Water Neutrality: Is It an Achievable Goal for Industry in Spain?

Water neutrality has become one of the most decisive concepts in environmental management across Europe.

Regulatory pressure, water stress and business competitiveness have elevated water to the same strategic level as carbon as a critical sustainability vector. In Spain—where 75% of the territory is at risk of desertification and water availability is expected to fall by 24% before 2050—water neutrality is no longer an aspirational concept: it is a strategic imperative.

This article provides a complete guide to understanding what it means to be water neutral, what is required of Spanish industry, which methodologies apply and which strategies enable progress toward this objective.

What is Water Neutrality?

Water neutrality is the condition in which an organisation fully compensates its water consumption and impact on water resources through reduction, reuse, regeneration, replenishment and basin-level improvement measures.

This process is built on four main pillars:

• Comprehensive measurement of water use: direct consumption, indirect consumption, returns and losses.
• Demonstrable reduction of water consumption through technology and operational improvements.
• Internal regeneration or reuse of water to achieve a net neutral balance.
• External water replenishment through verifiable projects when internal measures are not sufficient.

Why should Spanish industry aim for Water Neutrality?

The answer is clear: because Spain’s hydrological context demands a deep transformation in water management, and because companies that fail to act will be more vulnerable, less competitive and exposed to higher operational costs.

According to MITECO, 44% of the water used by industry comes from groundwater bodies at risk. At the same time, industrial water tariffs have increased by 18% over the last decade, while European regulations—especially the CSRD and ESRS E3 standards—require detailed reporting on water-related risks, consumption and mitigation plans.

How to calculate Water Neutrality: The methodology that works

Calculating water neutrality requires a rigorous methodology capable of measuring, reducing and compensating water use with scientific precision. Understanding total consumption is not enough: it is essential to understand how operations interact with the basin, identify real reduction opportunities and apply verifiable replenishment mechanisms.

Below are the key steps to achieving a neutral water balance in industrial environments:

1. Comprehensive measurement of water use

The first step is to conduct a full water inventory quantifying all water entering the facility, used in processes, reused internally and returned to the environment. This includes direct and indirect consumption as well as losses from leaks, evaporation and returns.

Accuracy at this stage is critical, as any initial error distorts the final neutrality balance.

2. Watershed Water Risk Assessment

Once data is collected, the hydrological context of the surrounding basin must be analysed. Water Risk Assessment methodologies allow evaluation of resource availability and quality, competition for use with other sectors, applicable tariffs and future climate projections.

This assessment determines the operation’s real vulnerability and guides reduction or replenishment decisions.

3. Selection of a representative baseline year

The next step is to define a baseline year that accurately reflects the organisation’s water consumption patterns. Selecting an appropriate baseline ensures that subsequent reductions are measurable, verifiable and comparable.

4. Identification of internal reduction opportunities

With a complete diagnosis, the company must identify measures to reduce freshwater consumption. These include closed-loop technologies, operational improvements, advanced sensors, blowdown optimisation and regeneration systems.

The technical principle here is deterministic: every cubic metre reused directly reduces freshwater extraction.

5. Reuse and regeneration Within the facility

Internal regeneration enables closed water cycles and reduces reliance on external resources. Combining tertiary treatment, reverse osmosis and internal recirculation typically achieves significant reductions, particularly in sectors such as electronics, automotive or food and beverage.

6. External water replenishment when internal reduction reaches its limit

When the facility has implemented all technically feasible improvements and still does not reach neutrality, it may rely on external replenishment projects, including wetland restoration, aquifer recharge or controlled infiltration infrastructure.

These projects are only valid if carried out in the same basin where the company operates—one of the main differences between water replenishment and carbon offsetting.

Is Water Neutrality truly achievable in Spain?

The evidence is strong: with currently available technology, water neutrality is viable for approximately 80% of industrial sectors in the country.

Sectors with the highest potential include automotive, electronics, logistics, pharmaceuticals and beverage plants with advanced investments in regeneration. These sectors operate with stable processes, closed water cycles and high recirculation potential.

Other sectors—such as food, textiles, chemicals or cement—have intermediate viability due to effluent complexity and seasonal variability. However, even in these cases, 50% reductions are achievable in the medium term.

Sectors like intensive agriculture, mining and primary metallurgy face greater limitations, though reductions of 30–40% are still possible, generating significant environmental and operational benefits.

Practical strategies to advance toward Water Neutrality

Companies starting this process should implement continuous measurement systems to detect leaks and abnormal consumption. Mapping water risks by basin is also essential, as 90% of a company’s water vulnerability depends on its location—not its sector.

Another key recommendation is to design a water roadmap with targets for 2030, including intermediate objectives, required investments and applicable technologies.

In parallel, integrating water metrics into CSRD reporting has become a regulatory requirement, ensuring transparency for auditors and stakeholders.

Finally, all water strategies must be communicated responsibly to avoid greenwashing. For further guidance, see our article on how to communicate your decarbonisation strategy and avoid greenwashing.

Water Neutrality: Achievable and strategically essential

Water neutrality is a technically and economically viable objective for most industrial sectors in Spain. Companies that begin this journey today reduce their risks, optimise costs, comply with regulations and strengthen their competitive position.

In a country increasingly exposed to water stress, moving toward neutrality is not optional: it is the only path to ensuring long-term operational stability.

FAQs about Water Neutrality

How long does it take for a company to achieve water neutrality?‍

Between 3 and 7 years, depending on the sector and level of investment.

Is water neutrality mandatory?‍

There is no explicit legal obligation yet, but reporting requirements—CSRD, ESRS E3, EU Taxonomy and water risk assessments—push companies in that direction.

Is water replenishment the same as carbon offsetting?‍

Yes, but with one key difference: replenishment must be carried out within the same basin.

How much does a water neutrality project cost?‍

Investments range from €100,000 to €3 million, depending on the size and complexity of the facility.