• 25-10-2024

Investing in Water: Securing Europe’s Sustainable Future

Did you know that nearly 40% of the EU’s population faces water scarcity, even as industries grow at an unprecedented rate? As Executive Director of Water Europe, I see every day how water is not just a basic necessity but a crucial driver for the economy and environment. With growing climate challenges and rising demands from high-value industries, investing in water-smart management is an urgent priority as highlighted by our recently published Socio-economic study  on the value of the EU investing in water.

The Challenge: Europe’s Water Crisis

As said by Enrico Letta in his report on ”Much more than a Market:Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens “Addressing the challenges and opportunities in the water sector is imperative for the European Union”.  Europe’s relationship with water is marked by both progress and persistent difficulties. Despite positive signs such as a reduction in overall water consumption, the issue of scarcity remains significant. As climate change leads to more frequent and severe droughts and floods, the stress on water resources will only intensify, posing risks to human communities and ecosystems. The economic impact is substantial too, with damages from water-related disasters reaching up to €9 billion annually.

Recognising the urgency, the European Commission, under President Ursula von der Leyen, has prioritised the development of a Water Resilience Strategy. This initiative aims to reshape water systems to enhance resilience, encourage industrial innovation, and embrace circular economy principles. Achieving climate resilience by 2050 will only be possible if water-smart management is at the heart of policies and investments

Opportunities for Innovation and Investment

Water is integral to more than agriculture and public supply; it is also crucial to Europe’s industrial landscape. High-value sectors such as semiconductor manufacturing, renewable hydrogen production, data centres, and electric vehicle (EV) battery production – all mentioned in Draghi’s report – are on a rapid growth trajectory. These industries, currently valued at €192 billion, could expand to nearly €1 trillion by 2030, potentially tripling water demand.

Take semiconductor manufacturing, for instance. This sector is integral to the EU Chips Act, with ultra-pure water essential for production. Any fluctuation in water quality can disrupt supply chains and incur significant costs, demonstrating that sustainable water management is not just an environmental goal but a business necessity. The semiconductor industry alone consumes 45 million cubic metres of fresh water monthly, highlighting the need for resource-efficient practices to maintain Europe’s competitive edge.

The opportunity lies in leveraging advanced water technologies to reduce consumption and improve efficiency. Innovations like advanced purification systems and closed-loop processes can substantially cut water use while boosting productivity. For example, adopting reclaimed ultra-pure water in semiconductor manufacturing could save the sector up to €756 million annually. Across Europe, these measures could generate nearly €3 billion in savings each year and create over 13,000 new jobs.

Additionally, tackling untreated wastewater, which remains a significant source of pollution, requires accelerated investments in wastewater treatment and digital water management. The revised Urban Wastewater Treatment Directive, alongside modern digital tools, will be key to securing water quality for industries that demand high standards, such as semiconductors, hydrogen, and EV batteries.

Policy Context: EU’s Strategic Water Priorities

The EU has outlined strategic initiatives to address water challenges, but a cohesive approach is essential. The Water Resilience Strategy positions water-smart management at the centre of Europe’s climate adaptation efforts. Policies like the EU Chips Act, the Clean Industrial Deal and the Industrial Emissions Directive further highlight the importance of water security for industrial competitiveness.

It’s striking that the Draghi Report entirely overlooks water, which is critical for environmental sustainability and industrial competitiveness. By failing to address water’s role, the report weakens its capacity to fully confront Europe’s most pressing challenges. In sharp contrast, the Letta Report acknowledges water’s pivotal importance, emphasising that safeguarding this resource is essential for a resilient economy and a sustainable future. Integrating water into the EU’s economic strategy isn’t just an option – it’s a necessity if we are to secure long-term growth and climate resilience.

Decarbonising the energy sector is also expected to reduce water consumption by up to 38% by 2050, with renewable systems like wind and solar consuming far less water than traditional thermal power. However, these transitions will require tackling existing water stress through strategic investments in water-saving technologies, including seawater electrolysis for hydrogen production and advanced cooling systems for data centres.

The EU’s upcoming legislative actions, such as the revised Energy Efficiency Directive and the Climate Adaptation Plan, will play vital roles in directing investments to where they are needed most. The stakes are high, but so are the rewards—ensuring a resilient water future is fundamental for sustainable growth, industrial advancement, and ecological stability.

A Call to Act Now

The path to a sustainable Europe is paved with water-smart investments. The choices we make today about water management will shape the future for generations. The recent EU Barometer survey, showing that 78% of Europeans demand more action on water challenges, underscores the urgency.

Aligning efforts across public and private sectors to invest in sustainable water management will sustain economic growth, bolster industrial competitiveness, and secure ecological resilience. As climate change continues to intensify, our immediate and strategic actions on water management are critical to securing a prosperous future.

Let’s act now to make water the foundation of Europe’s sustainable growth and resilience by building aWater-Smart Society. Water is a precious resource—it’s time to protect it for the benefit of all.

Read more in Water Europe’s Socio-economic study on the value of the EU investing in water.