Czech pharmaceutical and cosmetics companies are bracing for a financial hit as the country prepares to implement the European Union’s revised Urban Wastewater Treatment Directive, which mandates extended producer responsibility (EPR) for the removal of micropollutants. Under the new rules, manufacturers will be required to co-finance advanced treatment technologies, a move industry leaders warn could carry a significantly higher price tag than Brussels anticipates.
“The original estimates by the European Commission [of necessary industry investment] are very much underestimated,” said Pavel Slanina, senior consultant at Life Sciences 4.0, a collaborative platform linking companies, research institutes and universities in the life sciences sector.
Life Sciences 4.0 is spearheading a project to guide affected firms through the regulatory transition, aiming to develop a strategic roadmap and monitor key legislative developments. Czech industry figures suggest the cost of compliance could reach CZK 20 billion (€824 million), far exceeding initial projections.
Slanina added that implementing the directive’s so-called quaternary stage of wastewater treatment would require not only new technologies but also substantial upgrades to existing infrastructure.
Removing micropollutants
Czechia is preparing to implement the EU Urban Wastewater Treatment Directive, which introduces extended producer responsibility (EPR) for removing micropollutants. Pharmaceutical and cosmetics companies will be required to co-finance treatment technologies.
“The original estimates [on the industry’s investments needed] by the European Commission are very much underestimated,” warns Pavel Slanina, Senior Consultant at Life Sciences 4.0, a platform connecting companies, research institutes and universities in the field of life sciences.
The platform is running a project to help pharmaceutical and cosmetics firms prepare for the new obligations. The goal is to create an action plan for companies so that they know how to proceed, and to monitor some key aspects of the legislation.
The Czech pharmaceutical sector warns that the directive’s financial impact could be far higher than expected. According to Czech estimates, the costs for the country could rise to CZK 20 billion (€824 million).
Slanina notes that introducing the so-called quaternary stage of wastewater treatment will not only require new technology but also upgrades to existing plants.
“Each treatment plant must have the first, second and third stages before the quaternary can be added. If those previous technologies are not adapted, additional investment will be needed,” he explains to Euractiv.
Generic companies hit hardest
The Czech market, dominated by generic drug producers, could be disproportionately affected. “The pharmaceutical industry has the label of being rich and able to bear extra costs, but reality is different,” says Slanina.
He adds that companies could be pushed to increase medicine prices to cover the costs. “Prices are regulated, so the question is whether the increase can even happen. If not, the production won’t be profitable,” Slanina explains. “If the costs increase several times, the companies will stop producing. This concerns, for example, metformin or antibiotics.”
Under the current proposal, 80% of the cost burden would fall on the pharmaceutical sector and 20% on cosmetics, with an optional 20% contribution from the state.
According to Filip Vrubel, head of the Czech Association of Pharmaceutical Companies, pharma is being asked to shoulder a disproportionate share.
“The pharmaceutical industry is certainly not among the largest sources, by number or volume, of pollutants in wastewater, yet other industrial sectors were not included in the legislation,” he said.
Slanina insists that the industry is not opposing environmental goals but feels a sense of injustice.
The directive formally entered into force on 1 January 2025, meaning there is no longer room to reverse it. However, the directive faces lawsuits – one from Poland and another from the pharma industry itself. “The only thing we can change is the degree of unfairness, and that’s what the lawsuits are about,” Slanina explained.
The Czech Republic must prepare a national implementation plan by the first quarter of 2028. In 2028, investments into quaternary treatment should already begin. According to Slanina, the authorities are expected to introduce new levies, which will then be used for the construction and maintenance of wastewater treatment plants.
[VA, BM]
