Authors: Dunja Jandl, Partner, CMS Ljubljana; Ivan Gazdić, Partner, CMS Belgrade; Marija Marošan, Senior Attorney, CMS Belgrade; Tamara Žajdela, Attorney-at-Law, CMS Ljubljana; Igor Đorđević, Attorney-at-Law, CMS Belgrade
Wastewater treatment involves various methods of municipal and industrial wastewater treatment, by virtue of which harmful chemical and biological substances, as well as solids and gases are removed from wastewater, thereby achieving several very important goals.
The first and certainly the most obvious positive effect of wastewater treatment is obtaining clean water suitable for reuse. Additionally, in the process of purification and decomposition of biological material contained in wastewater, methane gas is obtained, combustion of which produces electricity, which in practice is often used on-site, i.e. for the operation of the wastewater treatment plant with the possibility of selling surplus electricity back into the grid. Finally, biological material extracted from wastewater can be converted into fertilizers that can be further used in agricultural production.
Where does Serbia stand? Can Slovenia lead the way?
Serbia – still at the beginning
However, despite the existence of possibilities for achieving the above described benefits, statistical data related to wastewater treatment clearly show that this sector in Serbia is marginalized and underdeveloped. In this respect, one may conclude that comprehensive regulations, harmonized with the EU standards, and the necessary capacities for wastewater treatment are lacking; according to data from 2019, in Serbia only 16% of wastewater is treated per annum.
Good news is that in January 2020, the Chapter 27 Negotiating Position was finally adopted. This position represents an expert analysis of the legislative system, institutional framework, and level of implementation of regulations relating to environmental protection and climate change. The adoption of this document finally created the conditions for the opening of Chapter 27 at the end of this year or next year, as well as for the commencement of work on the implementation of necessary reforms in this sector.
What are the obligations of private sector?
Obligations of companies regarding the protection of rivers from wastewater discharge are prescribed primarily by the Serbian Waters’ Act and the Environmental Protection Act, as well as accompanying bylaws.
Depending on the industry in which a company operates, the Decree on emission limit values for pollutants in water and deadlines for their achievement, sets emission limit values for pollutants for technological and other waste waters that are directly discharged into watercourses. More than 50 broad-spectrum activities mentioned in the Decree include, inter alia, oil refining, textile refining and production, milk and dairy processing, fruit and vegetable processing, non-alcoholic beverages and water production, sugar production, meat processing and canning of meat products, beer production, etc.
A legal entity or an entrepreneur who has wastewater treatment plants and / or discharges its wastewater into a watercourse, lake or a public sewer system is obliged to harmonize its emissions with the emission limit values for pollutants in the waters prescribed by the regulation, no later than 31 December 2025. They are also obliged to have an action plan for reaching the emission limit values (the deadline for adoption of the action plan has already expired), which sets deadlines for incremental achievement of these limit values. Legal entities also need to submit a report on the implementation of the action plan to the ministries responsible for environmental protection and water management, every two years from the date of adoption of the action plan.
A violation of regulations in this area can result in economic penalties, legal misdemeanors, and even criminal charges. Fines range up to 3,000,000 dinars (app. EUR 25,500).
Companies are, therefore, obliged to provide funds and set deadlines for the construction and commissioning of wastewater treatment plants in accordance with the action plan for reaching the emission limit values for pollutants, the water protection plan and the water management plan. There is also an obligation to continuously measure the quantity and quality of wastewater and its impact on rivers in Serbia.
In addition to the fact that wastewater treatment is a legal obligation, it is also a reflection of socially responsible behavior and care for the environment. There are good examples in this regard, such as the Apatin Brewery (Apatinska pivara), Hemofarm, and Grundfos companies. However, for many companies, compliance with this regulation and the one that will follow the opening of Chapter 27 is still pending and expected.
What about communal wastewater?
The majority of cities in Serbia, including Belgrade, do not have wastewater treatment plants. For that reason, it is expected that the construction of new wastewater treatment facilities (and reconstruction of the existing systems) will require an investment of more than 5 billion EUR.
One of the positive examples among the cities is the city of Šabac, where the wastewater treatment plant has been in operation since 2017. In addition to the obvious positive effects on the environment, the plant also facilitates the business of legal entities – they are not required to have their own treatment plant, but only a pretreatment plant.
On the other hand, there is the example of the city of Leskovac, where a missing sewage, wastewater collection and treatment system has been under construction for longer than a decade.
Belgrade is the only capital city in Europe that discharges its untreated communal wastewater into rivers. Construction of missing sewage systems has to date not been one of the city’s priorities. However, according to city officials, there are plans for the construction of five wastewater treatment plants on the territory of the city of Belgrade. The first and the biggest plant which will treat 80% of communal wastewater will be constructed by Chinese company – China Machinery Engineering Corporation. The said company was engaged in January 2020 based on a bilateral agreement between China and Serbia.
Furthermore, the documentation for construction of systems for collection and treatment of wastewater in Loznica, Pančevo, Kraljevo, Brus, Blace, Sokobanja, Kragujevac, and Zlatibor District is under preparation with the assistance of the EU PPF programme. Additionally, according to the Ministry of Finance, a public tender for the construction of a wastewater treatment plant in Niš is to be published in September this year.
Slovenia as a positive example in the region, but still with room for improvement
Soon after gaining independence and well before joining the EU, Slovenia adopted its first piece of legislation on environmental protection, which included wastewater treatment regulation. The first Environmental Protection Act was modelled on the principles of the then European Community and thus laid the foundations of modern environmental protection in Slovenia.
Despite extensive investment in the construction of basic infrastructure, including obtained European funds, Slovenia has still not met all the requirements regarding wastewater management originating from its accession treaty. Namely, some agglomerations (i.e. centers with many inhabitants or places of economic activity) have not yet met the requirements related to the collection and secondary treatment of wastewater, and Slovenia also has problems with the demarcation of agglomerations as well as with individual systems such as septic tanks.
In order to provide Slovenia with sufficient time to adapt to the requirements, the deadline for the implementation of Directive 91/271/EEC concerning urban waste-water treatment has been extended to 2021, that is, six years after the original deadline. In the 2019 Environmental Implementation Review, the European Commission called on Slovenia to increase investment in wastewater management and ensure compliance with European regulations as soon as possible.
All municipal wastewater must be treated before discharge into the natural environment in such a way that the impact on the natural environment is as small as possible. Each municipality in Slovenia must establish a public service for the collection and treatment of municipal and precipitation wastewater. This public service maintains public sewers and treats sewage sludge. Residential buildings must be connected to the sewerage system, but where there is no regulated public sewerage, the owners of buildings must arrange small municipal sewage treatment plants instead of septic tanks by the end of 2021 at the latest.
In the case of industrial wastewater, discharge and treatment is possible either by connecting to a public sewer or by independent discharge and treatment (pre-treatment before discharge into the public sewer). The temperature, pH and substance content limit values are set for each industry separately in the relevant Decree.
The Slovenian state encourages the reduction of wastewater pollution and the reduction of water use also through financial measures. One of the most important measures in this area is the collection of a tax for environmental pollution due to (i) industrial, and (ii) municipal wastewater discharge. Slovenia boasts one of the highest shares of environmental tax revenues in relation to gross domestic product in the entire EU.
When calculating the environmental tax for municipal wastewater, the operation of municipal wastewater treatment plants is taken into account. If the user discharges municipal wastewater into the sewage system, which ends with a municipal secondary or tertiary treatment plant or with a small municipal treatment plant, the environmental tax is reduced by 90%. If only primary treatment is carried out at the municipal treatment plant, the environmental tax is reduced by 40%. Septic tanks are not eligible for reducing the environmental tax.
For the calculation of the environmental tax for industrial wastewater, the annual sum of load units achieved in the previous calendar year shall be taken into account. Taxpayers submit the calculation of the environmental tax in the form of four quarterly declarations to the financial office where they are entered into the tax register.
Increasing amounts of sewage sludge have long been a major problem in the wastewater discharge and treatment process. Until recently, a large proportion of sludge (around 50%) was exported, mostly to Hungary. However, after Hungary’s decision not to accept foreign sewage sludge, the sludge began to accumulate.
Currently, much of the sludge is incinerated and the proportion of sludge that is disposed of in landfills is declining. Despite attempts to promote the use of sludge in agriculture, it remains unpopular among farmers. The reason for this lies mainly in the high cost of possible controls and analyses necessary for the use of sludge as fertilizer.
A fine of EUR 4,000 to 50,000 is imposed on a legal person liable for industrial wastewater minor offence if this person does not calculate the environmental tax or draw up or submit a tax return for environmental tax. In this case, a fine of EUR 400 to 4,000 is also envisaged for the responsible person in the legal entity.
Fines for legal entities that do not provide mandatory services of the public service of public sewerage or sludge treatment range from EUR 10,000 to 20,000 and between EUR 1,000 and 2,000 for the responsible person in the legal entity.
To popularize the proper management of wastewater, many municipalities in Slovenia subsidize the connection to the sewage system or construction of private small municipal wastewater treatment plants. For example, the municipality of Kamnik allocates up to 50 percent of the purchase value without VAT and a maximum subsidy of up to EUR 2,500.
In addition, loans granted by EKO Sklad (a government agency) are available to both business and citizens. Up to EUR 2 million is available to companies for the construction or reconstruction of wastewater treatment plants for a period of up to 15 years at an interest rate of EURIBOR + 1.3%. Individuals can obtain a loan of up to EUR 1,500 for connection to the public sewerage network or the construction of a small treatment plant for a period of up to 10 years at the same interest rate.
Being at the very beginning of its journey towards the development and implementation of sustainable environmental policies, Serbia should be searching for tested solutions, like Slovenia’s environmental tax revenues scheme, in order to strengthen the awareness, discipline and responsible behaviour of corporations, local authorities, and public utility companies.
Now more than ever, when the whole world is fighting the COVID-19 pandemic, people should be aware of the fundamental importance of all natural resources, and in particular lakes, rivers and other watercourses. Availability and access to clean water should not be taken for granted; every one of us needs to take action to protect the environment and keep our communities healthy.
*This article is intended for general information purposes only and does not constitute legal advice.