Digitalisation for Water Sustainability: Barriers to Implementing Circular Economy in Smart Water Management

“Clean water and sanitation” is listed as one of the 17 United Nations’ Sustainable Development Goals and implementing circular economy principles in the water sector has been widely regarded as an important approach in achieving this goal. In the era of Industry 4.0, research and practice in the digitalisation of the water sector to create a smart water system have attracted increasing attention. Despite the growing interest, limited research has been devoted to how digital technologies might enhance circularity. In practice, smart water systems often fail to promote circularity in such aspects as water reuse and resources recovery. This paper aims to identify the main barriers to implementing circularity in the smart water management system in Zhejiang, China. The research adopts a mixed research method that includes a literature review to identify the potential barriers from the existing studies, a case study to determine the most critical barriers in practice, and a fuzzy Delphi method to reach a consensus on the crucial barriers. The research identified 22 main barriers to implementing circular economy in smart water management. The barriers are divided into three categories: infrastructure and economic, technology, and institution and governance. The results show that the barriers related to recycling technologies, digital technology know-how, and the lack of CE awareness raise the most concern. Our findings also indicate that experts are interested in the decentralized wastewater treatment system. This research provides significant insights that practitioners, researchers, and policymakers can use in developing and implementing digital-based CE strategies to reduce water scarcity and pollution.