There are many hadiths (deeds and words of the Prophet) that forbid the pollution of water. Imam Ibn Majah reports that a person was making ablution and he was using too much water. Upon seeing him, the Prophet (peace and blessings be upon him) said: "What is this waste?" The man said: "Is there a waste in ablution also, O Messenger of Allah?" The Prophet (peace and blessings be upon him) said: "Yes, even if you were near a flowing river".
Unfortunately, there is a great waste of this valuable resource. The result is that there is a shortage of water all over the world. Countries are fighting each other or trying to control the water resources of others. Everywhere there is discussion going on currently to preserve water. We must use water wisely but we have to save this resource and keep it clean and pure as much as possible.
Recycling is a method of cleaning and preservation. It is being used in many Muslim countries as well. It should be encouraged. Some Muslim jurists and scholars have discussed this topic. There is a great need to discuss this subject in greater details and rules and regulations should be given in the light of the Shariah and modern science. We Muslims should be in the forefront of this study.
Briefly I can say that the basic rule of the Shariah about water is that by nature it is pure as long as its taste, color and smell have not changed. Nature also recycles itself. Allah has put some laws in nature by which it restores itself. Some recycling methods are very much like natural methods, but in a faster way. If a recycling method restores the taste, color and smell of some unclean water to its original level, then it will become pure. It can be then used for washing clothes, for making ablution and even for drinking purposes, if it is good for health. We must keep in mind that sometimes water looks like water, tastes and smells like water, but it could be very unhealthy and even deadly. Such water must not be used, not because it is impure but because it is unhealthy and dangerous.