The views expressed are those of the author and do not necessarily reflect the position of FORESIGHT Climate & Energy

The climate urgency requires swift action at global, regional and local levels
While the risks of a climate crisis loom ever-nearer, global leaders gathered a few weeks ago for the World Economic Forum in Davos, Switzerland, to argue once again for the need for swift climate action. Even before this, in January 2021, the new German Chancellor Olaf Scholz called for a determined approach, saying: "We will no longer wait for the slowest and least ambitious. We'll turn climate from a cost factor to competitive advantage". It is encouraging to see leaders finally rising to the climate challenge. The message is clear: We need more than ever to move faster and act collectively to address the climate emergency. To accelerate decarbonisation in industry and successfully achieve the goals set under the 2015 Paris Climate Agreement, we will have to work together. Governments, businesses, investors and civil society will need to partner to turn this commitment into concrete actions. Water efficiency is part of the solution to decarbonisation. CRITICAL ELEMENT Being a fundamental resource for nearly every step of manufacturing and production processes, water is a critical element of the solution. Water and energy are closely intertwined as water is the primary energy transfer medium for many industries–using water for pumping, heating, cooling and cleaning requires energy. This water-energy nexus is ubiquitous in our modern industrial society and their relationship in terms of energy efficiency can be represented quite simply: saving water means saving energy, which leads to greenhouse gas emission reduction while reducing costs for industry. In other words, water efficiency can help mitigate climate change while boosting industrial competitiveness. In Europe, industry represents nearly 50% of total water use. Optimising industrial water use will not only decarbonise the economy in a cost-effective manner, but it will also help reduce pressure on water resources and exposure to risks of shortages. According to the World Resources Institute, there will be a global deficit of 56% between water supply and demand by 2030. In addition, the International Energy Agency forecasts a 35% increase in world energy demand by 2035 which corresponds to a growth of 85% in water demand. Exacerbated by climate change and energy demand, water stress has become a serious business issue and generates competition between various economic sectors. POLICY INCENTIVES A strong policy framework is needed to incentivise water efficiency. Circular water management can help alleviate this problem through water efficiency and water reuse techniques. Unfortunately, only 2.4% of Europe’s treated urban wastewater effluents are being reused. For this reason, water reuse in industrial processes should be strongly incentivised whenever appropriate to minimise water abstraction and wastewater discharge. This would bring environmental benefits and have a positive climate impact. The water-energy nexus should be better reflected in legislation, and lawmakers should fully consider the benefits stemming from water efficiency as a key driver to delivering energy savings. For instance, the industry should be encouraged to assess water efficiency opportunities as part of their energy audits as it would incentivise measures towards water optimisation and energy savings. EU lawmakers should seize the Green Deal policy package as an opportunity to exploit the benefits from the water-energy nexus in order to contribute to the climate neutrality objective while addressing water preservation and reinforcing industrial competitiveness. Technological solutions already exist, but they need regulatory incentives to be deployed at a large scale and to make long-lasting impacts. PERFORMANCE INDICATORS Becoming greener also means being more competitive. Large industrial companies are increasingly realising that improved water cycle performance can drive both cost efficiencies and corporate sustainability commitments. Driving continuous improvement on water and energy-mass balance has become a critical performance indicator for industry as global competition increases pressures on productivity and costs while at the same time industry is called to support increasingly ambitious environmental regulation. As an example, Arcelor Mittal, the world’s largest steel mill company partnered with Ecolab to save 8.3 billion litres of water, reduce its energy use by 6.2 million kWh and avoid 1,226 metric tonnes of CO2 equivalent, while saving €1.2 million and creating a more sustainable operation in just over one year through more efficient water usage at a manufacturing site in Romania. Water efficiency is a direct and cost-effective strategy that enables decarbonisation and supports industrial competitiveness. It is now time for lawmakers and industry leaders to speed up their actions and seize these existing opportunities. •

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