Reclaimed water has a positive effect on the environment by eliminating the discharge of treated wastewater into natural waterways.

In the past, water corporations were licensed to discharge treated wastewater to local waterways, including rivers, lakes or the sea. The nutrients in the treated wastewater may promote rapid plant and algal growth. The rapid growth exhausts the nutrients and leads to loss of oxygen from the water, causing the death of water animals. Blue-green algal blooms may release toxins in the water which can cause skin irritations or affect stock health.

By using reclaimed water for irrigation purposes, nutrients and salts from the treatment of human and industrial wastes are no longer being added to waterways. This is contributing to healthier environments.

There is a consequent reduction in the amount of water that is needed from diversion of rivers when reclaimed water can be substituted for fresh water in towns. This provides immeasurable environmental benefits for river water quality while still maintaining economic and social development in the region.