In addition to the risk of water shortages in some regions, water insecurity can lead to significant production losses, increased costs and loss of industrial competitiveness
The impacts of climate change are now apparent in various parts of the world, in the heightened intensity and frequency of natural disasters such as droughts, floods, earthquakes, seaquakes, and more. In Brazil, some of the most worrying effects include water scarcity.
Although the country holds 12% of the world’s freshwater supply, this is unevenly distributed. For instance, the Southeast Region accounts for nearly half of the GDP and 45% of the population, but the supply of water is only 6% of the country’s total. In contrast, the North Region – where only 5% of the Brazilian population lives – holds 81% of the freshwater available in the country.
In addition to the risk of water shortages in some regions, water insecurity can lead to significant production losses, increased costs and loss of industrial competitiveness.
According to the Electric Energy Commercialization Chamber (CCEE), the total revenues generated by the electricity sector under the tariff flags system adopted due to the water crisis reached R$ 12.9 billion in September-December 2021. This is a fourfold increase from the last four months of 2019 – the year before the coronavirus pandemic broke out – and a sixteen-fold increase from the same period in 2020.
According to Robson Braga de Andrade, president of the National Confederation of Industry (CNI), the mismatch between water demand and supply requires actions to make water use more efficient and to reduce risks of a system collapse.
“Water security is vital for human survival and for generating employment and income. In the face of the additional challenges imposed by climate change, a more holistic view of the various uses of water is required, with the design and implementation of viable alternatives for a more efficient use of water,” said Robson de Andrade.
The National Water and Sanitation Agency (ANA) estimates a 42% growth in water withdrawals by 2040, from the current 1,947 m³/s to 2,770 m³/s. This is an increase of 26 trillion liters extracted from water sources.
Flávio Tröger, Water Resources Planning Superintendent at ANA, says that the National Water Security Plan published in 2019 included investments in strategic water infrastructure for the country, in addition to encouragements to the use of alternative sources, such as wastewater reuse and desalination. “Failing this, it is estimated that by 2035 around 70 million people would be at water risk and that the industrial and agricultural sectors could face losses of BRL 518 billion,” he warns.
The new National Water Resources Plan runs until 2040 and includes guidelines and actions for revitalizing river basins and adopting nature-based solutions, in addition to encouraging water reuse. According to Tröger, an assessment of the impacts of climate change on water supply is one of the innovations introduced in this plan. “Studies are planned to better estimate these impacts on water resources and on the various water-using sectors,” he says. “These studies will help us identify improvements in management instruments so that we can adapt to the effects of climate change.”
According to Francisco Igor Aires Nunes, Head of the Ministry of Regional Development’s Department of Water Works and Support for Studies on Water Security (MDR), high-profile extreme weather events that occurred in Brazil, such as the drought in the states of São Paulo and Minas Gerais in 2021, were the worst in the last 90 years. Meanwhile, some areas in Minas Gerais reported the highest rainfall rates in the last 30 years.
“These extreme events mean additional complexity to the planning of water infrastructures and amplify conflicts over the use of water resources,” says Nunes. According to Nunes, given this state-of-affairs, the federal government has sought to implement actions to bolster river basins with a view to increasing the quality and quantity of water supplies, reduce erosive events and have a balanced ecosystem. Since 2019, BRL 4.8 billion have been invested in water security actions and projects.
But what is Water Security after all?
Water Security means the availability of water in such a quality and quantity that are sufficient to meet human and economic requirements and to support conservation of aquatic ecosystems. It also involves managing risks to which the population and the environment are exposed in relation to extreme events such as droughts and floods and failures or ineffective management.
Unplanned population increase, disorderly occupation of urban areas and economic growth are factors threatening water security due to increased water demand. In addition, the impacts of climate change on the water cycle and the absence of concerted planning and management, and investments in water infrastructure and sanitation also cause water insecurity.
Industrial sector is doing its part to reduce water consumption and to reuse water
The industrial sector has a share of almost 22% of the GDP and accounts for only 9% of the total water withdrawn from water sources (2020). According to data from ANA, the sector is the third largest water consumer in the country, with 184 cubic meters per second in 2020. It is only behind the irrigation (964 m³/s) and urban supply (482 m³/s) sectors. Water consumption by the industrial sector is expected to reach 251 m³/s by 2040.
A recent survey conducted by CNI with the FSB Institute covering 500 medium and large companies showed that 91% of them adopt actions to reduce water and energy waste and 75% of them have processes in place to reduce or eliminate air or water pollution.
According to Mônica Messenberg, Head of Institutional Relations at CNI, the industrial sector has made significant and tireless efforts to use water more efficiently in production processes and also in its products. “The technological advances that the sector has made over the years to boost water use efficiency are impressive. In some industrial segments, water reuse comes close to 100% and, even so, the sector continues to search for alternative solutions to increase this efficiency even further,” says Mônica.
Watch a video that shows how the industrial sector has been innovating in order to reduce water consumption in its products:
ArcelorMittal has the largest seawater desalination plant in the country
ArcelorMittal, a steelmaker that produces steel, long and flat steel, and coils – one of the largest in the world in this segment – stands out for its initiatives involving water use. The Tubarão site, located in the Greater Vitória Metropolitan Region (ES), has started the largest seawater desalination plant in the country. With an initial capacity to generate 500 m³/hour of desalinated water, it provides greater water security for the company and the State.
Investments of BRL 50 million were made to develop the system. “The work included an evaluation of several technological options for desalination, analysis of seawater quality, technical discussions with suppliers from all over the world, laboratory tests and even technical visits to plants in Argentina and the United States,” says Jorge Oliveira, CEO of ArcelorMittal Aços Planos for South America.
Approximately 96% of the water used by ArcelorMittal’s Tubarão site comes from the sea and is used for cooling steel production equipment. The remaining 4% come from the Santa Maria da Vitória River. In order to mitigate the use of these 4%, ArcelorMittal has projects in place to reduce this consumption. Currently, the site’s freshwater recirculation rate is above 97%.
Click here to read ArcellorMittal’s full business case.
Industrial sector in favor of improving the water management system
While the industrial sector is doing its part to reduce water consumption, it is aware that an additional effort is needed by the government, business sector and civil society as a whole to improve the water management system. See the infographic for CNI’s proposals to improve the governance of this system. These will be detailed in a study to be released soon.
Learn about CNI’s proposals to improve the water management system
CNI’s study Cobrança pelo direito de uso dos recursos hídricos (Payments for the right to use water resources), to be released in June, shows that the water management system evolved very little in the past ten years. There were setbacks in some respects, such as the worsening of contingency problems or misuse of public funds.
Check out the main proposals by the industrial sector to improve this system:
- Reorganizing the system, based on a discussion of the concession market;
- Authorizing watershed management concessions to the private sector;
- Regulating the collection and allocation of funds;
- Harmonizing the methodology and model of delegation and collection across the States sharing a river basin;
- Organizing and articulating the legal roles of the entities involved in the water management system.
Regulating the use of alternative sources of water supply
As basic sanitation projects move forward, opportunities are emerging for investments in projects for the reuse of effluents treated by the industrial sector. However, this needs to be regulated in order to bring more legal certainty to these initiatives.
According to a study by the CNI, Brazil has the potential to increase its installed capacity to produce reused water by almost 13 times. Currently, the country produces just over one cubic meter per second. To achieve this, investments of BRL 1.89 billion in water reuse infrastructure would be necessary, which would provide an increase in savings of nearly BRL 5.9 billion. Watch the video.
Alternative methods of increasing water availability include desalination and rainwater harvesting, for which no regulation is in place either. According to Davi Bomtempo, CNI’s Chief Environment and Sustainability Officer, an adequate and efficient regulation of these practices will help to leverage business and to reduce pressure on water sources.
“The dissemination of the use of alternative sources of water for industrial use is an important practice that generates positive impacts on the environment and civil society and, therefore, should be encouraged through public policies,” says Bomtempo.
Focus on expanding energy efficiency, the wind and solar sectors and new green technologies
The energy aspect is central both to the climate change adaptation agenda and to the reduction of greenhouse gas emissions. Around the world, it is perceived as fundamental for the achievement of national emission reduction targets, especially for those countries that are heavily dependent on fossil fuels.
Although Brazil has a significant share of renewable sources in its electricity mix (84.8%), an excessive concentration in water sources persists, which currently bring more insecurity as a result of the frequent water scarcity crises. “We need to invest more and more in solar, wind, bioenergy and green hydrogen, where the country has great potential, as well as in energy efficiency projects,” says Bomtempo.
The new Ten-Year Energy Plan for 2031 already includes an expected reduction in the use of hydroelectric plants and a substantial increase in solar energy, which should overtake wind by 2031 (see infographic).
Another bet to reduce pressure on water sources are energy efficiency initiatives, which are quite common in the industrial sector, especially among medium and large energy-intensive companies. This efficiency can be translated as the use of less energy to obtain the same result, which can be achieved through technological improvements or changes in corporate energy management.
An initiative that contributes to a more rational use of water and energy is the Alliance Program, which is entering phase two in 2022. Established in 2015, it is the result of a partnership between the CNI; the Association of Large Industrial Energy Consumers and Free Consumers (Abrace); the Federal University of Campina Grande (UFCG); and the National Electric Energy Conservation Program (Procel).
The first phase of the Alliance Program was implemented in 2017-2020 in 12 industrial plants in sectors such as steel, metallurgy and mining, cement, pulp and paper, and chemicals.