On 3 September 2026, Advocate General Kokott delivered a significant Opinion in Case C‑193/25, Poland v Parliament and Council, recommending the annulment of the provisions of the revised Urban Waste Water Treatment Directive 2024/3019 (UWWTD) that require pharmaceutical and cosmetics producers to finance 80% of the costs of quaternary wastewater treatment. While the AG accepts the legitimacy of applying the polluter-pays principle to micropollutants in wastewater, she concludes that the EU legislature failed adequately to substantiate the scientific basis for selecting those industries to pay 80% of the costs.
Link to The challenge to the Urban Wastewater Treatment Directive The challenge to the Urban Wastewater Treatment Directive
The revised UWWTD was made under the Waste Framework Directive 2008/98/EC (WFD). Consistent with the “polluter pays” principle under Article 191(2) TFEU, the WFD sets out measures to prevent or reduce the generation of waste, to reduce the adverse impacts of the generation and management of waste and to reduce the overall impact of resource use and improve the efficiency of such use. It also introduced the concept of Extended Producer Responsibility (EPR) and outlined its parameters: broadly, that companies that produce a waste must contribute by financing collective schemes to deal with that waste.
The UWWTD introduces a “quaternary treatment” stage designed to remove micropollutants from wastewater. To finance that additional treatment, Article 9 requires Member States to ensure that producers cover at least 80% of the associated investment, operational and monitoring costs through an EPR scheme covering the products listed in Annex III to the Directive. Currently, Annex III lists only pharmaceuticals and cosmetics.
Poland brought an action for annulment challenging those provisions, arguing that they infringe the polluter-pays principle, the principle of equal treatment and the principle of proportionality. According to Poland, the EU legislature failed to demonstrate that pharmaceuticals and cosmetics are responsible for a sufficiently large share of micropollutants to justify imposing such a substantial financial burden on those two sectors alone.
The provisions have also triggered a number of related challenges. Several actions by affected industry bodies and companies were dismissed by the General Court as inadmissible, and the Irish High Court has separately made a preliminary reference to the Court of Justice raising similar validity questions.
Link to EU institutions’ margin of discretion EU institutions’ margin of discretion
The Opinion reiterates the Court’s well-established case law that the EU legislature enjoys a broad margin of discretion when adopting complex environmental legislation involving scientific, economic and policy assessments.
However, AG Kokott notes that even where that judicial review is of limited scope, it still requires that the EU institutions that have adopted the act in question be able to show before the Court that in adopting the act they actually exercised their discretion, and took account of all relevant basic facts. In particular, where scientific assessments underpin legislation, the institutions must be able to explain clearly how those assessments were conducted and the related conclusions reached.
Link to Issues with the EU institutions’ scientific justification Issues with the EU institutions’ scientific justification
The Commission’s impact assessment relied heavily on a feasibility study which concluded that pharmaceuticals and cosmetics account for 73% of micropollutant quantities entering wastewater treatment plants and as much as 92% of the relevant toxic load when weighted using a “predicted no-effect concentration” (PNEC) methodology.
The AG identifies a number of difficulties with those figures.
- Other polluting sectors: First, she notes that several scientific studies cited by Poland suggest that other sectors, particularly pesticides and biocides, may also contribute significantly to micropollutant contamination. In her view, the institutions failed adequately to explain why those sectors were excluded from the EPR scheme despite evidence of their contribution to wastewater pollution.
- Toxic load data: Secondly, and more importantly, the Opinion finds serious shortcomings in the data underpinning the PNEC-weighted toxic load calculations. Poland identified what it argued were substantial anomalies in the underlying scientific data, specifically, in the PNEC values used for several pharmaceutical substances. The AG considered those criticisms significant. According to her analysis, in the figures used to justify the legislation, four pharmaceuticals alone accounted for approximately 58% of the total PNEC-weighted toxic load, corresponding to 88% of the toxic load attributed to all pharmaceuticals. Yet alternative values contained in factsheets derived from the same scientific databases would have dramatically reduced their contribution.
- Cosmetics: According to data disclosed by the Commission, more than half of the toxic load attributable to cosmetics comes from the substance permethrin, which Poland argued is actually used as a pharmaceutical. AG Kokott noted that there are many uses that may result in the presence of permethrin in wastewater. She concluded that it was not reasonable to ascribe a considerable share of the responsibility for the toxic load in wastewater to a particular sector merely because a substance is used in that sector, where it remains unclear how much of the substance actually present in wastewater originates from that sector.
The Opinion does not conclude that the Commission’s figures were necessarily wrong. However, AG Kokott finds that the institutions failed to examine or adequately explain the underlying data before relying on them in the legislative process, stating “At the very least, therefore, the institutions have failed in their obligation clearly and unequivocally to show before the Court that in adopting the act they actually exercised their discretion”.[1]
Link to Generic medicines Generic medicines
The Opinion also specifically addresses the burden these provisions place on the generic pharmaceutical sector. Poland had argued that generic manufacturers would bear a disproportionate share of the costs because many widely prescribed active substances are supplied predominantly as generics. At the same time, generic manufacturers have little ability to redesign products to reduce micropollutant emissions because EU pharmaceutical legislation requires generic products to contain the same active substances as their reference products. Further, they argued that generic products are low margin and producers may be unable to pass on increased costs due to the constraints of national pricing and reimbursement systems for pharmaceuticals.
The AG accepts that the environmental incentive effect of the scheme may be weaker for generic manufacturers than for innovators. However, she noted that the legislation anticipates that additional costs will be low and that Member States will be able to influence both the arrangements for implementing EPR and pharmaceuticals pricing, so can mitigate any risks relating to affordability, availability or accessibility. Overall, the AG holds that the impact on the generic sector alone is not enough to establish that the EU legislature committed a manifest error in assessing whether extending EPR to the producers of generics was proportionate.
Link to Proportionality Proportionality
Poland also raised arguments based on proportionality and failure to give reasons. The AG considers these valid to the extent that they overlap with and support the concerns about the manifest error of assessment. However, other aspects concerning the ability of the institutions to use estimates and amend legislation without impact assessments are dismissed.
Link to Proposed annulment Proposed annulment
AG Kokott ultimately proposes that the Court annul Article 9(1)(a) and Annex III of the UWWTD, which together establish the obligation for pharmaceutical and cosmetics producers to finance 80% of quaternary treatment costs.
Importantly, the AG considers those financing provisions severable from the remainder of the Directive. The wastewater treatment obligations themselves could therefore remain intact even if the financing mechanism were removed.
Link to What happens next? What happens next?
The AG’s Opinion is not binding, but is often followed by the Court.
If adopted, it would be a significant finding that the EU legislature failed to substantiate a flagship “polluter pays” mechanism.
The AG suggests two possible ways forward if the Court is undecided:
- The Court could consider reopening the oral procedure and give the parties the opportunity to comment further on the issues she identifies.
- The Court could stay the present proceedings and then rule on them in conjunction with the request for a preliminary ruling in Case C‑614/26, Irish Pharmaceutical Healthcare Association and Medicines for Ireland.
She remarks that the second option would permit a more in-depth examination of the same questions.
For the time being, the pharmaceutical and cosmetics manufacturers have secured a significant endorsement of their criticisms, but the final word on the future of the EU’s wastewater levy now rests with the Court.
Arnold & Porter’s European Life Sciences team is following this case with interest, given its significance for pharmaceutical and cosmetics clients across the EU. If you have questions or wish to discuss how this Opinion, or the Court’s forthcoming judgment, may affect your business, please do not hesitate to reach out to Alexander Roussanov or Tom Fox.
[1] Case C 193/25, Poland v Parliament and Council, AG Opinion of 3 September 2026, para. 93.