The Circular Economy and the Water-Energy Nexus


Since the industrial revolution, the total amount of waste has constantly grown as economic growth has been based on a ‘take-make-consume and dispose’ model. This linear model assumes that resources are abundant, available and cheap to dispose of. In Europe, there is a move towards a ‘circular economy’ where existing materials and products are reused, repaired, refurbished and recycled. In the circular economy, what was once regarded as waste can be turned into a resource, which in turn reduces greenhouse gas emissions.

In Asia-Pacific, climate change is impacting the availability of water, which in turn affects the production of energy and food resources. Along with rapid population and economic growth increasing demand for scarce resources, the move towards the circular economy is critical in ensuring economic and social stability. As such, it is only through intensified ties and coordination with partners in the Asia-Pacific region that the European Union (EU) can address major global issues including climate change and resource scarcity. Other benefits of this includes job creation and increased economic productivity in producing innovations towards the circular economy.


Water-energy nexus pressures in Asia-Pacific

Water and energy are linked in two ways: first, water is used in the production of almost every type of energy (coal, geothermal, hydro, oil and gas, nuclear) and second, energy is a dominant cost factor in providing water and wastewater services. In Asia, increasing access to energy is a priority as around 700 million people lack access to electricity and 1.9 billion rely on biomass (e.g. wood) for heating and cooking. Despite creating alternative energy sources, over 80% of the expected increase in energy use to 2035 will come from fossil fuels, particularly coal - which in addition to being water-intensive - will lead to global warming, further exacerbating water scarcity.

One of the most challenging aspects of the water-energy nexus is that low-carbon growth targets for energy generation place stress on water availability. Among the renewable energy sources available, hydropower is likely to become the dominant source of low-carbon energy in the future. However, not only does hydropower consume water through evaporation from open surfaces of reservoirs, but it also impacts availability of water for downstream users (agricultural, fishery, industrial, municipal etc.).


Europe’s transition towards the circular economy

The European Commission has adopted the Communication ‘Towards a circular economy: A zero waste programme for Europe’ to establish a common and coherent EU framework for promoting the circular economy. Transitioning towards the circular economy means increasing recycling and preventing the loss of valuable materials, creating jobs and economic growth, show how new business models, eco-designs and industrial symbiosis can achieve zero-waste and reduce greenhouse gas emissions and environmental degradation.

Transitioning towards the circular economy is at the core of the resource efficiency agenda established under the Europe 2020 Strategy for smart, sustainable and inclusive growth. Under Europe 2020, the Flagship Initiative for achieving a resource-efficient Europe aims to create a framework for policies that support Europe’s transition towards a resource-efficient and low-carbon economy where resource efficiency minimises the amount of waste produced in a circular economy.

To achieve these goals, the Flagship Initiative calls for a 20-20-20 target by 2020: a 20% reduction in EU greenhouse gas levels compared to 1990 levels, reducing energy usage by 20% and a 20% increase in renewable energy. To achieve these goals the EU aims to, by 2020, manage waste as a resource with the aim of increasing recycling rates to reduce pressure on demand for primary raw materials, help reuse valuable materials that would have been wasted and reduce energy consumption and greenhouse gas emissions from extraction and processing which will in turn boost the EU’s competitiveness, ensure security of supply of essential resources, fight climate change and limit the environmental impacts of resource use.

Water plays a vital role in resource efficiency, as it is an essential component of agriculture, industry and energy. Reduced water availability therefore impacts economic output and energy production. In Europe, 20-40% of water is wasted and water efficiency could be improved by 40% through technological innovations, which ensure water resources are used sustainably and the energy footprint of water-using activities is low.

In the Asia-Pacific region, China, Japan and Korea in particular are starting to implement resource efficiency policies. Therefore, EU experiences in the Flagship Initiative can influence those particular countries as well as others in the region transitioning towards a circular economy, for the purpose of enhancing the green economy, reducing global greenhouse gas emissions, and achieving global security of scarce resources, including water.


Reducing water-energy nexus pressures in the Netherlands

In the EU, the Netherlands is a leading country that has adopted both circular economy principles and implemented showcase circular economy technologies that reduce water-energy nexus pressures.

In the Netherlands, the existence of a large recycling infrastructure, an active market for repairs, and a popular second-hand market show the country is capable of moving towards a circular economy. Increasingly, businesses in various industrial supply chains are cooperating in order to generate industrial symbiosis, for example re-using waste, energy, water and material streams in an economically responsible way. It is estimated that currently the Netherlands recycles 78% of its waste, incinerates 19% and dumps only 3%. To increase further the circularity of the Dutch economy, particularly in technical fields, means advocating more maintenance and repair work, intensive re-use, and increased recycling. With regard to value creation in waste streams, the Netherlands has the advantage of being a densely populated country enabling the symbiosis of industrial processes where waste can be directly reused in the production of other goods and services.

A good example of reducing water-energy nexus pressures in the circular economy can be seen in Amsterdam’s main wastewater treatment plant, which creates energy from sewage sludge, reducing the need for water in electricity production. In particular, the city’s main wastewater treatment plant ‘Amsterdam West’, operated by Waternet, is located beside a waste-to-energy plant operated by the AEB Waste to Energy Company. The close proximity enables an exchange of energy flows between the two plants with large environmental benefits: Amsterdam West produces 25,000 m3/day of biogas and 100,000 tons of sewage sludge per year for burning at the waste-to-energy plant. The energy produced in the waste-to-energy plant is then used to power the Amsterdam West treatment plant. In total, the integration of the two plants produces 20,000MWh/year of electricity and 50,000 GJ/year of heat, saving 1.8 million m3/year of natural gas, resulting in avoided greenhouse gas emission of 3,200 tons per year.

The important lessons from this example, that can be exported to the Asia-Pacific region, is that industrial processes can be connected (industrial symbiosis) to prevent industrial by-products from becoming waste, which in turn reduces the quantity of water and energy required in treating wastewater, reducing water-energy pressures. This technology can be exported to Asia-Pacific through the providing of technological and engineering assistance that aims to mainstream, particularly in cities, waste reduction and high-quality separation of waste for secondary use.



In Asia-Pacific, climate change is impacting the availability of water, which in turn creates water-energy nexus pressures – intensified by rapid population and economic growth increasing demand for water and energy. With resource scarcity there is the potential for economic and social instability in Asia-Pacific. In Europe there is a move towards the circular economy where existing resources are reused, repaired, refurbished and recycled.

With the European Commission aiming for a resource-efficient and low-carbon economy, the EU can transfer to the Asia-Pacific region circular economy best practices and technologies to increase security of supply of scarce resources, including water, and reduce global greenhouse gas emissions. 


Photo: A waste-to-energy facility helps to reduce water-energy nexus pressures.


Circular economy, water-energy nexus, resource efficiency, waste-to-energy

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