Australians inherently understand the critical importance of water to the wellbeing of our communities, environment and the economy. The increasing impact of bushfires, drought and also floods together with expanding urban development is acknowledged by the urban water sector in its response to the challenges of climate change and population growth.

The Water Services Association of Australia (WSAA) has stated that they support the national Water Reform 2020 Draft Report from the Productivity Commission and that the overarching goal for the National Water Initiative needs to be updated to reference climate change in addition to recognising the interests of Aboriginal and Torres Strait Islander people in water resource management.

WSP delivers some of the largest water and wastewater projects and programs across Australia. Being future focused and taking action to prepare for this future, WSP Senior Water Treatment Engineers Tanu Kaur and Matt Lyon have developed an insightful report ‘A Pathway to Carbon Neutrality in the Australian Water Industry’.

Their research included identifying relevant policies, carbon reduction trends in the water industry, and the existing tools which are available to assist in decision making. In developing the technical paper capturing the state of the industry, the team also interviewed water utilities and industry bodies to understand current challenges and opportunities that face the Australian water industry when it comes to reaching net zero.

In reviewing the position of climate policy within Australia, the team identified variability across State and Territory governments in regard to a carbon neutral target for the water industry. Currently there is a range of climate policies on achieving carbon neutrality by 2050 from aspirational state-based targets through to legislated reductions specific to individual water utilities.

“Every State and Territory government in Australia now have a 2050 net zero emissions target,” explains Matt. “While some State governments have invoked legislation, others have settled on aspirational targets and the impact of the differences of these policies on the water industry is significant. Because utilities are regulated by state-based pricing regulators, our clients are telling us that when there is no state-legislated target, only cost-positive carbon reduction projects are obtaining regulatory approval. This limits the ability of utilities to implement significant carbon emissions reductions.

“The water industry is complex, made up on many different water providers in Australia, with different regulatory bodies, demographics and diverse technical challenges. However, as the industry is largely government run, it is a non-competitive market with water and sewage prices largely being set by economic regulators. As a result, the water industry is uniquely positioned to share knowledge such as emissions reductions strategies, risks and opportunities.”

Reducing Greenhouse Gas Emissions

To get an understanding of the size of the challenge, Matt and Tanu looked at the major emissions from utilities reported via the national Greenhouse Gas (GHG) emissions reporting scheme. Matt says, “Within water utilities, wastewater treatment is one of the largest and most challenging sources of emissions. Not only because of the high energy use but also because of the gases that are emitted from these plants such as methane and nitrous oxide. Although not reported under the national GHG emissions reporting scheme, Scope 3 emissions are also a major emissions source due to the need for transportation of solid wastes and chemicals in addition to embodied energy in pipelines and structures.

“State governments are under pressure to reduce emissions in their water businesses as the water industry can make a significant contribution to reducing government emissions As is the case in Victoria where at 24 per cent, water infrastructure (wastewater, supply and other water) is responsible for the largest proportion of government emissions. The Victorian state government has mandated that water businesses be carbon neutral by 2030, with specific reductions for regional and metropolitan water utilities.”

The Journey to Net Zero

To drill down into the specific challenges that water utilities face in the journey to net zero, the research team held discussions with representatives from leading water utilities across Australia, as well as Water Research Australia and the Water Services Association of Australia.

Tanu says, “It was interesting to see the range of answers from water utilities when posed questions on policies, targets, practices, hurdles and the future state of emissions reductions.

“Despite various water businesses, even within the one state being at different points on the pathway to carbon neutrality, key themes in our discussions did emerge.

“The main challenge indicated by water utilities is the need for a clear mandate to reduce emissions, to allow utilities to implement the significant changes and projects required to reach net zero.

“Despite there being some quite specific reduction targets at state and territory levels, there is no clear direction for most utilities on what the trigger is for them to reduce emissions.  Therefore, only GHG reduction initiatives which can demonstrate a positive net present value, and that are low risk, have historically obtained approval, such as energy reduction and solar PV projects.

“There is however a concerted and increased focus within utilities on having long-term positive impact on the environment and communities. This has led to innovative solutions and future ready strategies being adopted, in areas such as resource recovery, circular economies and operational efficiency.”

Emission Reduction Initiatives

The project team identified the following emissions reduction initiatives currently utilised within the water industry:

Tanu says, “A current focus for utilities is preparing to meet new and more ambitious targets around GHG reduction. To achieve this, they will need to undertake long-term energy and emissions reduction planning, better understand their emissions sources (in particular nitrous oxide) and identify gaps in their current decision-making processes.

“This includes qualifying and quantifying the different benefits of emissions reduction projects, understanding risks, and identifying additional assessment tools that are needed.”

The research team identified that water businesses will need to consider and eventually implement a ‘next wave’ of GHG reduction initiatives which will likely have greater complexity, costs or risks compared to the those which have historically been implemented, but which will be required to bring them closer to carbon neutrality.

Tanu adds, “As water utilities approach net zero, the remaining emissions will be the most complex and difficult to address. This will foster even greater innovation and technological advancements in the water industry.”

The team has drawn some key recommendations from the project that could be adopted in the water industry as it strives for net zero.

“Our research shows that there is opportunity for the development of more standardised information sharing through a central facility; a roadmap for the industry is required as per that instigated in the UK; and longer-term planning is needed with the identification of specific projects,” says Tanu. “Utilities have indicated that they are looking to implement strategies such as internal carbon pricing, capturing broader environmental and social benefits, and instigating projects to provide climate change resiliency.”

Key recommendations outlined in the report include:

This project has identified that there is a real desire within the water industry to achieve net zero emissions. Water utilities have implemented various strategies to reduce emissions within their current regulatory constraints. WSP is committed to assist utilities in developing an achievable and clear pathway to net zero. Our team is continuing its research into opportunities in this space, including leveraging experiences from WSP’s global operations, and from industry leading utilities around the world.