Europe's water health crisis

By Mathieu De Kervenoael and Mathieu Jamot

Water pollution is Europe's chronic crisis — persistent, compounding, and largely invisible to those it affects most. Today, 50% of Europeans are exposed to drinking water above safety thresholds, while only 40% of surface waters meet ecological standards and fewer than 27% achieve good chemical status.

These metrics represent a fundamental breakdown in the systems that underpin public health, ecosystem resilience, and economic stability. Roland Berger supported Summa Equity in developing a comprehensive framework—the Water Health Scenario—that charts a path to restored water systems by 2040. The transformation requires €226 billion in incremental capital investment, but it also unlocks a €1 trillion market opportunity and prevents far greater costs down the line.

A compounding crisis

Water health — defined by chemical and ecological quality — determines whether ecosystems function, whether drinking water is safe, and whether water services remain reliable. When quality declines, the consequences cascade. Ecosystem degradation is shifting €230 billion per year in natural services — water filtration, flood protection, nutrient cycling—from nature onto citizens and governments. As water systems degrade, this natural capital erodes, shrinking the foundation of Europe's water security.

Europe faces six major pollutant families: PFAS (forever chemicals), pesticides, nitrates, pharmaceutical and personal care products (PPCPs), microplastics, and heavy metals. While toxicity varies, the real risk lies in combined, continuous exposure—what scientists call the exposome. People encounter this chemical mix daily through contaminated food and water, skin absorption, and air. These lifelong exposures accumulate from infancy to old age, altering metabolism, fertility, and immune resilience.

A shift in the sources of these pollutants makes the problem even harder to solve. Pollution has shifted from industrial point sources—largely addressed through regulation—to diffuse, persistent flows across the entire value chain. Agriculture generates nutrient and pesticide runoff. Industry produces chemicals that persist in products and waste streams. Urban and rural areas contribute through consumption patterns and inadequate treatment infrastructure. All these flows converge in water systems where treatment facilities struggle with substances they weren't designed to remove. Climate extremes compound the pressures: droughts concentrate contaminants, floods spread contamination, and wetland loss has removed critical natural filtration capacity.

The implementation gap

EU policy has made progress, but implementation lags behind ambition. Regulation remains largely reactive, with restrictions coming after widespread contamination. Monitoring covers only a few dozen substances, leaving major gaps for emerging contaminants and almost no evaluation of cocktail effects.

The European Commission has confirmed that full compliance with the Water Framework Directive's 2027 targets is out of reach under current programs. Nearly 50% of EU environmental infringement cases relate to pollution, exposing the gap between policy and reality.

The European Commission has confirmed that full compliance with the Water Framework Directive's 2027 targets is out of reach under current programs. Nearly 50% of EU environmental infringement cases relate to pollution, exposing the gap between policy and reality.

This implementation deficit has direct financial consequences. Current spending on environmental protection — including water, air, waste, and biodiversity — amounts to around 1.6% of EU GDP per year. Meeting existing environmental objectives would require this to rise to approximately 2.4% of GDP, an increase of roughly 50% corresponding to an additional €122 billion annually.

Falling short leaves aging infrastructure, legacy pollution, and emerging contaminants insufficiently addressed. The cost of delayed action: at least €180 billion annually in health impacts, ecosystem losses, and cleanup expenses. Private capital has largely stayed away due to fragmentation, long payback periods, and unstable regulation.

Five forces driving change

Several structural shifts are creating momentum for a different approach.

1. Innovative financing models are mobilizing capital through polluter-pays and beneficiary-pays principles. France is introducing a PFAS levy. Swedish courts are holding industrial polluters liable for cleanup costs. From 2028, EU directives will require pharmaceutical and cosmetics producers to finance at least 80% of the costs of removing micropollutants from wastewater. Applied broadly, these mechanisms could cover more than 30% of needed water treatment investments.
2. Circular economy solutions are transforming waste streams into resources. Biosolids valorization, nutrient recovery, and resource extraction from wastewater are moving from pilot projects to commercial scale. Recovering phosphorus addresses both pollution concerns and supply security. Generating biogas from anaerobic digestion creates revenue streams that help offset treatment costs.
3. Regulatory frameworks are evolving from compliance toward prevention and extended producer responsibility. This shifts accountability upstream, creating incentives for cleaner production rather than end-of-pipe treatment. Tighter standards are being implemented across drinking water safety, industrial emissions, and agricultural practices.
4. Citizen engagement is changing the governance landscape. Rising awareness and public pressure are strengthening demand for cleaner water, transparency, and reform. Communities are increasingly acting as water stewards, participating in monitoring and decision-making.
5. Advanced and digital technologies are enabling capabilities that weren't possible a decade ago. Digital tools enable real-time monitoring and predictive management across water systems. Advanced treatment technologies are scaling to address pollutants that persist and accumulate, including ultrafiltration, nanofiltration, and targeted destruction methods for PFAS, microplastics, and PPCPs.

The Water Health Scenario: a roadmap to 2040

Summa Equity's Water Health Scenario outlines a systematic approach to restore Europe's water systems by 2040, built on eliminating harmful substances through bans, phase-outs, and substitution, using advanced treatment to capture pollutants at their source or along their pathways, protecting populations from contamination, and restoring ecosystems through remediation initiatives.

The report poses that by 2040, these measures would cut pollutant emissions across all major contaminant groups by more than 50%, with around 75% of European water bodies achieving compliance with Environmental Quality Standards, compared to less than 40% today. PFAS exposure would shrink from approximately 200 million people today to fewer than 5 million, while pesticide exposure through tap water would fall from 45 million to fewer than 8 million people. Nitrate contamination would be eliminated for all Europeans. PPCP residues would be reduced by 70%. Microplastic ingestion would drop sixfold. Heavy metal exposure would be cut by around 90%.

Achieving this requires €226 billion in incremental capital expenditure over the next 15 years, distributed across the four levers, representing a 30% increase in water treatment spending. But the economic case is clear: Water health markets could reach €370 billion in annual revenues by 2040, driven by expanding demand for advanced treatment, resource recovery, and ecosystem restoration. In total, this transformation could unlock a €1 trillion water market opportunity — while preventing at least €180 billion annually in health impacts, ecosystem losses, and cleanup expenses.

This isn't only about avoiding risks — it's about unlocking innovation, creating healthier communities, and building resilience for generations to come. With coordinated action, Europe can cut toxic exposures, prevent premature deaths, revive ecosystems, and position itself as a global leader in water health and circular economy solutions.

Access Summa Equity's full report here.

Stay current with our latest insights on water, sustainability and climate action topics. We will email you when new articles and studies are published.