Greenland’s freshwater reserves are ‘frozen capital’ as water becomes security issue

Analysts told CNBC that water is a finite resource and a growing national security issue.

Water demand expected to exceed supply According to a landmark 2023 report on the water economy, there will be an increase of up to 40% by 2030. At the same time, climate change also affects the weather, and areas where water is abundant begin to dry out. As a result, more water needs to be moved to ensure access.

Freshwater is used in everything from manufacturing to agriculture, and demand is expected to increase as the population grows and AI data centers are built.

As water is increasingly viewed as a strategic asset, market observers are looking at Greenland’s freshwater reserves as a potential resource. The Danish region has recognized the strategic potential and has been trying to exploit this asset for a long time.

“The potential of water is very diverse, as clean, fresh water can be used, for example, as drinking water and water for food production, but also as bulk water for factories, farms or as a contribution to the bulk water supply,” according to a statement issued by the Greenlandic government. website. “There are many possibilities.” CNBC has reached out to Greenland officials for further comment.

Only 3% of the world’s water is fresh water, providing the basis for suitable drinking water, and a much smaller amount of this is easily accessible.

“Historically we’ve continued to dig deeper and deeper into water tables, but now we’re at the point where the aquifers can’t replenish themselves. It takes a long time for surface water to percolate downward,” said Noah Ramos, an analyst at Alpine Macro who covers innovation with expertise in water technology. He added that he could no longer be “trusted” to dig deeper.

Resource nationalism has become a “defining” geopolitical game, he said, and that includes water. “So water has inherently become a strategic asset.”

Of course, half of the world’s population experiences water scarcity for at least one month a year, which calls into question public health and food security. Remarkably, China strengthens water infrastructure. Investment Reached approximately $182 billion in 2025 alone As part of the country’s National Water Network strategy, according to a statement by the government. Eastern power, like the US, has unequal water distribution. The US has its own water strategy, the European Commission launched a “water resistance” plan.

“Greenland’s freshwater reserves are huge 10% of all reserves in the worldNick Kraft, senior analyst working on water, agriculture and responsible investment at Eurasia Group, told CNBC:

“Greenland’s water is a strategic asset and niche business opportunity, but it is not a practical short-term solution to global water stress or demand,” he said.

Still, some hope to take advantage of meltwater as climate change accelerates. In particular, Arctic Water Bank, a startup, appears to be planning to: building a dam to capture meltwater and we export internationally. The fate of the company is unclear, but the dam has not been built yet. A different company, Inland Ice, bottles it as premium, high-purity drinking water, according to Kraft. five businesses currently has active 20-year licensesGreenland Water Bank included Reported to be associated with Ronald LauderHeir to billionaire Estée Lauder.

“Officials considered proposals as ambitious as building dams for water exports,” Kraft said. “But real-world performance shows that what has actually happened so far has been small, premium boutique exports, while larger-scale export ideas have been announced and then discontinued.”

Exporting water isn’t easy because of its weight, University of Manchester professor Erik Swyngedouw, who studies the intersection of resources and governance, told CNBC.

“The cost is huge,” he said. “Attempts have been made towards mass water transport [overseas]; “none of them proved to be in any way feasible.”

It is common for water to be transported overland through canal systems or massive infrastructure networks. However, it was sent to Barcelona in emergencies, especially during the severe drought in 2008 and 2024.

“Actually, it is extremely difficult to make money from water, very, very difficult. Despite 20 years of attempts to privatize water, it has not been a great success,” Swyngedouw said. he said.

While some geopolitical tensions are water-related disputes — China’s plans for the world’s largest dam Swyngedouw, who has raised concerns in India and Bangladesh, for example, said interstate frictions are more likely to arise due to the unfair distribution of water.

“I’m sure that part of the ongoing uprising in Iran has to do with the massive drought that’s been going on for some time in Iran, making life in Iran extremely difficult.” he added.

Country It is the sixth year of droughtIn some cities, there are regular interruptions in access to water.

When asked whether it was in the government’s interest to secure water supplies to prevent civil unrest, Swyngedouw said “not all states are the same.”

“So the Iranian state has systematically neglected the provision of these basic infrastructures, with consequences as we know, and they did it for geopolitical reasons. They invest all their money in the military, that’s basically the option they have,” he added.

Swyngedouw called for governments to place greater emphasis on the provision of water as a public service.

Kraft added: “Water is increasingly being treated like a strategic asset – closer to critical infrastructure than a commodity – as climate variability and demand growth turn water insecurity into a national security issue. This will likely lead to more headlines about water export potential, but I don’t suspect anything material.” [will] Change towards the end of the decade.”

“Even though Greenland’s fresh water won’t be exported on a large scale any time soon, it’s still geopolitically important.”