Europe’s strengthened environmental focus for the years ahead is set to open the way for extensive water-related investment and, in turn, business opportunities, explains Veronica Manfredi of the European Commission.
“We are facing four planetary crises – climate change, biodiversity loss, pollution, and unsustainable and inefficient use of our natural resources,” says Veronica Manfredi, Quality of Life Director at the European Commission’s Directorate-General for Environment. “These intertwined crises are eroding the very basis of our entire economic system and our societal survival.”
The EU Green Deal recognises these threats and aims to bring about a transformation. Using words she attributes to Commission President Ursula von der Leyen, Manfredi explains that the Green Deal’s aim is to be Europe’s new ‘sustainable growth strategy’ which ‘gives back to the planet more than it takes’. Manfredi was a keynote speaker at the NWP Member Meet-up on 29 October 2020. In her speech, she discussed the European Green Deal and its connection to water. In this article, she further elaborates on the points she raised in her speech by reflecting on the fact that all the planetary crises are connected to water. “Water is literally everywhere in the European Green Deal.”
The EU Green Deal will shape the spending and support seen across Europe. This includes the EU’s proposed budget plan for the coming years – the Multiannual Financial Framework (MFF) for 2021-2027.
The Covid-19 pandemic also prompted the Commission to bring forward the Next Generation EU initiative, which Manfredi describes as featuring a “completely innovative budgetary tool that releases EUR 750 billion”. Much of that will come from accessing the financial markets to provide recovery support for Member States from 2021 to 2024.
“If you combine the financial firepower of Next Generation EU and the new MFF, you can unleash an unprecedented amount of EUR 1.85 trillion that will rebuild economies,” says Manfredi, adding, “We really hope this will be a catalyst for change.” She notes that the entire budgetary package is at a critical stage of negotiations between the European Council and the European Parliament.
Manfredi explains that the Commission’s proposal states that at least 37% of Next Generation EU and 30% of the MFF must be spent on EU Green Deal objectives, and that 100% of the EU co-funding must be in line with the objectives of the Paris Agreement. She also welcomes the fact that, in recent discussions, the EU co-legislators agreed to introduce new targets for spending on biodiversity. “As of 2024, 7.5% of the MFF should be spent on biodiversity and, as of 2026, 10%,” she says.
Initiatives for systemic change
Manfredi’s comment that water is everywhere in the Green Deal is based on the fact that water features in all the key areas designated for action, such as sustainable farming, mobility, enhanced resource efficiency across industrial and energy production, revamped biodiversity in rural and urban areas, renovation of the built environment, and zero-pollution and decarbonisation efforts.
Numerous initiatives have been introduced by the Commission since the Green Deal was adopted. “We unleashed an impressive amount of policy initiatives throughout 2020 that basically look at a systemic change across the way we produce, we consume and, I would say, simply how we live,” says Manfredi.
These include the new Circular Economy Action Plan and the Farm to Fork Strategy. Manfredi also highlights the Biodiversity Strategy for 2030, which includes the intention to restore more than 25,000 kilometres of rivers by 2030.
Asked whether all this represents the most ambitious set of water initiatives yet seen in Europe, Manfredi replies “I am 100% convinced this is the case, yes.”
The funding opportunities for water will appear across a range of tools and instruments. These feature the new EUR 670 billion Recovery and Resilience Facility, which is providing the bulk of the funding for the Next Generation EU initiative. Member States are currently preparing National Recovery and Resilience Plans with this in mind.
Manfredi also highlights the European Agricultural Fund for Rural Development (EAFRD), InvestEU, the Just Transition Mechanism and Fund, and the Horizon Europe research and innovation programme.
“We will have in place the largest single financing initiative ever, from which the water sector could potentially benefit greatly,” says Manfredi, hoping that both Next Generation EU and the MFF will soon be adopted by the co-legislators.
Manfredi then sees a great deal of potential for water investments, such as upgrading of wastewater installations to make them producers of clean energy and reusable water for agricultural irrigation. Others include eco-friendly water storage infrastructure, or nature-based solutions for protection against floods and droughts.
Importantly, Manfredi identifies several critical success factors in obtaining investment. There is a need to design win-win investments, such as improving water distribution networks whilst eliminating the still significant rates of water leakage across the EU, she says.
“Projects can and should be designed in such a way as to be bankable, not least by securing the monetisation of the multiple ecosystem services that they generate,” says Manfredi. “Furthermore, they should apply the polluter pays principle properly to secure revenue streams from the main economic actors responsible, while cooperating with them to build new forms of sustainable economic activities which will lead to the creation of new jobs.” As examples, she mentions sustainable tourism linked to restored biodiversity spots and organic farming/aquaculture production, and sustainable housing projects linked to cleaner and smarter mobility in both urban and rural areas.
All this should present water opportunities for NWP members over the coming years. “I think that, with their unique expertise, the Dutch water operators are particularly well-placed to seize the momentum and lead the way for innovative business opportunities which are in line with the Sustainable Development Goals,” concludes Manfredi.