Environment Agency withdraws catchment nutrient balancing

The Environment Agency (EA) has formally withdrawn catchment nutrient balancing (CNB) as an option for water companies in AMP8.

CNB allows water companies to offset the nutrient (mainly phosphorus) reduction requirements specified in their sewage works permits, by funding farmers to implement catchment measures to cut nutrients instead. It has been trialled in AMP7, with a view to cutting pollution and meeting phosphorus standards at lower financial, carbon and chemical costs, while also providing other benefits, such as for biodiversity.

Ahead of Christmas, the EA said it was ‘minded to’ withdraw CNB permitting as a regulatory mechanism for wastewater treatment works discharges, calling the approach “ineffective and unworkable”. It based this position on: 

• Lack of strong evidence demonstrating a link between CNB measures and water quality improvements to achieve environmental objectives.

• Insufficient availability of catchment measures to reduce nutrients sufficiently to meet polluter pays fair share requirements and achieve nutrient standards. 

• Enforceability concerns regarding third parties.

• CNB will not achieve key statutory environmental targets required to protect the environment.

The EA extended the time it had earmarked to consider responses after significant challenge from water companies and nature groups. However, in a recent letter to water companies, deputy director of water regulation Judy Proctor confirmed the ‘minded to’ decision would stand – starting from 1 April 2025. She said all responses had been considered in detail but “did not provide sufficient counter-evidence to the environmental and regulatory risks and challenges that we identified to be able to continue with CNB”.

An Environment Agency spokesperson added: “As the environmental regulator, we have a duty to make sure all sectors meet their legal water quality requirements and comply with their permits. After thorough evaluation, it has become clear that CNB does not aid water companies in meeting their targets for pollution reduction in order to offset the tight permit limits in place for their sewage discharges. We will work with water companies to develop alternative solutions to better protect the environment.

“We are committed to supporting innovation across all sectors, including through catchment permitting and nature-based solutions. We will also continue to encourage collaboration between the farming and water industries, and to build a robust evidence base in which innovative ideas to reduce nutrient pollution can be grounded.”

It remains to be seen whether the decision will be challenged.