Abstraction licencing: are you ready for the new charges?

Those who hold abstraction or impoundment licences may recall that last August (2021) the Environment Agency launched a strategic review of the charges associated with these licences. Members can view the CLA response to the consultation on the charges review here.

The drivers of the changes were to bring abstraction application fees in line with charges for other environmental permitting regimes – like waste operations and flood risk works – and for the Environment Agency to ensure it is upholding its statutory duty to ensure abstraction is sustainable, with enough water left in the environment.

The outcome of the review is a change to the abstraction licence charging regime for the first time in over a decade. The Environment Agency have based these new charges on:

• the volume of water taken from the environment;
• where the water is taken from; and
• how much of that water is returned to the environment.

The new application and annual charges went live on 1 April 2022 and we have been told that those with abstraction licences can expect their first annual bill under the new charging regime later this summer.

What are the impacts?

Within the agricultural sector, the Environment Agency have calculated that 80% of licence holders will see an increase or decrease in their annual charges of less than £100. 54% of agricultural licences are expected to be charged less than £200.

However, high volume abstractors may have significantly larger annual charges.

There are also impacts to new abstraction licence applications; the previous flat rate of £135 for new applications has gone, and there is the potential that new applications may cost significantly more depending on circumstances (possibly thousands of pounds).

Are you ready for the changes?

If you have an abstraction licence, make sure you know what changes to expect when your next bill is issued. You should expect to receive the next annual bill around August or September 2022.

To check what charges you can expect, use the Water Resources Annual Charge Indicator Tool which is available here on the gov.uk website. You can also find out more information on the new charging regime at this link.

What else is changing?

The Environment Agency has also consulted on moving the abstraction licencing regime into the Environmental Permitting Regulations (EPR) and you can read the CLA’s response to this proposal here. The move will enact some major changes to abstraction licencing, including to licences of right (permanent licences). The move into the EPR is expected to be implemented in Autumn 2023, so it is worth reviewing any licences and considering if you need to make any alterations before the regime changes.

The CLA sits on the Environment Agency’s External Advisory Group for the move of abstraction licencing into the Environmental Permitting Regime, so if members have concerns or points you would like to raise, please get in touch with us. Similarly, if you have been impacted by the new licence application fee, let the CLA know about your experience.