Identification of Barriers and Driving Forces for Circular Economy (CE) Implementation in Water and Wastewater Companies

Marzena Smol, Dominika Szołdrowska and Joanna Duda

Business Strategy and the Environment, 2025, vol. 34, issue 2, 2167-2189

Abstract: Water and wastewater management sector is one of the basic areas of implementing a circular economy (CE). Enterprises operating in this sector are mainly wastewater treatment plants (WWTPs) managed by municipalities or private companies. They encounter various barriers and facilitators to implement CE, in the area of technology development and management. However, a limited number of works in the available literature focus on nontechnological aspects of implementing CE in WWTPs. Therefore, this paper presents a comprehensive analysis of challenges (including driving forces and barriers) for WWTPs in the process of implementing CE policy goals. The PESTEL strategic analysis method was used, taking into account the identification of political, economic, social, technological, environmental, and legal factors. It was confirmed that there are more incentives than barriers to actively implementing CE model in analyzed enterprises. The most important driving forces include: (i) favorable European CE policy, as recommendations and law regulations in the area of water, raw materials, and energy recovery; (ii) society's pressure on resource protection; (iii) possible revenues from the sale of recovered water, energy or CE‐fertilizers; (iv) financial support for CE solutions. Among defined barriers that could slow down the circular transformation, the most important are: (i) lack of clearly stated regulations regarding water, energy, and raw materials recovery, as well as transparency and regulatory risk; (ii) limited own financial resources of WWTPs operators; (iii) high cost of investments and maintaining recovery/recycling technologies. Those results may be of key importance to practitioners in strategic decision making for the improved application of circularity in the operating process. Because the implementation of CE solutions should have an integrated approach throughout the enterprise, it is recommended to develop circular business models for these companies, that would take into account both the core business (water and wastewater management) as well as possibilities of further CE implementation, such as recovery of water, energy, and raw materials. In the coming years, such solutions could be financially supported by the national and European sources, which may have a positive impact on the acceleration to the CE model.

Date: 2025
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