Can the waste heat be used for distillation instead? To heat up the fuel/water mix to separate the two cleanly?
It would seem to me that the future of "waste heat" is to actually utilize the heat, instead of powering a relatively inefficient heat-engine. Perhaps instead of 20% efficiency, you get closer to 100% efficiency since all you'd be doing is running the fuel-water mix to the heat-source to evaporate the fuel out (I presume anyway, I'm no chemist)