Policy paper

Water abstraction plan: Environment

Updated 27 July 2021

This was published under the 2016 to 2019 May Conservative government

Part of the water abstraction plan

This document provides further information on the work to address unsustainable abstraction set out in the abstraction plan. It should be read alongside the abstraction plan and supplementary documents covering the ‘catchment focus’ and ‘abstraction licensing service’.

1. Why sustainable abstraction matters

Abstraction provides essential water for public water supply, agriculture and industry. However, unsustainable levels of abstraction impact the ecology and resilience of our rivers, wetlands and aquifers.

Having the right flow in our rivers and protecting groundwater levels is essential to supporting healthy ecology, enhancing natural resilience to drought, and ensuring that rivers continue to support wellbeing and recreation. Sustainable water abstraction is therefore essential to ensure that river flows and groundwater levels support ecology and natural resilience.

Unsustainable abstraction still diminishes some of the most iconic catchments and important habitats in the country, such as chalk streams, which are a globally important habitat. There are more than 220 chalk streams in the UK. These represent 75 to 80 per cent of this habitat type globally.

A changing climate is likely to bring greater variability in rainfall and higher temperatures. We expect less groundwater recharge and larger seasonal variations in river flow as well as changes to when and how extended dry periods occur. Sustainably abstracted water bodies will be more resilient to changes in climate and drought pressures so addressing unsustainable abstraction will help improve resilience to climate change.

2. How the impact is assessed

The Environment Agency defines areas of either surface water which includes rivers, lakes, reservoirs and transitional waters (estuaries), or groundwater (underground aquifers) as water bodies. These are typically smaller units than catchments, though some groundwater bodies can be very large. Water bodies are defined and used for managing resources.

For rivers in England, the Environment Agency uses the ‘Environmental Flow Indicator’ (EFI) to indicate where abstraction, or flow regulation, may start to have an undesirable impact on river habitats and species. The Environment Agency interprets surface water bodies with flow greater than the EFI as supporting Good Ecological Status under the EU Water Framework Directive (WFD).

The Environment Agency applies the EFI as a default for assessing the impact of abstraction on flows, unless there is better locally agreed information.

For groundwater abstraction, the Environment Agency uses 4 quantitative tests that aim to protect surface water flows, groundwater levels, spring discharges and water quality. The Environment Agency interprets groundwater bodies that meet those 4 tests as being at good status for groundwater quantity under the Water Framework Directive (WFD).

More water is licensed for abstraction than is typically used. This can be because abstractors hold water in reserve to meet short term peaks in demand or because their water use has decreased since their licence was issued. This can create a risk that future growth in abstraction could cause environmental damage, even if it is within licensed constraints. We call this damage ‘deterioration’. The Environment Agency assesses this risk by estimating future demand within licensed constraints and modelling the impact the additional abstraction would have on future flows and groundwater resources.

The Environment Agency published the current status of water bodies and their objectives in 2015 when it updated the River Basin Management Plans. It will review their status and objectives when it updates the plans again in 2021. The 2021 plans will show the objectives for 2027.

3. Progress made

Since 2008 the Environment Agency has made changes to over 270 abstraction licences to prevent over 30 billion litres of water per year being removed from the environment where abstraction is unsustainable. This is enough water to supply half a million people, or a city the size of Liverpool, with water for one year. The Environment Agency made two-thirds of these reductions to protect Natura 2000 sites, which are our most important habitats. 63 of these changes were to protect chalk streams.

The Environment Agency is continuing to increase its focus on addressing unsustainable abstraction. From January 2017 to November 2017 the Environment Agency has revoked an additional 253 unused and underused licences which has reduced environmental risks removing nearly 15 billion litres of water from licences.

Changes made to licences have brought many success stories. For example, changes made to the abstraction licences that allow water to be taken from Haweswater and Thirlmere public water supply reservoirs in the Lake District have returned water to previously dry streams. Passes and screens are now protecting fish and agreements are in place to maintain vital habitats. Following these changes, local ecology has been enhanced including increases in brown trout and salmon populations.

4. Remaining pressures

Latest data show that 82% of surface water bodies and 72% of groundwater bodies have enough water to protect the environment, providing good support to fish and other aquatic life. Sustainable surface waters have enough water to support ecology. In rivers this means enough flow. Sustainable groundwater bodies meet the four tests explained above. However, we know that abstraction in 8% of surface water bodies and 28% of groundwater bodies is unsustainable.

An additional 10% of surface water bodies are identified as potentially unsustainably abstracted. In these cases the Environment Agency is collecting further information to confirm whether river flows are sufficient to support ecology. This information will be used to reclassify the majority of these water bodies as either sustainably abstracted (green) or unsustainably abstracted (red) by 2021.

In addition to water bodies that need to be improved, the Environment Agency estimates that 5% of surface water bodies and 15% of groundwater bodies are at risk of deteriorating. This could happen if licensed water that is currently not used is abstracted to meet future demands.

Where the environment cannot cope with the amount of water taken we will take action to improve the situation. In priority water bodies, such as Natura 2000 sites, we will take all actions required to improve the situation irrespective of cost. Elsewhere, the costs of resolving all the issues sometimes outweigh the benefits. In these cases we will set alternative targets.

Reducing public water supply abstraction from the lower River Thames is an example where the costs of resolving all issues outweighs the benefits. Abstraction from the lower Thames is used to supply London with drinking water. However, it has a detrimental impact on ecology in the lower Thames and the Thames Tideway. The costs of reducing the abstraction and finding an alternative far exceed the benefit of making environmental improvements. In this case, Thames Water found that alternatives, such as boosting dissolved oxygen levels, would help reduce the effect of abstraction and is pursuing these options. While flows will remain below what would ideally be required, actions will be taken to reduce the impact that this has on ecology.

5. Our goals

We want to end damaging abstraction of water from rivers and groundwater wherever it is cost beneficial to do so. By 2021 we expect existing approaches to increase the proportion of water bodies supporting local ecology as set out in charts 1 and 2.

Chart 1 shows the proportion (%) of surface water bodies sustainably abstracted, potentially unsustainably abstracted and unsustainably abstracted now alongside the projected change by 2021. Note, the outcome of further work to reclassify water bodies currently potentially unsustainably abstracted is not yet clear. However, information available indicates that some will be assessed as sustainably abstracted by 2021.

	Unsustainably abstracted	Potentially unsustainably abstracted	Sustainably abstracted
Current	8	10	82
2021	6	4	90

Chart 2 shows the proportion (%) of groundwater bodies sustainably abstracted and unsustainably abstracted now and the projected change by 2021.

	Unsustainably abstracted	Sustainably abstracted
Current	28	72
2021	23	77

Charts 1 and 2 show an expected increase in sustainably abstracted waterbodies from 82% to 90% for surface water and from 72% to 77% for groundwater by 2021.

In 2021 the Environment Agency will reclassify water bodies to show where environmental improvements have been made, where improvements are still required before 2027 and where impacts are not yet confirmed. In advance of this reclassification it is not possible to give definitive projections on future improvements. However, current estimates are that an additional 5% of surface water bodies and an additional 8% of groundwater bodies will be improved by 2027. In the remaining water bodies the EA may need to set alternative objectives where the costs of improvements outweigh the benefits.

The projected improvements above are set against a backdrop of increasing pressure due to climate change and population growth. It is critical that we make sure that the environmental impact of abstraction does not increase. This means that, as well as making these improvements, it is necessary to work just to stand still.

6. What we will do

The actions below set out how the Environment Agency will use its current regulatory tools to address unsustainable abstraction and guard against future pressures. In order to achieve the goals set out above, the Environment Agency will focus on licences having the greatest impact and take action now to reduce future risks. The Environment Agency will:

• use the Water Industry National Environment Programme (WINEP), due in March 2018, to make sure that water companies take a leading role in addressing unsustainable abstraction. This will bring about investment to resolve historical issues and investigations to prevent future environmental impacts from abstraction
• review more than half of time limited licences by 2021 (2,300 in total), adjusting them as necessary to make sure they do not allow environmental damage now or in the future
• adjust all permanent licences shown to be seriously damaging. This includes completing the Restoring Sustainable Abstraction programme, a list of 150 potentially damaging licences, by March 2020
• revoke an estimated 600 unused licences by December 2018 that are no longer needed, and work with abstractors to reduce under-used licences. This will prevent increased abstraction from these licences creating new environmental pressures
• regulate all significant abstractions that have been exempt historically (approximately 5,000) to make sure that they also play a part in protecting the water environment
• update ten abstraction licensing strategies by 2021, and all remaining strategies by 2027, to capture agreed solutions to environmental pressures. These solutions will be developed through engagement in catchments facing particular environmental pressures from abstraction. More information on this approach is available in the ‘catchment focus’ document

6.1 The role of the water industry

Water companies have a vital role to play in this work. They are big abstractors and are able to develop and manage resources in a way that other abstractors are not. Water companies also have experience of delivering environmental improvements and a duty to have regard to the water framework directive.

Water companies have completed many investigations over the years to understand the environmental impact of their licences. Following these investigations we have changed licences to achieve sustainable abstraction. However, there are still abstraction impacts that need to be addressed. The Environment Agency will require water companies to make further changes to their abstraction licences as identified in the Water Industry National Environment Programme (WINEP).

Water companies are planning a significant number of investigations over the coming years to ensure their abstractions are sustainable. As part of these investigations, we expect water companies to engage with catchment partnerships to find integrated solutions and work across sectors to find the best solutions for bridging the gap between supply and demand. These solutions should include considering cross-sector resource development to help meet the needs of other abstractors where cost effective to do so.

Ofwat runs the Abstraction Incentive Mechanism (AIM). This is designed to encourage water companies to reduce the environmental impact of abstracting water at environmentally sensitive sites during periods of low surface water flows. In December 2017, in its methodology statement for the 2019 price review, Ofwat announced that the AIM will apply to all water companies from April 2020 onwards with financial incentives to increase its impact. AIM can be particularly useful as a tool for managing environmental impacts in the short and medium term while longer-term solutions are developed and should be considered as an option when developing solutions to abstraction pressures locally.

6.2 Time limited licences

Time limited licences, which typically last 12 years, allow the Environment Agency to periodically review abstraction in the light of changing patterns of water use and environmental requirements. Around 25 per cent of the 20,000 abstraction licences currently in force are time limited. Across all sectors, 2,300 licences will expire between now and 2021. When licences expire, licence holders must apply to renew their licence if they want to carry on abstracting. The Environment Agency will renew licences if they pass 3 tests:

• the abstraction is sustainable
• the abstractor has a reasonable need for the water
• the abstractor will use the water efficiently

The Environment Agency will make sure that, when licences expire, these 3 tests are applied. Where changes to licences are necessary at renewal the Environment Agency will work with the abstractors to minimise the disruption caused.

6.3 Permanent licences and the Restoring Sustainable Abstraction programme

The Restoring Sustainable Abstraction Programme currently includes 150 potentially unsustainable licences that need to be investigated. Two-thirds of these are water company licences and a quarter are agricultural. The Environment Agency will investigate all of these and make any necessary changes by March 2020.

The Environment Agency has already made the significant licence changes required to protect Natura 2000 sites and sites of special scientific interest (SSSI’s). It will continue to prioritise changes to the most seriously damaging abstraction licences.

6.4 Unused licences

We need to take action in the 5% of surface waters and 15% of ground waters at risk from water that is licensed but historically not taken. The risk is that these historically unused quantities are used and cause environmental damage. Water held on unused licences therefore presents an environmental risk. As well as this, unused licences can also prevent water trading by increasing environmental risk to the point where trading rules have to be too restrictive to work for abstractors.

In January 2017, the Environment Agency started a 2 year programme that involves writing to all abstractors who hold licences that have not been used in the last 10 years inviting them to revoke their licence voluntarily or further discuss their need for the water. We are aware that there are legitimate reasons that abstractors may need to hold licences that are unused. For example, the licence could be unused due to crop rotation patterns and clear plans could be in place to use the water in future. In these cases the Environment Agency will not seek to revoke licences on the basis of non-use. The Environment Agency is also writing to abstractors whose usage over the same period is less than half of their licensed volume to discuss their ongoing water needs.

We expect this process to lead to at least 600 revocations, significantly reducing environmental risk. The Environment Agency will follow up priority licences with mandatory revocations. This process will also reduce underused licences where abstractors no longer need their full volumes but are using part of their licence. This too will reduce environmental risks without requiring abstractors to change their current activity.

6.5 Removal of remaining significant abstraction exemptions

Currently about 5,000 significant abstractions are exempt from abstraction licensing compared to about 20,000 abstractors that are licensed. These exempt abstractions have no limits on when they can abstract or how much they can take.

Changes to the exemptions will come into force on 1 January 2018 at which point a 2 year licence application period will open, to be followed by a 3 year determination period (from January 2020) for the Environment Agency to process the applications. This will see the removal of significant exemptions. Bringing all significant abstractions into regulation is an important part of our plans to reform the licensing system. For more information on this see our ‘abstraction licensing service’ document.

6.6 Introducing a stronger catchment focus

Our analysis shows that there are around 100 surface water bodies where the pressures of unsustainable abstraction will be challenging to address using existing regulatory approaches. In these places we plan to work with abstractors, other local stakeholders and catchment partners to co-develop solutions that achieve long-term sustainable abstraction.

The Environment Agency will focus on 6 of the most challenging catchments first and capture the agreed solutions for each catchment in updated abstraction licensing strategies. The abstraction licensing strategies for the 6 catchments will be published by 2021. Following this, all licensing strategies will be updated as part of the river basin management plans by 2027.

Where licence changes are required, the Environment Agency will work with abstractors and catchment partners to co-ordinate changes to time limited and permanent licences. This will mean that different types of licences are treated fairly. The ‘catchment focus’ document supporting the abstraction plan contains more information on how we will develop this approach.

6.7 Other actions to protect the environment from unsustainable abstraction

In addition to the actions above, the Environment Agency will continue to ensure that all new licences are sustainable and include conditions necessary to protect the environment.

Licence conditions only provide environmental protection if they are complied with. The Environment Agency already carries out routine compliance checks. It is working to introduce improved targeting of inspections to ensure abstractors are complying with their licence conditions. The upgrade to licensing systems will further improve this process as compliance teams will have access to better information to target their activities.

We recognise that, as the margin between water availability and acceptable levels of abstraction becomes tighter, the approaches used to determine how much water can be taken will be increasingly important. The Environment Agency will work to improve its understanding of acceptable levels of abstraction. It will begin scoping this work, in collaboration with abstractors and environmental groups, in January 2018.

7. Tracking and reporting on progress

The Environment Agency will keep stakeholders informed of its progress on achieving sustainable abstraction. It will set out progress against the actions in this plan and will show how these have reduced environmental pressures from abstraction and impoundment. Ecology can take time to respond to changes in the environment so there may be a lag between the actions taken and the improvements on the ground.

We will report to parliament on progress with abstraction reform by May 2019 and will also report progress in the updated River Basin Management Plan (RBMP) in December 2021. The Environment Agency classifies and reports on water body status every 3 years. It will next classify water body status in 2019.

The Environment Agency will also update abstraction licensing strategies to show the solutions it has agreed with local abstractors and partners to address unsustainable abstraction. It will publish 10 new look strategies, including 6 for catchments that are facing long term environmental challenges from abstraction, by 2021. Following this, it will update all remaining strategies by 2027 as part of the third cycle of river basin management plans.