Legal challenge to the UWWTD's new extended producer responsibility regime in referral to EU's top court

The recast Urban Waste Water Treatment Directive of 2024 (UWWTD) faces a major legal challenge following the referral of questions raised by pharmaceutical industry associations by Ireland's High Court to the European Court of Justice. The Irish Pharmaceutical Healthcare Association (IPHA) and Medicines for Ireland have challenged the validity of the UWWTD's controversial extended producer responsibility (EPR) provisions prior to them being transposed into national law.

Article 9 of the recast UWWTD requires pharmaceutical and cosmetics producers to finance 80% of the costs of micropollutant removal treatment at larger wastewater treatment plants starting in 2028. The applicants contend that these obligations breach the polluter pays principle and the principle of proportionality, arguing that the underpinning feasibility study is fundamentally flawed, costs have been significantly underestimated and the 2028 application date is unworkable. The Irish High Court has requested that the ECJ prioritise the reference given the transposition deadline of 31 July 2027. Based on the average duration of preliminary ruling proceedings before the ECJ a ruling in late 2027 or early 2028 could be expected under normal conditions, but the Irish High Court has requested that the ECJ prioritise the reference given the proximity of the 31 July 2027 transposition deadline. An expedited or accelerated procedure could shorten that timeline considerably.

This referral follows the European General Court's earlier dismissal of challenges to the UWWTD brought by Cosmetics Europe, EFPIA (the European Federation of Pharmaceutical Industries and Associations) and several pharmaceutical companies for lack of standing.

The recast UWWTD's EPR regime

The recast UWWTD, which entered into force in January 2025, represents the most significant overhaul of EU wastewater regulation in over three decades. The most consequential change is arguably the introduction for certain segments of industry of a mandatory EPR scheme for micropollutants.

Under Article 9, Member States must establish EPR schemes requiring producers who place pharmaceutical products for human use or cosmetic products on the national market to collectively finance at least 80% of the costs of “quaternary treatment”, i.e. the removal of micropollutant residues from urban wastewater before discharge. The remaining 20% falls to the Member State (and, in practice, to water companies).

“Producers” encompasses manufacturers, importers, and distributors who first make these products available on a Member State's market. Producers must contribute to a centralised fund with contributions apportioned according to criteria to be defined by forthcoming delegated acts.

Critically, the obligation applies to all pharmaceuticals for human use and all cosmetic products; there is no exemption based on the micropollutant profile of individual products, which is central to an argument against proportionality in the challenge before the ECJ.

The new EPR schemes must be operational by 2028, with quaternary treatment phased in progressively; plants serving agglomerations of more than 150,000 population equivalents first, with full compliance by industry required by 2045. Member State transposition is however at an early stage. Few Member States have published draft legislation, and national EPR scheme design (governance, reporting, and enforcement) remains largely unknown.

Relevance to key sectors

Pharmaceutical and life sciences

Every company placing human medicines on the EU market will potentially be required to contribute to the cost of quaternary treatment. Industry estimates suggest aggregate annual costs across the EU could run into hundreds of millions of euros, though precise figures depend on delegated act methodology yet to be finalised.

The immediate concerns are budgeting in the absence of clarity on contribution calculations; the risk that EPR costs are passed through supply chains or reflected in pricing negotiations, with implications for market access and affordability; and the absence of any product-specific exemption, meaning producers of medicines with negligible micropollutant profiles bear costs alongside those whose products are demonstrably present in wastewater.

Cosmetics producers

Cosmetics manufacturers face identical EPR exposure. The UWWTD does not distinguish between product categories, meaning producers of rinse-off products (which enter wastewater directly) and leave-on products are treated alike. For companies operating across multiple EU markets, the cumulative burden of contributing to EPR schemes in each Member State could be very substantial and will require careful strategic planning, particularly given the lack of harmonisation in national cost apportionment.

Water companies

As operators of wastewater treatment plants, water companies must deliver the quaternary treatment infrastructure that producers finance while ensuring the 20% of capital and operational expenditure target under the cost-sharing model is met. They face the challenge of planning major capital programmes where the EPR funding stream is legally contested and the mechanisms for disbursing funds to operators have not yet been defined.

The UWWTD's EPR regime presents a novel and rapidly evolving set of legal, regulatory, and commercial challenges. Our environmental litigation and regulatory advisory team has extensive experience of EPR schemes across multiple geographies and sectors, including advising pharmaceutical, cosmetics, and water sector clients on the UWWTD's implications, from strategic positioning and advocacy in relation to delegated acts and national transposition, to the assessment of litigation options and regulatory advice on EPR scheme design. Please do not hesitate to get in touch if you would like more information on any of the issues raised in this blog.