Closing the loop: how circular economy can secure our water future
Dr David Tompkins, Associate Director (Circular Economy, Water Advisory)
| WSP
Water is critical to national resilience, yet our linear approach to managing it is increasingly unfit for a climate-impacted world. A circular economy model – focused on reuse, recovery and smarter regulation – offers a pathway to long-term water security and economic growth.
Water is the invisible foundation of every aspect of modern society. It sustains life, drives agriculture, supports industry, and underpins economic growth. Without reliable, clean water supplies, no economy can function, let alone thrive. Yet, despite its critical importance, the water sector has long relied on a largely linear model of resource use – drawing water from nature, using it, then discarding it back to the environment. This “take-make-throw” approach, once sustainable within the rhythms of the natural water cycle, is now increasingly under threat as climate change disrupts rainfall patterns and water demand soars. The urgent need for a more resilient and sustainable water system makes embracing the circular economy not just desirable, but essential.
Regional planning and emerging challenges
The way water is currently managed reflects a recognition of its vital role, but also exposes the limitations of traditional practices. In England, for example, the Water Resources Management Plan process requires water companies to carefully assess regional water availability and forecast demand over a 25-year horizon. This regional planning ensures that environmental needs – such as maintaining river flows and protecting ecosystems – are factored alongside economic considerations. While this approach represents a step forward from past decades, it also highlights a fundamental challenge: water is a finite resource with competing demands, and the natural cycles that replenish it are no longer stable.
The limits of a linear model
These challenges stem largely from the linear model underpinning much of the sector’s history. Traditionally, water is abstracted from rivers or aquifers, treated to potable standards, delivered to customers, then collected as wastewater for treatment before being discharged back to the environment. This process assumes a stable climate and sufficient natural flows to absorb discharges and replenish supplies. However, with climate change causing more extreme weather events – from droughts to floods – and population growth increasing water consumption, the linear system is showing its fragility. Boosting supplies in the traditionally water-scarce southeast of England through transfers from the traditional water-abundant north might prove an unreliable strategy in future. It also misses opportunities to maximise the value and utility of water and related resources embedded in wastewater streams.
Circular economy: a new paradigm
This is where the circular economy offers a transformative alternative. The principles of reduce, reuse, recycle, and recover, which have reshaped waste management, are equally applicable to water. Importantly, the water sector is not starting from scratch. It already embraces resource efficiency by minimising abstraction, reducing leakage, and engaging consumers to moderate water use. What remains is to expand these efforts, integrating circular practices fully into water supply, treatment, and reuse.
Recycling and recovery: unlocking resources
A key component of circularity in water is recycling and reuse. Rather than treating wastewater solely as a waste product to be disposed of, it can be a valuable resource. By treating wastewater or harvested rainwater to suitable standards, it can serve non-potable purposes like irrigation, industrial processes, or toilet flushing, thereby reducing pressure on fresh water sources. Rainwater harvesting and use systems are widely available for commercial or domestic applications: a 2023 study showed more than 1000 installations in the Anglian Water region. Despite technical feasibility, wider implementation requires supportive policies and regulatory frameworks to manage health and environmental risks, and to incentivise investment.
Beyond water itself, circularity extends to the recovery of materials and energy. End-of-waste frameworks, which define when a waste product ceases to be waste, are crucial for enabling safe reuse of biopolymers, nutrients, biogas and other resources from water and wastewater treatment processes. These frameworks have also proven essential in the waste sector for building confidence in the recovered resources, supporting the replacement of primary materials in markets as diverse as farming and biodiesel. Controlling contamination at the source – such as limiting industrial pollutants and household chemicals – will become essential to maintaining the quality and value of these secondary resources.
Policy and regulation: driving change
However, to accelerate and embed circular water practices, robust policy and regulatory support is vital. Current frameworks, while evolving, often lag behind technological and operational innovations. Abstraction licensing, water quality standards, trade effluent consents and pricing mechanisms need alignment to encourage reuse and resource recovery. Extended Producer Responsibility schemes, familiar from waste management, could be adapted to water to ensure that manufacturers internalise the costs of pollution and help fund recycling efforts. Such mechanisms uphold the polluter pays principle and distribute costs more fairly across the economy.
Cross-sector collaboration: water meets waste
The connection between water and waste sectors is increasingly apparent. Both manage complex resource flows, face similar environmental challenges, and share the objective of turning waste streams into resources. Water companies have been pioneers of circular approaches – from generation of renewable energy from sludge digestion to consumer engagement on water use. Defra’s Circular Economy Taskforce represents a critical opportunity to foster cross-sector collaboration, harmonise policies, and leverage shared knowledge to drive systemic change. Integrated approaches that recognise water as both a resource and a carrier of recoverable materials can unlock significant environmental and economic benefits.
The time for circular water is now
Water is the lifeblood of our economy and environment. The growing challenges of climate change and population pressures make the old linear water model untenable. Embracing circular economy principles offers a pathway to a more resilient, sustainable water future – one that protects ecosystems, ensures water security for all, and supports long-term economic prosperity. Policymakers and business leaders must act now to align regulations, foster innovation, and invest in circular water infrastructure. The future of water is circular, and the time to transition is now.
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