Water industry regulator Ofwat has launched a new consultation on the abstraction incentive mechanism (AIM).

The abstraction incentive mechanism (AIM) has the objective of encouraging water companies to reduce the environmental impact of abstracting water at environmentally sensitive sites when water is scarce.

Ofwat is planning to implement the AIM in reputational form from 1 April 2016. The water companies in England and Wales can propose abstraction sites for inclusion in the AIM. No water company wholly or mainly in Wales has proposed an AIM site and the environmental information the regulator currently has does not suggest there might be a need for them to do so.

Ofwat is therefore expecting that the AIM will only apply to water companies wholly or mainly in England.

The regulator said it wants the AIM to support:

• Ofwat’s vision for the sector of trust and confidence in water and waste water services
• The Water 2020 programme
• Ofwat’s new resilience duty
• Water trading incentives
• The Government’s planned abstraction reforms
• The Environment Agency’s work to restore sustainable abstraction
• Companies meeting the Water Framework Directive’s objectives

Ofwat set up an AIM taskforce in April 2015 to develop proposals for the AIM. Via the consultation the regulator is now  seeking views on the taskforce’s proposal for how the AIM will work, the number of abstraction sites companies are proposing to include in the AIM and Ofwat’s proposals for how companies will report on the AIM.

Deadline for submission of response is 14th January 2016. 

Click here to access the consultation online