Europe’s Water Crisis Deepens: Waste Fuels Climate Crisis and Economic Risk

WISE NEWS PRESS / BRUSSELS, BELGIUM — Oct. 27, 2025

Water waste is "deepening the climate crisis" and inflicting a heavy blow on economic resilience, according to experts urging immediate action. The energy and water systems in Europe are struggling to meet demand, a trend that could shrink the GDP of high-income countries by up to 8% by 2050.

According to a new report by Danfoss, the energy consumption of the water sector is expected to double by 2040, while the energy sector’s demand for water is projected to increase by nearly 60%. Global water demand could also exceed supply by 40% within the next five years, meaning millions more people will join the 3.6 billion already lacking sufficient year-round water access.

The Interdependence of Energy and Water

Every stage of the water cycle, from extraction and purification to distribution and use, requires energy. As the global population grows, so does the demand for fresh water, necessitating more energy to pump, treat, and distribute it. Currently, the energy sector accounts for about 14% of global fresh water withdrawals.

This interdependence means pressure on one system directly affects the other. For example, energy scarcity can limit water supply operations, while drought and heatwaves risk disrupting electricity generation. Experts argue that Europe can no longer afford to treat these systems separately.

Danfoss CEO Kim Fausing stated to Euronews Green, "How we use energy in our water system poses significant risks to resilience and competitiveness. Too much treated water in Europe, and the energy used to pump and treat that water, is wasted due to leaks and inefficiencies, which poses an economic and security problem."

The Cost of Europe's Water Crisis

Ignoring water and energy inefficiencies risks escalating costs. This situation could lead to a drop in GDP by 8% in high-income countries and 10–15% in low-income countries by 2050. Already, water-related global problems have added approximately $9.6 billion (about €8.26 billion) to the energy sector's costs. In Europe, most EU member states will need to spend an additional €500 to €1,000 per person on water supply and sanitation by 2030 just to comply with existing water regulations.

The water crisis threatens public health, infrastructure stability, and geopolitical security. Limited access to affordable water or energy could fuel conflicts, especially in regions dependent on imported energy or shared water resources.

Solutions: From Smart Meters to Desalination Efficiency

Technological solutions already available can help strengthen water and energy efficiency across all stages of the water cycle.

"We need ambitious regulations, water efficiency targets, and systems that incentivize investment in proven technologies such as leak detection, smart metering, pressure management, and energy efficiency optimization," Fausing urged. "Governments should consider integrating water efficiency into energy audits and set national industrial water reuse targets. Every drop saved means less energy wasted."

Danfoss suggests that if all existing desalination plants (which turn seawater into drinking water) worldwide were retrofitted to operate at current technological potential, €34.5 billion could be saved, and CO2 emissions could be reduced by 111 million tonnes. Furthermore, wastewater treatment plants can significantly reduce energy use and operating costs by using Variable Speed Drives (VSDs), which adjust motors and pumps based on real-time demand rather than running them constantly at the same speed.

Data Centers: Major Water Culprits

Data centers stand out as one of the biggest culprits in water consumption, currently using an estimated 560 billion liters of water annually globally. According to the International Energy Agency (IEA), this amount could double to 1,200 billion liters by 2030, equivalent to six times the total fresh water consumption of the EU in 2022. The main reason for this high consumption is the excessively heat-producing processing units that require cooling.

However, liquid cooling systems for data centers, based on a closed-water loop, can help reduce water consumption. Liquid-to-chip cooling systems are also at least 15% more energy efficient than their air-cooled counterparts.

The IEA suggests that waste heat from data centers could meet 10% of Europe's space heating demand by 2030. Even though the largest data centers may be located far from urban areas, the excess heat from data centers could meet a primary demand of 300 TWh for recipients located several kilometers away.

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