Changes to water abstraction licences in England

The Environment Agency (EA) are responsible for managing water resources in England, and issue abstraction licenses to allocate and manage the resources. All businesses that take more than 20m3 a day from a river, stream, canal or groundwater need to hold an abstraction licence.

Changes from April 2022 – Charging Scheme

In April 2022 the EA launched its new abstraction licence charging scheme, following a 12-week consultation. The costs under this new scheme are based on the services that the EA provide, whereas historically abstractors had been charged relative to the potential effect of their abstraction licence on the water environment.

Under the previous charging scheme, the application charge had two tiers where the majority of applicants paid the lower fee:

• Lower tier fee: £135; and
• Higher tier fee: £1500.

The annual charge under the previous scheme was calculated based upon the volume of water authorised.

From April 2022, under the new charging scheme, the application charge covers the cost of the activities which the EA carries out to assess and determine an application for an abstraction licence. The new application charge will apply to any operator who applies for a new licence or to vary an existing licence. The application charge consists of two parts:

• The application charge determined using the activity type, volume applied for, and the water availability. This part covers the cost of activities which the EA carry out to assess and determine the application; and
• Additional charge factors for those applicants that require the EA to carry out additional work.

Similarly, the annual charge under the new scheme is based upon cost recovery for the water resource management activities carried out by the EA. The new annual charge will apply to all existing and new abstraction licence holders from 1st April 2022. The new annual charge is made up of two parts:

• A base charge covering the cost of activities the EA carry out for all licence holders; and
• An additional charge factor for those license holders where the EA have to do extra work.

By changing the charging scheme the EA are hoping to increase investment allowing them to continue to manage water resources. The changes will also help to bring the water abstraction licence charging scheme in line with other charging schemes that the EA administer where a customers’ charge relates to the service which they receive.

The Environment Agency (Environmental Permitting and Abstraction Licensing) (England) Charging Scheme 2022 can be found at: Environmental permits and abstraction licences: tables of charges - GOV.UK (www.gov.uk).

Changes from 2023 – Moving to the Environmental Permitting (England and Wales) Regulations 2016

Bringing the water abstraction licences charging scheme in line with other EA charging schemes is beneficial because from 2023 the EA are proposing to move the regulation of abstraction and impounding licensing into the Environmental Permitting (England and Wales) Regulations 2016.

Principles from the water resources legislation, that are not found in the Environmental Permitting Regulations, but are fundamental to protecting abstractors will be moved into the Environmental Permitting Regulations. This will not change the rights, entitlements or conditions of existing licences.

However, new applicants or applicants who vary or transfer a transitional permit and who are issued with a new permit after the move to the environmental permitting regulations, will have different rights and conditions. The move is part of a drive to modernise abstraction and impounding management and to streamline the overall regulatory framework.

Operators will be able to opt for one permit for all of their operations on one site, reducing the administrative burden on operators who hold more than one legal permission with the EA and conduct multiple activities at the same site.

A 12-week consultation was held from the 29th September 2021 to the 22nd December 2021. Further information can be found at: Changes to the regulatory framework for abstraction and impounding licensing in England: Moving into the Environmental Permitting Regulations regime - Defra - Citizen Space.

If you would like to discuss how these changes may impact your business in more detail, please contact us.