As long-term modelling continues to project longer, hotter dry spells and less surface water across the Murray-Darling Basin, attention is turning to alternative water sources and ways to use available water more effectively – including water stored deep underground.

Released last month, One Basin’s Storing Water Smarter white paper argues that aquifers are an underutilised part of the Basin’s water infrastructure. ‘Water banking’ involves storing water when it is available in aquifers and recovering it later when and where it is needed. It can operate at local, regional or Basin scales using a range of water sources, including excess allocation, stormwater, recycled water, environmental water, and flood flows. By reducing losses and increasing flexibility, water banking has the potential to support drought resilience, environmental watering, floodplain restoration, alternative water supplies, and First Nations outcomes.

The white paper is the first significant output from the CRC’s Water Banking for Enhanced Drought Resilience project, and calls for water banking to be “explicitly recognised as a credible complementary water management tool” in future Basin planning and investment decisions. With the Murray–Darling Basin Plan Review, the Water Act Review, and the Productivity Commission Inquiry into National Water Reform all underway – and governments facing major decisions about ageing water infrastructure and future water security – the paper argues there is a timely opportunity to consider groundwater banking alongside more traditional water management approaches.

Stages to implementation

But recognition alone won’t unlock water banking. Storing Water Smarter sets out a staged pathway for moving from concept to implementation: practical pilot projects, stronger evidence, and the reduction of barriers to investment. This starts with streamlined approvals and clearer guidance for proponents, before moving towards reforms that provide greater certainty around recharge and recovery rights, encourage innovation and investment, create stronger incentives for lower-loss storage – and support more integrated management of surface water and groundwater resources.

Lead author Yvette Colton points out that while large-scale water banking programs are operating in parts of the United States, particularly in Arizona and California, and aquifers beneath Adelaide and Perth have been storing stormwater and recycled water for councils and local parks for decades, the opportunity to store water for farms and communities has remained “a peripheral water management tool” in the Basin – where existing policy, entitlement and accounting frameworks provide significant barriers to adoption, while infrastructure investment and water recovery efforts continue to focus largely on surface water measures.

“Water banking is a tool that aligns with so many of the goals of the Basin Plan Review, but it has not yet been widely considered as part of the Basin’s long-term water management toolkit,” she says. “Less than 1% of the $13 billion spent on Basin reform investment in the past 20 years has been spent on groundwater storage, even though research identifies around 4,000 gigalitres of potential subsurface capacity and shows water banking can be cost competitive with new surface storage.

“In addition, water banking can deliver far more than water storage. The South Australian experience shows it can help turn water that would otherwise be lost into an asset that supports wetlands, cultural outcomes, greener public spaces, drought resilience, and local economic development. It also creates opportunities for communities and Traditional Owners to be directly involved in shaping local solutions, which is increasingly important as Basin communities look for approaches that work with natural systems and deliver visible benefits on the ground.”

Lessons from South Australia

Among Basin states, South Australia is a shining example of small-scale water banking – or managed aquifer recharge (MAR) – with 39 MAR schemes providing 21 gigalites of storage, or 11% of Adelaide’s total water supply. Project lead Ilka Wallis points to the considerable MAR expertise of Australian researchers like Peter Dillon and Joanne Vanderzalm from CSIRO, who have pioneered the implementation of MAR schemes and national MAR guidelines, while experts like Professor Henning Prommer and others have made crucial contributions to understanding what happens chemically and microbiologically when water is stored underground.

“The lesson from Australia’s MAR schemes is that intentional aquifer recharge only works at scale when the science, regulation and policy settings line up,” says Dr Wallis, a quantitative hydrogeologist at Flinders University. “South Australia and WA have been important test cases because these states have shown how MAR can become part of practical water management when there is policy support.”

“If we’re serious about adapting to a hotter, drier and more variable climate, groundwater banking deserves to be part of the mainstream water management toolkit.“

Yvette Colton, lead author, Storing Water Smarter

One Basin CRC is in a unique position to increase acceptance of water banking by bringing together governments, researchers, industry and First Nations organisations to weigh its technical and economic merits, examine policy constraints, and push for small-scale ‘champion pilots’ to demonstrate the technology.

The project is currently considering a range of potential regions in the Basin where groundwater banking could potentially provide an additional safeguard for irrigation communities during drought. A key objective of any pilot would be to test both the technical feasibility and institutional arrangements required for water banking – providing practical proof of concept while addressing policy, entitlement and accounting questions.

Beyond individual pilots, the white paper identifies opportunities for water banking to help address some of the Basin’s biggest challenges. Potential applications range from the Lower Namoi, where integrated groundwater and surface water storage could improve climate resilience in an area facing growing water recovery pressures, to the Barmah Narrows, where underground storage could help overcome a major delivery bottleneck while reducing water losses. Across the Northern Basin, groundwater banking could potentially help to capture episodic flood flows and hold them in reserve for environmental and cultural water outcomes and drought preparedness.

Strengthening the policy pathway

Yvette Colton says that progress will require state and national leadership, practical pilots, and a willingness to look beyond traditional approaches to water management and consider new tools that support long-term resilience. “Right now, there are few incentives to shift water from higher-loss surface storage to lower-loss underground storage, while complex approvals, uncertainty around recovery rights, and high upfront costs are discouraging short-term investment,” she says. “This is why the main groups investing so far have been councils who can win grants and partner with government and wear the risk a bit more.”

One Basin’s white paper argues that the Basin Plan Review presents a unique opportunity to advocate for a comprehensive Basin-wide assessment of the costs and potential savings from integrating underground storage in Basin water management settings, while the Water Act Review could simultaneously examine the legal implications of scaling water banking alongside buybacks, water trade regulations, and accounting rules.

“The Basin already has effective tools for water accounting, carryover, and trade frameworks that could be adapted to accommodate water banking,” Yvette Colton points out. “We are having difficult conversations about water recovery, yet we still lose large volumes of water to evaporation and in many communities continue using high-value River Murray and potable water supplies for purposes that could potentially be met with stormwater, recycled water, or locally banked supplies.

“Water banking won’t solve every problem, but it is a tool that deserves consideration as part of a broader strategy to balance competing Basin pressures.”

Keith Thompson, Environmental Compliance Supervisor at Coleambally Irrigation, which provides water to some 490 farms in NSW’s Riverina, welcomed the release of the new paper – saying the need for new water storage and recharge solutions calls for a broader-based examination of alternative management solutions beyond traditional dams.

“Over the past 20 years, NSW irrigators have continued extending their on-farm storage, but it never enables us to store water for any meaningful amount of time,” he says. “The potential of large aquifers to store significant amounts of water in good years to reuse in dry years could be a literal lifesaver for our farmers. A lot of farmers have dams and bores which provide an important buffer – but they are limited by evaporation and by limited extraction allocations in dry years, so they can really only carry you through one or two years of drought.”

Further reading and information

Water Banking for Enhanced Drought Resilience Project (2024-27): Project page

Storing Water Smarter: Groundwater Banking for Basin Resilience: White paper

Water Banking for Drought Resilience: Factsheet

A broader series of factsheets and discussion papers will be published over the next few months to make water banking more accessible to councils, irrigators, water managers, and Basin communities – explaining how these schemes work, what’s required to implement them safely, and the benefits and challenges they involve.