AMP8, the eighth Asset Management Period, has brought record levels of approved spending as the UK Water Industry modernises ageing infrastructure and strengthens resilience against climate pressures.
However, this investment is accompanied by an inevitable rise in costs, and many businesses are already feeling the impact. According to MOSL (Market Operator Services Limited), wholesale charges for non-household customers in England are forecast to increase by around 42% between 2025 and 2030, before inflation is taken into account.
The sharpest increases have been front-loaded, with most water companies applying the bulk of their approved uplifts in 2025–26, catching many industrial users off guard.
Further cost escalation may follow. The Competition and Markets Authority (CMA) has provisionally supported average increases of around 20% for several water and wastewater companies that appealed Ofwat’s price determinations. Final decisions, expected in March 2026, could confirm these higher levels, adding to an already steep cost trajectory.
Compounding this challenge is Ofwat’s proposal to phase out Large User Tariffs (LUTs), which currently offer discounted rates to high-volume water users. Whether applied as a fixed discount or a sliding scale based on consumption, LUTs have long provided a degree of price stability for energy and water-intensive industries. Their removal would leave many businesses fully exposed to the new charging framework and further narrow the options available for cost control.
These economic headwinds come at a time when water scarcity is an increasingly material risk. Drought events in recent years have already exposed the fragility of regional supplies, while climate change, population growth and rising industrial demand will only heighten the pressure.
The Environment Agency warns that, without concerted action, seven UK regions will experience water stress as early as 2030 and England could face a shortfall of around five billion litres of water per day by 2050–55.
For manufacturers and process operators, securing reliable and affordable water sources will become as critical as managing energy or raw materials.
7 UK regions will experience water stress as early as 2030 and England could face a shortfall of around five billion litres of water per day by 2050–55.
From Cost Pressure to Circular Opportunity
For industrial users, the implications are clear: water costs are rising, and long-term supply security can no longer be taken for granted. Yet this is also a moment of opportunity. By rethinking how water is managed on site, businesses can turn a cost and compliance issue into a driver of efficiency and resilience.
At Veolia, we help our customers move towards circular water cycle management, an approach that keeps water in use for longer and transforms wastewater from a liability into an asset.
Reducing Consumption to Reduce Dependency on Mains Supply
- Smart monitoring and control across your operations helps us identify leaks or areas of high consumption which we can then work with you to reduce.
- Utilising water-efficient technologies to suit your business’ operations.
- Implementing on-site reuse and recycling of greywater to create closed-loop systems that reduce consumption and costs.
Turning Waste into a Valuable Resource
- Utilising anaerobic digestion, we can turn your wastewater into biogas, a renewable source of energy that can power your own operations, reducing reliance on the grid and further fluctuating prices.
- This process also produces a nutrient-rich bio-fertiliser, of high value across the agriculture sector.
- Waste heat can also be recovered across your water network.
By focusing on the entire lifecycle of your water use, from consumption to discharge, we can deliver cost reductions and support your environmental performance, helping you align with net-zero and circular economy goals.
Looking Ahead
AMP8 marks a pivotal shift in how water is valued, regulated, and managed across the UK.
For industrial users, the message is clear: now is the time to act. Rising bills and potential tariff changes make the financial case for efficiency stronger than ever, while growing scarcity makes sustainable water management a strategic necessity. By adopting circular solutions today, businesses can build resilience against future shocks, ensure compliance with tightening regulation, and position themselves as leaders in sustainable industry.
At Veolia, we are working in partnership with customers to make that transition – designing and operating smart, circular water systems that optimise performance, reduce risk, and create value through every drop.
Further support from the government would help accelerate a water transition during this critical time. Schemes such as the Public Sector Decarbonisation Scheme (PSDS), and the Industrial Energy Transition Fund (IETF) have already provided targeted support for large energy users with a clear mission of becoming energy efficient. Veolia believes it is time for the government to replicate these successful models but targeting instead the roll-out of water efficient solutions for the most water intensive industries.
If you would like to understand more about the implications this may have on your industrial or manufacturing operations:
