Water treatment: Increasing demand, tightening regulations drive need for reuse

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Over the next 25 years, demand and competition for water and energy resources will increase. The world’s population is projected to grow from 7 billion to 9 billion by 2040, according to the United Nations

That growth together with the megatrends of urbanization, increasing mobility, economic development, growth in trade, and climate change will drive increased competition for water, energy, agriculture, and other resources, according to the Food and Agriculture Organization of the United Nations, cites in a white paper produced jointly by General Electric (GE) and the World Resources Institute (WRI; Washington).

As more and more of the world’s population moves into cities, urban centers must keep up with demand for water and wastewater treatment. Millions of new residents will need drinking water and sanitation services. The development of energy and water infrastructure is not usually well coordinated across jurisdictions, and constraints on water and energy resources are rarely integrated into infrastructure development or planning. Public investment in infrastructure is also lacking: In the United States, extrapolating the funding gap for water- and wastewater infrastructure suggests the span could reach $144 billion by 2040, according to the GE-WRI white paper.

Increasing demand for water and energy will force compromises in arid and water-stressed areas. Water and energy as resources are connected in what is called the water-energy nexus, now a well-established concept, but the business risks and opportunities associated with it are still being considered. Huge quantities of water are required for thermal power plants and extracting and processing oil, gas, coal, metals, and chemicals. At the same time, treating, desalinating, and transporting water requires considerable amounts of energy, the white paper says. “Water crises” and “energy price shock” rank first and sixth, respectively, in the 2015 edition of the World Economic Forum’s annual  Global Risks  report.

Chemical companies are increasingly aware of what drives water-treatment demand. “There is a very clear correlation between water-treatment activity in the world and population growth,” says Jean-Marc Vesselle, head/liquid purification technologies business at Lanxess.

Vesselle: Market growing faster than GDP.

Desai: Water demand will increase 30% by 2030.

Huovinen: Water is the most undervalued product.

“The three main uses of water are obviously drinking water, agriculture, and industry. The first two are in big demand because of population growth, adding stress to an already unbalanced water supply. This unbalanced water supply is further sharpened by migration and people moving to places where most of the time the water quantity is not aligned to this growing population,” Vesselle says.

Water energy challenges and the resource consumption that drives them “will be among the top priorities for business over the next five years,” says Kevin Moss, the global director at WRI’s business center. The water-energy nexus is a challenge that cuts across sectors and geographies and affects public and private interests, he says.

Industrial water demand alone is expected to more than triple by 2030, according to Debora Frodl, executive director at GE Ecomagination, GE’s growth strategy to enhance resource productivity and reduce environmental impact. “Within the next decade, one third of the world’s population will live in water-stressed regions. Water is essential for agricultural and industrial production,” Frodl says.

Water scarcity challenges industries around the world. Population growth and economic development imply that demand, competition for, and cost of limited freshwater supplies will increase. Scarcer water creates challenges for energy supply because producing coal, oil, gas, and electricity requires considerable amounts of water. Many countries will nevertheless need more energy for energy-intensive water treatment, such as desalinating seawater, to meet growing demand for water, according to the GE-WRI white paper.

As the United States develops its domestic shale gas and tight oil reserves, it will have to trade off between water and energy. Shale resources are often found in areas where water supplies are stressed, and by 2020, an estimated 60% of US shale plays will be in regions with arid conditions or high water-stress, GE and WRI say.

The increasing demand for water coupled with its growing scarcity means potentially good business for companies in the water-treatment space. “We still expect the market to grow at a few times GDP, but depending on the market segment, we see bright spots and soft spots,” says Snehal Desai, director/water solutions at Dow Chemical. “The water market is really an interesting place to be because there really are no replacements or alternatives for water. Inherently, we know that water drives the economy, and therefore as the market grows and the world population grows, the need for water continues to increase, whether for food, for energy, or having water to drink. By 2030, we’re going to need 30% more water and 45% more energy. Our opportunity to be able to make an impact in the market is tremendous,” Desai says.

Other companies paint a similar picture. “Growth in the market is clearly higher than growth in GDP but is very different from region to region. In the developed areas, where strong infrastructure already exists and where the obligation to treat water has been around for decades, it is relatively small compared with those areas where the regulation is newly in force and where we see much faster growth,” Vesselle says.

In the United States, weakness in the oil and gas market is a drag for water treatment chemical makers. "In the oil and gas market, there are some sectors that are struggling to stay in business," says LaMarr Barnes, senior executive v.p./marketing and strategy at U.S. Water Services (St. Michael, MN). "The lack of growth is also putting cost pressure on suppliers so our margins are being compressed. I don't see that changing anytime in the next couple of years."

Still, other end markets are performing better than oil and gas. U.S. Water Services is seeing expansion in petrochemicals, refining, and fertilizers, Barnes says. Power-plant construction is slowing somewhat, but plants are still searching for ways to use water more efficiently, he adds.

The water-treatment chemicals market is growing approximately 3%/year, says Tero Huovinen, head/communications and corporate responsibility at Kemira. “The important message here is that the water-treatment market is growing independently of the current economic fluctuations. It’s a stable market in that sense,” he says.

The increasing demand for water is driving the need for reuse. Rather than passing water into rivers or the sea, it can be treated and used again, such as in chemical processes or as cooling water for power plants. Reusing water is a central component of integrated water management, and promoting water reuse is a clear step toward a circular economy, as identified by the European Commission’s 2014 green paper on water reuse, according to Kemira in a position paper. Reusing water can also lower the amount of wastewater discharged into the environment, safeguard water supplies, and manage the imbalance between water demand and supply in water-stressed regions, Kemira says.

Increasing water efficiency and reducing a product’s water footprint “will also lead to energy savings, reducing the payback time of water investments significantly,” says Gitte Dige, manager/business development at pump manufacturer Grundfos (Bjerringbro, Denmark).

Reusing wastewater is far more energy-efficient than desalinating seawater for urban water supply and treatment. The energy content of municipal sewage can also be two to four times greater than the energy required to treat it, so the energy available in wastewater could sufficiently power a water treatment plant. Treating wastewater would require less than 1 kilowatt hour (kWh) of electricity/cubic meter of water compared with 4 kWh/cu meter for desalinating seawater, according to a WRI analysis of the city of Qingdao, China.

Reuse is also generating interest among industrial water users. "There is increasing interest in water reuse in the food and beverage industry," Barnes says. "Most companies were not interested in reuse 7-8 years ago, as it was too hard from food safety standpoint, but now with environmental regulations and water scarcity a lot of food companies have had to do this. As an example, companies California’s Central Valley are very interested in anything that makes them more efficient in water use, including reuse.”

 

The sustainable use of water can be an advantage for companies that take steps to respond to the worldwide shortage of freshwater. Dow’s manufacturing site at Terneuzen, Netherlands—the company’s largest outside the United States—is the heaviest industrial water user in its region. The company has entered into a wastewater recycling program with the municipality. Dow’s Terneuzen site accepts 30,000 cu meters/day of wastewater from the city of Terneuzen, has it purified, and uses the resulting water to generate steam and feed the site’s manufacturing plants. The site has reduced its carbon dioxide emissions by 60,000 m.t./year through recycling the city’s wastewater compared with using desalinating seawater for the same end.

“One of biggest trends we’ve seen in last several years is the transition to the circular economy,” says Dow’s Desai. “Water is definitely part of that conversation because as we move to try to have a more sustainable environment, we can’t afford to use water once and pass it along. It’s way too valuable for us to do that. This whole notion of closing the loop and reusing water is not trivial.”

However, cost is often barrier to reusing and recycling, according to Kemira. The current price of reused water is often too high to encourage its uptake, and the price of freshwater is too low in some instances. In many cases, virgin raw materials are the cheaper option, and the cost of the recovery process is often a hindrance. “Commonly, people think that drinking water comes without cost, so it’s a utility, but it’s probably the most undervalued product in the world,” Huovinen says.

As the costs of water resources rise, companies increasingly see the financial potential in resource efficiency. From a sustainability perspective, water-efficient solutions are clearly interesting, but cost is the driver. “We have very seldom been able to charge more for a product simply because it is sustainable,” says Peder Tuborgh, CEO at Arla Foods (Arhus, Denmark).

In the absence of economic drivers, the high capital investment costs of reuse plants and related infrastructure serve as another barrier to uptake. Regulations on treating water and what it can or cannot contain before being discharged are becoming more stringent, and those regulations’ enforcement is being tightened.

Chemical companies active in the water-treatment sector agree that regulation is good for business and will drive the market. “One growth driver for our municipality water-treatment business is regulation, how strict it is, and how strictly [it is] enforced,” Huovinen says. The enforcement of regulations in sludge treatment in emerging markets is a key driver, especially in China. “We are seeing early signs of growth there in 2016,” he says.

Regulation promotes the adoption of advanced solutions, Desai says. “When discharge limits are tightened, more advanced solutions are required,” he says. “But as we get tighter restrictions, it actually lends itself to advanced solutions being part of the equation. Some of those tightening restrictions on discharge are encouraging people to take just a tiny step more to be able to close the loop and rather than be able to do all that treatment work just to send it on. They are saying, ‘If I’m going to put in all that energy in capital and technology to treat this water to a certain level, why not take it one small step further and bring it all the way back around?’ So in a way, tightening regulations is actually encouraging thinking about water reuse,” he adds.

Lanxess’s Vesselle concurs. “Regulations clearly help [demand for water treatment]. When the government is enforcing new regulation, this is very good,“ he says.

Agriculture accounts for as much as 70% of worldwide water consumption, according to official statistics. Further down the supply chain, the food and beverage industries account for one fifth of industrial water consumption. Overall, almost three quarters of water demand relates to people consuming food and drink. The water footprint of food products is expected to receive increasing attention from consumers and become highly visible on political agendas in the coming years, according to a white paper by the Rethink Water network in Denmark.

Another potential driver for the water-treatment market is the recovery and reuse of valuable materials contained in wastewater. Only 32% of the phosphorus present in wastewater in Europe is currently recycled, according to Kemira. About 50% is disposed of or incinerated, and the rest is found in wastewater after treatment. The wasted phosphorus damages the environment through eutrophication in rivers, lakes, and oceans, resulting in algal blooms and depleting the oxygen in the water. Using coagulants, about 90% of the phosphorus lost with the treated water could be captured at the treatment plant, and this proportion could also be recycled to agriculture, Kemira says.

Water treatment will ultimately continue to grow as water becomes scarcer through increasing demand and water reuse. “Overall, we see a sharpening of the tension for water supply, and this sharpening is leading to more constraints being placed on industrial water uses, and this leads to a regular growth in the water-treatment industry. From that point of view, we are extremely confident that there will be growth in the future,” Vesselle says.

Source: Chemical Week

 

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