Aguas de Portugal says consumers will be the ones paying for the climate transition

President Aguas de Portugal warned this Wednesday that subsidies to finance the climate transition in this sector are gradually being reduced and that it will be the people who will foot the bill, either through taxes or tariffs.

“We are the ones who will pay for the climate transition. We don’t really know whether this will come through taxes or tariffs, but certainly not through subsidies. Subsidies are gradually being phased out. [redução gradual]with increasingly targeted activities towards positive dissemination,” warned José Furtado, President of the Board of Directors of Águas de Portugal.

Generally speaking, the currency that finances the climate change transition has two sides: either taxes or tariffs, he said, likening the equation to a zero-sum game where “more taxes means less tariffs and vice versa.” vice versa”.

In the final debate of the National Assembly of Water and Sanitation Enterprises (ENEG) in Gondomar, where he participated, the person in charge admitted that the climate transition will “exacerbate” the asymmetries between metropolitan areas and regions within the country, which will experience more difficulties in achieving their goals.

José Furtado argues that in these asymmetrical efforts there must be mechanisms of social solidarity, deeming it “unacceptable or sustainable” that “certain sections of the population have to bear the bulk of the effort” for investments resulting, among other things, from the transposition of European water quality directives and wastewater.

Also in Spain, financing is the biggest problem in the water sector.

Pascual Fernandez, president of the Spanish Association of Water Purification and Saneamiento (AEAS), said that, as in Portugal, tariffs, which in the neighboring country are around two euros per cubic meter, are “clearly insufficient” to cover the costs of operators. .

The amount charged in Spain contrasts, he said, with those in the Nordic countries or the Americas, where the user pays principle is observed and where tariffs can reach 12 euros per cubic meter.

According to Pascual Fernandez, the effective application of this concept will provide the means to “attack” upcoming tasks.

Water and Wastewater Services Regulatory Agency (ERSAR) President Vera Eiro believes there is a governance problem in the sector that needs to be addressed and is calling on the 232 governing bodies (155 municipalities under direct control) to come to an understanding.

However, the leader admits that the big difficulty in direct governance is the “hidden subsidy” that results from the country not having national governance to cover costs.

“This creates problems for the future because people don’t value what they have and don’t pay what they should pay,” he said.

Vera Eiro also believes that by applying the criterion of global subsidies to the sector, Portugal is, on the one hand, subsidizing those who need it and those who do not need it – “which is unfair” – and on the other hand, it is not allowing investment to take place .

“Because without adequate tariffs it is impossible to invest in the structure, and with investments in rehabilitation of 0.2% per year we will not achieve this. In ten years we will have a serious problem, and it will be a shame,” he concluded.