The concept of virtual water measures the hidden volume of freshwater used to produce a commodity, food, or service at its place of origin. This volume includes all the water consumed or polluted throughout the entire production chain, from growing the raw materials to final processing. The idea was first introduced in 1993 by Professor John Anthony Allan, a British geographer, who recognized that international food trade represented a flow of water from water-rich regions to water-poor regions. Understanding this embedded water provides a new perspective on global water scarcity and resource management.
Deconstructing the Concept
The total virtual water volume associated with any product is broken down into three distinct components, often referred to by color: green, blue, and grey water.
Green water is the rainwater that is stored in the soil as moisture, which is then consumed by crops through evapotranspiration. This type of water is particularly relevant in agriculture, where it sustains rain-fed crops and pastures. Blue water is the fresh surface water and groundwater that is consumed during the production process. This typically includes water taken from rivers, lakes, or aquifers for irrigation, industrial cooling, or washing, and is the component most directly linked to local water scarcity.
Grey water represents the volume of freshwater required to dilute pollutants generated during the production process to a level that meets established water quality standards. This component quantifies the water needed to assimilate substances like fertilizers, pesticides, and industrial effluents. For example, if a fertilizer application pollutes a local stream, the grey water footprint is the amount of water needed to dilute that pollution back to a safe concentration.
Calculating Water Footprints
The water footprint of a product is calculated by summing the volumes of green, blue, and grey water consumed and polluted throughout the supply chain, which results in a value typically expressed in liters per kilogram or per item. The vast majority of a product’s water footprint is often hidden in the early stages of production, especially the water required to grow feed for livestock.
For instance, the global average water footprint for producing one kilogram of beef is approximately 15,400 liters. Around 95% of this volume is attributed to the water needed to grow the hay, grains, and forage consumed by the animal over its lifetime. The blue water footprint is significantly higher for cattle raised on irrigated feed crops than for those that graze on rain-fed pasture.
A single kilogram of wheat requires about 1,340 liters of water, while producing one cup of coffee is estimated to require approximately 140 liters. Even for non-food items, such as cotton, the water footprint is substantial, with the blue water component being particularly high if the cotton is grown in arid regions with high irrigation demands. The measurement process highlights that water use is highly regional, meaning the footprint of the same product can vary dramatically depending on the local climate and production practices.
Virtual Water in Global Trade
The movement of goods across international borders constitutes a global transfer of virtual water, a phenomenon known as virtual water trade. This trade has profound implications for water security, allowing countries to manage their domestic water resources more strategically. For nations experiencing chronic water scarcity, importing water-intensive products, particularly food, is a strategic method to conserve their limited local supplies.
By importing one tonne of wheat, for example, a water-scarce country effectively imports the roughly 1,340 cubic meters of water that would have been required to grow it domestically. This decision frees up local water resources for other uses, such as for drinking, sanitation, or higher-value industrial processes.
International trade policy and resource management are increasingly guided by these virtual water flows. Approximately 80% of the virtual water traded globally is embedded in agricultural products, making the food trade the primary driver of this resource transfer.
While the theory suggests that water-rich countries should be the main exporters and water-poor countries the importers, the reality is more complex. Economic factors and existing trade infrastructure sometimes result in water-scarce nations exporting water-intensive crops, which can place further stress on already strained local water supplies. Analyzing a nation’s virtual water balance—the difference between its virtual water imports and exports—is a tool for policymakers to assess the sustainability of their consumption patterns and trade relationships.