Responsibility for regulation of the water sector is divided between the Danish Ministry of Energy, Utilities and Climate and the Ministry of Environment and Food of Denmark.

Since 2015 the Danish Ministry of Climate, Energy and Utilities has been responsible for the legislation regarding:

  • Economic regulation and organisation of water supply companies.
  • Consumer payment and delivery terms for drinking water and wastewater services.

The Ministry of Environment is responsible for legislation concerning the environment, the supply of drinking water, and disposal of wastewater.

Economic regulation and organisation of Danish water companies

The drinking water and wastewater sectors in Denmark are natural monopolies. Therefore, both sectors are regulated according to a self-supporting principle by which companies can charge the price that corresponds to the necessary costs.

In order to ensure efficient management of the sectors, in 2009 the Danish Parliament passed legislation under which the largest water supply companies and municipally owned water supply companies are subject to a number of requirements concerning economic regulation and organisation. 

Approximately 300 companies are subject to the regulation covered by the Danish Water Sector Act. The Act provides rules for the water supply companies to keep their revenues within a set limit (a revenue cap), and it stipulates rules for efficiency requirements. Benchmarking is used by the regulator to set individual requirements for efficiency improvements. The water sector legislation also regulates the activities which the water and wastewater companies are allowed to perform.

The Secretariat for Water Supply is the Danish economic regulator for water supply companies. The tasks of the Secretariat are stipulated in the water sector legislation. The Secretariat is a part of the Danish Competition and Consumer Authority under the Ministry of Industry, Business and Financial Affairs.

Payment and delivery terms for water

Most consumers in Denmark are connected to systems from a water supply company and a wastewater company.  The Danish legislation on payment for drinking water and wastewater services regulates how the water supply companies cover the costs for the services they provide to the consumers. (The rules can be found in the Water Supply Act and the Act on Payment Rules for Wastewater Supply Companies).

Wastewater supply companies are also financing climate change adaptation

In the event of a cloudburst, many sewers can be overloaded beyond their capacity. Wastewater companies are responsible for financing climate change adaptation within their discharge system. Furthermore, according to the Act on Payment Rules for Wastewater Supply Companies, the wastewater companies may also co-finance their part of climate change adaptation projects with dual purposes, i.e. cloudburst adaptation on municipal and private property.

You can read more about climate change adaptation in Denmark on the Danish portal for Climate Change Adaptation.

Anita C. Jakobsen
Advisor (+45) 3392 6652