Water guide

What is Trade Effluent and how are the charges calculated?

Does your business discharge anything other than toilet and sink water into the sewer? If so, you’re probably producing Trade Effluent, even if you’ve never heard of the term.

Trade Effluent rules cover a huge range of industrial and commercial wastewater, from the rinse water at a car wash to the process effluent at a food factory. It is subject to its own legal framework, consent process, and complex charging structure.

This guide explains Trade Effluent rules and charges for British businesses. Here’s what we cover:

What is Trade Effluent?
Trade Effluent discharge examples
What are Trade Effluent charges?
Trade Effluent legislation and regulations
What is Trade Effluent consent and when is it required?
Trade Effluent discharge and where it goes

What is Trade Effluent?

Section 141 of the Water Industry Act 1991 defines Trade Effluent:

Any liquid, either with or without particles of matter in suspension in the liquid, which is wholly or partly produced in the course of any trade or industry carried on at trade premises.

The Water Industry Act then clarifies that the definition does not include domestic sewage (wastewater from toilets, cooking, washing dishes, etc.).

In practice, Trade Effluent is any wastewater arising from business processes at non-domestic properties.

Businesses discharging Trade Effluent into the public sewage system must obtain consent from the local water company, and must pay Trade Effluent charges as set out in the published business water rates of the local water company.

Trade Effluent discharge examples

Broadly, wastewater discharged into the sewage system at a non-domestic property can be categorised as either Trade Effluent, domestic sewage, or surface drainage.

This section provides examples of each, based on the publications of the regional water companies.

Examples of Trade Effluent – requiring consent

The following table provides examples of the types of businesses and processes that produce Trade Effluent.

Business types	What is being discharged in the sewers
Metal finishing & electroplating	Wastewater containing heavy metals (chromium, nickel, copper, zinc, cadmium, lead), cyanide compounds, acids and alkalis used in plating baths, chemical solvents
Car washing	Wash water containing detergents, surfactants, oils, greases, suspended solids, road grime and dirt residues
Commercial laundry / launderette	Wash water containing detergents, surfactants, bleaching agents, fabric softeners, dyes, suspended solids and lint from items received from off-site
Dairy processing	Whey, milk residues, cleaning chemicals (caustic soda, nitric acid), fats, high biological oxygen demand liquids, suspended solids
Brewery / distillery	Spent grain liquor, yeast residues, sugars, alcohol, cleaning chemicals, cooling water
Meat processing / abattoir	Blood, fat, protein, suspended solids, cleaning chemicals, high BOD and high ammonia effluent
Food manufacturing (factory scale)	Process wash water containing food residues, fats, oils and grease, detergents, sugars, proteins
Chemical manufacturing	Process water containing organic and inorganic chemicals, solvents, acids, alkalis, potentially toxic compounds depending on product
Pharmaceutical manufacturing	Process water containing active pharmaceutical ingredients, solvents, reagents, cleaning chemicals
Textile dyeing & finishing	Wastewater containing synthetic dyes, salts, bleaching agents, surfactants, high chemical oxygen demand, strong colouration
Paper production	Effluent containing suspended solids, bleaching chemicals (chlorine compounds), lignin
Vehicle servicing & maintenance	Workshop drainage containing oils, fuels, coolants, brake fluids, degreasers, suspended solids
Printing industry	Wash water containing inks, solvents, heavy metals (from pigments), cleaning chemicals
Swimming pools (commercial / council facilities)	Backwash water and drain-down water containing chlorine, disinfection by-products, algaecides, pH adjustment chemicals, suspended solids
Fish farming / aquaculture	Water containing nitrogen, phosphorus, suspended solids, fish faeces, uneaten feed, drugs and pesticides used in fish health management
Agriculture	Silage effluent, slurry washings, pesticide residues, milk residues from cleaning of equipment

Examples of domestic sewage – not requiring consent

According to the Environment Agency, the following types of wastewater discharge count as domestic sewage and do not require consent from the local water company.

The Environment Agency specifically states that the scale of an activity needs to be considered when assessing whether wastewater counts as Trade Effluent. It uses the example of producing 30 jars of jam in a day as a domestic activity, even if some or all of those jars are then sold elsewhere. However, regularly producing 300 jars a day for sale is classed as a trade.

From toilets

Human waste and toilet paper flushed from toilets at any premises, whether a home, office, pub, hotel, restaurant or school.

From personal washing

Any wastewater from baths, showers, and sinks used for personal hygiene.

Other household-style washing

Wastewater from washing machines and dishwashers that are used on a domestic scale.

This includes kitchen wastewater from commercial cooking that is sold directly to consumers, including hotels, pubs, and takeaways.

Non-commercial swimming pools

Swimming pools at homes and hotels, where they are provided free of charge to residents, and where the effluent is treated and discharged in combination with other domestic sewage effluent.

Surface drainage

One of the key roles of water companies is to manage the drainage of rainwater falling on a property. Uncontaminated rainwater discharge does not require consent from the local water company. Find out more in our guide to surface drainage charges.

What are Trade Effluent charges?

Trade Effluent charges are paid by businesses holding consent to discharge Trade Effluent into the public sewer system.

These charges are separate from standard wastewater charges paid by all commercial properties connected to the sewage system.

Trade Effluent charges are calculated by the local water company based on the volume and strength of the effluent being discharged, as well as other factors such as the level of treatment required before the effluent can be safely released into the environment.

Your business water supplier will then pass on these charges, plus a retail fee, to your business and will present them separately from other charges on a business water bill.

Trade Effluent charges cover four distinct activities that are necessary for dealing with Trade Effluent:

Reception: Accepting the effluent into the public sewer network.
Conveyance: Transporting it through the sewer system to the treatment works.
Treatment: Processing the effluent at the sewage treatment works to the required standard.
Sludge disposal: Dealing with the solid waste produced during treatment.

How Trade Effluent charges are calculated

Trade Effluent charges typically include a fixed standing charge and a volumetric element. This section explains both.

💡Business water suppliers will add a retail fee on top of Trade Effluent charges before passing on these costs to business water customers.

Trade Effluent fixed charge

Local water companies typically charge a fixed annual consent fee to businesses holding consent to discharge Trade Effluent into the sewage system.

This covers the cost of administering the consent, monitoring compliance, and maintaining capacity to receive the effluent.

For large-scale industrial dischargers, fixed charges can cost tens of thousands each year.

Trade Effluent volumetric charges

Volumetric Trade Effluent charges in England, Scotland and Wales are calculated using the Mogden Formula.

The calculation produces a cost per cubic metre that takes into account a range of variables explained below.

Charge per unit m³ of Trade Effluent =
R + V + B(Ot/Os) + S(St/Ss)

Where:

R is Reception and Conveyance – A volumetric charge applying to all Trade Effluent regardless of strength for transporting the effluent through the sewage system.
V is Volumetric Treatment – A standard charge for processing all effluent at a sewage works which includes screening, primary treatment, and grit removal.
B(Ot/Os) is Biological Oxidation – The strength-sensitive component for organic contamination. The ratio compares the effluent’s strength to that of average domestic sewage and increases the charge accordingly.
S(St/Ss) is Sludge Treatment and Disposal – The component that rises with the weight of suspended solids in the effluent requiring disposal. The ratio compares the solids in the effluent to those of standard domestic sewage and increases the charge accordingly.

Businesses holding Trade Effluent consent will typically have regular samples taken by the water company to determine the strength and suspended solids content of the effluent.

The cost per cubic metre is then multiplied by the total volume of Trade Effluent produced, typically measured by a dedicated water logger, to give the total invoice amount.

Trade Effluent legislation and regulations

Trade Effluent in the UK is primarily governed by the Water Industry Act 1991, which remains the key legislation for any business that produces and discharges industrial or commercial wastewater.

The Act defines what Trade Effluent is, establishes the requirement for businesses to obtain consent before discharging to the public sewer, and gives water companies the legal power to levy Trade Effluent charges for receiving and treating it.

There are three distinct regulatory functions involved with Trade Effluent:

Ofwat – Sets the economic framework within which Trade Effluent charges are determined and handles appeals about consent conditions and charges.
The Environment Agency (or equivalent) – Controls the most hazardous discharges and regulates any direct discharge to the water environment.
Local water companies – Issue consent, set conditions, monitor compliance, and levy charges for the area in which the business operates.

Trade Effluent consent is a licence giving permission to discharge Trade Effluent into a public sewer. It is a legal requirement for any business to hold consent before discharging Trade Effluent.

Consent is issued by the regional water company that operates the local sewer system.

Consent typically includes conditions related to the volume, flow rate, and nature of the effluent, which are set to protect the environment and water infrastructure.

How Trade Effluent consent works

Trade Effluent consent is provided to a particular commercial property rather than the occupier. Consent is a legally binding document and typically sets out the following conditions:

Which sewer or sewers the Trade Effluent may be discharged into.
The nature and composition of the effluent permitted.
The maximum daily volume that may be discharged.
The maximum rate of discharge.
The hours during which discharge is permitted.
Limits on temperature, pH, suspended solids, and chemical oxygen demand.
Requirements to eliminate or reduce specific substances before discharge.
The provision and maintenance of an inspection chamber or manhole for sampling.
Metering requirements to measure volume and flow.
Record-keeping and reporting obligations.

Trade Effluent consents are either permanent or temporary (with a defined end date), depending on the application used.

Trade Effluent consents are publicly available documents recorded on a register maintained by each local water company

Trade Effluent monitoring

The local water company will regularly sample your Trade Effluent discharge to ensure your business is adhering to the consent conditions and collect the composition data needed to calculate charges accurately.

A typical condition of your consent document will be that you provide an access point to the Trade Effluent discharge to allow samples to be collected.

Depending on the nature of your Trade Effluent, your business may be required to install a monitoring system for your effluent discharge. A monitoring system is recommended as it allows your business to adhere to the Trade Effluent consent and be alerted to any issues.

Trade Effluent consent applications

A Trade Effluent consent application is submitted to your business water supplier, who will work with the local water company to process your application.

The Trade Effluent application consists of one of the following two forms:

Trade effluent – Form G-02 – Trade Effluent discharge application
Trade effluent – Form G-03 – Temporary Trade Effluent discharge application

The non-household market operator, MOSL, has published guidance on how to complete these consent applications:

What happens if I’m refused consent?

Water wholesalers have the right to refuse a Trade Effluent consent application on the basis that:

The effluent will cause undue harm to the environment.
The effluent will damage the sewage system.
The local treatment plant will not be able to process the Trade Effluent.

If your business is refused consent to discharge Trade Effluent into the public sewers, there are several alternative options, including:

The use of a disposal firm to take the effluent away and treat it on your behalf.
Treating the Trade Effluent at your business premises to bring it to a state suitable for disposal into the public sewer network.
Altering your business operations so that the effluent becomes suitable for disposal into a public sewer.

What affects Trade Effluent costs for businesses?

Most Trade Effluent charges are volumetric, meaning they increase with the volume of effluent discharged into the sewers.

The charges per cubic metre scale with the levels of chemical oxygen demand and solids in the effluent. A business producing high-strength effluent (for instance, food production businesses) will pay a significantly higher volumetric charge than one producing weaker effluent (such as from a car wash).

How to reduce Trade Effluent charges

Your business can take active steps to reduce your Trade Effluent charges. Our biggest recommendations are:

Installing an effluent treatment system that reduces the strength of your Trade Effluent. Through the Mogden Formula, you will be billed less if your Trade Effluent is less concentrated.
Installing a Trade Effluent monitoring system so that any reductions in volume or strength of Trade Effluent can be measured and your water supplier informed accordingly.
Comparing Trade Effluent charges from different suppliers. Business water suppliers often add a retail fee to Trade Effluent charges. See whether your business could benefit by switching business water suppliers.

Save on Trade Effluent charges today using our business water comparison service.

Trade Effluent discharge and where it goes

Trade Effluent enters the public foul or combined sewer at the business’s premises, where it combines with the domestic sewage and effluent being produced by other nearby properties.

It flows through a network of underground pipes towards the local sewage treatment works.

At a sewage treatment works, the mixed effluent is treated to a standard at which it can be safely returned to the natural water cycle. Find out more about this process in our guide to understanding sewage.

The process of treating wastewater is essential to avoid contamination of the environment but is highly carbon intensive. Find out more in our article on the environmental impact of the water industry.