The world is facing a growing water crisis, and the industrial sector is a significant part of the challenge. Globally, industries account for 20% of freshwater withdrawals, and this figure rises to 45% in the United States (U.S.). In total, over 322 billion gallons of water are consumed every day in the U.S. across all sectors, including agriculture, domestic use, and industry. The U.S. is already ranked as the number one importer of water worldwide, and the demand for freshwater is expected to rise even further.
Amidst this growing water scarcity, experts warn that U.S. water resources will decline by as much as one-third in some areas by 2070. Industries such as mining, energy production, and semiconductor manufacturing, which are heavily reliant on water, face substantial risks. As operational costs rise due to water scarcity, industries must take urgent action to rethink how they manage this precious resource.
The adoption of digital technologies, including automation, AI, and IoT solutions is becoming essential for reducing water usage and optimizing water management. These technologies not only help address the growing water crisis but also provide industries with the tools to create more circular, efficient, and sustainable processes.
The growing urgency for smarter water management
Water consumption by industries has continued to grow globally. Mining operations, for example, use over 16,000 cubic meters of water for every million dollars of output. Energy production is also a major water consumer, with five barrels of freshwater needed for every barrel of oil produced. In the U.S., where 94.6 million barrels of oil are produced daily, this means significant water withdrawal that contributes to water stress. To put this into perspective, this translates to enough to drain a body of water the size of Lake Tahoe every 70 days. The semiconductor industry has also seen water consumption increase drastically, using five times more water than it did a decade ago.
The semiconductor industry, which plays a critical role in supporting the development of AI, EVs, and other technologies, has seen its water usage increase dramatically. The sector now uses five times more water than it did a decade ago, driven by increased chip production to meet global demand. With these industries relying so heavily on freshwater, the risks posed by water scarcity, pollution, and regulatory compliance have never been greater.
In addition to high consumption, infrastructure inefficiencies are a major issue. In the U.S., 16% of treated water is lost due to leakage, and 2 trillion gallons of treated wastewater is wasted annually. The financial costs are enormous. In fact, $38.5 billion in losses are attributed to water-related issues. In 2018, 30% of companies responding to the CDP water security report faced fines, penalties, or enforcement orders due to water-related challenges, resulting in $82.2 billion in losses. In 2022 alone, U.S. corporations lost $15.5 billion in stranded assets due to the disruption of water access, with the oil and gas, utilities, and mining sectors hardest hit.
Digital innovation
Amidst these challenges, industries are recognizing the need for smarter water management practices. Digital technologies play a central role in this transition. By leveraging automation, AI, and data analytics, industries can optimize water use, reduce losses, and develop circular water management systems that prioritize reuse and waste minimization.
Schneider Electric’s solutions, for example, help industries reduce water consumption by 25%, lower energy use by 30%, and decrease total cost of ownership by 20%. These technologies provide real-time insights into water usage and treatment processes, allowing industries to identify inefficiencies, detect leaks, and improve overall operational efficiency. By integrating smart meters, IoT sensors, and AI-driven analytics, companies can monitor water usage with unprecedented accuracy, ensuring that water resources are managed sustainably.
One real-world example is São Paulo’s Aquapolo, South America’s largest water reuse company. This facility processes over 250 gallons of reused water per second for industrial clients in sectors such as aluminum manufacturing and petrochemicals. By using digital tools to monitor water quality in real-time, Aquapolo ensures that its operations remain safe, efficient, and compliant with environmental regulations. The use of AI and remote monitoring also enables the facility to anticipate water quality issues and take preemptive actions, such as temporarily shutting off inflows when pollutants are detected.
Circular water economies
Building circular water economies is key to ensuring long-term sustainability in water management, as these systems aim to reduce reliance on freshwater sources by maximizing water reuse and minimizing waste.
Digital solutions, such as using real-time data and predictive analytics, help companies to understand their water consumption patterns and identify opportunities for recycling and reuse, thereby adopting circular water management models. For example, wastewater treatment facilities can integrate digital tools that optimize chemical usage, reduce energy consumption, and improve water quality, creating more sustainable processes.
Across industries, digital transformation offers a way to build resilience against the growing risks posed by water scarcity. By reducing water waste, optimizing treatment processes, and creating closed-loop systems that prioritize water reuse, companies can significantly reduce their environmental impact. This shift not only helps industries meet regulatory requirements but also supports long-term operational viability.
Practical steps towards water security
To advance water circularity and improve sustainability, industries should consider the following actions:
- Assess and monitor water use: Conduct detailed assessments of water consumption using smart meters and sensors. Real-time monitoring helps identify inefficiencies, allowing companies to take targeted actions to reduce water usage and improve performance.
- Invest in digital technologies: Integrate AI, ML, and digital twins into water management processes to enhance decision-making, optimize treatment, and predict future water needs. These technologies enable facilities to be proactive, responding dynamically to changes and minimizing risks.
- Automate water management operations: Automation reduces the need for manual interventions, enhancing the consistency and reliability of water management. By setting automated parameters, facilities can maintain optimal performance with reduced resource use.
- Foster a culture of sustainability: Engage and educate employees on the importance of water conservation and circular practices. Creating a culture of sustainability ensures that every team member contributes to reducing water waste.
- Collaborate for greater impact: Partner with technology providers, industry experts, and other stakeholders to develop and implement innovative water management solutions. Collaborative efforts can amplify impact and drive meaningful change across entire supply chains.
Embracing the future
As industries continue to face the challenges of water scarcity and rising operational costs, the transition to smarter, data-driven water management is no longer just an option – it is a necessity. By embracing digital transformation and adopting circular water management practices, industries can enhance their operational resilience, reduce environmental impacts, and contribute to a more sustainable future.
In a world where water resources are becoming increasingly scarce, it is essential for industries to rethink their approach to water management. Through collaboration, innovation, and the adoption of advanced technologies, industries can secure a water-sustainable future for themselves and the communities they serve.
