Circularity and the Water Sector Part 2

The Circular Economy is not just an environmental regulation, but is being promoted in many countries as a policy to change the very structure of the economy. How is Japan faring in this context? How does it look to those who, like investors, keep a close eye on economic trends and changes?

 In 'Talk Circular x Economy', Mr. Andre-Hottinguer, who has been involved in investments in global companies for more than 10 years and has travelled back and forth between Europe and Japan, gives his unique perspective on these topics, drawing on his background as an investor and as a foreigner.  Let's enjoy his 'way of seeing' and explore the 'Circularity x Economy

In Part 2, we will examine how corporates are providing tools to enhance circularity in the water sector, as well as promising development on wastewater treatments.

Corporations are also taking steps to reduce their water consumption. For example, Japanese conglomerate IHI recycles wastewater in its painting and cleaning operations. At its headquarters, gray water produced from recycled kitchen wastewater and other sources is used for toilet flushing. As part of its environmental initiatives, the company has set a target to decrease water withdrawals at each site by 1% compared to the previous fiscal year.

Others are developing solutions to maximizes the use of rainwater, typically through advanced storage systems. Japanese construction firm Obayashi, for example, is developing a Smart Water Network (SWN) in Tokyo. This initiative aims to utilize rainwater—which is currently rarely used before being discharged into Tokyo Bay—as a valuable new water source. Collected rainwater would be stored within SWN building systems and in the Water Ring, a massive underground reservoir, then supplied for general service needs.

Finally, some of the most interesting initiatives are around reusing wastewater, which is often more cost-effective than alternatives like desalination or transporting potable water over long distances. On a global scale, water reuse remains in its infancy, representing around 1% of total water consumption in countries like Japan and France, though it has reached 14% in Spain. Currently, treated wastewater is primarily used for irrigation, but technological breakthroughs now make it possible to produce drinking water at purification facilities. Industry leaders such as Veolia note they can even produce ultra-pure water suitable for microelectronics and pharmaceuticals.

Innovative initiatives are also unlocking the value embedded in wastewater. Wastewater treatment can recover resources such as energy, reusable water, and nutrients, which are then turned into products like compost, fertilizers, and biofuels. These efforts can reduce operational expenses, cut down on landfill waste, replace chemical fertilizers, and decrease reliance on non-renewable energy sources. Municipalities and industries are increasingly turning to alternative sources of water and energy, such as recovering heat from wastewater at the household level, within sewer systems, or from underground sources.

Overall, applying circular economy principles to wastewater treatment, resource recovery, and reuse can turn sanitation from a costly obligation into a self-sustaining, value-generating service—delivering a powerful dual benefit: safeguarding the environment and promoting economic resilience.

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