Water pricing in some EU countries

2010-02-15T14:52:08Z

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Water pricing

Member States	Comments
Belgium	Incentives to use the water resources efficiently are incorporated in the Flemish legislation by means of the taxes on groundwater and in the legislation on drinking-water. The taxation for a cubic meter groundwater is differentiated according to the total pumped amount of groundwater, to the aquifer in which the extraction well is situated and the existing pressure head of the groundwater in the region. The taxes depend as follows on the pumped volumes (Q): Q is less then 500 m³/y: no tax Q is 500 m³/y until 30.000 m³/y: tax = Q * 5 eurocent * index Q is more than 30.000 m³/y: tax = Q * index * (6,2 eurocent + 0,75 eurocent * Qgwe/100.000) Qgwe = total volume pumped by all individual wells = sum of the Q of all individual wells * lambda lambda values are differentiated depending on the aquifer and the state of groundwater in the region. Special prices are applied for drinking-water companies. tax = Q * 7.5 eurocent * index The index is defined on a yearly basis. Every inhabitant gets every year a volume of 15 m³ drinking-water free of charge. Those who need more drinking-water have to pay for the surplus. The taxation for a cubic meter surface water is differentiated according to the total amount of surface water abstracted and to the sector of the water use. 0.058574 EUR/m³ for abstracted amounts less than 1000000 m³ 0.0339729 EUR/m³ for abstracted amounts between 1000000 and 9999999 m³ 0.0170695 EUR/m³ for abstracted amounts between 10000000 and 99999999 m³ 0.0032135 EUR/m³ for abstracted amounts above 10000000 m³ The abstraction of surface water for agricultural use is charged with a fixed price.
Cyprus	Water for domestic purposes is mainly supplied through the Government Water Works by the Water Development Department and is sold on a bulk basis to the Nicosia, Limassol and Larnaca Water Boards, to Municipalities and Community Councils, which, in their turn, undertake its supply to the consumers. Usually, the tourist and industrial sectors are included in the domestic sector because the system of water distribution in urban areas is common for all uses. Charges set by the Water Boards usually comprise a fixed and maintenance charge and a series of block charges where successive blocks of water are sold at a higher price (rising block tariffs). Water for irrigation purposes is supplied through government and non-government schemes. Irrigation water in government schemes is delivered directly to individual farmers (retail supplies) and in isolated cases is also provided on a bulk basis to irrigation divisions. Non-government schemes consist of small irrigation schemes, which are managed by committees chaired by the District Officer. For irrigation provision through the government schemes, charges are established on a volumetric basis and are uniform for all schemes covering a high proportion of the total financial cost. Consultancy Services are currently in progress for the design of a protocol of information related to the economic analysis process and the implementation of the water pricing policies of the WFD. The protocol of information will be able to support the future steps leading to the implementation of the WFD and will enable future studies including the assessment of the incentive properties of the current pricing policies for all water services in Cyprus. The study on the assessment of the incentive properties of the current pricing policies is expected to be completed by the end of 2008.
Denmark	The use of water pricing has generally had a positive effect on both water use and loss in distribution systems. Typical water price/m³ around 5 EURO, consisting of: Water: 20% Wastewater: 44% Water tax: 14% Wastewater tax: 2% VAT: 20%
England	Abstraction charges are levied on all licensed abstractors. Charges reflect environmental impacts – eg use, location,, seasonal impacts etc. Tariffs therefore vary from around 1 pence to over £100 pounds. (1.4 Euro cents to 140 Euros) per million litres
Finland	In irrigation sector, practically all systems are constructed and operated by individual farmers. Therefore, there is no common pricing policy for irrigation. For other agricultural water (e.g. for livestock and dairy farming) water supply pricing policy allies whenever the water is obtained through and public piped water supply system. The present pricing policy for water supplies in the full cost recovery, i.e. the consumer tariff has to cover all costs (capital and operation and maintenance). There are also many sparsely populated areas with long pipelines, where water consumption reduction is not rational, because certain amount of consumption is needed to secure good water quality. For industries which obtain their water through public piped water supply system, the water supply pricing policy applies.
France	For water pricing, there is no specific water pricing for the dry season. We try to reflect as much as possible the cost of the water and the associated services and also of environmental and resource costs with the tariffs. The level of cost recovery in France is over 85 % for household and industry. This cost recovery includes environmental charges (abstraction and discharge) representing in average about 15% of the tariffs. We push all sectors (households, industry, agriculture) to have tariffs based on metering, in order to reflect water scarcity. For some cities where there are a lot of tourists in summer, some specific tariffs are in place to take into account these picks. For agriculture, the cost recovery can vary from 40% for some collective systems (with dams and channel) to 100% for individual systems. An incitation to metering of water for agriculture is given throughout the tariffs.
Germany	In general pricing systems for cost effectivness in all water related sectors
Hungary	Drinking water: Pricing policy is depending on the ownership of the water works: In case of local-government owned works the price is determined by the assembly of the municipality, while in case of state-owned works the decision on price is made by the Minister of Environment and Water in agreement with the Finance Minister. The price is varying on region / service provider and within a reach of HUF 72 and 278/m3 in the country (2002). Price for sewage water collection and treatment varies between HUF 50 and 490/m3 in the same year. There is a state subsidy in the order of HUF 5 billion a year. Industrial water: The scattering of water prices for industrial plants and institutions is larger than for the households and the average price is higher by 8%. This stimulates companies to establish their own wells. The Water Management Act stipulates that water users shall pay a water resource charge (WRC) on the quantity of water committed in their water license or used without a license, or on the quantity actually consumed with respect to industrial users. The equation applied: WRC = V A m g, Where: V - volume (m3) A – base charge (determined yearly) m - factor of measurement = 1.0 if the water used is metered; = 2.0 if not, g – factor depending on type of use and character of resource, as well as of region (varying from 1.0 to 10.0) A recent amendment of the Act has erased the tariff system for agricultural use, both from surface and groundwater. This measure unfortunately does not support the sustainable use of water resources.
Italy	Italian water pricing policy does not provide adequate incentives for users to use water resources efficiently with the exception of a tariff regulation for the civil sector. A water pricing policy is provided by L.36/94, but the water sector reform is not yet completed, so there are different prices on the territory. The drinking water average price is 0.55 €/mc The average price of the sewage system is 0.13 €/mc The Integrated Water Service average price is 1 €/mc This water pricing, updated 2005, is calculated (IVA 10%) on an annual average use of 197 mc. Water pricing differs according to the areas of reference. Central Italy is characterised by the highest price of the Integrated Water Service. Source: COVIRI 2006 from Cittadinanzattiva 2005
Malta	Pricing policies not yet developed
Netherlands	The Dutch provinces charge for groundwater abstractions, in order to cover the costs for groundwater management. On a national basis, there is an environmental levy for groundwater abstractions.
Portugal	All water public services (urban, sanitation, irrigation, navigation and others) apply taxes and tariffs (quantitative calculation). However, these taxes and tariffs don’t cover all of the costs and need to be redesigned to include adequate incentives for users to use water resources efficiently. For water supply self-service the costs are fully supported. Data is available for tariffs concerning water supply and sanitation and for irrigation in public schemes, but collecting it for this questionnaire would take some more time. There is however lack of data in some cases and/or sectors (e.g. industry, private abstractions for Agriculture). There are great disparities in tariffs for urban supply, throughout the municipalities, but the Institute for Regulation (IRAR) is establishing a reference model for tariff revision, considering principles of cost recovery and equity.
Slovak Rep	In Slovak Republic are according to the Water law only the real water withdrawals paid for, not the amounts stated in the Water permission. The water for irrigation is not paid for.
Slovenia	Not yet
Spain	The existing water pricing system in Spain includes changes for the services provided by the River Basin Authorities (regulation and transportation mainly) to irrigation associations, municipal services and industrial users and these in turn charge for this and their own distribution and treatment services to the final users. Urban tariffs to domestic and industrial users are mainly 3 block tariffs (in major cities there could be 5 blocks) to penalise excessive usage; Industrial tariffs discriminate for bigger users both in the fixed and variable charges. The Water Law allows river basin authorities (RBAs) to modulate charges to incentive water savings; increasingly irrigation associations are establishing charges by volume and penalisation for excessive use where water is scarce.

Pricing Irrigation Water: A Literature Survey

2010-02-15T14:52:08Z

By Robert C. Johansson, Policy Research Working Paper, 2449

Water Pricing in the EU: A Review

2010-02-15T14:52:08Z

We believe that within this frame water pricing can substantially support the efficient use of water
and therefore help leading to relaxation of water stress situations. On the other hand water quality
and quantity cannot be managed separately and water pricing therefore has to consider the polluter
pays and precautionary principle. This requires therefore the internalisation of environmental costs.
In this respect cost recovery could be a powerful tool not only to increase the effectiveness and
efficiency of water systems and to move from supply to demand management, but to help
preventing deterioration, enhancing and protecting the status of our waters and finally achieving
sustainable water use in quantitative and qualitative terms. The main and important goals of EU
water policy are the protection and improvement of our aquatic environment and the contribution to
sustainable, balanced and equitable water use.
Water Pricing is one in the series of possible tools beside others to help to achieve these goals.
EEB's former stagiaire Eva Roth has prepared a background paper, which provides a basis for
further discussion and assessments of water pricing policies. We would like to thank her very much
for her helpful work.

by Eva Roth, EEB, January 2001, Publication Number 2001/002

EEA: Are water prices and water saving technologies effective tools to improve water conservation?

2010-10-25T14:46:08Z

OECD: Pricing water

2010-10-26T05:43:33Z

Private Sector participation and Regulatory Reform in Water Supply: The Southern Mediterranean Experience

2010-10-29T11:48:21Z

The aim of this study is to examine the water regulatory framework in southern Mediterranean countries and the development of private sector participation in the context of water crisis.

AEAS Report on "Water Rates and Prices in Spain"

2010-10-25T14:44:37Z

(in Spanish)

Social Aspects of Water Pricing

2010-10-25T14:30:44Z

Malta: Review of Proposed Water Tariffs - 14th December 2009

2010-10-27T14:12:49Z

Water Economics

2010-12-09T18:31:22Z

Euro-Mediterranean Information System on know-how in the Water sector - Water Pricing

Water pricing in some EU countries

Water pricing

Pricing Irrigation Water: A Literature Survey

Water Pricing in the EU: A Review

EEA: Are water prices and water saving technologies effective tools to improve water conservation?

OECD: Pricing water

Private Sector participation and Regulatory Reform in Water Supply: The Southern Mediterranean Experience

AEAS Report on "Water Rates and Prices in Spain"

Social Aspects of Water Pricing

Malta: Review of Proposed Water Tariffs - 14th December 2009

Water Economics