The report, published last week, will fuel proposals being considered in the EU that would impose sanctions against companies that do not meet prevention, recycling and reuse targets. Environmental researchers, Worldwatch, said the growing trend towards non-carbonated healthier drinks has led to an increase in the demand for bottled water packaging, the recycling rates of which are falling. While global consumption has doubled between 1997 and 2005, reaching $10bn (€7.4bn) in the US alone, the country sends two million tons of polyethylene terephthalate (PET) bottled water packaging to landfill each year. In 2005, the recycling rate for PET was only 23.1 per cent in the US, far below the 39.7 per cent rate achieved a decade earlier, according to Worldwatch. Across Europe, the PET recycling rate averages between 20 and 40 per cent, with Switzerland's 80 per cent leading the way. Proposals to revise the EU waste regulations were approved by a Commission vote in February, which would establish a five-stage hierarchy that gives priority to prevention, recycling and reuse over landfills and incineration. However, system is unlikely to be adopted by the European Council, which will decide later this year. Members of the European Parliament (MEPs) also set binding targets for waste prevention for the first time, earlier this year. The system would require food processors and others to pay for impact studies justifying their use of particular types of packaging if they do not fall in line with the hierarchy. The EU's packagers - supported by the food industry and other sectors - have been lobbying against the proposals for the past year, claiming that they would be too costly to industry and provide no further benefit to the environment. Ling Li, author of the report update, said the problems associated with the increase in global demand extend beyond those of how to deal with the waste. "Bottled water may be an industry winner, but it's an environmental loser," Ling Li said. "The beverage industry benefits the most from our bottled water obsession. But this does nothing for the staggering number of the world's poor who see safe drinking water as at best a luxury, and at worst, an unattainable goal." The report said that in addition to the energy cost of producing, bottling, packaging, storing and shipping bottled water, there is also the environmental cost of the millions of tons of oil-derived plastic, from non-renewable sources, needed to make the bottles. The report claims that bottled water in developed countries can be 240 and 10,000 times more expensive than tap water, making it out of reach for the poorest. Furthermore, within developed countries, the safety levels of bottled water are scrutinized using lower standards than that obtained from the tap, the report said. The US remains largest consumer of bottled water at 28,651 million litres according to 2005 figures. China, despite doubling consumption between 2000 and 2005 to 12,901 million litres is third, while India, which trebled consumption during the period to 6,177 million litres, is tenth.