Policy and legislative barriers to close water-related loops in innovative small water and 1 wastewater systems in Europe: a critical analysis

22 Water supply and reuse through non-conventional water resources can significantly decrease 23 the stress on natural water resources. Decentralized systems can help not only to alleviate 24 issues of water security in arid areas, but also to create a sustainable framework within a circular economy. Although these small-scale innovative technologies are able to achieve 26 ready-to-use, high quality of recovered/treated water on-site, the loop cannot be closed in 27 most cases due to legislative barriers. Similarly, the end-use of sewage sludge after treatment 28 in decentralized systems still lacks specific regulations that limit its valorization. This work 29 analyzes the current policy and legislation related to water supply, wastewater treatment, 30 water reuse, and resource valorization within the context of decentralized state-of-the-art 31 technologies applied in rural areas. The drawbacks in the current EU legislation that set 32 barriers to close water-related loops in European countries are highlighted. A regulatory 33 fitness check is applied to each type of loop to identify the key factors to accomplish the 34 legislative compliance, and financing pathways are further evaluated at the EU level. As a 35 possible solution, further development of an innovation deal approach is recommended to 36 address the environmental, regulatory, and financial gaps in water management through an 37 integrated framework, providing ad-hoc policies and prescriptions for the sustainable reuse of 38 all water resources. 39


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The depletion of natural resources at a fast rate leads to a transition of the current society to 45 re-evaluate these resources in a sustainable manner. Water is a fundamental resource to 46 sustain life and irregularly distributed both spatially and temporally; furthermore, anthropogenic activities continuously contaminate the limited water reserves (Voulvoulis, 168 Following the afore-mentioned water stress and possible decentralized solutions, the enabling 169 environment was initially analyzed by checking whether the relevant policies support or 170 hinder the implementation of small-scale decentralized collection and treatment systems when 171 inputs (e.g. water categories) are considered to produce and reuse different outputs (e.g. 172 reclaimed water and recovered materials and potentially marketable products). Table 1 shows 173 the relevant legislation, policies, and guidance for the input and output of water-related loops.

Legislative framework and barriers
Fitness check was specifically assessed within the following main directives. A summary of these directives are given in the e-Supplementary file.

Water reclamation and sanitation for water safety
When considering the implementation of any solution that aims at ensuring sustainable 179 management of water and sanitation (Sustainable Development Goal-SDG 6) in the EU, the 180 fitness check with the Water Framework Directive (WFD) 2000/60/EC cannot be overlooked.

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In the WFD, the use of reclaimed water is considered as a means of increasing water 182 availability while ensuring a good quality status of water resources. Specifically, the Directive 183 (Annex VI(x)) refers to 'efficiency, reuse measures, and water-saving techniques for 184 irrigation' to help to achieve good environmental status. In this perspective, the Agency (European Commission, 2019b). In this perspective, the WFD (Art.11(3-f)) allows to 189 artificially recharge the groundwater bodies with water that "…may be derived from any 190 surface water or groundwater…", after the necessary authorization. Thus, no clear constraint 191 on the use of specific water sources is stated, as long as the water used does not compromise 192 the achievement of the environmental objectives for a good water status.

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Furthermore, no explicit permission or prevention is detected for drinking water production 194 from rainwater, as the WFD referred only to conventional water bodies as sources for 195 drinking water production (Art.7(1) and (2)). when reclaimed water production from wastewater is involved. In this regard, the UWWTD 204 (Art.12(1)), promotes the reuse of "treated wastewater…whenever appropriate", as long as it         For each parameter, the reference documents were listed (see column "reference documents").

427
Documents were grouped according to directives, technical standards, guidelines, manual (see 428 column "document type"). Finally, "relevant information" was reported to point out whether 429 the regulatory instruments "support" or "hinder" the recovery and use/reuse of specific 430 resources/by-products. 20 Table 2. Summary of fitness check for small-scale decentralized systems (A: "considered no barrier", in green: if quality and/or safety standards 433 are met and the output reuse is generally allowed; B: "not considered", in yellow: no explicit reference/information in the legislation; C: 434 "considered, potential barrier" in red: if legislation highlights possible constraints to be overcome). supply and sanitation systems. When aquifer recharge is involved, the discharged water is 451 regulated by the WFD in terms of quality to maintain a "good" status of groundwater.

452
Regarding salt production, quality standards defined by FAO and WHO needs to be ensured 453 when food-grade salt is considered. Since no information on the source of salt and the 454 minimum treatment is provided, reuse is outlined as "not defined", while national/regional 455 regulations should be further analysed. The analysis conducted for all EU member states highlighted that the cost recovery is mostly 474 achieved through tariffs, whose affordability differs from between countries. Specifically, the 475 majority of the Countries use the taxpayer's money to cover the Capital Expenditure costs 476 (CAPEX), while few economically weaker Countries use foreign funds as "money transfers" 477 for cost recovery. Moreover, the source of used subsidies for cost recovery can be divided 478 into two main categories ( Table 3): 479 • Countries with a specific water financing structure. In this case, the concept of "water 480 pays water" is followed; • Countries with financing strategies mainly derived from public budget at national or 482 local/regional levels. does not involve any financial transaction, end users will be the payers of the "tariff" (e.g. a 492 farmer will pay to maintain/operate its small-scale decentralized treatment system and the 493 initial investment at least partly).

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Furthermore, local, regional or national public bodies or water service operators can provide  The challenge is to consider the health and environmental risk related to the emerging 516 contaminants (e.g. pharmaceuticals, micro-nanoplastics) while recovering and safely reusing 517 water and raw materials. Therefore, the implementation of small-scale treatment solutions must 518 be supported by ad-hoc regulations for small agglomerations and by a regional integrated health 519 and environmental risk-based approach to sustainably manage solid and liquid non-zero-