ES), Finland (FI), France (FR), Hungary (HU), Italy (IT), The Netherlands (NL), Poland (PL), Portugal (PT), Slovenia (SI), Sweden (SW), United Kingdom (UK). From the 4 addressed non -EU -25 MS only Norway (NO) gave a reply. This general response rate was calculated based on those countries which sent out a reply, not taking into account yet the quantity nor quality of the answers. In the following description of the response rate, only the 25 EU MS are taken into account.

4.1.1.2 The production and use of P(H)S

For each P(H)S it was asked to indicate whether this substance was produced in and/or used by the responding country. For the PS the countries were asked to indicate which substance is discharged to surface water by point sources. For PHS and PS under review also the discharge to surface water by non - point sources, the emission to air and the release to soil was asked. Table 4.1 .2 gives an overview of the response rate on these questions, given in percentage of all EU -25 Member States. The general response rate indicates the response rate to this specific question, meaning that a response is considered if a specific question is answered for at least one P(H)S. The average response rate indicates the average of the response rates per substance.

Table 4.1.2: Response rate of the questionnaire for MS on the use, production and emission, discharge and release of P(H)S

General response rate Average response rate in number of in % of all EU - in number of in % of all EU - countries 25 MS countries 25 MS Production 18 72 16 62 Use 18 72 16 62 Discharge to water (point -sources) 18 72 16 65 Discharge to water (d iffuse) 16 64 14 56 Emission to air 14 56 12 49 Release to soil 12 48 10 40

4.1.1.3 Activities present in each country

This section of the questionnaire asked for the presence of specific industrial activities in each country. All EU -25 MS, responding to the q uestionnaire, filled out this specific question, leading to a response rate of 72% for this question.

4.1.1.4 The current emission situation

This section gives an overview of the response rate on the question to give data on the direct discharge of PS, P(H)S and P S under review by point sources. The general response rate, meaning that data are given for at least one substance per country, is 48% (12 MS).

17 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive

Table 4.1.3: Response rate of the questionnaire for MS regarding emission data of P(H)S

ID Substance Response rate in number of countries in % of all EU -25 MS Wastewater discharge 6 24 1 Alachlor 0 0 4 Benzene 5 20 8 Chlor fen vinphos 1 4 10 1,2 -Dichloroethane 6 24 11 Dichloromethane 6 24 15 Fluoranth ene 4 16 23 Nickel and its compounds 12 48 32 Trichloromethane 6 24 2 ** Anthracene 2 8 3 ** Atrazine 1 4 5 * Brominated diphenylether 1 4 6 * Cadmium and its compounds 11 44

* 7 C10 -C13 -Chloroalkanes 2 8 9 ** Chlorpyrifos 2 8 12 ** Di(2 -ethylhe xyl)phtalate 2 8 13 ** Diuron 2 8 14 ** Endosulfan 2 8 16 * Hexachlorobenzene 6 24 17 * Hexachlorobutadiene 5 20 18 * Hexachlorocyclohexane 4 16 19 ** Isoproturon 1 4 20 ** Lead and its compounds 11 44 21 * Mercury and its compounds 12 48 22 ** Na phtalene 6 24 24 * Nonylphenols 4 16 25 ** Octylphenols 2 8 26 * Pentachlorobenzene 1 4 27 ** Pentachlorophenol 4 16 26 * Polyaromatic hydrocarbons 3 12 - benzo(a)anthracene 0 0 - benzo(a)pyrene 1 4 - benzo(b)fluoranthene 1 4 - benzo(g,h,i )perylene 1 4 - benzo(k)fluoranthene 1 4

18 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive

ID Substance Response rate in number of countries in % of all EU -25 MS - benzo(1,2,3 -cd)pyrene 1 4 29 ** Simazine 1 4 30 * Tributyltin compounds 1 4 31 ** Trichlorobenzenes 4 16 33 ** Trifluralin 0 0 * Priority Hazardous Substance ** Priority Substance under review

Table 4.1 .3 shows an average response rate of 16% or 4 responding countries for each specific substance.

4.1.2 Overview of the information provided

In this chapter an overview is given of the results, based on the answers given in the questionn aires.

4.1.2.1 The production and use of P(H)S

Based on the responses of the MS, an overview is given of the number of countries where each specific P(H)S is produced, used, discharged in surface water, emitted to air and released to soil. Note that not all MS rep lied to this question, giving an incomplete result. For more detai led information on production and use of each substance, please consult the section “production and use profile” in the substance information sheets in the annex.

Table 4.1.4: Overview of the production, use, discharge, emission and release of the PS, PHS and PS under review in the EU -25 Member States as reported in answers to the questionnaires

Produced Used Discharge to water Emission Release to air to soil Point sources Diffuse sources 1 Alachlor 5 6 2 0 0 0 2 ** Anthracene 8 10 8 9 10 1 3 ** Atrazine 3 8 2 10 1 4 4 Benzene 12 16 13 0 0 0 Brominated 5 * diphenylethers 0 10 4 4 2 0 Cadmium and its 6 * compounds 8 17 17 9 12 5

7 * C10 -C13 -Chloroalkanes 3 11 4 2 0 0 8 Chlorfenvinphos 1 3 1 0 0 0 9 ** Chlorpyrifos 3 15 1 9 1 5 10 1,2 -Dichloroethane 9 14 11 0 0 0

19 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive

Produced Used Discharge to water Emission Release to air to soil Point sources Diffuse sources 11 Dichloromethane 7 16 13 0 0 0 12 ** Di(2 -ethylhexyl)phtalate 9 14 8 7 4 0 13 ** Diuron 4 11 4 11 1 3 14 ** Endosulfan 2 12 2 10 2 5 15 Fluoranthene 5 7 8 0 0 0 16 * Hexachlorobenzene 2 3 9 3 6 0 17 * Hexachlorobutadiene 3 2 7 3 2 0 18 * Hexachlorocyclohexane 2 4 7 9 3 2 19 ** Isoproturon 2 11 2 11 2 4 Lead and its 20 ** compounds 9 15 16 10 11 5 Mercury and its 21 * compounds 5 15 13 8 12 5 22 ** Naphtalene 9 14 10 7 11 1 23 Nickel 9 17 14 0 0 0 24 * Nonylphenols 5 12 9 5 1 1 25 ** Octylphenols 4 10 7 3 1 0 26 * Pentachlorobenzene 2 1 2 1 1 0 27 ** Pentachlorophenol 0 2 6 3 4 0 Polyaromatic 28 * hydrocarbons 4 5 9 8 12 3 benzo(a)anthracene 0 0 0 0 1 0 benzo(a)pyrene 4 5 3 2 3 1 benzo(b)fluoranthene 2 4 2 1 1 0 benzo(g,h,i)perylene 2 3 2 1 1 0 benzo(k)fluoranthene 2 3 2 1 1 0 benzo(1,2,3 -cd)pyrene 2 2 2 1 1 0 29 ** Simazine 4 11 3 10 1 5 30 * Tributyltin compounds 3 13 10 8 2 1 31 ** Trichlorobenzenes 0 7 6 2 4 0 32 Trichloromethane 7 15 12 0 0 0 33 ** Trifluralin 5 11 3 9 0 6 * Priority Hazardous Substance ** Priority Substance under review

20 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive

4.1.2.2 Activities present in each coun try

Table 4.1 .5 gives an overview of some important activities in the framework of discharge of PS, PHS and PS under review and their presence in different EU -25 Member States.

Table 4.1.5: Overview of the presence of important activities in the different EU -25 Member States as reported in answers to the questionnaires

IPPC Sector/Activity Number of MS where code activity is present 4.4 Crop protection industry 8 - Synthesis of active ingredients 9 - Formulation of pesticides 13 Chemical industry 1 4.1 - Production of large volume organic compounds 15 4.1/4.2 - Production of fine chemicals (including active ingredients of PPP) 15 4.3 - Production of fertilisers 15 4.2 - Chlor -alka li industry 15 1.2 Refineries 14 Metal industry 2 2.1/2.2 - Production of iron and steel 15 2.5 - Production of non -ferrous metals 16

2.6 - Surface treatment of metals (galvanising, degreasing, …) 16 6.1 Pulp and paper industry 16 4.5 Pharmaceutica l industry 16 6.7 Wood treatment 17 Waste (water) treatment and recycling 15 5 Drinking water production 14 4.1 Plastics manufacturing 17 Plastics converting 12 6.2 Textile industry 17 6.3 Tanning 14

4.1.2.3 The current emission situation

Based on the r esponses, an overview was made of the emission situation of PS, PHS and PS under review. Table 4.1 .6 shows the discharge from point sources to surface water in the EU -25. To correctly interpret the data, the response rate needs to be taken into account, which is minimum 0% and maximum 48%. This means that maximum half of the MS provided discharge data for a specific substance. Next to the total discharges calculated based on the questionnaires, a comparison was made

21 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Wate r Framework Directive with the data fr om the Haskoning report and the EPER data. This comparison shows important differences. Some reasons for that could be: • Haskoning data show sometimes total emissions (emissions to air+water+soil) and can include as well diffuse emissions; • The reference yea rs in the Haskoning data can differ significantly; • Data through the questionnaire are dependant of the response rate, which is sometimes 0% and maximum 48%; • EPER data only include specific sectors and only report emission data from companies, having an emi ssion above a certain threshold. Since this database also reports only industrial emissions (as well as the questionnaire data), these data are more comparable than the Haskoning data.

The Member States report important discharges by point sources (> 10 to nnes) of: • Benzene; • 1,2 -Dichloroethane; • Dichloromethane; • Nickel and its compounds; • Trichloromethane; • Cadmium and its compounds; • Lead and its compounds; • Nonylphenols.

Following important sectors (important emitters) can be identified: • Chemical industry (incl . chloro -alkali industry); • Metal industry; • Refineries; • Wastewater treatment; • Plastics manufacturing.

22 Hexachlorobutadiene 7 2 ,0

0,0 0,0 0,0 1, 1,3 1, 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,0 0,0 0 5,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,0 0,0 0,0 0,0

10,6 140,0 124,6 Hexachlorobenzene 0,0 0,0 0,0 9,8 0,2 0,1 2,0 0,0 0,0 0,0 0,0 0,0 0,0 0,7 0,0 0,0 0,2 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 3,9 0,0 0,2 0,0

17,4 90,0

34,5 112,7 Fluoranthene 0,0 0,0 0,0 0,0 0,0 0,3 0,1 0,4 0,0 0,0 0,9 1,7 0,1 0,0 0,0 0,0 0,0 0,0 0,0 1,0 0,0 0,0 0,2 0,0 0,0 0,0 0,0 0,0 0,0 1,5 91,8 97,8

Results of questionnaires Results 5000,0

Endosulfan 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,3 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,4 Diuron 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,0 0,1 0,1 0,0 1,2

na (DEHP) 0,0 0,0 0,0 1,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,0 0,0 1,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 1,0 0,0

45,0

48,3 ethylhexyl)phthalte ethylhexyl)phthalte 2- Di( 741000,0 8

0,0 0,0 0,0 0,2 1,3 0,0 0,2 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,6 0,2 0,1 0,0 0,1 0,0 0,0 0,0 0,0 Dichloromethane 56,3 87,6 10,0 10,0 29,2 00,0 158,7 262, 65586,5 446 101074,3 66225,4 0

0,0 0,0 1,1 0,0 0,0 0,0 0,0 0,0 0,1 0, 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

Dichloroethane - 1,2 25,4 30,3 63,6 10,0 299,3 410,0 292,8 2157,6 1257,5 1027,8

15000,0 21361,6 18883,9 answers tothe questionnaires

26937,0 Chlorpyrifos 1,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,0 0,0 13,0 15,0 na

asreported in Chlorfenvinphos 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 na 0 0

0,0 0,0 0,0 1,0 0,0 0,0 0,0 0, 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0, 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,0 0,0

13 - 10 24,5 17,0 chloroalkanes - C 43,5 234,6

1784000,0

compounds 0,0 0,0 0,0 3,4 1,5 1,6 0,0 0,0 0,1 0,0 0,3 0,1

35,6 11,1 21,5 24,1 51,8 16,0 10,0 Cadmium and its its and Cadmium 319,2 259,1 539,1 306,4 362,0 503,8 132,0 309,1 23 2279,2 1209,9 2161,1 14587,5 13723,6 131842,0 24168,0

0 Brominated diphenylethers Brominated 0,0 0, 0,0 1,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,0 0,0 12,0 14,0 991,0 1140,0 ,9 0,0 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 4,5 0,0 0,0 7,8 0,1 5,1 0,0 0,0 0,0 0,0 0,0 0,0

20,0 10,0 Benzene 805,5 123,3 775,5 180,0 4298 28002,2 27841,5 34926,8

97001,1

1760600,0 Atrazine 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,3 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,8 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

274,8 276,0 2250,0 Anthracene 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,6 0,0 0,0 0,2 0,3 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,4 0,0 0,0 0,2 0,0 0,0 0,0 0,0 0,0 0,0 0,4 2,3

2959,0 Alachlor na 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

:Current emission situation (from pointsources tosurface water) several in MS 0,0 0,0 0,0 1,9 0,0 0,0 0,0 0,0 0,0 (m³/year)

.6 410,4 440,3 245,8 Wastewater discharge discharge Wastewater 2208,0 3709,8 2757,3 1959,8 1606,2 6096,0 1366,7 4191,1 48392,1 11703,4 22963,5 83196,5 11742,1 4.1 176243,4 211555,7 251500,9 616604,5 638675,3 121561,0 380944,2 1377361,4 3977437,1 Table ferrous metals - industry

Sector/Actvitity Crop protection industry - - Chemical industry - compounds - - Refineries Chlor Metal industry - - - degreasing, …) Pulp and paper Pharmaceutical industry Wood treatment Waste (water) treatmentrecycling and waterDrinking production Plastics manufacturing Plastics converting Textile industry Tanning Additionalsectors Waste metal Waste treatment Glass Industry Food Surface treatment Landfills PowerFuel production Mineral industries Others TOTAL Comparison HASKONING (only industry) Comparison EPER data ECOLAS 03/07767/DL Trifluralin 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 na

,0 (chloroform) 0,0 0,0 0 0,7 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,3 8,2 0,0 0,0 0,0 0,0 0,0 0,0 4,0

54,3 79,3 84,4 77,0 Trichloromethane 774,2 767,0 296,7 249,0 350,0 3003,0 5085,0 10838,1

0 Trichlorobenzenes 0,0 0,0 0,0 4,8 0, 1,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,8 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 3,9 308,5 Results of questionnaires Results 320,1

< 1000 <

compounds Tributyltin 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 30,0 30,0

3800,5

na Simazine 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,6 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,6 0,2 0,0 0,0 51,0

52,4

cd)pyrene - 1,2,3 ( Indeno

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,2 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,2 0,6

enzo(k)fluoranthene B

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,2 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,5

enzo(g,h,i)perylene B ,0

0 0,0 0,0 0,0 0,0 0,0 0,0 0,6 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,7 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,1 1,6

enzo(b)fluoranthene B

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,4 0,0 0,0 0,1 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,6 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,1 1,5

enzo(a)pyrene B 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,8 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,1 1,3 al MS(cont.)

0,0 0,0 0,0 0,1 5,1 1,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

30,0 16,3 85,1 75,8 Polyaromatic hydrocarbons Polyaromatic 213,4 29778,3

7343000,0 Pentachlorophenol 0,0 0,0 0,0 4,5 0,0 0,4 0,0 0,0 0,0 0,0 0,0 0,0 0,0 5,0 0,0 0,0 0,0 0,0 0,0 4,0 0,0 0,0 0,0 0,0 0,0 0,2 2,5 1,0 0,1 0,0 679,0

696,7

na Pentachlorobenzene 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 na

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 Octylphenols 85,0 600,0 100,0 1200,0 1985,0 33000,0

,0 24

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0 0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 Nonylphenols 100,0 5016,0 1614,0 1600,0 10000,0 19000,0 37492,4 1087000,0

0,0 0,0 0,0 0,3 0,0 0,2 0,0 9,3

80,3 25,5 66,4 27,9 and its compounds its and Nickel 07,5 327,7 511,8 427,5 229,0 8025,2 1450,6 14 3987,2 6441,4 9189,3 4236,1 2425,1 2058,0 2330,0 6082,1 18045,9 11917,8 95552,9 72690,9 166736,8 272002,3 ,0

0,0 0,0 0,0 2,2 0,0 0,0 1,3 0,0 0,0 0,4 1,4 1,2 0 0,0 0,1 0,0 0,0 9,1 0,0 0,8 0,9 0,0 0,0 0,0 1,0 Naphtalene 10,3 15,0 51,0 14,5 187,0 384,0 680,2 47000,0

,7 Mercury and its compounds its and Mercury 6,9 0,0 0,0 0,1 6,4 2,6 9,7 0,4 0,0 0,0 0,5 9,6 0,0 0,1 0,0 1,8 0,0 6,1 1,1 89,5 37,6 91,5 31,3 58,5 17,0 145,0 478,2 494,1 109,6 1081,0 1312,9 4415,0 2335,1 :.Current emission situation (from pointsources surfaceto water)sever in 4053 .7

0,0 0,0 2,0 0,0 0,6 8,8 0,0 0,4 4.1 Lead and its compounds its and Lead 36,4 32,3 13,6 53,9 146,7 123,9 144,7 230,0 1386,6 1612,9 1852,8 2368,1 3902,7 3913,5 3933,9 1725,8 1762,0 2101,0 1930,4 12465,9 13592,5 38728,5 36702,4

518566,0 108533,2

Table 131702,5 Isoproturon 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1,0 0,0 0,0 0,0 0,0 0,0 0,0 0,1 0,0 0,0 1,0

0,0 0,0 0,0 0,2 0,0 0,0 0,0 0,0 0,0 1,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 Hexachlorocyclohexane 265,7 225,7 829,0 229,1 ferrous metals -

Sector/Actvitity

Assessing economic impacts of hazardouseconomicthe controlforpriority Assessingspecific and regulatedimpacts ofthe measures substances ArticleWaterunderFramework16substances Directive stries - rison EPERrison data alkali industry - Synthesis activeof ingredients Formulation of pesticides Production of large volume organic Production of chemicalsfine Production of fertilisers Production of iron and steel Production of non Surface treatment metals of (galvanising, Crop protection industry - - Chemical industry - compounds - - Refineries Chlor Metal industry - - - degreasing, …) Pulp and paper industry Pharmaceutical industry Wood treatment Waste (water) treatmentrecycling and waterDrinking production Plastics manufacturing Plastics converting Textile industry Tanning Additionalsectors Waste metal Waste treatment Glass Industry Food Surface treatment Landfills PowerFuel production Mineral indu Others TOTAL Comparison HASKONING (only industry) Compa ECOLAS 03/07767/DL ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

4.1.2.4 Emission reduction measures and associated costs

On the question what the share of the companies is, already applying BAT -like emission reduction measures , no direct answer cou ld be given by any country. Of the countries who did give an answer (12 MS), 4 mentioned they have no information on it, so only 8 useful answers were given. The percentage of countries using BAT -like emission reduction measures is in all cases based on th e distribution of BAT based permits, administered to the companies in the MS. The average share in the responding 8 MS is then 78% of the companies.

Only 6.3% of the responders state that no ELV are being imposed, 6.3% doesn’t not have information on this issue. This means that in 88% of the countries, an ELV is being imposed. Only Flanders (Belgium) refers to the BAT -studies, available for several sectors in this country, as technical and/or economic studies been made considering the attainability of such emission limit values for these sectors.

Regarding the availability of studies on possible further reduction measures, 4 Member States (BE, CZ, IT, UK) mention the existence of studies. For CZ this study is limited to a list of possible emission reduction measures.

About the establishment of quality standards for the PS, PHS and PS under review only Germany refers to an economic assessment study of the impact of setting these quality standards (Umwelt Bundes Amt, 2004).

4.1.2.5 Treatment of urban wastewater

The res ponses to the questionnaire show that a lot of countries do not have sufficient information to indicate the connection rate from industry to the sewer system or from the sewer system to urban wastewater treatment plants. A lot of countries did respond that most of the industries have a wastewater treatment on -site. Based on 3 data for the industry connection rate and 13 data for the population connection rate, following averages were calculated: • For households: - Connection rate households - sewage system: 75 % - Connection rate sewage system - UWWTP: 87% • For industry: - Connection rate industry - sewage system: 37% - Connection rate sewage system - UWWTP: 97%

Due to the lack of information no future situation can be predicted.

The average situation of the configura tion of UWWT plants in the EU -25 can be calculated based on data of 13 EU MS: • Primary treatment: 15% • Secondary treatment: 29% • Tertiary treatment (N and/or P removal only, no specific measures for additional metal removal ): 53%

The average share of separate sewage systems in the complete sewage system in 8 MS is 34%. Five MS do not have enough insight in this issue to identify this share. Only 6 MS indicate that ELV are being imposed for UWWTP, of which the UK provided an impact assessment study on imposing ELV. The information on the average discharge through stormwater and combined sewer overflows is too scarce to show any results. Though 7 MS mentioned the existence of design criteria for stormwater and combined sewer overflows.

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4.1.2.6 Current chemical status of surface waters

In the questionnaires, the Annual Average Quality Standards (AAQS) in water for each PS, PHS and PS under review were shown (from the latest version of 010304 of the EQS datasheets available on CIRCA and subject to consultation of the CSTEE) . Chapter 4.1.1.4 shows a low average response rate per substance, which makes it difficult to show representative results for the EU25. Taking this remark into account, an average exceedence of the AAQS in more than 5% of the water bodies was reported for: • Benzo(g,h,i)perylene: 22% of the water bodies (response of 2 MS) • Benzo(1,2,3 -cd))pyrene: 18% of the water bodies (response of 2 MS) • Lead and its compounds: 41% of the water bodies (response of 5 MS) • Mercury and its compounds: 11% of the water bodies (response of 5 MS) • Nickel and its compounds: 37% of the water bodies (response of 6 MS) • Tributyltin compounds: 32% of the water bodies (response of 2 MS)

No specific data were provided on the EQS set and the level of exce edance of t hese EQS. The reporting on the tendency of the average concentration in the waterbodies in each MS is too low to draw any representative conclusions This applies especially to the Member States and river basins where measures are required , which contribut es to the difficulties in estimating the overall costs for the proposal .

4.1.2.7 Studies provided by the Member States An overview of all studies that have been provided to us by the Member States can be found in continuation of the literature list.

4.1.3 Data gaps

The quality of the data received through a questionnaire is depend ent o n the response rate on the one hand and on the quality of the data on the other hand. Based on the response rates (see Table 4.1 .1) already some data gaps can be identified: • There is a lack of information on the emission situation of PS, PHS and PS under review; • The insight in the number of industrial plant already applying BAT is not satisfactory; • There are very little studies available on: - Possible emission reducti on measures (point sources and non -point sources); - The attainability of imposing ELV for each industrial sector (technical and/or economic studies); - The impact of setting quality standards • Only scarce information is available on the current chemical status of the water bodies.

4.2 QUESTIONNAIRES TO IN DUSTRY SECTORS

The relevant sectors , which questionnaires were sent to, were selected mainly on the basis of the source screening sheets, taking into account the additional information from two existing economic impact assessments (RPA, 2000 and UK DEFRA, 2002). Additional validation was done through consultation with the EAF (Member States experts, environmental NGOs and industry associations) and different Commission Services .

The aim of this questionnaire is to gather information on: • the production and use of priority substances (PS), including priority hazardous substances (PHS) and priority substances under review;

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• the relevance of specific P(H)S in a specific sector; • the composition of the industrial sector an d economic data; • the current emission situation; • emission reduction measures and associated costs; • possibly sector specific questions

4.2.1 Response rate

The general response rate as well as a response rate for specific questions is given in the following sections. The most important data gaps and the information provided is described.

Table 4.2.1: Overview of the industry sectors which received a questionnaire

Sector Addressed to Response received Car manufacturing ACEA (Association des Constructeurs Européens d’ Automobiles) Chemical industry and chlorine - Eurochlor X alkali industry - Isochem Company (1) X - EBFRIP (European Brominated Flame Retardants X Industry Panel) through CEFIC (European Chemical Indus try Council) - ECPI (European Council for Plasticisers and X Intermediates) through CEFIC (European Chemical Industry Council) Detergents AISE (European Soap and Detergent Industry Association) Electrical industry EECA (European Electronic Component Manufacturers Association Fertiliser production EFMA (European Fertilizers Manufacturers Association) Glass & Ceramics - ECIA (European Composites Industry Associat ion) - CERAMIE-UNIE Incineration of waste EURITS (European Union for responsible incineration and treatment of special waste) Laboratories EUROLAB (European Federation of National Associations of Measuremnet, Testing and Analytical Laboratories) Large Combustion Plants Eurelectric (European Electricity Industry) X Metal industry: - Eurometaux - subsector specific answers from: X - Ferrous metal - ENiG: European Nickel Group - Non -ferrous metal - ICA: Industrial Cadmium Association - Surface treatment metals - LDAI: Lead Development Association Int - Iron and steel - WirtschaftsVer einigung Metalle – Germany - EAA (European Aluminium Association) - Outokumpo Finland (1) - CETS (European Committee for Surface Treatment) - EUROFER (European Confederation of Iron and Steel X Industry)

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Sector Addressed to Response received - EURO INOX (European Market - Developmen t Association for Stainless Steel)

Mining industry EURMINES Oil and Gas production - EOSCA (European Oilfield Speciality Chemicals Associat ion) - OGP (International Oil and Gas Producers’ Association

Pesticide production and - ECPA (Eu ropean Crop Production and formulation) X formulation - ECCA (European Crop Care Association) - Dow AgroSciences (1) X Pharmaceuticals - EFPIA (European Federation of Pharmaceuticals and Industries Association) Polymers - APME (Associat ion of Plastics Manufact urers in Europe) - EUPC (The Plastics Converters in Europe) X Pulp and Paper CEPI (Confederation of European Paper Industries) Refineries Concawe X Rubber industry BLIC (Bureau de Liaison des Industries de Caoutchouc de X la CE) Shipbuilding sector CESA (Committee of European Unions Shipbuilders’ Association) Tanning COTANCE (The European Leather Associat ion Confederation of National Associat ions of Tanners and Dressers of the European Community) Textiles Euratex (The European Apparel and Textile Organisation), answers from national organisations - TVI (Textile Indstry of Germany) (1) X - Febeltex (Belgian Textiles Federation) (1) X - Arcotexteis Portugal (1) X Drinking water production and - Eureau (European Water suppliers and wastewater X waste water treatment operators association) - EWA (European Water Association)

- Water UK X

Wood treatment CEI -Bois (European Confederation of Woodworking Industries)

(1) These companies or national associations did receive a questionnaire through their relevant European associations, not by the European Commission directly

An overview of all studies and other sources of information that have been provided to us by the different sector representatives can be found in continuation of the literature list.

28 ECOLAS Results of questionnaires 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive In addition to these documents, i nformation was received by means of BIPRO consultants with regard to the results of the questionnaire which was addressed in the framework of the EIA of the Strategy on the Sustainable Use of Plant Protection Product s (PPP).

4.2.2 Data gaps

The quality of the data received through a questionnaire is depend ent o n the response rate on the one hand and the quality of the data on the other hand. Following data gaps can be identified: • There is a lack of information on the emission situation of PS, PHS and PS under review; • The insight in the number of industrial plant already applying BAT is not satisfactory; • There are currently few studies available on: - Possible emission reduction measures (point sources and non -point sources); - Cost assessments for the implementation of these measures - The specific situation for IPPC/non -IPPC companies - The impacts of these measures on the companies and related sectors • There is little information regarding the evolution to be expected in the sect or

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5 PRIORITISATION AND S ELECTION OF CASES

The selection of cases was the result of a combination of a number of criteria : • Expected economic impact on the substance level; • Classification of the substance : priority substance, priority hazardous substance , priority substance under review; • Number of relevant pollutants for the industry sector; • Sector composition (IPPC companies vs. SME’s); • Significance of the type of sources (point sources vs. diffuse release in the use phase); • Links with other legislation ; • Data availability.

Some of these criteria are worked out in somewhat more detail below.

Upon the selection of cases, a starting point is to obtain a balanced view on the impact of the Proposal. This means that cases are addressed where significant econom ic impacts may be expected, as well as cases where moderate to negligible economic impacts are expected; that cases are addressed involving priority substances and priority hazardous substances; that cases are addressed involving large and small industry s ectors; that cases are addressed involving mainly IPPC companies and involving SME’s; that cases are addressed for which the release is mainly through industrial point sources and for which the release is mainly through diffuse release in the use phase.

5.1 EXPECTED ECONOMIC IMPA CT ON THE SUBSTANCE LEVEL

A first assessment of the expected economic impact on the substance level was made based on the results of two previous economic assessments for the priority substances and priority hazardous substances (RPA (2 000) and UK DEFRA (2002). In both economic assessements, an indication of which industry sectors are likely to be significantly affected, is also given. The results of these studies are summarized in Table 5.1 .1 :

Table 5.1.1 : Results of two previous economic assessments on the reduction of emissions of priority substances and priority (hazardous) substances

RPA (2000) UK DEFRA (2002) Economic impact Affected sectors Economic impact Affected sectors Alachlor Unpredictable Low Anthracene Moderate – extensive Chemical, wood Significant Wood treatment for intentional uses treatment Extensive for unintentional uses Atrazine Unpredictable Significant Benzene Extensive Very signi ficant Chemical Brominated Extensive Polymers, textile Very significant Polymers, textile diphenylethers Cadmium and its Stabilisers : negligible Polymers, chemical, Very significant Metals, fertilisers, compounds surface treatment batteries, surface Pigments, plating & treatment batteries : extensive

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RPA (2000) UK DEFRA (2002) Economic impact Affected sectors Economic impact Affected sectors Extensive for unintentional sources

C10 -C13 - Metalworking & Metalworking, Significant Chemical, CASE, Chloroalkanes leather : negligible leather,textile, rubber rubber, polymers, Other uses : sealants & adhesives moderate - extensive Chlorfenvinphos Unpredictable Low Chlorpyrifos Unpredictable Very significant 1,2 -Dichloroethane Extensive Chemical, polymers Very significant Chemical, polymers Dichloromethane Extensive Chemical, polymers, Very significant Chemical food, surface treatment Di(2 - Extensive Chemical, polymers Very significant Polymers ethylhexyl)phthalate (DEHP) Diuron Unpredictable Significant Endosulfan Short term : extensive Low Hexachlorobenzene Negligible for Low Chemicals, intentional uses polymers Ex tensive for unintentional uses Hexachloro - Negligible for Low Chemicals, butadiene intentional uses polymers Extensive for unintentional uses Hexachloro - Moderate Low Wood treatment cyclohexane Isoproturon Unpredictable Signifi cant Lead and its Extensive NF metals Very significant NF metals, compounds batteries Mercury and its Moderate for Chlor -alkali, Low Chlor -alkali, compounds intentional uses chemical, chemical, equipment, dentists batter ies, dentists Extensive for unintentional uses Naphthalene Extensive Chemical Significant Chemical Nickel and its Extensive Chemical, metal, Very significant Metal compounds food, surface treatment Nonylphenols Extensive Chemical, polymers, Very significant Chemical, textile, leather polymer Octylphenols Unpredictable Chemical, polymers, Significant Textile, metal textile, leather working, cleaning

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RPA (2000) UK DEFRA (2002) Economic impact Affected sectors Economic impact Affected sectors Pentachloro - Negligible – moderate Low Chemical benzene Pentachlorophenol Moderate - negligible Wood treatment, Low Wood treatmen t, textile textile Polyaromatic Extensive Very significant NF metals, wood hydrocarbons treatment, refineries Simazine Unpredictable Significant Tributyltin Negligible Low Shipyards, wood compounds treatment Trichlorobenzenes Unpredictable Significant Trichloromethane Extensive Chemical Very significant Chemical, polymers Trifluralin Unpredictable Significant

The fact that atrazine and simazine have been banned under Directive 91/414/EEC and certain uses of C10 -C13 chloroalkanes have been restricted under Directive 2002/45/EC since these studies have been finished, might affect the predicted economic impact.

Taking into account the results of these two previous economic assessments (RPA (2000) and UK DEFRA (2002)), for the following the economic impa cts associated with the reduction (or phase-out) of their release was judged to be negligible: • Hexachlorobenzene • Hexachlorobutadiene • Pentachlorobenzene • Tributyltin compounds

For hexachlorobenzene and hexachlorobutadiene, the economic impact was only found to be negligible for the phase-out of intentional uses. If unintentional uses also have to be phased out, economic impact was assessed to be very significant.

On the other hand, the existing economic assessment studies have identified the impacts of a red uction (or phase-out) for the following substances to be very extensive : • Benzene • Cadmium and its compounds • 1,2 -Dichloroethane • Dichloromethane • Lead and its compounds • Naphthalene • Nickel and its compounds • Polyaromatic hydrocarbons • Trichloromethane

For the re maining substances :

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• Pesticides (alachlor, atrazine, chlorfenvinphos, chlorpyrifos, diuron, endosulfan, isoproturon, simazine and trifluralin) • Anthracene • Brominated diphenylethers

• C10 -C13 -chloroalkanes • Di (2 -ethylhexyl )phtalate • Hexachlorocyclohexane • Mercury and its compounds • Nonylphenols • Octylphenols • Pentachlorophenol • Trichlorobenzenes the existing studies either came to a different conclusion on the economic impact or the economic impact could not be assessed in the RPA study.

5.2 SIGNIFICANCE OF THE TYPE OF SO URCES

A number of compounds are mainly released to the water bodies through their dispersive use, meaning that other mechanisms (thematic strategy or marketing & use restrictions) are more appropriate to control their releases than control on point sources . These compounds are : • 10 pesticides (alachlor, atrazine, chlorfenvinphos, chlorpyrifos, diuron, endosulfan, hexachlorocyclohexane, isoproturon, simazine, trifluralin) • Pentabromobiphenylether • Di (2 -ethylhexyl )phtalate • Nonylphenols • Octylphenols

For the lat ter 2 substances (nonylphenols and octylphenols) restriction should be made to the above interpretation because these substances are released in significant amounts by some sectors (mainly textile and tanning).

The fact that these compounds are mainly released in the use phase implies, however, that the urban wastewater treatment plants become a significant point source for these compounds.

Based on the two above selection criteria (expected economic impact and significance of type of sources), the substanc es can be subdivided into two broad categories :

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5.3 NUMBER OF RELEVANT P OLLUTANTS IN THE IND USTRY SECTOR

The source screening procedure carried out by the Expert Advi sory Forum on Pri ority substances and outlined i n the (draft) concept paper on emission con trols (with a limited release of source screening sheets on CIRCA) has established a list of all compounds for which the release in certain industry sectors could be classified as Category 1 or Category 2. In Table 5.3 .1 an overview i s given of this number of pollutants, divided into IPPC and non -IPPC companies.

The information available from the two existing economic impact assessments and from the significance of type of sources can also be introduced in the results of the source sc reening procedure. The second column for each industry category (IPPC and non -IPPC) shows the number of substances, without accounting for these substances for which the economic impact was found to be low and without accounting for these substances that are mainly released in the use phase. Some substances are mentioned separately: hexachlorobenzene and hexachlorobutadiene as the economic impact of the phase-out for unintentional by -products was judged to be significant and nonyl – and octylphenols becau se these compounds are released in significant amounts by some industry sectors (although the major release is in the use phase of the products).

35 ECOLAS Prioritisation and selection of cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priorit y hazardous substances regulated under Article 16 of the Water Framework Directive Table 5.3.1 : Number of compounds for which release in a certa in industry sector was found to be important

IPPC Non - IPPC All pollutants All pollutants with All pollutants All pollutants with significant significant economic impact economic impact and mainly and mainly discharged by discharged by poi nt point sources sources Large combustion plants 11 10 11 10 Refineries 16 13 Coking plants 2 2 Coal gasification 3 3 Iron & steel 3 3 6 5 Electric arc steel 2 2 2 2 Ferrous metal processing 7 5 + HCB 6 4 + HCB Non -ferrous metal 10 8 + HCB 10 7 + HCB processing Surface treatment 6 4 + NP + OP 6 4 + NP + OP Mining 4 4 4 4 Cement 4 4 4 4 Glass 4 4 4 4 Ceramics 2 2 2 2 Large volume organic 18 11 + HCB + HCBD chemicals + NP + OP Organic fine chemicals 18 11 + HCB + NP + OP Polymers/PVC 8 3 + HCB + N P + OP Chlorine -alkali industry 2 1 + HCB Fertilisers & inorganic 6 6 3 chemicals Pesticide formulation 16 6 + NP 11 2 + NP Waste incineration 11 7 11 8 Solvent recovery 2 2 2 2 Pulp & paper 8 5 + NP + OP 8 5 + NP + OP Textiles 13 7 + NP + OP 13 8 + NP + OP Tanning 4 1 + NP + OP 4 1 + NP + OP Food & drink 9 7 9 8 Surface treatment using 12 8 12 9 solvents Cooling water 1 1 1 1

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IPPC Non - IPPC All pollutants All pollutants with All pollutants All pollutants with significant significant economic impact economic impact and mainly and mainly discharged by discharged by poi nt point sources sources Wood treatment 8 5 Flame retardant 1 applications Car repair 11 8 + NP Laboratories 5 4 + NP Shipyards 1 Dentists 1 1 Farm yards & 6 greenhouses HCB : hexachlorobenzene HCBD : hexachlorobutadiene NP : nonylphenols OP : octylphenols

5.4 DATA AVAILABILITY

The general data availability to work out the various cases was low, as already indicated by the data gap analysis in the previous section. This implies that a lot of data had to be retrieved through desk research of public available sources or through extrapolation based on a very limited amount of information.

The following categories will be assigned to data availability: • Good : sufficient and useful information supplied through questionnaire and/or easily retrievable from sector websites, only minor things required in depth desk research • Moderate : some information supplied through questionnaire and/or easily retrievable from sector websites, major things (discharge volume, pollutant concentration, …) required in depth research • Low : most information had to be looked up through desk research • Poor : insufficient information available to work out a case

5.5 SELECTION OF CASES

Based upon this prioritisation, following cases (sector & substances) were selected.

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Table 5.5.1 : Overview of cases and relevant pollutants

Pollutants Chlorine production Mercury Iron & Steel Polyaromatic hydrocarbons, metals Non -ferrous metals Polyaromatic hydrocarbons, metals PVC Conversion Lead, Di(2 -ethylhexyl)phtalate Refineries Benzene

SCCP C10 -C13 -Chloroalkanes Production and formulation of pesticides All pesticides Use of plant protection products All pesticides

Thus, about 60% of PS and PHS are covered in the case studies .

In Table 5.5 .2, an overview is given how the different generic scenario conditions translate to the different cases.

In Table 5.5 .3, the various selection criteria are applied to the selected cases, indicating the set of cases has been selected, taking into account the different selection criteria. In Table 5.5 .4, the remaining sectors are checked against the selection criteria.

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Table 5.5.2 : Specific scenario conditions for each case

Sectors Scenario 1 2 Key elements Community wide EQS for PS Community wide ELV s for PS by 2015, prog ressive from point sources reduction beyond 2015 corresponding to meeting EQS for PS by 2015 , progressive Phase-out for PHS by 2025 reduction beyond 2015 with more stringent program of measures Phase-out of PHS from ‘known’ point sources by 2015 Iron & steel PS 50% reduction by 2015 Community wide ELVs by 2015 80% reduction by 2021 PHS 50% reduction by 2015 Reduce as much as technically feasible by 2015 80% reduction by 2021 Chlorine PS - - production PHS Same as baseline scenario Phase-out of emissions, discharges and losses by 2015 Non -ferrous PS 50% reduction by 2015 Community wide ELVs by 2015 80% reduction by 2021 PHS 50% reduction by 2015 Reduce as much as technic ally Reduce as much as feasible by 2015 technically feasible by 2025

SCCP (C 10 -C13 PS - - chloroalkanes) PHS 50% reduction by 2015 Phase-out by 2015 Phase-out by 2025 PVC Conversion PS 50% reduction by 2015 –Community wide ELVs by 80% reduction by 2021 2015 PHS - -

Refineries PS 50% reduction by 2015 Community wide ELVs by 2015 80% reduction by 2021 PHS - -

P&F pesticides Meta -study from US -EPA studies Use PPP Meta -study starting from the EIA for the Sustainable Strategy on PPP

39 Good Moderate Data availability Moderate Moderate 2/176/EEC IPPC directive Links to other legislation IPPC directive/ 8 IPPC directive Cd : 91/388/EEC DEHP : COM(2002) 70 final

Prioritisation and selection ofcases selection and Prioritisation Point sources Type ofType sources Point sources Point sources Point sources + released diffuse use phase in - IPPC - IPPC Sector composition IPPC IPPC IPPC + non Non

ector

Number of relevant pollutants in s this according to source screening 2 3 10 8 40

Substance classification PHS Hg : PHS Cd : PHS Hg : PSR Pb : PS : Ni PAH PHS : PHS Cd : PHS Hg : PSR Pb : PS : Ni PAH PHS : PHS Cd : PSR Pb : DEHP PSR : /

Preliminary economic impact assessment according to existing studies Moderate low / Extensive very / significant Extensive very / significant Extensive very significant : Assessment : of the various cases against appliedthe selection criteria .3 - 5.5 - dmium Table

Substance(s) considered in case Mercury Hexachloro benzene Cadmium Mercury Lead Nickel Polyaromatic hydrocarbons Ca Mercury Lead Nickel Polyaromatic hydrocarbons Cadmium Lead Di(2 ethylhexyl) - ferrous -

Sector(s) Chemical Chlorine / alkali & steel Iron Non metals Chemical

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amework Directive amework metals ECOLAS 03/07767/DL Fr Case Chlorine production & steel Iron Non PVC conversion Good Poor Poor Data availability Moderate IPPC directive 91/414/EC 91/414/EC Links to other legislation 2002/45/EC

Prioritisation and selection ofcases selection and Prioritisation Point sources Point sources Type ofType sources Point sources Diffuse sources IPPC IPPC IPPC - - - IPPC Non Sector composition IPPC non and Non

ector 16 Number of relevant pollutants in s this according to source screening / 11 16 9 41 : PS : : PHS : : PHS : : PHS : : PSR : : PS : SCCP : PHS SCCP : Substance classification Benzene Cd Hg Pb Ni PAH PS, PHS and PSR PS, PHS and PSR es Neglegible for metalworking and tanning Moderate to significant for other us Preliminary economic impact assessment according to existing studies Extensive ry ve / significant Low to very significant, depending on substance Low to very significant, depending on substance - 13 -C 10 Benzene Cadmium Mercury Lead Nickel Polyaromatic hydrocarbons C PPP 9 PPP 9 Chloroalkanes Substance(s) considered in case phtalate

Sector(s) Refineries Metalworking Tanning Plastics Paints Chemical Agriculture

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ECOLAS 03/07767/DL Fr Case Refineries SCCP PPP production and formulation PPP phase use e

Data availability poor for discharge to poor for discharge to poor for discharge to - - -

Prioritisation and selection ofcases selection and Prioritisation Good Good dischargefor to air Low Low water Low Moderate Good dischargefor to air Low Good dischargefor to air Low Poor Poor Low water water Moderate but similar case lik refineries

IPPC - - 6 6 4 4 2 - 4 11 10

Non 3 7 6 4 4 2 4 11 10 18 IPPC

Number of relevant pollutants 42 )

EPA (2000) and UK

impact based on ethylhexyl)phthalate) - Dichloroethane) -

DEFRA (2002) Checkingof additionalthe sectors againstthe selection criteria : polyaromatic hydrocarbons .4 5.5

Expected economic gnificant (benzene)

Table available information from Very si Very significant (Nickel) Very significant (Nickel) Very significant (cadmium) Very significant (Dichloromethane) Very significant (Nickel) Significant ( Very significant (1,2 Very significant (Dichloromethane) Very significant (Di(2

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ECOLAS 03/07767/DL Fr Large combustion plants Coal gasification metalFerrous processing Non Surface treatment Mini Cement Glass Ceramics Large volume organic chemicals r for discharge to

Data availability poo - moderate

Prioritisation and selection ofcases selection and Prioritisation Good Good dischargefor to air Low - Low Poor Poor

IPPC - - - - 11

Non 2 8 18 11 IPPC

Number of relevant pollutants 43 )

EPA (2000) and UK

impact based on ethylhexyl)phthalate) - Dichloroethane) -

DEFRA (2002) polyaromatic hydrocarbons

Expected economic

available information from ignificant (Octylphenols) Very significant (benzene) Low (Hexachlorobenzene) Low (Hexachlorobutadiene) Very significant (Nonylphenols) Significant (Octylphenols) Very extensive (Trichloromethane) Significant ( Low (cadmium as stabiliser) Very significant (1,2 Very significant (cadmium in pigments) Very significant (cadmium in fertilisers) Very significant (Dichloromethane) Very significant (Di(2 Low (Hexachlorobenzene) Low (Hexachlorobutadiene) Very significant (Nonylphenols) S Very extensive (Trichloromethane) Low (Hexachlorobenzene) Low (Hexachlorobutadiene) Very extensive (Trichloromethane)

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ECOLAS 03/07767/DL Fr Organic fine chemicals Polymers / PVC Fertilisers & anorganic chemicals Waste incineration Data availability

Prioritisation and selection ofcases selection and Prioritisation Low Poor Poor Poor Low Low Low Low water Poor Low Poor Poor

IPPC 8 1 5 1 1 6 - 2 8 9 1 11 13

Non ------2 8 9 1 13 IPPC

Number of relevant pollutants 44

EPA (2000) and UK

impact based on

DEFRA (2002) Dichloromethane)

Expected economic significant (Brominated diphenylethers)

available information from Very significant (brominated diphenylethers) Very significant (Nonylphenols) Significant (Octylphenols) Low (Pentachlorophenol) Very significant ( Very significant (Nickel) Significant (Polyaromatic hydrocarbons) Low (Hexachlorocyclohexane) Low (Pentachlorophenol) Low (Tributyltin compounds) Very Low (Tributyltin compounds) Low (mercury)

Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water - RPA (2000) and UK DEFRA (2002)

amework Directive amework See also

ECOLAS 03/07767/DL Fr Solvent recovery Pulp & paper Textiles & drink Food water Cooling Wood treatment Flame retardant applications Car repair Laboratories Shipyards Dentists Farm yards & greenhouses ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

6 CASES

6.1 CHLORINE PRODUCTION

6.1.1 Scenarios

In the following, the scenarios that have been investigated are described in general terms. Specific details of the sector profile, discharges of relevant pollutants, reduction measures, associated costs and of the scena rio construction are given in Annex 1.

As applying BAT is a requirement of the IPPC Directive, this can be seen as belonging to the baseline scenario. BAT requires that the us e of mercury cells are discontinued. Application of BAT is also part of the Europ ean mercury strategy. The parts of the mercury strategy relating to the chlorine -alkali industry are thus an integral part of the baseline scenario. Other aspects of the mercury strategy (measuring and control equipment, coal combustion and cremation) have not been accounted for , but will also contribute to a lowering of releases of mercury in the environment and ultimately in the water courses . Scenario 1 foresees in a complete phase-out of the discharges, losses and releases of priority hazardous substan ces over a 20 years period with an intermediate goal of reaching a 50% reduction of the discharges, losses and releases of priority hazardous substances by 2015. It is assumed that this 50% reduction will enable the reaching of the environmental quality s tandards in all river basins by 2015. As the Eurochlor voluntary commitment for phase-out by 2020 also complies with the requirement under scenario 1 to phase-out PHS by 2025, we assume that scenario 1 is equal to the baseline scenario. This implies that there is no incremental cost associated with scenario 1 (which does not mean that the measure itself is costless). Scenario 2 foresees in a complete phase-out of the discharges, losses and releases of priority hazardous substances by 2015, implying that th e measures, foreseen in the voluntary commitment of Eurochlor will have to be implemented 5 years earlier.

Specific details of the sector profile, discharges of relevant pollutants, reduction measures, associated costs and constructed scenario’s are given in Annex 3 .

6.1.2 Economic Assessment

The industry’s commitment to phase-out the use of mercury cells by 2020 determines the baseline scenario for this case. As a phase-out by 2020 also complies with the requirement under scenario 1 to phase-out PHS until 2025, we assume that scenario 1 is equal to the baseline scenario. This implies that there is no incremental cost associated with scenario 1 (which does not mean that the measure itself is costless). Scenario 2, which requires a phase-out of PHS by 2015, is appl ied to this case by shifting the date for the complete phase -out of mercury cells from 2020 to 2015. This means that scenario 2 does not evaluate the full costs of the phase-out of mercury cells, but rather the incremental cost of advancing the phase-out by five years.

In a first step, the direct cost of scenario 2 to the Chlorine industry is assessed by calculating the net present value for 2005 of the following cash flow and giving it a negative sign: As the investment is shifted by five years from 2020 t o 2015, there is an expenditure of 3.2 billion Euros in 2015 and a receipt representing the investment cost savings in period 2020. In addition, there are receipts of 217.5 million Euros representing the electricity cost savings in the periods 2015 to 2019 .

To get a feeling for its magnitude, we also calculate the net present value for this cash flow for 2015 and spread the resulting cost figure over 5 years by calculating the corresponding annuity and divide this annuity by the tonnes of chlorine produced in mercury cells per year. To this purpose, we make the simple assumption that the output of the mercury cells stays constant at 55 % of the 9 million ton nes of

45 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive chlorine that are currently produced in EU25 per year , i.e. at 4.95 million ton nes per year . T his exercise provides a cost figure per tonne of chlorine produced in the five years in question (2015 to 2019). EU25 output of chlorine would be expected to drop in the case that some chlorine users move to outside Europe. The overall influence of such a drop in output on the unit costs of scenario 2 would, however, be unclear. As, to our knowledge, figures on total production costs for chlorine are not publicly available, the resulting cost figures can be compared to the range of market prices for chlorine, which is roughly 60 to 250 Euros per tonne. Table 6.1 gives the costs of advancing the replacement of mercury cells by five years for a range of discount rates. It should be noted that these figures exclude tax effects, which tend to lower the absolute values of such figures considerably. Also note that the impacts of the proposal are smaller than estimated here if the industry’s commitment leads to a lower number of mercury cells in operation in 2015 than foreseen in our baseline scenario.

Table 6.1.1: Direct costs to the chlorine industry of replacing mercury cells five years earlier

Discount Negative net present value Annuity over 5 years Cost per tonne produced 1 rate (2005, million Euros) (2015 -2019, million Euros) (total discounted cost) * (annualised cost) * 4% - 295 - 98 - 20 €/t 8% 39 21 4 €/t 12% 163 140 28 €/t

* Thorough readers may notice that the annualised costs seem to be disproportionate for the different discount rates as compared to the respective numbers for the total discounted costs. This has to do with the fact that for the sake of consistency with the other case studies, 2005 has been chosen as the base year for calculating the negative net present value, while the annualised costs accrue to the years 2015 to 2019. Had 2015 been chosen as the base year for the negative net present value, the total discounted costs (in 2015) would amount to -437 million Euros at 4 %, 84 million Euros at 8 %, and 506 million Euros at 12 %. Starting from these figures, discounting over one decade generates the left column and a standard annuity formula generates the center column of the table.

Using a discount rate of 4%, which is recommended for impact assessments, scenario 2 is highly beneficial for the Chlorine industry, with direct cost savings of 20 Euros per tonne. In dustries usually operate with much higher discount rates, because they ask investment projects to achieve an expected internal rate of return that is at least as high as for alternative projects in the same risk category. Using a discount rate of 12%, whic h should be within a reasonable range from an industry point of view, the alleged cost savings turn into a large additional direct cost of 28 Euros per tonne.

This highlights the importance of the assumptions on discount rates. While 4% is perceived by ma ny as being in the upper range in the context of evaluations of public policies and especially environmental policies, it is far too low to evaluate risky investments from a private sector point of view. As decisions of firms are driven by private optimisation, the discount rates used by industry matter when assessing the economic impact of a measure, even if policy -makers should disagree with the use of these discount rates. If output should be reduced as a reaction to the measure, this may have a negative effect on employment in the chlorine -alkali industry, which according to the questionnaire currently employs about 42.000 people.

This already indicates that assessing economic impact is more than assessing the additional direct cost of a measure. For any payment in the economy, there is someone who pays and someone who receives it. In this case, we have firms that provide and set up the membrane cells. These firms perceive the chlorine

1 Chlorine prices are very volatile in an approximate range of 50 to 200 Euros per tonne.

46 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive industry’s investment cost as a revenue which may result in higher pro fits and/or additional employment. On the other hand, electricity producers face a demand decrease. Due to the associated positive environmental effects, electricity savings are usually perceived as positive, a view which may not necessarily be shared by electricity producers in liberalised markets.

Table 6.1.2: Mercury plants in the EU

Country Number of Total annual Country Number of Total annual plants capacity (kt) plants capacity (kt) Belgium 2 580 Italy 8 763 Czech Republic 2 197 The Netherlands 1 74 Finland 1 43 Poland 3 198 France 7 874 Slovak Republic 1 76 Germany 9 1227 Spain 8 762 Greece 1 40 Sweden 2 220 Hungary 1 137 United Kingdom 3 858

Table 6.1 .2 shows the number and total capacity of mercury plants in EU countries as reported in the questionnaire. The overall effect of scenario 2 on the trade balances of countries with mercury cells can be expected to be negative, as a considerable part of the membrane cells would be imported. However, under a later phase-out – as considered in the baseline – this effect would occur anyway at a later moment. Furthermore, a negative effect on the trade balance is not necessarily a negative economic impact.

Further conclusions can be drawn from analysing the characteristics of the chlorine market. Chlorine is difficult to transport, which is why about 85% of the chlorine is used on the same site. For the rest, markets are mainly regional, resulting in market power on both the supply a nd demand sides. The local and regional nature of chlorine markets makes relocation of chlorine production meaningless, unless it is relocated together with downstream processes. These would have to be products with a high cost share for chlorine such as E DC/VCM 2. Such a “chain reaction” is conceivable, but rather unlikely due to the electricity cost savings associated with the measure.

Another important question is whether chlorine producers would be able to pass on a part of the perceived costs to downstr eam users. Where the chlorine is used for downstream processes within the same company, additional costs appear in the total production costs of the downstream product. In the relation with other clients, the ability of chlorine producers to pass on the ad ditional cost depends on the shape of the demand and supply functions on the respective regional market. In general, both functions can be assumed to be rather steep, because there are no substitutes for chlorine and because major capacity changes are diff icult, at least in the short run. This is confirmed by the high price volatility, even though the latter is partly due to the co -production with NaOH. In a market with such features, chlorine producers are able to pass on a part of the cost increase to dow nstream users, with the exact share varying between regions and clients. This applies at least if, as is usually the case, chlorine can be regarded as the process’s main product of market value and NaOH as the by -product. As there are many different downstream uses of chlorine, a general analysis of the reactions of these users to a price

2 The fact that EDC (1,2 -Dichloroethane) is also on the list of substances does not have any effects on the measures to be taken at the level of the chlorine production, as EDC production resorts under another sector (large volume organic chemicals).

47 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive increase of chlorine cannot be given. Depending on the characteristics of the respective markets, the profit margins of these firms are slightly reduced and/or the prices of the respective end products are slightly increased.

6.1.3 Summary

Due to industry’s commitment to phase-out production in mercury cells by 2020, scenario 1 is equal to the baseline scenario and has thus no incremental cost. This also means that scenario 2 doe s not evaluate the full costs of the phase-out of mercury cells, but rather the incremental cost of advancing the phase-out by five years. Even without considering environmental benefits, scenario 2 is highly beneficial using the discount rate of 4% which is recommended for impact assessments. It results in major cost savings in chlorine production and leads to an investment impulse due to the installation of membrane cells. In contrast to this general view, affected chlorine producers that use industry -like discount rates in the two digit range perceive a major economic burden and may reduce output. A part of the burden may be passed on to downstream users of chlorine and eventually to consumers of the associated end products.

48 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

6.2 IRON & STEEL

6.2.1 Scenarios

In th e following, the scenarios that have been investigated are described in general terms. Specific details of the sector profile, discharges of relevant pollutants, reduction measures, associated costs and of the scenario construction are given in Annex 2.

Th e baseline scenario comprises the implementation of measures to reach BAT under Directive 1996/61/EC associated emission levels of metals - lead, nickel, cadmium and mercury -, PAH and benzene in all integrated iron - and steelworks (which includes coke oven plants, sinter plants, blast furnaces and basic oxygen furnaces). Integrated iron - and steelworks meet the requirements of the 76/464/EEC daughter directives for Cd (83/513/EEC) and Hg (84/156/EEC). Blast furnaces and basic oxygen furnaces already apply B AT today. Sinter plants have only minor emissions to water, so direct emission loads to water from sinter plants are disregarded in the scenarios. This means that particularly coke oven plants (only 15% of this category applies BAT today) will have to make efforts to implement measures to reach BAT emission levels for PAH and benzene in their waste water.

As the baseline scenario, also called scenario 0, is assumed to be achieved even without the proposal, its costs do not have to be seen as a cost attribu table to the proposal . We are only interested in calculating the 'additional' costs to achieve the requirements of two other scenarios. In other words, scenario 0 serves as a zero cost baseline.

Scenario 1 comprises the reduction of direct discharges of th e relevant priority (hazardous) substances with 50 % by 2015 and with 80 % by 2021. The corresponding measures consist of biological treatment with pre -denitrification/nitrification complemented by physical/chemical oxidation for some coke oven plants; opt imisation of gas -scrubbing waste water treatment plants in all blast furnaces and basic oxygen furnaces; and replacement of off gas wet scrubbing systems by dry de -dusting systems comprising mostly bag filters combined with efficient post combustion and injection of activated carbon or lignite coke powder to reduce organic micro -pollutants for electric arc furnaces. These technologies eliminate the priority hazardous substances under consideration (Cd, Hg, PAH) to the currently feasible technical limits, wh ich does not completely correspond to a phase-out scenario.

Scenario 2 imposes Community wide emission limit values for Pb and Ni and a reduction of discharges down to the technically feasible level by 2015. The proposed annual average environmental quality standards were considered as emission limit values. These AA -EQS are significantly more stringent than the ones set in the 76/464/EEC daughter directives for these compounds, This requires measures at all coke ovens, blast furnaces and basic oxygen furn aces. The corresponding measures are implemented by 2015 and respectively consist of biological treatment with pre -denitrification/nitrification complemented by ultra -filtration and reversed osmosis in coke oven plants ; gas scrubbing waste water treatment plants complemen ted by an ultra -filtration and reversed osmosis installation in blast furnaces ; and the replacement of wet scrubbing waste water treatment plants by dry de -dusting systems with ESP filters in basic oxygen furnaces .

49 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

6.2.2 Economic assessment

The EU -15 steel industry produced approximately 160 million tonnes (Mt) of crude steel in 2003, which represents about 20% of world steel production, with an estimated annual turnover of around 80 -90 billion Euro. Its share in total industrial production is 1. 8% and its labour force corresponds to about 260 000 people. Total crude steel production in the new member states amounted to 22 Mt in 2002, which corresponds to just under 12% of total EU steel output. The steel production in the new member states accoun ts for about 5% of the value added in this region's manufacturing.

About 60% of steel is produced via the blast furnace route (integrated steelworks), whereas 40% is produced with electric arc furnaces.

In a first step, the direct costs of the measures t hat correspond to scenarios 1 and 2 are obtained by calculating the negative net present value of the associated cash flows. To calculate the net present value of each scenario, we consider the investment costs in 2015 and, if applicable, 2021, and operati onal costs over the technical lifetime after the respective investments. To this purpose, some assumptions have to be made concerning the cost figures for the new member states, the technical lifetime of the equipment and the discount rate. 1. As we lack cost figures on steel production in the new member states, we extrapolate cost figures from old member states to EU -25, based on relative production figures. The implicit assumption is that the specific costs of the measures in old member states can also be ap plied to the new member states. 2. We assume a technical lifetime of 25 years, after which new investments will have to be done if companies keep operating. We regard any new investments at that time as unrelated to the current proposal, and therefor we use an investment horizon of 25 years in the cost calculations. 3. The use of a 4% discount rate is recommended for impact assessment. Since industries usually expect to reach an internal rate of return that is at least as high as for alternative projects in the same risk category, we also show the results for two alternative discount rates: 8% and 12%.

Table 6.2.1: Direct costs to the European steel industry (million Euros)

Discount Negative net present value Annuity over 25 years Cost per tonne of liquid steel rate (million Euros) (million Euros) produced 3 (total discounted cost) (annualised cost) Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2 4% 1 911 22 228 122 1 423 0.67 €/t 7.75 €/t 8% 893 11 481 84 1 076 0.46 €/t 5.86 €/t 12% 461 6 460 59 824 0.32 €/t 4.49 €/t

Knowing that the steel industry has an estimated annual turnover of roughly 100 billion Euros for EU -25, the negative net present values of the first scenario are considerab le and the figures for the second scenario are even more than ten times higher. Using the recommended 4% discount rate, the direct

3 In 2003, the average market price of steel was between $250 -350 per tonne depending on the specific product (flat or long product) (IISSI, About Steel, 2004). In October 2004, $500 -800 were paid for different carbon steel products (see http://www.meps.co.uk/world -price.htm ).

50 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive costs amount to 2 billion Euros for scenario 1 and to 22 billion Euros for scenario 2. For higher discount rates, the direct costs decrease since companies give lower importance to costs that accrue in the future.

To get a feeling for its magnitude, we spread the resulting cost figure (negative net present value) over 25 years by calculating the corresponding annuity and divide this annuity by the tonnes of liquid steel produced per year. Our cost calculations are based on current production level (183 MT in 2003 for EU - 25). Any future development in European liquid steel production will affect this cost per tonne ratio calculati on, by changing the numerator and denominator. Both past developments 4 and outlooks 5 about EU steel production, tells us that only a very slight increase in steel production can be expected in the future for EU -25. In addition, we expect that the less pol luting electric arc furnaces will mop up this small production increase. Yet, for the sake of simplicity, we assume a constant future steel production and use the current output level (183 Mt/year in EU -25) in the cost per tonne ratio calculation, acknowledging that this could slightly affect the future unit costs.

In the following, we compare the unit costs to the prices of major steel products. In 2003, the average market price of steel was between $250 -350 per tonne depending on the specific product (fl at or long product) (IISSI, About Steel, 2004). In October 2004, $500 -800 were paid for different carbon steel products (see http://www.meps.co.uk/world-price.htm ). Compared to th ese figure s, the incremental cost appears to be rather low under scenario 1 ( 67 Eurocents per tonne produced). Under scenario 2, the steel sector faces high costs. At a discount rate of 4%, the additional cost is about 7.75 Euros per tonne produced.

Within an economic analysis, we are also interested in who is going to bear the ad ditional cost burden. To this purpose, we refer to the following characteristics of the steel industry. On the supply-side, the European steel -making industry consists of large companies, although compared to other industrial sectors (e.g. automobile indus try) it remains a less concentrated sector and has been characterised by intense competition in the late 90s. Studies have estimated a high elasticity of steel supply6, which implies a flat supply curve for steel. Looking to the global (world) market deman d curve, it is reasonable to assume a rather steep or inelastic curve as steel products are used in many major industrial sectors (such as construction, mechanical engineering, car manufacturing, …) where substitutes are not easily available. Narrowing the focus on the demand curve for European steel, we observe a rather flat demand curve as customers have the possibility to purchase from other producers as European steel becomes more expensive. The relevant geographic market for steel being the global comp etitive market, the steel price is determined on the world steel market and European steel suppliers can be assumed to be price

1 European Commision, 2004, European Steel Technology Pl atform, Vision 2030, Report of the Group Personalities, March 2004, p. 38. http://www.eurofer.org/publications/pdf/2004 -EUsteelTchPlat.pdf . Figure 1 of this report shows that st eel production in the EU has been oscillating around the current production level over the period 1970 -2002.

5 The Deutsche Bank, 2004, The Steel Industry: Enlargement Creates Opportunities for EU Mills, EU -Monitor Economics, January 2004, p.11 -18. http://www.dbresearch.de/PROD/DBR_INTERNET_EN - PROD/PROD0000000000072144.pdf . This report only predicts a slight production increase for EU -25 steel sector (0.8% growth in EU -25 steel production over the period 2002 -2010)

6 e.g. Maasoumi, Prowse and Slottje, 2002, Measuring Market Power in the Steel Industry, 25p. They refer to studies that present supply elasticities for the steel industry as a whole that are high (between 2.0 and 5.9).

51 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive takers. This means that chances for steel producers to pass on the cost burden (especially of scenario 2) to the many downstream users of steel are very limited, a possible exception being high quality segments of the market in which European steel producers may be able to exercise some price setting power.

As a result, the cost burden is likely to affect the output of European s teel producers. So, higher environmental costs for steel producers may endanger employment and profits in the steel sector. Due to international treaties, the opportunities for implementing compensatory subsidies are limited. Upstream suppliers (such as co al, coke, iron ore, fluxes, limestone and scrap industries) may also be negatively affected under scenario 2 . On the other hand, the sectors delivering the treatment equipment benefit from both scenarios 1 and 2 .

6.2.3 Summary

The direct costs related to the me asures are rather low under the first scenario, but high under the second scenario. International competition indicates that the second scenario has a negative impact on the output of European steel producers with negative consequences for employment and p rofits in this sector. These consequences may also affect upstream suppliers. Downstream users of steel will be affected to a much lesser extent, a possible exception being users of specific high quality products. The sectors that deliver the treatment equ ipment benefit under both scenarios.

52 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

6.3 NON-FERROUS METALS

6.3.1 Scenarios

In the following, the scenarios that have been investigated are described in general terms. Specific details of the sector profiles, discharges of relevant pollutants, reduction measures, associated costs and of the scenario construction are given in Annex 3.

The baseline scenario comprises the implementation of measures to reach BAT associated emission levels of heavy metals - lead, nickel, cadmium and mercury -, and PAH in all production p lants of the non - ferrous metals industry. All copper, zinc, lead, cadmium and nickel producing plants have waste water treatment systems that are reported to be at a high standard, thus reaching BAT emission levels for heavy metals (priority substances lea d and nickel and priority hazardous substances cadmium and mercury) . Aluminium plants implement ed measures to reach BAT emission levels for polycyclic aromatic hydrocarbons (priority substances naphthalene and fluoranthene and priority hazardous substance s anthracene, PAH (benzo(a)pyrene, benzo(b)fluoranthene, benzo(g,h,i)perylene, benzo(k)fluoranthene and indeno(1,2,3 -cd)pyrene) ). Existing legislation, as the IPPC Directive and the daughter directives of 76/464/EEC, is taken into account in this baseline scenario. All non -ferrous metal plants meet the requirements of the daughter directives of the 76/464/EEC Directives As the baseline scenario, also called scenario 0, is assumed to be achieved even without the proposal, its costs are not attributable to th e proposal. We are only interested in calculating the 'additional' costs to achieve the requirements of two other scenarios. In other words, scenario 0 serves as a zero cost baseline.

Scenario 1 comprises the reduction of direct discharges of the relevant priority substances (lead, nickel and the PAH naphthalene and fluoranthene) with 50 % by 2015 and with 80 % by 2021 and the reduction of direct discharges of the relevant priority hazardous substances (cadmium, mercury and the PAH anthracene, benzo(a)pyren e, benzo(b)fluoranthene, benzo(g,h,i)perylene, benzo(k)fluoranthene and indeno(1,2,3 -cd)pyrene) with 50 % by 2015 and a phase-out (or a reduction as far as technically feasible where a phase-out is not achievable) by 2025.

Scenario 2 imposes Community wide emission limit values for the relevant priority pollutants (lead, nickel and the PAH naphthalene and fluoranthene) and a phase out (or a reduction as far as technically feasible where a phase-out is not achievable) of the relevant priority hazardous pollutants (cadmium, mercury and the PAH s anthracene, benzo(a)pyrene, benzo(b)fluoranthene, benzo(g,h,i)perylene, benzo(k)fluoranthene and indeno(1,2,3 -cd)pyrene) by 2015. This requires all measures taken in scenario 1 to be implemented by 2015.

6.3.2 Economic assess ment

1. We assume a technical lifetime of 25 years, after which new investments will have to be done if companies keep operating. We regard any new investments at that t ime as unrelated to the

53 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive current proposal, and therefor e we use an investment horizon of 25 years in the cost calculations.

2. The use of a 4% discount rate is recommended for impact assessment. Since industries usually expect to reach an internal rate of ret urn that is at least as high as for alternative projects in the same risk category, we also show the results for two alternative discount rates: 8% and 12%.

3. In the case of the primary and secondary copper production, production figures are available only f or EU -15. To obtain an EU -25 cost figure, we extrapolate the available data on the basis of GDP. Although this is a very rough extrapolation, we consider other approaches more distorting due to lack of relevant data or lack of data reliability.

Table 6.3.1 Direct costs to the European Primary Aluminium Production (million Euros)

Discount rate Negative net present value Annuity over 25 years Cost per tonne of primary (million Euros) (million Euros) aluminium produced 7 (total discounted cost) (annualised cos t)

Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2

4% 82 132 5.2 8.4 1.62 €/t 2.61 €/t

8% 44 83 4.1 7.8 1.27 €/t 2.43 €/t

12% 26 55 3.3 7.0 1.03 €/t 2.18 €/t

Using the recommended 4% di scount rate, the direct costs amount to 82 million Euros for scenario 1 and to 132 million Euros for scenario 2. For higher discount rates, the direct costs decrease since companies give lower importance to costs that accrue in the future. The EU25 Alumini um industry ha d approximately 107 000 employees in 2002.

To get a feeling for its magnitude, we spread the resulting cost figure (negative net present value) over 25 years by calculating the corresponding annuity and divide this annuity by the annual prima ry aluminium production (BREF figures for EU15 in 1997). Using the recommended 4% discount rate, the direct unit costs amount to 1.62 €/t for scenario 1 and 2.61 €/t for scenario 2. This cost compares to a price of aluminium at the London Metal Exchange of 1396 €/t (average for November 2004).

Table 6.3.2 Direct costs to the European Primary and Secondary Copper Production (million Euros)

Discount rate Negative net present value Annuity over 25 years Costs per tonne of copper (million Euros) (million Euros) produced 8 (total discount ed cost) (annualised cost)

7 This figure is based on output data from the BREF document for EU15 (3.216 million tonnes in 1997), which leads to an overestimation of the unit costs. The unit costs compare with aluminium prices at the London Metal Exchange of 1396 €/t (average for Nove mber 2004). Aluminium prices have risen by about 30 -40% over the last two years.

8 This figure is based on output data from the BREF document for EU15 (6.961 million tonnes in 1997), which leads to an overestimation of the unit costs. The unit costs compar e with copper prices at the London Metal Exchange of 2404 €/t (average for November 2004). Copper prices have more than doubled over the last two years.

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Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2

4% 264 415 17 27 2.44 €/t 3.88 €/t

8% 93 210 9 20 1.29 €/t 2. 87 €/t

12% 36 116 5 15 0.72 €/t 2. 15 €/t

Using the recommended 4% discount rate, the direct costs amount to 264 million Euros for scenario 1 and to 415 million Euros for scenario 2. For higher discount rates, the direct costs decrease since companies give lower importance to c osts that accrue in the future. The EU25 Copper industry ha d approximately 23 000 employees in 2002.

By spreading the resulting cost figure (negative net present value) over 25 years, the corresponding annuity is calculated. We divide this annuity by the a nnual copper production (BREF figures for EU15 in 1997). Using the recommended 4% discount rate, the direct unit costs amount to 2.44 €/t for scenario 1 and to 3.88 €/t for scenario 2. This cost compares to a price of copper at the London Metal Exchange of 2404 €/t (average for November 2004).

55 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

Table 6.3.3 Direct costs to the European Primary and Secondary Zinc, Lead and Cadmium Production (million Euros)

Discount rate Negative net present value (million Euros) Annuity over 25 years (million Euros) (total discounted cost) (annualised cost)

Scenario 1 Scenario 2 Scenario 1 Scenario 2

4% 596 934 38 60

8% 210 473 20 44

12% 83 261 11 33

Knowing that the Lead, Zinc and Tin industry has an estimated annual turnover of roughly 6 billion Euros for EU -25, the negative net present values of the first scenario are considerable and the figures for the second scenario are even higher. Using the recommended 4% discount rate, the direct costs amount to 596 million Euros for scenario 1 and to 934 million Euros for scenario 2. The EU25 Lead, Zinc & Tin industry has approximately 24 000 employees in 2002.

To get a better feeling for its magnitude, we spread the resulting cost figure (negative net present value) over 25 years by calculating the corresponding annuity. Using the recommended 4% discount rate, the direct annualised costs amount to 38 million Euros (or 0,60% of the total turnover) for scenario 1 and to 60 million Euros (0,94% of the total turnover) for scenario 2.

Table 6.3.4 Direct costs to the European Primary Nickel Production (million Euros)

Discount rate Negative net present value Annuity over 25 years Costs per tonne of nickel (million Euros) (million Euros) produced 9 (total discounted cost) (annualised cost)

Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2

4% 19 29 1.2 1.8 7.15 €/t 10.72 €/t

8% 7 15 0.6 1.4 3.57 €/t 8.34 €/t

12% 3 8 0.4 1.0 2.38 €/t 5.96 €/t

Using the recommended 4% discount rate, the direct costs amount to 19 million Euros for scenario 1 and to 29 million Euros for scenario 2. For higher discount ra tes, the direct costs decrease since companies give lower importance to costs that accrue in the future. The EU25 “other non -ferrous” industry has approximately 52 000 employees in 2002.

9 This figure is based on output data from the BREF document for EU15 (167.9 thousand tonnes in 1996), which leads to an overestimation of the unit costs. The unit costs compare with nickel prices at the London Metal Exchange of 10 817 €/t (average for November 2004). Nickel prices are very volatile and have oscillated roughly between 4 000 and 18 000 $/t o ver the last six years.

56 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive To get a feeling for its magnitude, we spread the resulting cost figu re (negative net present value) over 25 years by calculating the corresponding annuity. We divide this annuity by the nickel production (BREF figures for EU15 in 19 96). Using the recommended 4% discount rate, the direct unit costs amount to 7.15 €/t for scenario 1 and to 10.72 €/t for scenario 2. This cost compares to a price of nickel at the London Metal Exchange of 10 817 €/t (average for November 2004).

6.3.3 Summary

In the cases of aluminium, copper and nickel, the unit costs of both scenarios are low if compared to current high market prices of the products. For scenario 1, the ratios of incremental unit costs to prices are 0.06% for nickel, 0.10% for copper, and 0.12% for aluminium. Scenario 2 is somewhat more expensive with ratios of incremental unit costs to prices of 0.10% for nickel, 0.16% for copper, and 0.18% for aluminium. The burden imposed on individual companies may be higher, as in this calculation costs hav e been spread over the respective industries as a whole. In the case of zinc, lead and cadmium production, the costs of the measures are more considerable. The annualised costs represent 0.60% of total turnover for scenario 1 and 0.94% of total turnover fo r scenario 2. Especially, it should be noted that the associated investment is large if compared to the size of the industry.

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6.4 PVC CONVERSION

6.4.1 Scenarios

In the following, the scenarios that have been investigated are described in general terms. Specific de tails of the sector profile, discharges of relevant pollutants, reduction measures, associated costs and of the scenario construction are given in Annex 4.

As the companies active in the PVC conversion sector do not fall under the IPPC Directive, the basel ine scenario 0 in this case corresponds to the requirements of 76/464/EEC (replaced from 2009 onwards by of Art. 11 of the WFD ) and marketing and use restriction under Directive 76/769/EEC on the use of DEHP in toys for children under 3 years of age. Sce nario 1 comprises the reduction of direct discharges of the relevant priority substances with 50 % by 2015 and with 80 % by 2021. Two types of measure can be distinguished to reach that goal. The first option for DEHP removal is end -of -pipe -treatment at pr ocessing sites with granulated active carbon. A second type of measure is the substitution of DEHP by other types of plasticizer. Scenario 2 imposes Community wide emission limit values for DEHP to be reached by 2015. Again the two types of measures: end -of-pipe treatment at processing sites (GAC in the case of DEHP) and substitution (by other types of plasticizer) can be applied.

6.4.2 Economic assessment

Europe consumes about 1 ,000 ,000 tonnes of plasticizer per year , mainly phthalate types . The market has an an nual value of about 1 ,000 ,000 ,000 € (RPA, 2000). According to EuPC, total use of DEHP as a plasticizer in PVC production and conversion is approximately 250,000 tonnes per year (2003). The European PVC market is worth about 50 ,000 ,000 ,000 € per year , 32% of which is generated by plasti cized PVC (RPA, 2000).

1. We assume a technical lifetime of 25 years, after which new investments will have to be done if companies keep operating. We regard any new investments at that time as unrelated to the current proposal, and therefor we use an investment hor izon of 25 years in the cost calculations.

2. The use of a 4% discount rate is recommended for impact assessment. Since industries usually expect to reach an internal rate of return that is at least as high as for alternative projects in the same risk catego ry, we also show the results for two alternative discount rates: 8% and 12%.

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Table 6.4.1: Direct costs of measure 1 (End of pipe treatment at processing site) to the European PVC conversion industry (million Euros)

Discount Negative net present value Annuity over 25 years Cost per tonne of DEHP rate (million Euros) (million Euros) reduced by 2015 (respe ctively (total discounted cost) (annualised cost) by 2021) (€/t)

Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2

4% 247 340 16 22 7 €/t (5 €/t) 5 €/t

8% 113 169 11 16 5 €/t (3 €/t) 4 €/t

12% 58 92 7 12 3 €/t (2 €/t) 3 €/t

Table 6.4.2: Direct costs of measure 2 (Substitution of DEHP) to the European PVC conversion industry (million Euros)

Discount Negative net present value Annuity over 25 years Cost per tonne of DEHP rate (million Euros) (million Euros) reduced by 2015 (respectively (total discounted cost) (annualised cost) by 2021) (€/t)

Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2

4% 1 381 1 899 88 122 0,053 €/t 0,036 €/t (0,033 €/t)

8% 616 918 58 86 0,034 €/t 0,026 €/t (0,022 €/t)

12% 306 487 39 62 0,023 €/t 0,019 €/t (0,015 €/t)

To get a feeling for its magnitude, we spread the resulting cost figure (negative net present value) over 25 years by calculating the corresponding annuity and divide this annuity by the tonnes of DEHP reduced per year. For scenario 1 we calculate 2 figures, one based on the reduction of DEHP by 2015 and one based on the reduction by 2021.

In the following, we compare the unit costs of measure type 1 (End of pipe treatment at processing site) to the unit costs of measure type 2 (Substitution of DEHP) for both scenarios. By doing this, we account for the fact that measure 2 results in much higher annual emission reductions than measure 1. (Please refer to section 4.4 of the annexes for details.) From the results in Table 6.4 .1 and Table 6.4 .2 we can conclude that substitution of DEHP is a far more cost effective measure for the PVC conversion than applying end -of -pipe treatments such as GAC.

The cost for substitution may t urn out to become even lower as price for substitutes will lower when market demand increases and/or other cheaper alternatives are developed. Additional benefit of

59 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive substitution is that no measures are required at UWWTP’s for removal of DEHP coming from re leases during use phase.

Strong decrease of DEHP consumption will also have an effect on the organic chemical industry, where DEHP is produced. However, substitutes are also organic chemicals and most probably with higher added values. Some substitutes (DINP, DIDP , DINCH) can be produced by the same installations as DEHP with only minor adjustments. The use of these substitutes does lead to a higher level of protection to man and the environment. The final risk assessments for DINP indicates that there is no need for further risk reduction measures beyond those which are being applied already for both man (occupational, consumer and combined exposure) and the environment. For DIDP there is no need for further risk reduction measures beyond those which ar e being applied already for both man (occupational exposure) and the environment. There is some concern for DIDP for consumer and combined exposure for babies and infants when DIDP is used as a plasticizer in toys. For other substitutes, new installations will have to be built which can lead to a shift of production from one company to another.

6.4.3 Summary

For the PVC conversion industry, two different measures have been taken under consideration, end of pipe treatment at processing site and substitution of DEH P. Effectiveness of both measures cannot be compared. At production site, an efficient removal of DEHP can be achieved while substitution does also prevent later emission in the use phase (which is significantly higher). When comparing both measures in the PVC conversion industry, the net present values and annuities are about 25% lower for the end of pipe treatment than substitution , although potential marketing and use restrictions in the baseline may reduce the relative attractiveness of end of pipe meas ures. Anyway, s ubstitution of DEHP is a far more cost effective measure when using the cost per tonne DEHP reduced instead of cost per tonne produced.

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6.5 REFINERIES

6.5.1 Scenarios

In the following, the scenarios that have been investigated are described in gene ral terms. Specific details of the sector profile, discharges of relevant pollutants, reduction measures, associated costs and of the scenario construction are given in Annex 5.

In the baseline scenario , all refineries implement BAT measures, i.e. API + DA F (American Petro leum Institute Separator + Diss olved Air Flotation) or a similar level of treatment. The baseline scenario is assumed to be met even without the proposal. To assess the impact of the proposal, the costs of scenarios one and two are calculated relative to the baseline scenario. In other words, the baseline scenario serves as a zero cost baseline, which does not imply that in reality there are no costs associated with it. Rather, this implies that the costs incurred in the baseline scenario are unrelated to the proposal.

Scenario 1 is constructed to reduce relevant PS (benzene) emissions by 50% until 2015 and by 80% until 2021. Scenario 2 is based on community -wide emission limit values for benzene to be reached by 2015 .

6.5.2 Economic assessment

To calculate the direct cost to refineries in terms of the net present values of scenarios 1 and 2 for this case, some further assumptions have to be made. These assumptions concern the technical lifetime of the equipment and the discount rate.

We assume a technical lifetime of the treatment equipment of 25 years. As two different technologies are in line with scenario 1, the least cost option is determined by calculating the net present value for the 25 year time horizon. This calculation was made for the average -sized refinery in EU15 and in the new member states. Due to considerable economies of scale for MPPEs (Macro Porous Polymer Extraction Units ), the least cost option for the larger average EU15 refinery is MPPE, while the average refinery in the new member states is found to choose UF + RO (Ultrafiltration + Reverse Osmosis Unit) . We assume that the choice of the average plants applies to the respective region as a whole. Although this is unlikely to be the case in reality, a mix of MPPE and UF + RO technologies can indeed be expected due to size differences for EU25 as a whole. Sludge treatment and disposal cost when applying UF + RO technologies have not been accounted for.

To calculate the net present value for each scenario, we consider the investment costs in 2015 and, if applicable, 2021, and operational costs over the first 25 years after the respective investment. The operational costs include partial retrofits, but replacements after the end of the technical lifetime are not considered. If the refinery still operates after that, our assumption implies that any new investments in treatment equipment at that time can no longer be attributed to the current proposal. The cash flow for all measures that are associated with a scenario is discounted to 2005.

To get a feeling for its magnitude, we spread the resulting cost figure (negative net present value) over 25 years by calculating the corresponding annuity and divide this annuity by the tonnes of crude oil processed per year. Although refining cap acities may slightly decrease in the future, it is a justifiable assumption to base this calculation on a constant capacity of 798 Mt/year, 755 Mt/year in EU25 (Concawe 4/04) and 43 Mt/year in the new member states. Assuming an average utilisation rate of 90%, this results in 718 Mt/year of crude oil processed in EU25.

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Table 6.5.1: Direct costs to the refining industry

Discount Negative net present value Annuity ove r 25 years Cost per tonne of crude oil rate (million Euros) (million Euros) processed (total discounted cost) (annualised cost) Scenario 1 Scenario 2 Scenario 1 Scenario 2 Scenario 1 Scenario 2 4% 4872 14138 312 905 0.43 €/t 1.26 €/t 8% 2187 7147 205 669 0.29 €/t 0.93 €/t 12% 1084 3981 138 502 0.19 €/t 0.70 €/t

The negative net present values of the two scenarios are impressive in absolute terms. Using the 4% discount rate that is required for impact assessments, the direct cost of scenario 1 amounts to 4.9 billion Euros and for scenario 2 it i s 14.1 billion Euros. As this is a major industry, the figures per tonne of crude oil processed look much less dramatic. Especially if compared to the fluctuations in crude oil prices and to the level of taxation of some of the major products, the specific incremental cost of the assumed measures does not appear to be particularly high. This can be illustrated by referring to the incremental cost per litre of gasoline or diesel. Using the conversion efficiencies given in a study prepared by Purvin & Gertz f or DG Environment (Birch/Ulivieri 2000), a tonne of crude oil yields about 365 l of gasoline or 253 l of diesel. Assuming that refineries can fully pass on the costs to the fuel users, price increases for these fuels would have to be expected in the order of magnitude given in Table 6.5 .2.

Table 6.5.2: Price increase for gasoline and diesel due to the reduction scenarios

Discount Scenario 1 Scenario 2 rate Gasoline Diesel Gasoline Diesel 4% 0.12 Eurocent/l 0.17 Eurocent/l 0.35 Eurocent/l 0.50 Eurocent/l 8% 0.08 Eurocent/l 0.11 Eurocent/l 0.25 Eurocent/l 0.37 Eurocent/l 12% 0.05 Eurocent/l 0.08 Eurocent/l 0.19 Eurocent/l 0.28 Eurocent/l

According to these figures, scenario 1 is unlikely to have any perceivable impact on fuel prices. Scenario 2 may result in a price increase of up to half a Eurocent per liter, although it should be said that industry is unlikely to use discount rates as low as 4%. If the benefits of the reduction of r elevant PS are high, even the price increase in scenario 2 may be justifiable. What is more, other firms profit from providing and setting up the treatment equipment, and operation and maintenance of the treatment equipment generates employment.

The assum ption that refineries can pass on most of the cost burden is quite realistic: Fuel demand is known to be rather inelastic in the short - and medium -term. High fixed costs and market power in the refineries sector imply a flat supply curve. In such a market, the cost burden is likely to affect mostly downstream users and to a lesser extent the profits in the refineries sector itself. As markets for refined petroleum products rely on the existing regional distribution systems, relocation of refineries as a rea ction to the proposal is not an issue and employment in the refining industry is unlikely to be affected.

Regarding downstream users, the products are mostly used for combustion, e.g. for transportation and heating. Combustion fuels include, next to gasol ine and diesel, mostly jet fuels and heating oil. Other refinery products are used for lubrication and as petrochemical feedstock. Increases in prices for refinery products affect the whole economy, with transportation being vital to many sectors and impor tant also in private consumption.

Thus, increases in fuel prices are a major political issue. Governments have, however, sufficient medium - term flexibility in tax rates to compensate for the foreseen price increase if they perceive it as

62 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive inacceptable. Dep ending on the tax policy of the respective member state, the additional cost may affect the public budget or fuel users. In the first case, magnitude and distribution of the negative economic impact depend on so many aspects of public budgeting that a deta iled conclusion cannot be given. In the latter case, low income groups are affected more than high income groups as they tend to spend a larger share of their income on fuels. On the other hand, it should be noted that some view higher fuel prices as neces sary to curb greenhouse gas emissions.

6.5.3 Summary

The absolute direct cost numbers of both scenarios are high . Despite this, the measures are likely to have only minor effect s on profit margins or employment at refineries, as refineries are able to pass on most of the cost burden to downstream users. The resulting increase in fuel prices is almost negligible for scenario 1, but may be between 0.2 and 0.5 Eurocent per liter for scenario 2, resulting in negative impacts on downstream users, notably on transport ation and the users of transportation services. The distributional effect of such a price increase is potentially regressive, provided that it is not compensated through tax rate adjustments. The negative impacts associated with the price increase are part ly compensated by the investment impulse due to the installation of the treatment equipment as well as possibly by the employment associated with maintenance and operation of that equipment.

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6.6 SHORT CHAIN CHLORINA TED PARAFFINS (C 10 -C13 -CHLOROALKANES)

6.6.1 Scen arios

The baseline scenario comprises the implementation of measure 2002/45/EC. This measure states that short -chain chlorinated paraffin’s (SCCPs) may not be placed on the market for use as substances or as constituents of other substances or preparati ons in concentrations higher than 1 %:

- in metalworking fluids;

- in fat liquoring agents for leather processing.

As the baseline scenario, also called scenario 0, is assumed to be achieved even without the proposal, we do not calculate the cost of it. We are only interested in calculating the incremental costs that have to be made in order to achieve the requirements of the two other scenarios. In other words, scenario 0 serves as a zero cost baseline.

Scenario 1 comprises two stages to reduce and ultimately phase out direct SCCP discharges to water. In a first phase, a 50% reduction of SCCP releases to the environment has to be achieved by 2015 in SCCP production, leather processing and metalworking (these three industries being the ones directly releas ing SCCP to water). Secondly, a complete phase-out of the direct SCCP discharges to water has to occur for the same three sectors at latest by 2025.

The more stringent scenario 2 imposes a complete phase out of all SCCP discharges and releases to all medi a by 2015. This means a complete phase out of SCCP production and a global SCCP substitution in fat liquoring agents for leather processing, in lubricants for metalworking, in flame retardants in textile and rubber industry and in plasticizers in paints, sealants and adhesives.

Impacts of Directive 2002/45/EC have been accounted for and calculated costs in Scenarios 1 and 2 are based on the assumption that all fluids used still contain some SCCP (although in concentrations < 1%). The limit of 1% of SCCP ha s been introduced in 2002/45/EC because the MCCP and LCCP, that are often used as substitutes for SCCP, might contain some SCCP as an impurity. It is not clear whether 2002/45/EC will lead to a shift towards MCCP and LCCP containing fluids or towards CCP -free fluids. If the latter holds true, than no additional measures will be required for Scenarios 1 and 2 for the metalworking and leather processing industries .

6.6.2 Economic assessment

Applications for SCCPs range from extreme pressure additives in metalworkin g fluids, to fat liquoring agents in leather finishing, secondary plasticizers in paints and plastics, and flame retardants in rubber and various plastics and textiles. The major European user of SCCPs is the metalworking industry while the European leathe r processing is only a minor user.

According to Eurochlor, SCCPs are produced in three Member States: Italy, the UK and the Slovak Republic. Lacking figures of production in the new Member States and based on figures of Italian and British plants, the EU -25 SCCP production in 2003 can be estimated to be 11.3 KT, with 1,725 KT placed on the EU market (15.2% of production). There are unfortunately no data available on imports. However,

64 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive as SCCP use is expected to decrease further in time, given the general mo ve away from SCCP -use over the few last yeas, this may partially level out the underestimation of future SCCP use.

In a first step, the direct costs of scenarios 1 and 2 are obtained by calculating the negative net present value of costs related to measure s. To calculate the net present value of each scenario, we consider investment costs if applicable and operational costs over a 25 -years period after the implementation date of the measure.

To perform the calculations, some assumptions have to be made . 1. Substitution of SCCPs by MCCP and LCCP is possible for all applications. As these three chemicals are produced with the same equipment, the costs related to the termination of SCCP production can be estimated to be low for the SCCP manufactures as they are likely to shift into the production of alternative products. Since those substitution costs are so low, we are not considering any cost resulting out of the termination of SCCP production. However, it has to be stressed that MCCP and LCCP have very similar properties as SCCP and are likely to have very similar environmental effects. The draft risk assessment of MCCP indicates the same concerns for the same type of applications as the final risk assessment of SCCP. 2. In case of the metalworking and leather pro cessing industry, production figures are only available for three Member States (Germany, Italy and The United Kingdom) and EU -15 respectively. To obtain an EU -25 output figure, we extrapolate the available data on the basis of GDP. Although this is a very rough extrapolation, we consider other approaches more distorting due to lack of relevant and/or reliable data. 3. There has been a general trend away from the use of SCCPs over the last decade, enhanced by voluntary actions and international agreements. Th is has lead to an important decrease of SCCP use over the last years. Although a further reduction is most probable even without implementing the Proposal, the pace at which the decrease has occured since 1998 is exceptional. Extrapolating this tempo to th e future would obviously lead to unacceptable underestimation of cost. But due to the lack of reliable estimates, we assume for the sake of simplicity a future constant production and utilisation level, acknowledging a potential overestimation of costs. 4. We take into account the cost of substitution in the first 25 years after its implementation. As in the other cases, we regard any costs after that time as unrelated to the Proposal. 5. The use of a 4% discount rate is recommended for impact assessments. Sinc e industries usually expect to reach an internal rate of return that is at least as high as for alternative projects in the same risk category, we also show the results for two alternative discount rates: 8% and 12%.

Table 6.6.1: Aggregate direct costs in EU -25 due to a ban on SCCP use (million Euros)

Discount rate Negative net present value (million Euros) Annuity over 25 years (million Euros) (total discounted cost) (annualised cost) Scenario 1 Scenario 2 Scenario 1 Scenario 2 4% 2 047 2 449 131 157 8% 870 1 192 81 112 12% 416 631 53 80

Regarding scenario 1, companies have the choice to apply different measures. Companies adopt the least cost response to the imposition of a 50% reduction in emissions for the period 2015 -2020. We performed an optimisation in order to find this least cost option. We minimised the total cost, which is expressed in the negative net present value of the scenario, under the constraint of relevant emission limit. The result

65 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive of the optimisation indicates that producers will (partially) stop producing SCCPs and users will switch to alternative fluids in scenario 1, rather than facing increased disposal costs.

Using the 4% discount rate that is required for impact assessments, th e direct cost of scenario 1 amounts to 2 billion Euros and for scenario 2 to 2.5 billion Euros. Higher discount rates, as they may actually be used by industry, lead to much lower total cost figures. To get an annual incremental cost figure, we spread the cost figure s (negative net present value) over 25 years by calculating the corresponding annuities . As phasing out SCCP does not significantly affect producers, we do not need to take the latter in our next analysis. The incremental direct costs have to be borne by the several SCCP -users. The annual incremental cost of 131 million Euros in scenario 1 (at a 4% discount rate) is charged to the metal and leather industry. In scenario two, the incremental direct cost is spread over leather processing, metalwork ing, sealants and adhesives, and textile and rubber industries and amounts to 157million Euro (at a 4% discount rate) .

As the cost figure in table 1 are aggregate numbers, we performed a cost analysis per relevant sub - sector (i.e. calculating the direct c ost of a SCCP -ban to the different sub -sectors separately). This analysis revealed that the direct 10 cost to the EU -25 metalworking industry accounts for more than 90% of the aggregated direct cost, since metalworkers are the biggest user of SCCP. This resu lt underpins the conclusion of Reynolds and Moore that there are no indications that tanners would be particularly bad affected by SCCP use reductions. The relatively small differences between scenario 1 and 2, also indicates that the effect on adhesives, sealants, paints, textile and rubber industries are relatively low. However, those effects could greatly vary among different Member States, as results of past substitution efforts.

We thus narrow our analysis to the European metalworking industry and lea ve out the other SCCP -users. After having obtained the direct cost to the metalworking industry, we will relate this to general information about the European metalworking industry. Being confronted with a considerable information gap for the sector profile of the new Member States, we opt to do the next analysis on EU -15 level.

Table 6.6.2: Direct costs to the EU -15 metalworking industry due to a ban on SCCP use (million Euros)

Discount rate Negative net pres ent value (million Euros) Annuity over 25 years (million Euros) (total discounted cost) (annualised cost) Scenario 1 Scenario 2 Scenario 1 Scenario 2 4% 1 944 2 320 124 149 8% 826 1 129 77 106 12% 395 598 50 76

A ban on the use of SCCP -based metalwor king fluids will oblige metalworkers to switch to alternative and more expensive lubricants. Since the metalworking industry is spread over a large number of companies , it will be difficult for most companies to pass on any increases in cost to secondary industries (with the exception of specialised processes provided only by a few metalworkers). There may be impacts at the firm level. The impact will clearly be stronger on small to medium sized metalworkers as they rely on a smaller product range and oper ate on tighter margins compared to larger firms. In principle, this could result in job losses in such small metalworking companies. Nevertheless, the changes required by both scenarios relate to a minor input of the production. Moreover, the metalworking sector has already moved away from SCCPs to a great extent and many metalworkers do not use SCCP -containing fluids

1 Although entering the debate, we want to note that subsitution of SCCP by MCCPs and LCCPs may not necessarily deliver any better outcomes for the environment.

66 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive anymore. So, across the sector as a whole, we expect any market shares lost by one company to be taken over by another company and that overa ll levels of employment will remain unaffected. Overall, it can be concluded that the economic impacts of introducing use restrictions to all links in the chain of trade would be very low.

However, one should additionally draw the attention to the fact th at a SCCP ban will affect the metalworking industry in some EU countries to a greater extent than in others, as some countries have already imposed stricter SCCP restrictions.

6.6.3 Summary

The three large firms producing SCCPs are not affected negatively in th e scenario when a ban is imposed on SCCP. They are likely to shift into the production of alternative products without experiencing any considerable negative effects. Scenarios 1 and 2 should pose only minor problems to leather processing, sealants and adh esives, and textile and rubber industries. The metalworking industry faces impressive incremental cost under both scenarios, as it is the main SCCP -user. However, SCCPs affect only a minor input of production and there are only few obstacles to substitution. Furthermore, metalworkers represent a very large number of companies, which have already banned to a great extent SCCPs out of their activities. So, overall effects on profits and employment are expected to be low or even negligible. 11

2. Reynolds, L. and Moore, L., 1997, Risk & Policy Analysts Limited, R isk Reduction Strategy on the Use of Short Chain Chlorinated Paraffins in Leather Processing, Risk & Policy Analysts Limited, Final Report.

3. To give an idea about the number of metalworkers, there are around 50,000 companies using metalworking fluids in the UK. (RPA. Risk -Benefit Analysis on the Use of Short-Chain Length Chlorinated in Cutting Fluids in the Metalworking Industry commissioned by UK Department of the Environment. 1997).

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6.7 PRODUCTION & FORMULATION PESTICIDES

6.7.1 Introduction

Due to the large data -gap with regard to the number of facilities operating in Europe with regard to the production & formulation of pesticides, the state of implementation of measures for reducing losses & discharges and t he cost of additional measures to be taken, the best way forward for assessing the economic impacts with regard to this sector is by transferring results from similar studies in the United States. The US study aimed at identifying the best of measures (em ission limit values or zero discharge option) providing maximum reduction of discharge without leading to excessive costs.

Due to the approach of a ‘transfer of results’, the definition of scenarios is not straightforward in this case.

For pesticide manu facturing, the baseline scenario 0 is linked to the IPPC Directive , as a BREF document for organic fine chemicals, including active ingredient synthesis, is currently under development. Pesticide formulation, packaging and repackaging plants do not fall u nder the IPPC Directive unless these activities take place in the same plant as active ingredient synthesis. The pesticide active ingredients considered are regulated by the daughter directives of 76/464/EEC. Directive 91/414/EEC only covers the use phase of active ingredients and has no direct influence on the emissions of production plants (although a ban on the use might result in the closure of production of production and formulation plants and hence of the emissions related to these activities).

The US ‘emission limit value’ scenario is similar to scenario 2 in this study for the PS.

The US ‘zero discharge’ scenario resembles both scenarios in this study for the PHS, although the timeframes set in the US study are different.

ECPA has stated that rel eases from production sites are very small but did not submit any quantitative data. Individual companies provided data on the discharge levels of chlorpyrifos and trifluralin production. In a UK production site, chlorpyrifos levels in treated wastewater are well below the 3 µg/l emission limit value. No further data on total quantities released or on total quantity of wastewater produced have been provided. In an Italian production site, the emission limit value for trifluralin is set at 50 µg/l but ef fluent concentrations never exceed 10 µg/l. Total quantity of trifluralin discharged to water from this production facility amounts to 2,9 kg of trifluralin per year. No data are provided on production capacity or on total amount of wastewater. These fe w data indicate indeed that emission concentrations are low and total quantities released can also be expected to be very small.

6.7.2 Literature review and analysis

In the beginning of the 1990’s, the US EPA was developing new legislation targeting a reduction of the discharge of active ingredients to water from both pesticide manufacturing (active ingredient synthesis) and pesticide formulation, packaging and repackaging (Tudor, 1992 and Tudor, 1994). The aim was to come to a reduction of the discharge of act ive ingredients in the watercourses by point sources. A total of 272 active ingredients were targeted with this new legislation. Two possible ways to reach this reduction were taken into consideration : • Emission limit value option : Imposing stringent em ission limit values for point sources; • Zero discharge option : No discharge of those active ingredients from point sources.

For reaching the emission limit values, side streams were treated using technologies like activated carbon, hydrolysis, chemical oxi dation, membrane filtration, … and combinations thereof. For the zero ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive discharge option, the only possibility was to store the wastewater containing active ingredients and either reuse it or dispose it off -site by incineration. In practice, reuse was only possible in pesticide formulation, where the rinsing water of the production of one batch could be reused for the production of the following batch of the same product.

Some 90 facilities were active in pesticide manufacturing , employing some 9.990 people in the US. The number of employees are the ones directly connected to pesticide manufacturing as most pesticide manufacturing facilities are integrated in fine chemical complexes where also other organic fine chemicals are produced. The total annualised cost and the effects on employment and facility closure are given below for both options :

Total annualised cost Loss of employment Facilities closed US$/year (1986) FTE Emission limit value option 20.670.000 111 0 Zero discharge option 5.334.600.00 0 7.912 27

Some 2600 facilities were active in pesticide formulation , packaging and repackaging in the US. Only some 578 of them had a discharge to water that could contain active ingredient and were affected by the proposed legislation. In these 578 f acilities, some 10.288 employees were directly connected to pesticide formulation, packaging and repackaging. The total annualised cost and the effects on employment and facility closure are given below for both options :

Total annualised cost Loss of em ployment Facilities closed US$/year (1988) FTE Emission limit value option 32.600.000 437 9 Zero discharge option 27.900.000 426 1

It can be seen that the effect of the proposed legislation is the largest for the pesticide manufacturing industry, wh ere the zero discharge option has a very significant economic impact, leading to the closure of almost 1/3 of the facilities and to the unemployment of over 70% of all employees in the sector. On the contrary, for the pesticide formulation industry, the z ero discharge option turns out to be the preferred option because of the possibility for (and cost reduction associated with) reuse of rinsing water. If reuse of this rinsing water should not be possible and this water should also have to be destroyed by incineration, total costs would amount to 360.200.000 US$/year and would incur a loss of some 1173 jobs.

6.7.3 Transfer

The US study considered 272 active ingredients , while in this case only 10 active ingredients (of which some are already banned under Directi ve 91/414/EEC) are of concern , which implies that the associated cost levels may be significantly lower. Despite this , some of the conclusions can be transferred to this study: • Costs associated with a phase out of discharge of active ingredients, designate d as priority hazardous substance and that are still produced in the EU, can be significant for the production facilities in question. In case the active ingredient under consideration faces a ban under Directive 91/414/EEC, production may cease totally up on disappearance of the EU market. In the latter case, costs associated with the closure of these production plants can not be attributed to this proposal but should be attributed to the ban on use under 91/414/EEC. ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

• Costs associated with a phase out of discharge of active ingredients, designated as priority hazardous substance and that are still formulated in the EU, are acceptable if the reuse option for the rinsing water is used. • Costs associated with a progressive reduction of the discharge of active ingredients, designated as priority substances, are acceptable for both the pesticide manufacturing and the pesticide formulation industry.

An overview of the potential economic impacts of the progressive reduction of the discharge of priority substances and the phase out for priority hazardous substances is given in Table 6.7 .1:

Cases lation facilities lation facilities - - out of discharges is - ficant economic impact oductionand formulation of without incurring significant costs. Ban on use under 91/414/EEC is likely to have larger influence without incurring significant costs. No information concerning formulation facilities EU25. in production/ Ban on use under 91/414/EEC is likely to have larger influence Economic impact Progressive reduction of discharge by point sourcesproduction and formu is possible for Option I : Progressive discharge by point reduction sources is possible of for production facilities without incurring significant and costs. Ban on use formulation is more likely to have signi than discharge. progressive reduction Option II : Phase of likely to incur significant costs for the production site. Ban 91/414/EEC on is likely to lead use to closure under the productionof facility. Progressive reduction of discharge by point sources production and formu is possible for Option I : Progressive discharge by point reduction sources is possible of

Directive 91/414/EEC Decision pending Ban on use protection as plant 91/414 product Ban on use Decision pending the US ta available pesticides

Use in in Use formulation da No Formulation sites France in Netherlands and some 2000 where tonnes The of active imported from are used ingredient dataNo available dataNo available

specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water

Production Production volume tonnes/year 1000 over No data production sites on number of Production volume tonnes/year 1000 over 1 production site producing tonnes/year >50 in Italy dataNo available 2 production sites EU25 in (Denmark the and UK), substance

Designation under ofArt. the 16 WFD Priority substance Priority review under Option I> PS : Option II:> PHS Priority substance Priority substance Potential : economic impacts of the progressivereduction ofPS and the phaseout of PHSin pr the

Assessing economic impacts of the - .1 6.7 nvinphos Table

ECOLAS 03/07767/DL Directive Framework Alachlor Atrazine Chlorfe Chlorpyrifos Cases mulation ve more ave more ha h to to ity. cant costs for the out of discharges is out of discharges is out of discharges is - - - for for production facilities without incurring significant and costs. If ban on use is installed, this formulation measure is likely tosignificant economic progressive reduction of discharge. impact than Option II : Phase likely to incur significant costs for the production site. Ban 91/414/EEC on is likely to lead use to closure under the productionof facil Option I : Progressive discharge by point reduction sources is possible of for production facilities without incurring significant and costs. If ban on use is installed, this for measure is likely to significant to have economic more progressive reduction of discharge. impact than Option II : Phase likely to incur signifi production site. Ban on 91/414/EEC is likely to lead use to closure under the productionof facility. Option I : Progressive discharge by point reduction sources is possible of for production facilities without incurring significant and costs. If ban on use is installed, this formulation measure is likely to Economic impact significant economic progressive reduction of discharge. impact than Option II : Phase

Directive 91/414/EEC Decision pending Decision pending

Use in in Use formulation dataNo available dataNo available – s/year

specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water es/year 3000 3000 producing company EU25 in tonnes/year, 1 1 production site (Germany) in producing EU25 5000 tonn Production producing some tonne 4000 3000 Priority substance review under Option I> PS : Option II:> PHS Priority substance review under Option I> PS : Option II:> PHS Designation under of Art. the 16 WFD review under Option I> PS : Option II:> PHS

Assessing economic impacts of the -

ECOLAS 03/07767/DL Directive Framework Diuron Endosulfan Cases nificant have more have more on on use under to to lity. out of discharges is out of discharges is - - economic impact than Option I : Progressive discharge by point reduction sources is possible of for production facilities without incurring sig and costs. If ban on use is installed, this formulation measure is likely tosignificant economic progressive reduction of discharge. impact than Option II : Phase likely to incur significant costs for the production site. Ban 91/414/EEC is likely to lead to closure the productionof facility. No No effects as substance is no longer produced in EU25. Option I : Progressive discharge by point reduction sources is possible of for production facilities without incurring significant and costs. If ban on use is installed, this formulation measure is likely to significant progressive reduction of discharge. Option II : Phase likely to incur significant costs for the production site. Ban on 91/414/EEC is likely to lead use to closure under the productionof facility. Economic impact likely to incur significant costs for the production site. Ban on 91/414/EEC is likely to lead use to closure under the productionof faci restricted use – Annex Annex I allowed Decision pending Directive 91/414/EEC Ban on use from2007 used Formulation sites are likely ingredient as imported the from US is active also Use in in Use formulation Most substance likely produced and is still as g 300 tonnes/year

specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water

Production longerNo produced 1 production site producin in Italy 2 production sites (ItalyEU25 and Hungary) in the

Designation under of Art. the 16 WFD Priority substance Priority review under substance Option I> PS : Option II:> PHS Priority review under substance Option I> PS : Option II:> PHS

Assessing economic impacts of the -

ECOLAS 03/07767/DL Directive Framework Isoproturon Simazine Trifluralin ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority ha zardous substances regulated under Article 16 of the Water Framework Directive

6.8 USE OF PLANT PROTECTION PRODUCTS

6.8.1 Introduction

In order to reduce the impact of the use of pesticides to the aquatic environment, measures to protect surface water should be implemented. In this case, the economic costs of such protection measures are estimated. Two ki nds of measures are distinguished: scenario A ‘measures to prevent losses of pesticides to surface waters’ and scenario B ‘measures to remove pesticides from drinking water (corresponding to an end of pipe treatment scenario for pesticide use)’. The two ty pes of measures are not meant to be comparable courses of action, since scenario B fails to take into account the damage to the aquatic environment.

The measures in scenario A shall be seen in the context of the Communication from the Commission “Towards a Thematic Strategy for the use of plant protection products”, where the need for measures to protect the pollution of surface waters from the use phase of plant protection products are included. Part of the baseline for scenario A considers the existing u se restrictions for authorised plant protection products under Directive 91/414/EC and Good agricultural practices under the Common Agricultural Practices and the Nitrates Directive (91/676/EC) as regards for instance buffer zones. For Scenario B, the baseline scenario is the “Drinking water Directive” 98/83/EC, which includes the requirement that drinking water at tap shall include < 0.1 µg/l pesticides.

Due to this baseline, the assessment made in this case study is aimed at identifying the relative but not absolute costs of the measures and assess part of the potential economic benefit of “control at source” compared to the drinking water treatment option, although it is important to point out that Scenario B does not deliver sufficient protection for a ll Water Framework Directive protection objectives, notably protection for the aquatic environment.

6.8.2 Scenario A: Measures to prevent losses of pesticides to surface waters

In order to prevent the discharge of pesticides to surface water, a number of measure s can be taken, which can be divided as follows: • Reduction of pesticide losses into surface waters by measures having an impact on land use or vegetation structure: pesticide -free buffer strips along banks of rivers and creation of vegetation shields (hedg es) to minimize wind drift of dispersed pesticides form orchards and vines; • Reduction of pesticide losses into surface waters by technical measures on spraying equipment.

6.8.2.1 Reduction of pesticide discharges into surface waters by measures having an impact on land use or vegetation structure

CREATION OF PESTICIDE -FREE BUFFER STRIPS ALONG BANKS OF RIVERS

This measure involves the creation of buffer strips along the banks by converting the agricultural land to extensive grassland or natural vegetation. To optim ize their effect, these buffer strips are preferably 10 m wide. As 10 m wide strips may be costly and not applicable in all regions (depending on the size of the agricultural parcels), 5 m wide buffer strips can be seen as an alternative, albeit with reduc ed environmental effectiveness.

This measure results in an improved water quality by minimizing the losses of pesticides into the surface waters due to direct drain off from agricultural land.

74 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority ha zardous substances regulated under Article 16 of the Water Framework Directive Positive secondary effects of this measure are improved bank s tructures and a positive effect on the landscape. Significant increase in uncropped strips to protect water courses from field operations has shown to be very beneficial for biodiversity. 12 Negative effects are reduced yields for agriculture due to the loss of usable agricultural land and possibly also due to shading.

Associated costs :

It is important to note that buffer strips are put in place also for various other reasons, such as soil erosion, nature development, maintenance of the river banks, and withi n the framework of the Nitrates Directive. For example, using buffer strips as a measure against soil erosion is common practice in hilly and mountainous areas.

According to the second report on implementation of the Nitrates Directive, 43% of the territor y is considered sensitive from the perspective of nitrates pollution and require measures to protect water courses by preventing losses from fields. Within the framework of the Nitrates Directive, buffer strips are one of the possibilities to meet the requ irements.

Given these other reasons for implementing buffer strips, it is more than difficult to quantify the share of additionally implemented buffer strips that can be attributed to the Proposal. This means that the costs of scenario A are rather uncert ain due to baseline uncertainties, especially with regard to the effects of the Nitrates Directive. It may be sensible, however, to assume that not more than 15 % of the agricultural areas along rivers could receive buffer strips as a consequence of the Pr oposal.

Estimated land surface to be purchased:

According to the information, provided by the European Environment Agency (EEA), the total river length in the EU -15 (except Greece) is 2,191,730 km. In this estimation, all rivers significant enough to be ma pped at a 1:50,000 scale are included and artificial drainage ditches are excluded. Extrapolation of this figure, based on the corresponding surface area, results in a total river length in the EU -25 of 2,586,425 km. As not all land along the banks of the river is agricultural land, the share of river length with agricultural land is calculated using the ratio of the total agricultural area to the total surface area for each member state. In that way, the total river length considered to be exposed to run o ff of pesticides from adjacent agricultural land is estimated to amount to 1,172,731 km. Withion scenario A, we consider vegetation shields – instead of buffer strips - as the measure for orchards (fruit trees) and vines (also see below). Orchards and vine s together represent about 3% of agricultural land, 13 thus further reducing the area necessary for buffers. Of the remaing 1,137,549 km, 15% – or 170,632 km – would be equipped with buffer strips according to the assumption made above. The total land surfac e to be purchased (buffer strips on both sides of the river, with a width of 10 m) thus amounts to 170,632,000 m * 10 m * 2 = 3,412,640,000 m² (or 341,264 ha).

Estimated cost of land purchase:

Assuming a purchase cost for agricultural land 14 of 1.30 €/m ², the value of this land surface corresponds to 4,436 .432 million € (or roughly 4.44 billion Euros)

12 Measuring change. Environmental Improvement on farm over 10 years dem onstrated by analysis of the LEAF (Linking Environment and Farming) Audit Data. A report produced by LEAF for the Crop Protection Association.

13 Based on somewhat incomplete data for EU15 (2001) , see DG for Agriculture (http://europa.eu.int/comm/agriculture/agrista/2003/table_en/35221all.pdf ) . It is assumed that the shares in total agricultural land also reflect the shares in the areas that are relevant for this meas ure.

14 Purchase14 price of agricultural land: ≈ 1.30 €/m ² (range up to 4.00 €/m ²) (Interwies et al., 2004).

75 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority ha zardous substances regulated under Article 16 of the Water Framework Directive The purchasing cost can be seen as an approximation of the net present value of the agricultural yield that could be achieved on that respecti ve land in the future if it was still used for that purpose. However, measures of the Common Agricultural Policy (CAP) may compensate the creation of buffer strips. Due to the mid-term review 2003, a new set of rules is being applied for compensation under CAP, coming into force in 2005. One of the main differences is that compensation is decoupled from the type of culture. Compensation is also depending on historical rights. This means that the compensation may vary widely from one agricultural region to a nother. Applying buffer strips could make use of compensation which in general terms will vary between 0,035 €/year.m2 (fallow supplement with a minimum width of 10m – for all member states) and 0,06 up to 0,13 €/year.m2 (buffer strips with a minimum width of 5m and complementing measures for sustaining the buffer strip – will vary from member state to member state). A large part of the measure buffer strips can thus be compensated.

Example alternative :

The purchasing cost can be reduced by implementing buffer strips with a reduced width. 5 m wide buffer strips, e.g. would cut the cost in half, to approximately 2.2 billion Euros. However, the environmental effectiveness of the measure would also be reduced, which is why the 10 m option has been considere d as part of scenario A.

In general, the cost depends very much on the price of the land to be purchased, on the size of the watercourses to be included (especially in the baseline assumptions), on the desired width of the buffer strips , and the compensation a farmer may get under the CAP measures .

CREATION OF VEGETATIO N SHIELDS (HEDGES ) AS A MITIGATION MEA SURE

For some agricultural activities, notably for orchards and vines, it is more effective to plant shrub vegetation. This will create a shielding eff ect which prevents contamination of adjacent surface waters due to aerial dispersion of pesticides sprayed on the crops. Orchards (fruit trees) and vines together represent about 3% of agricultural land. 15

Negative effects of this measure could be reduced yields for agriculture due to shading. This can be (partly) compensated by the positive effect of the hedges on climatic factors (improvement of microclimate due to wind braking, extending far into the field).

Associated costs :

- Planting of hedges : 10 €/piece, 5 per linear m, resulting in 50 €/m

Total length of vegetation to be planted on both sides of the rivers in the EU -25: 1,172,731,000 m *0.03 * 2 = 70,363,860 m

Total investment cost 70,363,860 m * 50 €/m = 3,518.193 million € (or roughly 3.5 2 billion Euros)

- Maintenance of hedges : ≈ 1.60 €/m

Total annual maintenance cost: 70,363,860 m * 1,60 €/m = 112.582 million €/a

15 Based on somewhat incomplete data for EU15 (2001) , see DG for Agriculture (http://europa.eu.int/comm/agriculture/agrista/2003/table_en/35221all.pdf ) . It is assumed that the shares in total agricultural land also reflect the shares in the areas that are relevant for this measure.

76 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority ha zardous substances regulated under Article 16 of the Water Framework Directive The cost of this measure seems unreasonably high in comparison with the reduction effect (shielding surface waters from pestici des which are dispersed by the wind) that can be expected. From a pilot project in Walhain (Belgium) (Belgaqua – Phytophar, 2002), it could be concluded that wind drift of dispersed pesticides on adjacent agricultural land is only a minor cause of the load of pesticides in surface waters , the main cause still being discharges from farm yards upon filling and cleaning of spraying equipment . However, other sources still stress the importance of wind drift 16 .

6.8.2.2 Reduction of pesticide discharges into surface water s by technical measures on spraying equipment In order to reduce discharges into surface waters, appropriate technical equipment should be used, such as: • suitable and functionally reliable equipment; • loss-minimizing injector nozzles (in exchange for the fl at spray nozzles that are usually applied); • special washing stations with collection and treatment of contaminated rinsing water to clean/rinse spraying equipment; • storage of pesticides in appropriate reservoirs that are contained in impervious bunds.

Asso ciated costs : An injector nozzle designed for 90 % drift reduction costs approximately 3.60 €/nozzle. For one spraying equipment (working width of 21 m, one nozzle every 0.5 m, 42 nozzles in total), this results in a total cost of approximately 180 €. The number of spraying machinery in the EU -25 is estimated to be 300,000 (one per 600 ha of agricultural land). The replacement of the spraying nozzles thus would generate a cost of 54 million €. The installation of special washing stations with collection of contaminated rinsing water is estimated to amount 25,000 € per station, with a total number of 20,000 (assuming 1 regional washing station for every 15 farmers), thus generating a cost of 500 million €.

6.8.2.3 Total cost calculation and evaluation for scenario A

In the calculation of total costs for scenario A, we assume that 15 % of the agricultural land along rivers implement 10 m wide pesticide -free buffer strips and that hedges are applied to orchards (fruit trees) and vines, which together represent about 3% of agricultural land. 17 In addition to the buffer strips and hedges, the technical measures on spraying equipment described above are assumed to be implemented under the proposal. The costs of these technical measures are, however, dominated by the cost of the buffers and hedges. As the baseline assumptions concerning the buffers are uncertain, the total cost estimates should be interpreted with caution. Especially, it is unclear, what percentage of relevant land would receive buffer strips under the Nitrate s Directive.

The following table shows the resulting direct costs for alternative discount rate assumptions.

16 Secondhand pesticides. Airbor ne pesticide drift in California. Kegley, Katten and Moses, Californians for Pesticide Reform, Pesticide Action Network Noth America, 2003. www.panna.org/resources/envHealth.html

17 Based on so mewhat incomplete data for EU15 (2001) , see DG for Agriculture (http://europa.eu.int/comm/agriculture/agrista/2003/table_en/35221all.pdf ) . It is assumed that the sha res in total agricultural land also reflect the shares in the areas that are relevant for this measure.

77 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority ha zardous substances regulated under Article 16 of the Water Framework Directive

Table 6.8.1: Direct costs of measures to reduce discharges of pesticides into surface waters

Discount Negative net present value Annuity over 25 years Cost as a share of rate (million Euros) (million Euros) agricultural gross value added (total discounted cost) (annualised cost) at basic prices 0% 11 323 453 0.28% 4% 10 338 662 0.4 1% 8% 9 807 919 0.57% 12% 9 498 1 211 0.75 %

Displaying the annuity cost as a share of agricultural value added gives a good idea of its magnitude. Although the cost remains below 1 % of value added for all discount rates, the cost can be regarded as co nsiderable.

Taking the significant reduction effect on discharges of pesticides into surface waters into account, the cost of special equipment (loss-minimizing nozzles of spraying equipment, special washing station) seems feasible (estimated investment cost: 554 million € in the EU -25).

Regarding the measure ‘creation of buffer strips along river banks’, it may be an option to differentiate the implementation and the width of the buffer according to the characteristics of the area (such as current concentrati ons and ecological value). The measure could have not only a minimizing effect on the direct drain off of pesticides into the adjacent surface water, but also the natural vegetation developing on the buffer strips can have a shielding effect regarding to w ind drift of dispersed pesticides, can contribute to the improvement of bank structures and can have a positive effect on the landscape.

The cost of the measure ‘planting hedges as a vegetation shield against wind drift’ is very high, especially if the re dution effect is considered that it can be assumed to generate . As the specific costs and the environmental effectiveness vary from case to case, it may however be a cost-effective measure in some cases, T he assumption here is to only apply it to orchards and vines. It should be noted that vines, which account for roughly two thirds of the hedges assumed in this calculation are distributed very uneavenly across Europe, with about half of the countries having virtually no vines at all and the southern MS hav ing shares in total agricultural land of 3 to 6 percent.

The numbers in the table reflect the costs at the moment of implementa tion. Hence, they are not linked to the likely implementation schemes under scenarios 1 and 2 (although they can easily be applied to them). This is done for the sake of improved comparability with the end of pipe scenario B in this case study, the results of which are presented in the form of annual costs. To the same end, an annualised cost figure without discounting has been add ed to the table, which can be compared more easily with the annual costs of scenario B (see below).

6.8.3 Scenario B : Removal of pesticides from drinking water As considerable shares of groundwater and surface water resources used for the abstraction of drinkin g water are contaminated with pesticides in concentrations > 0.1 µg/l, purification treatment is required for the production of drinking water.

78 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority ha zardous substances regulated under Article 16 of the Water Framework Directive The cost of pesticide removal for the production of drinking water can be estimated as follows. In three membe r states, data on an estimation of costs for the treatment of drinking water to remove pesticides are available: • In the Netherlands, the total treatment costs to remove pesticides from drinking water in the total period 1991 – 2000 amounts 244 million € (K IWA, 2001). Taking a total amount of water abstracted for public water supply of 1,259.0 million m³ (in 2000) into account (Eurostat, 2004), this corresponds with an average cost for the removal of pesticides from drinking water of 0.019 € per m³ of drinki ng water supplied. • According to Pretty et al. (2000) (in BIPRO, 2004), the costs for water companies to remove specifically pesticides from drinking water in the United Kingdom is around 147.4 million £. Taking a total amount of water abstracted for public water supply of 7,221.2 million m³ (in 1998) into account (Eurostat, 2004), this corresponds with an average cost for the extra treatment of drinking water of 0.031 € per m³ of drinking water supplied. • In a part of Belgium, Flanders, the total treatment costs to remove pesticides from drinking water in 2001 amounts 11.6 million € (Vlaanderen, 2004). The total volume of drinking water produced in 2001 in Flanders was 347.0 million m³, which corresponds with an average cost for the removal of pesticides from drinking water of 0.033 € per m³ of drinking water supplied.

From Eureau, data on the contamination of raw water resources with pesticides in concentrations > 0.1 µg/l in a number of member states are available.

Table 6.8.2 Contamination of raw surface water resources with pesticides

Share of raw surface water being contaminated with pesticides Member State Regul arly exceeding 0,1 µg/l Exceeding 0,1 µg/l on occasion Belgium 100% 0% The Netherlands 50 % 50% Germany 0% 10% United Kingdom 77% 11,7%

The above table indicates that on average 74,7% of the raw surface water used for drinking water extraction is con taminated on occasion by pesticides in concentrations exceeding 0,1 µg/l and requires treatment.

Eurostat (2004) provides for 2002 data on the total amount of water abstracted by public water supply companies and the share of this coming from surface wate r and from ground water.

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Table 6.8.3 : Water abstracted by public water supply companies in the EU25 (2002)

Water abstracted by public water supply companies (mio m³/year) Surface water Ground water Total Belgium 258.2 471.6 729.8 Denmark 5 410.8 514 Germany 1398.2 4010.7 5409 Greece 417 444.5 861.4 Spain 4317.7 1298.7 5616.4 France 2212.4 3659.3 5871.7 Ireland 303 61 364 Italy no info no info 7980.4 Luxembourg 14.3 23.5 37.7 The Netherlands 495. 6 761.6 1257 Austria 5.5 598.8 604.3 Portugal 401 471 442 Finland 165 239 404 Sweden 471 452 923 UK 5335.9 1885.3 7221.2 Cyprus 36 3 39 Czech Republic 394.6 382.3 776.9 Estonia 39.8 26.7 66.5 Hungary 59.7 686.7 687.2 Lithuania not used 127 127 Latvia 0.4 16.8 17.1 Malta not used 17.1 20.4 Poland 795.6 1421.9 2217.5 Slovenia 100.2 109.8 210 Slovak Republic 64.2 330.5 394.7 Total 17290.3 17909.6 42792.2

If we account for the fact that on average 74,7% of the abstracted surface water requires treatment due to pesticide contamination and that the average treatment cost amounts to 0.028 €/m ³; a total cost for the treatment of the abstracted surface water in the EU 25 amounts to 362 .5 million €/annum . It should be noticed that treatment costs of surface waters in order to minimize negative effects o f elevated pesticide concentrations on aqueous ecosystems are not included in this figure.

This calculation implies that measures to prevent contamination at the source of surface waters with pesticides, which result in concentrations < 0.1 µg/l, may lead to a reduction of extra treatment costs of

80 ECOLAS Cases 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority ha zardous substances regulated under Article 16 of the Water Framework Directive 362.5 million €/a . This cost cannot be split in investment and operational costs, as only treatment costs per unit of drinking water have been provided.

6.8.4 Summary

Based on the study of BIPRO (2004) and some other data available in literature, several measures to reduce the impact of pesticides in the aquatic environment were evaluated. These measures could be grouped in two scenarios: scenario A includes different measures at source, whereas scenario B comprises an end -of -pipe treatment of surface and ground water that is abstracted to produce drinking water.

Although the costs of the measures at sources vary considerably, the costs of some measures are feasible, especially when their significant reduction effect is take n into account. This is the case for ‘loss- minimizing spraying equipment’ and to a certain extent also for the measure ‘creation of buffer strips along river banks’. For this last measure, a significant contribution in the cost can be made by the Agri - Envi ronment measures of the Common Agricultural Policy (CAP).

Some general observations should be made. The described measures induce supplementary benefits towards biodiversity, landscape and other issues. Taking a holistic perspective, the cost-efficiency o f these measures is further increased. On the other hand, additional measures taken with respect to the nitrate directive, biodiversity, soil erosion prevention, etc. will have their supplementary benefit on reducing impacts of pesticides in the aquatic en vironment. Where possible, this has been taken into account by allocating part of the costs.

Compared to the costs of the measures at source considered in scenario A, the costs of the end -of -pipe treatment technique of scenario B seem relatively low (annu al costs of € 362.5 million as compared to an annualised cost of the measures at source of € 662 million). However , the two scenarios are not directly comparable in terms of their environmental impact. Scenario B only achieves part of the protection object ives of the WFD, notably human health via drinking water, while it is not designed to mitigate the negative effects of elevated pesticide concentrations on aqueous ecosystems.

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82 ECOLAS Literature 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framew ork Directive

LITERATURE

AMADEUS data base (annual accounts).

Argus (2000), The behaviour of PVC in landfill, Report on behalf of DGXI.E.3, 88 pp.

Belgaqua – Phytofar (2002). Groenboek. 38 p.

Bio-Wise (2000), A Guide to Biological Treatment for Metalworking Fluids Disposal

BIPRO (2004), Assessing economic impacts of the specific measures to be part of the Thematic Strategy on the Sustainable Use of Pesticides.

Birch, C.H. and Ulivieri R. (2000); ULS gasoline and diesel refining study; Study prepared by Purvin & Gertz on behalf of European Commission, Directorate General ENV.3, 41 pp. + Ap pendix

Boustead, I. (2002), Eco -profiles of the European plastics industry – PVC conversion processes, 49 pp.

CIRCA Limited release of fact sheets .

Concawe (2004a), Trends in oil discharged with aqueous effluents from oil refineries in Europe - 2000 survey , Concawe Report 4/04

Concawe (2004b), Answers provided to the Ecolas Questionnaire

DG ENV.B1, Extended Impact Assessment – Proposal for groundwater daughter Directive , 18 pp.

DG ENV (2003); Final UWWT report 6/11/2003; 125 pp.

EAF(7) – 05/01/ENV , Concept paper on the control of emissions, discharges and losses of priority substances and priority hazardous substance – version 2, DG ENV.D.2

ECB (2002), European Union Risk Assessment Report Alkanes, C10 -13 , chloro, 163 pp.

ECVM (2004), http://www .ecvm.org , accessed 15/08/2004

EPER database, Available at www.eper.cec.eu.int

DG ENV (2004). Existing and future controls for priority substances under the WFD - Measures tables for the individual substances – version 3.

EuPc (2001), EuPC Economic Rep ort 2001 – The European Plastics Processing Industry in the year 2001 and beyond , 61 pp.

EU RAR (2002), Benzene , Draft Risk Assessment 13.05.2002

EU RAR (2001), Risk assessment report Bis(2 -ethylhexyl)phthalate , Final draft

Eurochlor (2004a), Answers to the Ecolas questionnaire

Eurochlor (2004b), Eurochlor’s contribution to the European Commission’s consultation document on the development of an EU Mercury Strategy

Eurochlor (2003), Chlorine industry review 2002 – 2003

83 ECOLAS Literature 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framew ork Directive Eurochlor (2001), Chlorinated Pa raffins – General Information, Toxicology and Eco -toxicology, Available at http://www.eurochlor.org/chlorparaffins/generalinfo/info.htm

European Commision (2004 ), European Steel Technology Platform, Vision 2030, Report of the Group Personalities , March 2004, p. 38. http://www.eurofer.org/publications/pdf/2004 -EUsteelTchPlat.pdf .

European Environment Agency (EEA), (2004 a) . Available on: http://reports.eea.eu.int/92 -9167 -023 -5/en/page011.html

European Environment Agency (EEA), (2004b). Available on: http://dataservice.eea.eu.int/dataservice/viewdata/viewpvt.asp

Eurostat (2004 ). Available on: http:/ /europa.eu.int/comm/eurostat/Public/datashop/print -catalogue/EN?catalogue=Eurostat

Eurostat (2003), Towards an Enlarged European Union – Key indicators on Member States and Candidate Countries

IDW (1995), Chlorparaffin -Produktion by Hoechst, Available at http://www.idw -online.de/public/pmid- 142/zeige_pm.html

IISSI (2004), About Steel.

Interwies E., Kraemer A., Kranz N., Görlach B., Dworak T., Borchardt D., Richter S., Willecke J. (2004), Grundlagen für die Auswahl der kosteneffizientesten Maßnahmenkombinationen zur Aufnahme in das Maßnahmenprogramm nach Artikel 11 der Wasserrahmenrichtlinie. Umweltbundesamt, Berlin, 250 p.

JRC (2003a), Reference Document on Best Available Technique s for the Tanning of Hides and Skins

JRC (2003b), Reference Document on Best Available Techniques in Common Waste Water and Waste Gas Treatment / Management Systems in the Chemical Sector

JRC (2003 c), Reference Document on Best Available Techniques for Mineral Oil and Gas Refineries

JRC (2001 a). Reference Document on Best Available Techniques in the Non Ferrous Metals Industries

JRC (2001 b). Reference Document on Best Available Techniques in the Production of Iron and Steel

JRC (2000), Reference Docume nt on Best Available Techniques in the Chlor -Alkali Manufacturing Industry

Kidman and Tsuji (1991 ), Preliminary cost comparison of advanced oxidation processes, Los Alamos National Laboratory Report LA -12221 -MS, 30 p.

KIWA Water Research (2001 ). Door dri nkwaterbedrijven gemaakte kosten als gevolg van bestrijdingsmiddelengebruik. Inventarisatie over de periode 1991 -2000 . 16 p.

Maasoumi, Prowse and Slottje (2002), Measuring Market Power in the Steel Industry , 25p.

Pars and Meijer (1998), Removal of dissol ved hydrocarbons from production water by Macro Porous Polymer Extraction (MPPE), Paper presented at the 1998 SPE International Conference on Health, Safety and Environment in Oil and Gas Exploration and Production – Caracas, 7-10 June 1998

PE Europe GmbH , IKP, IPU -DTU and Randa Group (2004), Life Cycle Assessment of PVC and of principal competing materials, 330 pp.

Pretty et al. (2000) (in BIPRO, 2004),

Pussemier L. (2004 ). Personal communications.

84 ECOLAS Literature 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framew ork Directive

Royal Haskoning (2003) , Fact sheets on production, use and release of priority substances in the WFD

RPA (2000a), Socio-Economic Impact of the Identification of Priority Hazardous Substances under the Water Framework Directive, Study on behalf of DG ENV, 18 pp. + Annexes

RPA (2000b), The Availability of Substitutes for Soft PVC Containing Phthalates in Certain Toys and Childcare Articles, Study in association with the Research Institute for Toxicology of the Utrecht University on behalf of DG Enterprise, 82 pp.

RPA (1997 a), Risk-Benefit Analysis on the Use of Short -Chain Length Chlorinated in Cutting Fluids in the Metalworking Industry commissioned by UK Department of the Environment.

RPA (1997 b), Risk Reduction Strategy on the Use of Short -Chain Chlorinated Paraffins in Leather Processing, Report on behalf of UK DEFRA

The Deutsche Bank (2004) , The Steel Industry: Enlargement Creates Opportunities for EU Mills, EU - Monitor Economics, January 2004, p.11 -18. http://w ww.dbresearch.de/PROD/DBR_INTERNET_EN - PROD/PROD0000000000072144.pdf .

Tudor, L.G. (1994), Economic impact analysis of proposed effluent limitation guidelines and standards for the pesticides formulation, packaging and repackaging industry, US EPA Report 821R94003

Tudor, L.G. (1992), Economic impact analysis of proposed effluent limitation guidelines and standards for the pesticides manufacturing industry , US EPA Report 821R92003

UK DEFRA (2002), Regulatory Impact Assessment – Priority List of Substances under Article 16 of the Water Framework Directive, Available at http://www.defra.gov.uk/environment/water/wfd/art16 - ria/index.htm

UK DEFRA (2001), Proposed EC Directive on the use of Short Chain Chlorinated Paraffins (SCCPs) in Metal Working and Leather Finishing – Consultation Paper – Annex C : Report on UK costs of a ban on all uses of SCCPs, Available at http://www.defra.gov.uk/environment/consult/sccp/index.htm

UK DEFRA (1999), Economic Instruments for Water Pollution Discharges, Available at http://www.defra.g ov.uk/environment/water/quality/econinst2/index.htm

Umweltbundesamt (2003), Leitfaden zur Anwendung umweltverträglicher Stoffe – Teil Fünf : Hinweise zur Substitution gefährlicher Stoffe – 5.1 Function : Weichmacher, Study by Ökopol and Fraunhofer ISI on behalf of the German Umweltbundesamt, 22 pp.

Umweltbundesamt (2002), Schwermetalleinträge in die Oberflächengewässer Deutschlands, Texte 54/2002, Available at http://www.umweltbundesamt.de/uba -info -medien/publikationsliste.htm

Lohse, J. ; Wirts, M. ; Ahrens, A. ; Heitmann, K. ; Lundie, S. ; Lissner, L. and Wagner, A. (2003); Substitution of hazardous chemicals in products and processes; Report of Ökopol on behalf of DG ENV B3, 110 pp. + Annexes

US EPA (2001), Removal of Endocrine Disruptor Chemicals using Drinking Water Treatment Processes, EPA/625/R -00/015, 20 pp.

US EPA (2000); Wastewater technology factsheet – granulated activated carbon adsorption and regeneration; EPA 832 -F-00 -017, 7 pp.

Vinyl 2010 (2001), The Voluntary Commitment of the PVC Industry , 24 pp.

Vlaanderen, 2004 , Available on: http://aps.vlaanderen.be/statistiek/cijfers/stat_cijfers_milieu.htm .

85 ECOLAS Literature 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framew ork Directive VMM (2004), http://www.vmm.be/servlet/be.coi.gw.servlet.MainServlet/standard?toDo=open&id=1271&& , accessed 15/08/2004.

Walker, M. (2004), Personal communication

WASS (2004), Waterzuiveringsselectiesysteem – Techniekbladen (Waste Water Treatment Selection System – Technical Sheets), Available at http:// www.emis.vito.be/wass/index.asp?pageChoice=Technieken

Studies that have been p rovided by the Member States • Belgium - BAT studies - RDC. Substitutie van hooggechloreerde korte keten paraffines, trichloorbenzeen, musk-xylenen, nonylfenolen, nonylfenol -ethoxylaten, gebromeerde vlamvertragers en ftalaten. - Vlaamse Milieumaatschappij (1996). Krachtlijnen voor een geïntegreerd rioleringsbeleid in Vlaanderen. Code van goede praktijk voor de aanleg van openbare riolen, individuele voorbehandelingsinstallaties en kleinschalige rioolwaterzuiveringsinstallaties • UK - RPA (2003). Regulatory Impact Asses sment for Proposed Daughter Directives Revision to Dangerous Substances Directive. Prepared for the Department for Environment, Food and Rural Affairs Water Directorate - Environment Agency (2003). Guidance for the Speciality Organic Chemicals Sector. Second draft April 2003 - Alloway et al . (1998). The vulnerability of soils to pollution by heavy metals 1995 -1997. Project OC 9325 for the Ministry of agriculture, fisheries and food. • Finland - Finnish Environment Institute (2003). Implementation of HELCOM recommen dations and EU water directives in Finland 2001. • France - DRIRE Champagne -Ardenne (23003). 1er inventaire des substances toxiques dans les rejets aqueux de 115 établissements industriels de la région Champagne -Ardenne. Résultats de la campagne 2001 - 2003 - Mini stère de l’Écologie et du Développement Durable (2004). Les substances dangereuses prioritaires de la directive cadre sur l’eau. Fiches de données technico -économiques • Germany - Bericht der Bundesrepublik Deutschland zur Durchführung der Richtlinie 76/464/EW G und Tochterrichtlinien betreffend die Verschmutzung infolge der Ableitung bestimmter gefährlicher Stoffe in die Gewässer er Gemeinschaft für den Zeitraum 1999 -2001. - Environmental Research of the Federal Ministry of the Environment, Nature conservation an d Nuclear safety (2004). Basic principles for selecting the most cost-effective combinations of measures for inclusion in the programme of measures as described in Article 11 of the Water Framework Directive. Handbook. Research Report 202 21 210. UBA -FB 00 0563/E. - OSPAR Commission (2003). Mercury losses from the chlor -alkali industry (1982 -2001). - Umwelt Bundes Amt (2004). Grundlagen für die Auswahl der kosteneffizientesten Massnahmenkombinationen zur Aufnahme in das Massnahmenprogramm nach Artikel 11 der Was serrahmenrichtlinie. - Umwelt Bundes Amt (2000). Emissionsinventar Wasser für die Bundesrepubliek Deutschland - Umwelt Bundes Amt (2002). Emissions of heavy metals and lindane into river basins in Germany

86 ECOLAS Literature 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framew ork Directive - Umwelt Bundes Amt (2002). Einsatz umweltvertäglicher Ch emikalien in der Kühlwasserkonditionierung - Umwelt Bundes Amt (1998). Investigation of emissions and abatement measures for persistent organic pollutants in the Federal Republic of Germany - Umwelt Bundes Amt (2002). Ermittlung der Quellen für die prioritären Stoffe nach Artikel 16 der Wasserrahmenrichtlinie und Abschätzung ihrer Eintragsmengen in die Gewässer in Deutschland - Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, Germany (2002). Promulgation of the new version of the ordi nance on requirements for the discharge of waste water into waters - Statistische Bundesamt (2001). Fachserie 19/Reihe 2.2: Umwelt. Wasserversorgung und Abwasserbeseitigung in der Industrie - German Federal Environmental Agency (2002). Identification of the sources of PS set out in article 16 of the WFD and estimation of their discharges into the German aquatic environment - German Federal Environmental Agency (2003). Guidance for the use of environmentally sound substances - German Federal Environmental agency (20 03). Leitfaden zur Anwendung umweltverträglicher Stoffe - Presentations from the EU Conference on Substitution of Hazardous Chemicals in Products and Processes. Hamburg 13/14 June 2002. • Italy - UNEP/MAP (2003). Assessment of transboundary pollution issues in the Mediterranean sea. - ALLEGATI AL DLGS 152/99. Così come modificati dal Dlgs del 18 agosto 2000 n. 258, secondo quanto indicato all’articolo 25. - Comitato per la vigilanza sull’uso delle risorse idriche (2003). Lo stato dei servizi idrici – Anno 2002. Secon do rapporto sulle ricognizioni disponibili al 31/12/2002, sulle opere di adduzione, distribuzione, fognatura e depurazione • Norway - Assessment of the consequences of the proposed regulation of emissions from crematoria • Portugal - Programa de Monitorização das Substâncias Perigosas (1999 -2000). • SLovenia - Identifikacija Nevarnih snovi na podrocju RS Z namenom Prprave programov Zmanjsevanja Onesnazevanja Vodnega (2003) - Operativni program preprečevanja onesnaževanja vodnega okolja z nevarnimi kloriranimi ogljikovodiki iz razpršenih virov onesnaževanja (year unknown) - Operativni Programi Zmanjsevanja Osnesnazevanja Povrsinskih Voda S Prednostnimi I Drugimi Nevarnimi Snovmi (year unknown) - ERICo Velenje, Inštitut za ekološke raziskave (2002). Raziskava Virov Zivega Srebra V Republiki Sloveniji In Studija Moznosti Za Zmanjsanje Emisij Zivega Srebra V Okolje. • The Netherlands - RIONED (2002 -2003). Riool in cijfers - Inspectorate of H ousing, Spatial Planning and the Environment (2003). Emission monitor for the Netherlands: 2000 and estimates for 2001. Report Series MilieuMonitor (Environmental monitor). - Factsheets EAF + Factsheets Prioritaire stoffen - Dutch IPPC report 2003

87 ECOLAS Literature 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framew ork Directive

Supplement ary information received from sector representatives Following information was supplementary received from the different sector representatives : • ECPA - ECPA (2002). Cost and Benefits of CPPs: Analysis of impact of a 75% reduction in CPP usage (full report ). - ECPA (2003). The cost of new agrochemical product discovery, development and registration in 1995 and 2000. A consultancy study carried out by Phillips McDougall on behalf of European Crop Protection Association and Croplife America. - ECPA (2003). Statistical Review 2002 • CEFIC (Chemical Industry) - BSEF - Bromine Science and Environmental Forum (2003). Summary Report on the Investigations on potential Decabromodiphenyl Ether (DecaBDE) emissions at 9 different plants in various European countries and estimat ion of total DecaBDE emissions in the EU - Study within a BSEF product stewardship program. • Eurelectric (Large combustion plants) - Eurelectric (2002). Environmental Statistics of the European Electricity Industry - Eurelectric (2003). Statistics and prospects for the European electricity sector (1980 -1990, 2000 -2010) - Joint Eurelectric/VGB Group "BREF LCP"(2001). BAT Reference document for large Combustion plants • Iron and steel - Amendola G.A (2003). Benchmarks for Steel Industry and Wastewater Treatment Systems. AISE Steel Technology p. 25 -35. Amendola Engineering, Inc., Westlake, Ohio. • Pesticides - Impact of Current Legislation on Industry Competitiveness and Innovation (2001). Brussels. • EUCP (Polymer manufacturing) - EUPC (2000). The plastics network - plastics con verting in Europe - EUPC (2001). Economic report - The European Plastics Processing Industry in the year 2001 and beyond - EUPC (2002). Brochure • CONCAWE (Refineries) - CONCAWE (2004). trends in oil discharged with aqueous effluents from oil refineries in europe. 2000 survey. Prepared for CONCAWE's Water Quality Management Group by its Special Task Force on the Quality of Aqueous Effluents from Oil Refineries (WQ/STF -31 • Textile industry - Ministry of industry and Trade (2003). Panorama of Czech Industry 2002. • Eureau - KIWA (2001). Door drinkwaterbedrijven gemaakte kosten als gevolg van bestrijdingsmiddelengebruik. Inventarisatie over de periode 1991 -2000. On behalf of VEWIN. - Eureau (2001). Keeping raw drinking water resources safe from pesticides. Position Paper.

88 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

ANNEXES

ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

1 QUESTIONNAIRE FOR ME MBER STATES

AIM OF THE QUESTIONN AIRE

In the framework of the Water Framework Directive (WFD), the European Commission needs to identify the appropriate cost-effective and proportionate level and combination of product and p rocess controls for both point and diffuse sources for priority substances. For the priority substances , the Commission shall submit proposals of specific measures for:

• the progressive reduction of discharges, emissions and losses of priority substances, a nd in particular

• for the priority hazardous substances: the cessation or phasing -out of discharges, emissions and losses

In this framework, ECOLAS carries out an economic impact study to identify and evaluate:

• direct costs and benefits: quantitative impact ;

• indirect costs and benefits: qualitative impact; for progressive reduction of discharges, emissions and losses of priority substances in direct discharges by point sources into surface waters or sewers and cessation or phasing -out of discharges, emission s and losses of priority hazardous substances by all sources. This impact study is performed taking into account several policy options and for the whole of Europe (Member States and Accession Countries).

By ‘Member State’ we mean those states that are mem ber of the EU on the 1st of May 2004. By Accession Countries we mean those states that are currently negotiating accession to the EU (Bulgaria and Romania).

In order to do so, we ask for the co -operation of all Member States and Accession Countries to prov ide us with available information on current emission data, activity levels, emission reduction measures and related costs. This information can consist in the form of reports, datasets, weblinks where such data are stored, or specific answers to the questions contained in the questionnaire. We are aware that Member states are in the process of compiling information on pressures and impacts and certain economic data under Article 5 of the Water Framework Directive, which are due to be reported in 2005. How ever, as some of these data and preliminary findings would be very valuable for the purpose of the economic impact assessment for the forthcoming Commission proposal on priority substances, some targeted questions are included.

Member States and Accession Countries are invited to answer the questions as far as feasible in the timeframe given. We apologize for the short time given for responses, but the urgency is due to the importance of presenting a Commission proposal under article 16 of the Water Frame work Directive in 2004.

91 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the spec ific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

CONTENT OF THE QUEST IONNAIRE 1. Contact persons 2. List of priority substances, including priority hazardous substances and priority substances under review 3. Industry sectors under consideration 4. Current emission situation 5. Emission reduct ion measures and associated costs 6. Treatment of urban wastewater 7. Current chemical status of surface waters

CONFIDENTIALITY

All information, given in the framework of this study, will be used anonymously. No information, indicated by its provider as being c onfidential, will be traceable in the final report. The information gathered will not be used for commercial aims and will be used exclusively in the framework of this study.

92 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the spec ific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

1.1 CONTACT PERSONS

Please indicate below the name and co -ordinates of the person w ho will be the key contact person for potential further questions and clarifications with regard to the provided data for your country :

NAME :

INSTITUTION :

FUNCTION :

ADRESS STREET AND NUMBER :

ZIP-CODE :

CITY :

COUNTRY :

TELEPHONE :

MOBILE :

FAX :

E-MAIL :

Please indicate below the name and coordinates of a possible back -up for the key contact person :

NAME :

INSTITUTION / COMPANY :

FUNCTION :

ADRESS STREET AND NUMBER :

ZIP-CODE :

CITY :

COUNTRY :

TELEPHONE :

MOBILE :

FAX :

E-MAIL :

93 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the spec ific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive 1.2 LIST O F PRIORITY SUBSTANCE S, INCLUDING PRIORIT Y HAZARDOUS SUBSTANCES (*) AND P RIORITY SUBSTANCES U NDER REVIEW (**)

2.1 Please identify for each priority substance whether this substance is being produced, used or discharged to water by point sources in your cou ntry. For the priority hazardous substances and priority substances under review, please specify discharge to the compartments water (specify point or non -point sources), air and soil.

Use the following signs in the table to indicate: • YES: Y • NO: N • DON ’T KNOW: ?

Nr 18 Priority substances Produced Used Discharge to water by point sources 1 Alachlor 4 Benzene 8 Chlorfenvinphos 10 1,2 -Dichlorethane 11 Dichloromethane 15 Fluoranthene 23 Nickel and its compounds 32 Trichlorometha ne (Chloroform)

Nr 18 Priority hazardous Produced Used Discharge to Release to substances (*) and priority Water Emis Soil substances under review sions (**) to Air Point Non -point sources sources 2 Anthracene (**) 3 Atrazine (**) 5 Brominated diphenylethers – Pentabromobiphenylether (*) 6 Cadmium and its compounds (*) 7 C10 -13 -chloroalkanes (*)

18 This number refers to the numbers given in Annex 10 of Directive 2000/60/EC as amended by Decision 2455/2001/EC of the European Parliament and of the Council of 20 November 2001 ‘Establishing the list of priority substances in the field of water policy and amending Directive 2000/60/EC’. In this Annex the CAS numbers are also indicated.

94 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the spec ific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

Nr 18 Priority hazardous Produced Used Discharge to Release to substances (*) and priority Water Emis Soil substances under review sions (**) to Air Point Non -point sources sources 9 Chlorpyrifos (**) 12 Di(2 -ethylhexyl)phthalate (DEHP) (** ) 13 Diuron (**) 14 Endosulfan (**) - (alpha -endosulfan) (**) 16 Hexachlorobenzene (*) 17 Hexachlorobutadiene (*) 18 Hexachlorocyclohexane (*) – (gamma -isomer, Lindane) 19 Isoproturon (**) 20 Lead and its compounds (**) 21 Mercury and its compounds (*) 22 Naphthalene (**) 24 Nonylphenols (*) - (4 -(para) -nonylphenol) (*) 25 Octylphenols (**) - (para -tert -octylphenol) (**) 26 Pentachlorobenzene (*) 27 Pentachloroph enol (**) 28 Polyaromatic hydrocarbons (*) - (Benzo(a)pyrene) - (Benzo(b)fluoranthene) - (Benzo(g,h,i)perylene) - (Benzo(k)fluoranthene) - (Ideno(1,2,3 -cd)pyrene 29 Simazine (**) 30 Tributyltin compounds (*) - (Tributy ltin-cation) 31 Trichlorobenzenes (**) 33 Trifluralin (**)

95 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the spec ific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

2.2 Some substances are currently being regulated by Directive 86/280/EEC. In order to be able to assess the impact of a possible review and repeal of the controls included in Directive 86/280/EEC, we ask you to please indicate whether the following substances are still produced and/or used in your country. Please use the same ‘symbols’ as in question 2.1.

Substances Produced Used DDT Aldrin Dieldrin Isodrin End rin Trichloroethylene (TRI) Perchloroethylene (PER) Carbon tetrachloride

96 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the spec ific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

1.3 INDUSTRY SECTORS UND ER CONSIDERATION

3.1 The following list indicates the main industrial sectors and specific (sub)sectors, being the subject of this study. Please indi cate in the following list, whether these industrial sectors deploy activities in your country (indicate the existing sectors with an ‘X’ in the last column)

Industrial sector under consideration IPPC code Activities in your country Crop protection indu stry 4.4 • Synthesis of active ingredients • Formulation of pesticides

Chemical industry • Production of large volume organic compounds 4.1 • Production of fine chemicals 4.1/4.2 • Production of fertilisers 4.3 Refineries 1.2 Chlor -alkali industry 4.2 a Metal industry • Production of iron and steel 2.1/2.2 • Production of non -ferrous metals 2.5 • Surface treatment of metals (galvanising, degreasing, …) 2.6 Pulp and paper industry 6.1 Pharmaceutical industry 4.5 Wood treatment 6.7 Waste (water) treatment and recycling 5 Drinking water production - Plastics manufacturing 4.1 Plastics converting - Textile industry 6.2 Tanning 6.3

3.2 Are you aware of any other industry sector that is responsible for the discharge of significant amounts of priority substances, including priority hazardous substances and priority substances under review? If so, please indicate (sub)sector and substances concerned.

97 ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the spec ific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

1.4 CURRENT EMISSION SIT UATION

Please take into account that we are in the ability to c onsult the EPER database. As such, it is not needed to provide us with these data. On the other hand, specifically existing information under the form of reports & data regarding non -IPPC sources and emissions under the EPER threshold19 are valuable.

4.1. Discharge TO WATER BY POINT SOURCES

Could you provide us with existing studies / data on the direct discharge to water by point sources of the priority substances including priority hazardous substances and priority substances under review for each or some of the (sub)sectors that are the subject of this study:

4.1.1 Total or average quantity of wastewater discharged for each (sub)sector – if possible as a function of company size (IPPC vs non -IPPC, cf Annex I of the IPPC Directive 96/61/EC): • Can be expr essed as a specific discharge (m³/unit of production) • Please indicate whether differences exist between IPPC companies and non - IPPC companies • Please indicate whether differences exist as a function of applied production process

4.1.2 Total quantity of wastewater directly discharged to surface water for each sector

4.1.3 Total quantity of wastewater discharged to the sewer system

4.1.4 Total quantity of wastewater undergoing treatment in a wastewater treatment plant prior to discharge

4.1.5 Disch arge of priority substances including priority hazardous substances and priority substances under review for each (sub)sector - if possible as a function of company size (IPPC and non -IPPC)

Discharge can be expressed as total quantity, concentration or spe cific discharge as a function of the production level

As an alternative for sending us available studies, please fill out the table on the next pages: • The first and second columns indicate the sectors under consideration • In the third column, please indica te, per (sub)sector, the average discharge of wastewater per year (m³/year) or the average discharge of wastewater per tonnage of production (m³/tonne) • In the following columns, please indicate the discharge of a specific substance per (sub)sector per year and the year to which the data apply.

19 See 2000/479/EC: Commission Decision of 17 July 2000 on the imple mentation of a European pollutant emission register (EPER) according to Article 15 of Council Directive 96/61/EC concerning integrated pollution prevention and control (IPPC)

(nr. 17) (nr. e

Hexachlorobutadien

(nr. 16) (nr.

Annexes Hexachlorobenzene

(nr. 15) (nr.

Fluoranthene Fluoranthene

(nr. 14) (nr.

Endosulfan

(nr. 13) (nr.

Diuron Diuron

(nr. 12) (nr.

DEHP DEHP

(nr. 11) (nr.

Dichloromethane Dichloromethane

0 10)

(nr. (nr.

hane hane Dichloroet

(nr. 9) (nr.

818

Chlorpyrifos Chlorpyrifos

)8)

818

(nr. (nr.

Chlorfenvinphos

(nr. 7) (nr.

818

Discharge (kg/yr) YEAR :______SCCP

(nr. 6) (nr. 99 818

Cd Cd

(nr. 5) (nr.

818

PBDE PBDE

(nr. 4) (nr.

818

Benzene Benzene

(nr. 3) (nr.

818

Atrazine Atrazine

(nr. 2) (nr.

818

Anthracene

(nr.1)

818 Alachlor Alachlor m³/yr or m³/tonne Wastewater discharge 2.5 2.6 4.2 6.1 4.5 4.4 4.1 4.3 1.2 6.7 IPPC code 2.1/2.2 Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water 4.1/4.2 -

Directive alkali - ECOLAS 03/07767/DL Framework ferrous - Discharged by sourcespoint to water Crop protection products Synthesis Formulation Chemical LVOC chemicalsFine Fertilisers Refineries Chlor Metal & steel Iron Non Surface treatment Pulp and paper Pharmaceutical Wood treatment

(nr. 33) (nr.

Annexes Trifluralin

(nr. 32) (nr.

Trichloromethane

(nr. 31) (nr.

Trichlorobenzenes

(nr. 30) (nr.

Tributyltin Tributyltin

(nr. 29) (nr.

Simazine

(nr. 28) (nr.

PAH

(nr. 27) (nr.

Pentachlorphenol

(nr. 26) (nr.

Pentachlorobenzene

(nr. 25) (nr.

Octylphenols

(nr. 24) (nr.

Discharge (kg/yr) YEAR : _____ Nonylphenols

(nr. 23) (nr.

18 100

i N

(nr. 22) (nr.

Naphthalene

(nr. 21) (nr.

(nr. 20) (nr.

(nr. 19) (nr.

Isoproturon

(nr. 18) (nr.

18 Hexachlorocyclohexane m³/yr or discharge m³/tonne Wastewater C - - 5 6.2 6.3 5.2 5.4 4.1 4.4 IPP code Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water -

Directive Synthesis ECOLAS 03/07767/DL Framework Formulation stics Drinking water Drinking Waste water Pla manufacturing Plastics converting Textile Tanning Waste treatment Incineration Landfill Discharged by sourcespoint to water Crop protection products Chemical Annexes 101 - - 5 4.2 4.3 1.2 6.7 4.1 6.2 6.3 2.5 2.6 4.1 6.1 4.5 5.2 5.4 4.1/4.2 Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water 2.1/2.2 -

Directive ical cals LVOC ferrous Landfill Surface - alkali Fertilisers treatment ECOLAS 03/07767/DL Framework - Iron & steel Iron Non Incineration Fine chemi Fine Refineries Chlor Metal Pulp and paper Pharmaceut Wood treatment water Drinking Waste water Plastics manufacturing Plastics converting Textile Tanning Waste treatment ECOLAS Annexes 03/07767/DL - Assessing economic impacts of the specific control measures for priority substances and priority hazardous substances regulated under Article 16 of the Water Framework Directive

4..2 Discharge TO WATER BY NON -POINT SOURCES AND TO AIR AND SOIL

Discharge of priority hazardous substances or priority substances under review to water by non -point sources and to the compartments air and soil

Could you provide us with existing studies / data on the current emission of priority hazardous substances and priority substances under review to water by non -point sources and to the compartments air 20 and soil for each o f the (sub)sectors that are the subject of this study :

4.2.1 Discharge of priority hazardous substances and priority substances under review for each (sub)sector - if possible as a function of company size (IPPC vs. non -IPPC plants) • Discharge can be e xpressed as total quantity, concentration or specific discharge as a function of the production level

20 We have access to the studies undertaken in the field of the Air Quality Daught er Directives (PAH, Pb, Hg, Cd, Benzene)

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1.5 EMISSION REDUCTION M EASURES AND ASSOCIAT ED COSTS

This chapter of the questionnaire deals with the degree of implementation or the potential to implemen t emission reduction measures and the associated cost. Please provide available data on the following topics :

5.1 What is the share of the companies in each (sub)sector that are already applying BAT -like emission reduction measures - if possible as a func tion of company size (IPPC vs. non -IPPC)

5.2 Has your country imposed emission limit values for the discharge to water by point sources of certain priority substances including priority hazardous substances and priority substances under review for some or all of the industry sectors?

5.2.1 If yes, please provide us with an overview of the applicable emission limit values for each industry sector.

5.2.2 Has a technical and/or economic study been made considering the attainability of such emission limit values for each industry sector? If yes, please provide us with a copy of such existing studies.

5.3 Possibilities for further reduction of the emission of priority substances including priority hazardous substances and priority substances under review to water by point sources include end -of -pipe measures as well as process modifications, change in use of raw materials and substitution

The study ‘Substitution of Hazardous Chemicals in Products and Processes’ (B3 - 4305/2000/293861/MAR/E1) defines ‘substitu tion’ as the replacement or reduction of hazardous substances in products and processes by less hazardous or non -hazardous substances, or by achieving an equivalent functionality via technological or organisational measures.

Have studies been made regarding the possibilities for further reduction of the discharge to water by point sources of priority substances including priority hazardous substances and priority substances under review for specific (sub)sectors and that address aspects like reduction poten tial, associated cost and economic impact? If yes, please provide us with a copy of such existing studies.

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5.4 In case your country has established or is in the process of establishing environmental quality standards for the priority substances, includ ing priority hazardous substances and priority substances under review

5.4.1 Can you provide us with an overview of the priority substances, including priority hazardous substances and priority substances under review, for which your country has set env ironmental quality standards + the applicable EQS?

5.4.2 Has an economic assessment of the impact of setting these quality standards been made? If yes, could you please provide us with the results of this economic assessment.

5.5 Have studies been made regarding the possibilities for further reduction of the discharge to water by non -point sources or the emissions to air or soil of priority hazardous substances and priority substances under review for specific (sub)sectors and that address aspects like reduction potential, associated cost, economic impact, … ? If yes, please provide us with a copy of such existing studies.21

21 We have access to the studies undertaken in the field of the Air Quality Daughter Directives (PAH, Pb, Hg, Cd, Benzene)

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1.6 TREATMENT OF URBAN W ASTE WATER

We would also like to get an overview of the current and future situation of urban wastewater t reatment and stormwater/combined sewer overflows in your country. Could you provide us with existing studies / data with regard to :

6.1 Industry connection to sewers (number of companies, total discharge by industrial sector to sewers, contribution of in dustrial discharge to total p.e. treated, …) + (if available) share of industry connected to sewer having prior pretreatment on site.

6.2 Connection rate of sewer system to UWWT plants – current situation and expected future evolution

6.3 Configuration o f UWWT plants in your country : number of plants with primary, secondary and tertiary treatment + number of p.e. connected to each type of treatment – current situation and expected future evolution

6.4 Configuration of the sewer network in your country : share of combined and separate sewer systems, connection rate of combined and separate sewers to UWWT plants – current situation and expected future evolution

6.5 Discharge of priority substances including priority hazardous substances and priority substances under review through UWWT plants in your country.

Discharge can be expressed as total quantity, concentration or specific discharge as a function of the connected p.e.

6.6 Has your country imposed emission limit values for the discharge of certain priority substances including priority hazardous substances and priority substances under review for UWWT plants?

6.6.1 If yes, please provide us with an overview of the applicable emission limit values

6.6.2 Has a technical and/or economic study been made considering the attainability of such emission limit values for each industry sector? If yes, please provide us with a copy of such studies.

6.7 Studies on average discharge through stormwater and/or combined sewer overflows on a yearly basis or sha re of wastewater from sewer systems that is discharged trough stormwater and/or combined sewer overflows.

6.8 Applicable design criteria for stormwater and combined sewer overflows : retention volume, required minimum design spill frequency, …

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1.7 CURRE NT CHEMICAL STATUS O F SURFACE WATERS

7.1 The following table shows the Annual Average Quality Standards (AAQS) in water for each priority substance, priority hazardous substance and priority substance under review (in the latest version of 010304 of the E QS datasheets available on CIRCA and currently subject to consultation of the CSTEE).

Please indicate in this table for each priority substance, priority hazardous substance and priority substance under review: - the percentage of the water bodies exceeding the AAQS indicated; - the tendency over time of the average concentration in the waterbodies in your country (increasing or decreasing); - whether the concentration is not measured (thick the ‘NM’ column); - if monitoring data are submitted to EEA (European Env ironmental Agency) or Eurowaternet please check the foreseen box (last column of the following table). In that case you do not need to fill out this table.

Nr 18 AAQS 22 Percentage Tendency of concentration NM 23 EEA / of the water in the waterbodies in your Euro - bodies country waternet exceeding AAQS µg/l Increasing Decreasing 1 Alachlor 0,25 2 Anthracene** (a) 0.063 (b) 0.0063 24 3 Atrazine** 0,6 4 Benzene 1,7 5 Brominated 1217 (octa - diphenylether bromoderivate -Pentabromo - (a) 0,0005; diphenylether* (b) 0,00018 6 Cadmium* No overall QS can be given 25 7 Chlorinated alkanes* (a) 0,41;

22 AAQS = Annual Average Quality Standard, (a) is for inland waters and (b) is for transitiona l, coastal and territorial waters

23 NM= not measured

24 AAQS as included in previous EQS datasheets of 200902. This value is likely to change shortly, as an update of the EQS datasheets is pending.

25 AAQS for Cd should not exceed 0,26 µg/l with QS = C backgr ound + MPA (Maximum Permissible Addition) where MPA is 0,08 µg/l for hardness 40 -<100; MPA = 0,15 for hardness 100 -<200 and MPA= 0,25 for hardness > 200

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Nr 18 AAQS 22 Percentage Tendency of concentration NM 23 EEA / of the water in the waterbodies in your Euro - bodies country waternet exceeding AAQS µg/l Increasing Decreasing (b) 0,1 8 Chlorfenvinphos 0,06 9 Chlorpyrifos** 0,03 10 1,2 -dichloroet hane 10 11 Dichloromethane 20 12 DEHP** 1,3 13 Diuron** 0,2 14 Endosulfan** (a) 0.005 - alpha -endosulfan** (b) 0.0005 15 Fluoranthene 0,09 16 Hexachlorobenzene* 0,0004 17 Hexachlorobutadiene* 0,003 18 Hexach lorocyclohexane* (a) 0,042; (b) 0,01 - Lindane (a) 0,02; (b) 0,002 19 Isoproturon** 0,32 20 Lead** 0,4 (dissolved Pb) 21 Mercury* No overall QS can be given 26 22 Naphthalene** (a) 2,4; (b) 1,2 23 Nickel 1,7 24 Nonylphen ols* (a) 0,33; (b) 0,033 - 4-paranonylphenol* 25 Octylphenols** 0,061 - para -tert - octylphenol** 26 Pentachlorobenzene* (a) 0,0032; (b) 0,00032 27 Pentachlorophenol** 0,22 28 PAH*

26 QS = C background + MPA (Maximum Permissible Addition), where MPA=0,036 µg/l for the pelagic communit y

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Nr 18 AAQS 22 Percentage Tendency of concentration NM 23 EEA / of the water in the waterbodies in your Euro - bodies country waternet exceeding AAQS µg/l Increasing Decreasing -benzo(a)anthracene - benzo(a)pyrene 0,05/0,03 - benzo(b)fluor anthene 0,03 - benzo(g,h,i)perylene 0,0016 - benzo(k)fluoranthene 0,03 - indeno(1,2,3 - 0,0016 cd)pyrene 29 Simazine** 0,7 30 Tributyltin* 0,0001 - tributyltin cation 31 Trichlorobenzenes** 0,4 32 Trichloromethane 12 33 Trifluralin** 0,03

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2 QUESTIONNAIRE FOR IN DUSTRY SECTORS

AIM OF THE QUESTIONN AIRE

In the framework of the Water Framework Directive (WFD), the European Commission needs to identify the appropriate cost-effective and proportionate level and combination of product and process controls for both point and diffuse sources for priority substances. For the priority substances , the Commission shall submit proposals of specific measures for:

the progressive reduction of discharges, emissions and losses of priority substances, and in particular

for the priority hazardous substances: the cessation or phasing -out of discharges, emissions and losses

In this framework, ECOLAS carries out an economic impact study to identify and evaluate:

direct costs and benefits: quantitative impact;

indirect costs and benefits: qualitative impact; for progressive reduction of discharges, emissions and losses of priority substances in direct discharges by point sources into surface waters or sewers and cessation or phasing -out of discharges, emissions and losses of priority hazardous substances by all sources. This impact study is performed taking into account several policy options and for the whole of Europe (Member States and Accession Countries).

By ‘Member State’ we me an those states that are member of the EU on the 1st of May 2004. By Accession Countries we mean those states that are currently negotiating accession to THE EU (Bulgaria and Romania).

In order to do so, we ask for the co -operation of all industry sectors to provide us with available information on current emission data, activity levels, emission reduction measures and related costs. This information can consist in the form of reports, datasets, weblinks where such data are stored or specific answers to th e questions contained in the questionnaire.

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CONTENT OF THE QUEST IONNAIRE 1. Contact persons 2. List of priority substances, including priority hazardous substances and priority substances under review 3. Industry sectors and substances under consideration 4. Composition of industrial sector and economic data 5. Current emission situation 6. Emission reduction measures and associated costs 7. Other contacts

CONFIDENTIALITY

All information, given in the framework of this study, will be used anonymously. No information, indicate d by the provider as being confidential, will be traceable in the final report. The information gathered will not be used for commercial aims and will be used exclusively in the framework of this study.

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2.1 CONTACT PERSONS

Please indicate below the industry sector, to which the provided data are referring to, and the name and coordinates of the person who will be the key contact person for potential further questions and clarifications with regard to the provided data for this industry sector :

INDUSTRY SECTO R:

NAME :

INSTITUTION / COMPANY :

FUNCTION :

ADRESS STREET AND NUMBER :

ZIP-CODE :

CITY :

COUNTRY :

TELEPHONE :

MOBILE :

FAX :

E-MAIL :

Please indicate below the name and coordinates of a possible back -up for the key contact person :

NAME :

INSTITUT ION / COMPANY :

FUNCTION :

ADRESS STREET AND NUMBER :

ZIP-CODE :

CITY :

COUNTRY :

TELEPHONE :

MOBILE :

FAX :

E-MAIL :

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2.1 Underneath , a list is given of all priority substances, priority hazardous substances (*) and priority substances under review (**). The numbers in this list refer to the numbers given in Annex 10 of Decision 2455/2001/EC of the European Parliament and of the Counc il of 20 November 2001 ‘Establishing the list of priority substances in the field of water policy and amending Directive 2000/60/EC’. In this Annex the CAS numbers are also indicated. The numbers used here are used through the entire questionnaire. 1. Alachlor 20. Lead and its compounds (**) 2. Anthracene (**) 21. Mercury and its compounds (*) 3. Atrazine (**) 22. Naphthalene (**) 4. Benzene 23. Nickel and its compounds 5. Brominated diphenylethers 24. Nonylphenols (*) - Pentabromobiphenylether (*) - (4 -(para) -nonylphenol) (*) 6. Cadmium and its compounds (*) 25. Ocylphenols (**) 7. C10 -13 -chloroalkanes (*) - (para -tert -octylphenol) (**) 8. Chlorfenvinphos 26. Pentachlorobenzene (*) 9. Chlorpyrifos (**) 27. Pentachlorophenol (**) 10. 1,2 -Dichlorethane 28. Polyaromatic hydrocarbons (*) 11. Dichloromethane - (Benzo(a)pyrene) 12. Di(2 -ethylhexyl)phthalate (DEHP) (**) - (Benzo(b)fluoranthene) 13. Diuron (**) - (Benzo(g,h,i)perylene) 14. Endosulfan (**) - (Benz o(k)fluoranthene) - (alpha -endosulfan) (**) - (Ideno(1,2,3 -cd)pyrene) 15. Fluoranthene 29. Simazine (**) 16. Hexachlorobenzene (*) 30. Tributyltin compounds (*) 17. Hexachlorobutadiene (*) - (Tributyltin-cation) 18. Hexachlorocyclohexane (*) 31. Trichlorobenzenes (**) - (gamma -isomer, Lindane) 32. Trichloromethane (Chloroform) 19. Isoproturon (**) 33. Trifluralin (**)

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2.2 Some substances are currently being regulated by Directive 86/280/EEC. In or der to be able to assess the impact of a possible repeal of the controls included in Directive 86/280/EEC, we ask you to please indicate whether the following substances are still produced and/or used in your sector. Use the following signs in the table to indicate: • YES: Y • NO: N • DON’T KNOW: ?

Substances Produced Used DDT Aldrin Dieldrin Isodrin Endrin Trichloroethylene (TRI) Perchloroethylene (PER) Carbon tetrachloride

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2.3 INDUSTRY SECTOR AND SUBSTANCES UNDER CONSIDERATION

3.1 Pl ease indicate which of priority substances, priority hazardous substances and priority hazardous substances under review (cf. previous page) are NOT produced and/or used by your sector in the different Member States and Accession Countries. (If you do not know, please indicate with “?”) Country Substances NOT produced/used in your sector Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Luthuania Luxembourg Malta Netherlands Poland Portugal Slovekia Slovenia Spain Sweden United Kingdom Bulgaria Romania

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3.2 Are all of the above priority substances, including priority hazardous substances and priority substances under review, relevant for di rect discharge by point sources to water in this industrial sector ?

3.2.1 If no, please indicate which pollutants are not relevant for direct discharge by point sources to water in this industrial sector and the reason why. Please provide any additional information (studies, measured data, …) to support this.

3.3 Are all of the above priority hazardous substances and priority substances under review, relevant for discharge to one of the media (water, air, soil) in this industrial sector ?

3.3.1 If no , please indicate which pollutants are not relevant for discharge to one of the media in this industrial sector and the reason why. Please provide any additional information (studies, measured data, …) to support this.

3.4 Do you know of other priority s ubstances, that are relevant for direct discharge by point sources to water for this industrial sector (IPPC vs non -IPPC, cf Annex 1 of IPPC Directive 96/61/EC)

3.4.1 If yes, please indicate which priority substances and provide additional information (s tudies, measured data, …) to support your point of view.

3.5 Do you know of other priority hazardous substances and priority substances under review, that are relevant for discharge to one of the media (water, air, soil) in this industrial sector ?

3.5. 1 If yes, please indicate which priority substances and provide additional information (studies, measured data, …) to support your point of view.

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2.4 COMPOSITION OF INDUS TRIAL SECTOR AND ECO NOMIC DATA

Please take into account that we have all publicly available BREF studies at our disposal. If you do not have additional or more recent information on the hereafter mentioned topics, you may disregard these questions.

Could you provide us with studies / data on the composition and strength of your sector and its relevant subsectors :

4.1 Number of companies active in this industrial sector for each Member State and Accession Country, if possible with - a distinction between IPPC and non -IPPC - a classification according to number of employees or turnover, throu ghput, …

4.2 Number of employees in this industrial sector for each Member State and Accession Country (direct and indirect) - if possible as a function of company size (IPPC vs non -IPPC)

4.3 Contribution of this industrial sector to the GNP for each Mem ber State and Accession Country - if possible as a function of company size (IPPC vs non -IPPC)

4.4 Key production figures of this industrial sector - if possible as a function of company size (IPPC vs non -IPPC). Production figures directly related to the discharge of one of the priority substances are preferred.

4.5 Average investment level of this industrial sector – share of ‘environmental’ investments in the average investment level

4.6 Competitiveness of the industrial sector : are the main competitors located within or outside the EU?

4.7 Profitability and added value of the sector

4.8 Future evolution of the sector

4.9 Please indicate also whether the activities of the sector on a European level are concentrated in a small number of Member State s or Accession Countries

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2.5 CURRENT EMISSION SIT UATION

5.1 Since we are in the ability to consult the EPER database, it is not needed to provide us with these data. On the other hand, specifically existing information under the form of reports and data reg arding non -IPPC sources and emissions under the EPER threshold27 are valuable.

5.2 Could you provide us with existing studies / data on the current emission of the priority substances including priority hazardous substances and priority substances under rev iew of your sector and its relevant subsectors :

5.2.1 Total or average quantity of wastewater discharged

5.2.1.1 Can be expressed as a specific discharge (m³/unit of production)

5.2.1.2 Please indicate whether differences exist between IPPC and non -IPPC

5.2.1.3 Please indicate whether differences exist as a function of applied production process

5.2.2 Total quantity of wastewater discharged either to surface water or to sewer or share of the companies discharging to surface water (or to sewer) – if possible as a function of company size (IPPC vs non -IPPC) and for each Member State and Accession Country. If available, please make a distinction between companies discharging to sewer with and without pretreatment of the effluent.

5.2.3 Discharge of p riority substances including priority hazardous substances and priority substances under review for this industrial (sub)sector - if possible as a function of company size (IPPC vs non -IPPC) and for each Member State and Accession Country.

Discharge can be expressed as total quantity, concentration or specific discharge as a function of the production level

27 See 2000/479/EC: Commission Decision of 17 July 2000 on the implementation of a European pollutant emission register (EPER) according to Article 15 of Council Directive 96/61/EC concerning integrated pollution prevention and control (IPPC)

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2.6 EMISSION REDUCTION M EASURES AND ASSOCIAT ED COSTS

This chapter of the questionnaire deals with the degree of implementation or the potential to impleme nt emission reduction measures and the associated cost. Could you please provide information on the following topics:

6.1 Share of the companies in this industry sector that is already applying BAT -like emission reduction measures - if possible as a functi on of company size (IPPC vs non -IPPC) and for each Member State and Accession Country

6.2 Have some Member States or Accession Countries imposed emission limit values for the discharge to water by point sources of certain priority substances including pri ority hazardous substances and priority substances under review for your industrial sector ?

6.2.1 If yes, please provide us with an overview of the applicable emission limit values for each Member State or Accession Country.

6.2.2 Has a technical and /or economic study been made considering the attainability of such emission limit values for your industry (sub)sector ? If yes, please provide us with a copy of such existing studies.

6.3 Possibilities for further reduction of the discharge of priority substances including priority hazardous substances and priority substances under review to water by point sources include end -of -pipe measures as well as process modifications, change in use of raw materials and substitution.

The study ‘Substitution of Haz ardous Chemicals in Products and Processes’ (B3 - 4305/2000/293861/MAR/E1) defines ‘substitution’ as the replacement or reduction of hazardous substances in products and processes by less hazardous or non -hazardous substances, or by achieving an equivalent f unctionality via technological or organisational measures.

Have studies been made regarding the possibilities for further reduction of the discharge to water by point sources of priority substances including priority hazardous substances and priority substances under review for specific (sub)sectors and that address aspects like reduction potential, associated cost and economic impact? If yes, please provide us with a copy of such existing studies.

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2.7 OTHER CONTACTS

If you know persons/companies who can pr ovide us with more information on :

7.1 the composition of the industrial sector;

7.2 the discharge of priority substances including priority hazardous substances and priority substances under review by point sources to water in this industrial sector;

7. 3 the abatement of the direct discharge of priority substances including priority hazardous substances and priority substances under review by point sources to water by either process integrated or end -of -pipe measures; can you please provide us with the ir coordinates ?

They will be contacted in case we need to collect additional information.

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