sustainability Review A Systemic View on Circular Economy in the Water Industry: Learnings from a Belgian and Dutch Case Tanaka Mandy Mbavarira * and Christine Grimm Institute for Innovation and Technology Management, Lucerne University of Applied Sciences & Arts, 6048 Horw, Switzerland; [email protected] * Correspondence: [email protected] Abstract: Water is fundamental to our existence and has increasingly been put under pressure by soaring population growth, urbanization, agricultural farming and climate change; all, of which impact the quantity and quality of our water resources. Water utilities (WUs) are challenged to provide clean, safe drinking water when faced with aging, costly infrastructure, a price of water that is not reflective of its true value and the need for infrastructure to remain resilient in a time when threats of floods and droughts are pervasive. In the linear take-use-discharge approach, wastewater is treated only to be returned to waterways and extracted again for treatment before drinking. This can no longer sustain our water resources as it is costly, energy-intensive and environmentally unsound. Circular economy (CE) has been gaining attention in the water industry to tackle this. It follows the 6Rs strategy of reduce, reuse, recycle, reclaim, recover and restore to keep water in circulation for longer and reduce the burden on natural systems. The aim of this study is to determine what the economic and operational system effects of CE are on WUs, informing them of CE’s potential to change their business operations and business model while highlighting its associated challenges. Based on a review of literature, input from expert interviews (Q4 2019) and case studies, an economic view of the urban water system is qualitatively modeled, on top, of which a circular water economy Citation: Mbavarira, T.M.; Grimm, C. system is designed using a causal loop-diagramming system mapping tool. Digitalization, water A Systemic View on Circular reuse and resource recovery were determined to underpin circularity in water, providing operational Economy in the Water Industry: benefits through efficiencies and diversification of revenue streams. However, issues of investment Learnings from a Belgian and Dutch and a missing enabling legal framework are slowing the rate of uptake. On this basis, CE represents Case. Sustainability 2021, 13, 3313. both a challenge and an opportunity for the water industry. https://doi.org/10.3390/su13063313 Keywords: circular economy; water; wastewater; causal loop diagram Academic Editor: Mariusz Sojka Received: 21 December 2020 Accepted: 28 February 2021 1. Introduction Published: 17 March 2021 As a basic human right and public good fundamental to life, the importance of water Publisher’s Note: MDPI stays neutral cannot be overstated. Water underpins all drivers of growth—be it agricultural production, with regard to jurisdictional claims in energy generation, industry or manufacturing. Its roots in social, environmental and published maps and institutional affil- economic dimensions anchor it at the core of sustainable development. When not well iations. managed, competing interests for water has the potential to cause wars and leave sectors economically vulnerable, especially those that provide basic services. Water scarcity has been detrimental to crop yields and quality; and has threatened thermal power station output due to insufficient water for cooling [1]. The global thirst for water has been exacerbated by the compounding effects of population growth; increased agricultural Copyright: © 2021 by the authors. Licensee MDPI, Basel, Switzerland. activity; urbanization, which has seen 75% of Europe’s population living in cities and urban This article is an open access article areas; and erratic weather caused by climate change. The greenhouse gas effect of climate distributed under the terms and change has disrupted the hydrological cycle through elevated moisture, evaporation and conditions of the Creative Commons temperature, leading to melting snow, rising sea levels and an uneven distribution of Attribution (CC BY) license (https:// rainfall patterns [2,3]. The hydrological cycle is evidence that water is circular; however, creativecommons.org/licenses/by/ anthropogenic activities over the last hundred years have disrupted the circulation of the 4.0/). earth’s water stock [3]. Sustainability 2021, 13, 3313. https://doi.org/10.3390/su13063313 https://www.mdpi.com/journal/sustainability Sustainability 2021, 13, 3313 2 of 62 1.1. Background The World Economic Forum (WEF) has consistently highlighted water as a global crisis, ranking it the fourth greatest risk by impact and the ninth greatest risk by likelihood in 2019 [4]. Prior to this, in 2015, the United Nations (UN) drew much attention to water in its sustainable development goals (SDG) with SDG 6: clean water and sanitation. The SDG 6 is concerned with improving water quality and water-use efficiency, as well as integrating water resources management. Agriculture accounts for roughly three-quarters of global freshwater withdrawals, and agriculture-related nutrients are polluting watersheds. Additional pressure on our renewable freshwater resources (groundwater, rivers, lakes and reservoirs.) stem from energy production and mass tourism, which consume 15% and 9% of resources, respectively, while water leakages can contribute up to 60% of distributed water loss [5]; representing gross operational inefficiencies and potential for savings. Water demand across Europe is unevenly distributed [6]. The European Environment Agency (EEA) estimates that around one-third of the European Union (EU) territory is exposed to water-stressed (1000–1700 m3/year per capita of available water resources) conditions, either permanently or temporarily and not only limited to places like Portugal, Spain and Greece but also in more Northern countries, such as Germany, the United King- dom and Belgium. The decreasing trends in water abstraction observable in Western and Northern Europe can be attributed to improvements in water efficiency and management of water supplies yielding a 19% decrease between 1990 and 2017 [6]. In order to continue the decrease in water withdrawal levels required to level out pressures on water reserves, circular economy (CE) offers a path in reshaping how water systems operate. The conventional linear take-make-dispose approach for materials is mirrored in the water sector as take-use-discharge. This linear approach, which is prevalent in the majority of water basins today, is short-sighted and inherently unsustainable given today’s climate. The concept of CE was first introduced by Pearce and Turner in 1990 [7] and developed further in 2010 in various sectors by the Ellen MacArthur Foundation. The principles of CE are founded on designing out waste and pollution, where today’s waste becomes tomorrow’s resources that yield economic, social and environmental benefits [8]. It follows the 6Rs strategy: reduce, reuse, recycle, reclaim, recover and restore, which keeps water in circulation for longer to reduce the burden on natural systems and encourage regeneration. The goal of CE is to decouple economic growth from negative externalities on environmental systems and resource use [9]. The aim of the study is to investigate the economic, environmental and operational effects of a CE on WUs by systematically mapping out cause and effect relations in a qualitative model. The model provides an economic view of an urban water system. The urban water system (UWS) is subsequently augmented with circular economic practices to create a successive model—a circular water economy system (CWES). By drawing on literature, case studies and conducting qualitative research to gain insight into expert views on the water industry and the role that CE can play in it, the paper sets out to demonstrate the effects of CE on water quantity, water quality, and operational practices of WUs. This study supports WUs by informing them of CE’s potential to change their business operations and business model while highlighting its associated challenges. 1.2. Context and System Boundary The system boundary is set in the context of a European urban water system. Cities are homes to many of the challenges faced by WUs, such as surface water pollution and flooding caused by built-up concrete areas as well as poor drainage, providing great opportunities for cities to meet their sustainable goals. Figure1 presents a simplified view of the components of a municipal water system, which are more complex in reality with more connections and interfaces with other systems. However, it sufficiently highlights the interfaces and industries incorporated in the model- ing and therewith the system boundary. Combined sewer overflowing (CSO), specified in Sustainability 2021, 13, x FOR PEER REVIEW 3 of 62 flooding caused by built-up concrete areas as well as poor drainage, providing great op- portunities for cities to meet their sustainable goals. Figure 1 presents a simplified view of the components of a municipal water system, Sustainability 2021, 13, 3313 which are more complex in reality with more connections and interfaces with other3 ofsys- 62 tems. However, it sufficiently highlights the interfaces and industries incorporated in the modeling and therewith the system boundary. Combined sewer overflowing (CSO), spec- ified in Figure 1, is the legacy infrastructure that is essentially a discharge pipe that re- Figureleases 1both, is the stormwater legacy infrastructure