How the water industry can tackle the various challenges of our time

At the Global Water Summit 2023, in Berlin, I highlighted the 3 main challenges that our industry is facing:

1. There is - fortunately I would say - a fast growing climate-related constraint, given the necessity to reduce greenhouse gas emissions, preserve resources and biodiversity, and improve the resilience of our infrastructure.
2. There is an economic constraint, resulting from the sudden increase in energy prices, higher interest rates and limited borrowing capacities of municipalities and local authorities.
3. There is a growing social constraint, with citizens’ rightful demands regarding the quantity and quality of their drinking water.

These constraints are here to stay. And they form a new paradigm which our organizations must fully consider and to which we must adapt.

We are indeed all affected by climate change. But, like every industrial activity, we are also partially responsible for it. I believe, we have a duty to be candid, transparent and to live up to our responsibility:

• Yes, water purification and water treatment require a lot of energy, especially electricity.
• Yes, this energy is too rarely produced in an entirely sustainable and decarbonized way.
• Yes, we must and can do something about it.
• Yes, this will translate into higher financial costs, to reflect the social cost of green house gas emissions, as well as the investments required to shift to greener energy.

This is where the climate constraint amplifies the economic one.

All these elements combine to create a pressing need for investment, in a post pandemic context where public finances have declined. Some estimates, like the one from the OCDE, suggest that up to $7 trillion of investments in infrastructure will be needed by 2030 to reach water-related Sustainable Development Goals.

Given of all this, my belief is clear: the water industry is capable of mitigating the impact of both climate-related and economic constraints, for all its stakeholders.

First, we can increase the value generated by water assets over their entire lifecycle

At SUEZ, we estimate that the water industry is only half-way in terms of digitalization. With digital solutions, not only can we improve operational effectiveness and reduce non-revenue water, but also implement predictive maintenance.

Second, we can make drinking water production and wastewater treatment neutral in terms of greenhouse gas emissions.

• This starts with the energy supply becoming sustainable. There are some great examples of mega-plants operated 100% with renewable energy, such as in Australia with the Victoria desalination plant.
• Beyond energy supply, plants can produce energy. In particular, wastewater treatment plants are morphing into net energy producers and are supplying electricity and/or heat and/or biogas. In France, Haliotis 2, the future wastewater recovery and treatment complex in Nice will produce four times the energy that it consumes today.
• To exemplify the potential, we see in terms of decarbonization, SUEZ has committed to reduce the GHG emissions from its global Water activities by 40% between 2022 and 2030, in line with SBTi requirements.

Coming to my third point: I believe our industry has not only a role to play in mitigating the effects of climate change. It can also help restore natural water resources:

• We can and must improve water quality wherever we operate. As we all know, one of the effects of climate change is that water has not only become rarer, but its quality had also been impacted. This is why, as of 2018, SUEZ has been researching the occurrence, treatment and destruction of PFAS in Water.
• Another example that comes to mind is underground water replenishment. We have references such as the building of the wastewater Treatment plant of Beenyup in Australia, where the treated wastewater is used to recharge underground water that secures Perth’s water supply.
• And then there is also the potential of “REUSE”. For instance: the REUSE of water near coastal zones can be a pertinent solution to limit freshwater withdrawals from the natural environment. Here again, our Nice Haliotis 2 project, on the shores of the Mediterranean, is a good example. This wastewater recovery and treatment complex will be able to recycle 5 million cubic meters of water per year. Enough to water the green spaces and clean the roads of the city of Nice!
• Having said all that, one size does not fit all: we are conscious of the fact that REUSE is not appropriate when the outflows from wastewater Treatments plants can be used to help maintain the vital minimum levels of certain rivers.
• ?Finally, climate change presents an opportunity to reconsider our business model:

o??In our Sustainable Development Roadmap we’re committed to proposing a water savings program of up to 10% of the total volume provided over 5 years, for all drinking water service contracts by 2027.

o??These performance-based contracts, with an objective of reducing resource extraction, represent a transformation of our business model, which remains predominantly volume -focused.

To conclude, i’d say that adapting to climate-related, economic and social constraints requires major transformations.

They will make us more efficient in the long term.

• However, as these transformations are costly, Public Private Partnerships are crucial, as I highlighted a few weeks ago in New York, at the UN Water conference. I believe that public-private partnerships including co-financing and risk/reward sharing schemes provide more alignment among parties for a successful project delivery.?

o??For instance, in Africa, the water sector is only attracting 10-12% of the investment on the continent. The funding gap is estimated at $50-60bn. Only public-private partnerships will be able to bridge this gap.

o??I am very proud that SUEZ was recently awarded the first public-private partnership in the water sector in Tunisia.

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• We also need to address the issue of the price of water. This price must reflect the ecological and social value of water. It must reflect the human and material capital required to produce drinking water in adequate quantity and quality.
• Beyond technical solutions, financial investments and ambitious ESG commitments, we, the water sector, need to get the public on board and convince them of the importance of water issues. This is what social innovation is all about.
• Without ownership by our communities, there will be no solution to the water climate nexus. And here I am not only reflecting on the willingness to pay the appropriate price for the social, environmental and technological value of water. I am also reflecting on changing our individual behaviors.

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Sabrina Soussan