Europe’s water crisis: how supplies turned to "gold dust" Analysis by Financial Times

The Financial Times has published an article arguing that drought, leaky pipes and poor policy are among several factors contributing to Europe’s scarcity problem. Caliber.Az reprints the article.

Farmer Pepe Gilabert is already facing the reality of a parched future. The soil in his olive groves has the consistency of salt and only 30 per cent of his normal olive crop will grow this year.

Gilabert’s groves were once fed by groundwater reserves alone but those are so depleted that farmers in his part of Andalucia, Spain, now pipe water to their trees. This year’s harsh and early drought means that now they are only receiving half of the water they need. “It’s an espiral diabólico, a devil’s spiral,” said Gilabert.

Drought and wildfires across southern Europe this summer are the most overt signs of a complex and entrenched water scarcity problem that is becoming more severe as the climate changes. “There is no country in Europe that can pretend to be shielded,” said Xavier Leflaive, who leads the water team in the OECD’s environment directorate.

Droughts have “dramatically increased” in number and intensity in the EU, with the areas and people affected rising almost 20 per cent between 1976 and 2006, according to the World Meteorological Organization. The World Resources Institute forecast in 2020 that global fresh water demand would outstrip available supply by 56 per cent by 2030 — a greater gap than the 40 per cent forecast by consultancy McKinsey in 2009.

Tensions have risen to such a point in France and Spain that riots have burst out between farmers, the biggest consumers of the continent’s water supply, and environmental groups. In coming years, a mixture of poor policymaking, vested interests and rapid climate change appears set to make the situation even worse.

Long accustomed to cool winters and high, steady levels of rain, Europe’s policymakers have tended to give water supplies little thought. “Most [water] regimes in Europe are legacies from times of plenty. They now need to be reformed to reflect scarcity,” said Leflaive. “These are very tricky and politically difficult reforms but to me they are essential.”

The impact of such a shortfall is acute for farmers. But it will also hit households and other industries, including energy production, since water is needed for cooling nuclear power plants and to generate hydropower.

The problem is not just limited to Europe’s driest lands either. A tangle of local water regulation, leaky pipes and extreme weather is turning even the wettest parts of Europe, such as Poland or Germany, into areas of “water stress”. Belgium, a country famed for grey weather, is the most water- stressed country in Europe due to population density and poor infrastructure, according to the WRI’s index published this month.

For Gilabert on his Andalusian farm, it’s simple: no water means “we don’t earn money”.

Europe is warming faster than any other continent. But this has been compounded by other issues. Flows of Alpine meltwater, which are crucial for the continent’s water supply, are falling. On top of that, drought-ridden soils are not sufficiently retaining rainwater, which is depleting groundwater reserves.

“The challenge we have is we run low on surface water because that’s the easily available source. You tap into groundwater and then we use it at a much higher rate than it’s being replenished,” said Geoff Townsend, an industry fellow at water services company Ecolab.

Despite concerns over water scarcity, the approach to distribution remains so lackadaisical in the EU that on average 25 per cent of drinking water is lost through leaky pipes, according to industry body EurEau.

Bulgaria, Romania and Italy top the worst offenders list, based on EurEau data. In Rome, for example, 42 per cent of water is lost through sieve-like infrastructure that in some neighbourhoods dates back to the Roman empire. Hard, dry earth can cause fracturing and twisting of the pipework, which makes the leaks worse.

In the UK about a fifth of the water supplied is lost every year. Thames Water and Northumbrian Water said last year that the record-breaking 40C summer heatwave and cold winter weather caused a big increase in burst mains. But critics say climate-related issues have been exacerbated by chronic under-investment in infrastructure by utility companies.

To water industry executives, leaks not only represent throwing water down the drain, but throwing away money too. Yet identifying and eliminating leaks is difficult.

“All these leaks are what we call ‘non-revenue water’. You have to produce drinking water. It is a cost and then you put it in the pipes and if it doesn’t reach the tap then you get no tariffs on it,” said Denis Bonvillain, head of EU affairs at Veolia, a water and waste group.

But the OECD’s Leflaive said fixing every single leak did not make financial sense and that a rate of about 10 per cent water loss was considered a best-case scenario. “Going beyond that will require very heavy investment and it’s probably not worth it.”

As water is generally managed by a patchwork of local companies and municipal authorities, it is also challenging for national and EU-level policymakers to take action. More than 78,000 businesses of varying sizes across the EU work in water reuse, waste and distribution.

Marc Bierkens, professor of hydrology at Utrecht University in the Netherlands, said there were “hardly any” countries that incentivised efforts to conserve water. Belgium’s Flanders region is one of the exceptions; households pay a basic rate that increases if they use a greater volume.

Traditionally, water tariffs are relatively cheap for European households compared with the cost of energy bills, which limits the cash companies have available to do vital repair work. In Ireland, there are no tariffs at all for basic domestic use.

According to the OECD, all EU countries except Germany need to increase annual expenditure on water by more than 25 per cent to comply with EU drinking and waste water rules, which means bills are likely to go up.

“It is well known that the price paid for water does not yet reflect the true cost of extraction, transportation, use and pollution,” said Cate Lamb, global director of water security at CDP, which helps companies and authorities monitor their environmental impact.

Industry body Water Europe has recommended putting a greater focus on the types of water used for different purposes, such as recycled water for industry and farming, while rainwater is preserved for drinking. The cost of inaction “would exceed by five times the investment required” by the industry to tackle water scarcity risks up front, it said.

But the problem goes beyond having water for drinking, cooking, washing and crops. Clean technologies — vital to Europe’s efforts to transition away from fossil fuels — are thirsty too.

The Energy Transitions Commission, an industry coalition, has said water for power generation, hydrogen electrolysis, cooling nuclear power stations and carbon capture could amount to 58bn cubic metres per year by 2050 — roughly double Europe’s current drinking water consumption. Mining for minerals critical to electric vehicle and wind turbine production could push the figure up by another 4bn to 5bn cubic metres per year, its report added.

On top of this comes an ever-expanding network of data centres, which use large amounts of water for their cooling and humidification systems, alongside demand for high-tech semiconductor manufacturing, which requires treated “ultra pure” water for washing the chips. Google’s Saint-Ghislain data centre in Belgium consumed 270.6mn gallons in 2022 — enough to fill 408 Olympic swimming pools.

Industries such as food production and textiles, which require large volumes of water for processes such as sanitising vegetables or fixing dyes, are also at risk. Mauro Scalia, director of sustainable businesses at textile industry body Euratex, said solutions to treat water for reuse were “neither simple plug and play, nor easy to afford”.

“The problem is getting bigger and bigger,” said James Leten, a senior programme manager at the Stockholm International Water Institute. “The main question is how do we adapt to that in a democratic way?”

Hector Llorente, who grows wheat as part of a co-operative in León, Spain, may have one solution. Using three different apps, including Climate FieldView, which monitor crop conditions and moisture levels in real time through satellites as well as the provision of water from the local reservoir, he has managed to halve his water use at the same time as tripling crop production.

He has also reduced fertiliser run-off that can pollute water sources. “Water is gold dust, so we are using it wisely,” he said, adding that more local farmers were signing up to use the technology.

But Johannes Cullmann, director of climate and water at the World Meteorological Organization, said not enough of Europe’s farmers were incentivised to take on “proactive” water management because when they are hit by droughts, governments tend to bail them out with water supplies or compensation for failed crops.

Some movement has begun on policy. EU-led rules on water reuse came into force in June and Brussels has required member states to work on drought management plans. French president Emmanuel Macron has set a target of reusing 10 per cent of wastewater by 2030 as part of a new “water sobriety” plan. The UK is looking at mandatory water-efficiency labels on new toilets and washing machines.

However, Ecolab’s Townsend said policymakers were not acting quickly enough. The critical thing, he added, would be to gather data about how and where water is lacking. “You have a crisis a long way before you lose water at the tap.”