Decentralisation and sector coupling are becoming increasingly crucial for the decarbonisation of the energy system. Resources such as waste and water have high energy recovery potential and are required as inputs for various conversion technologies; however, waste and water have not yet been considered in sector coupling approaches but only in separate examinations. In this work, an open-source sector coupling optimisation model considering all of these resources and their utilisation is developed and applied in a test-bed in an Israeli city. Our investigations include an impact assessment of energy recovery and resource utilisation in the transition to a hydrogen economy, with regard to the inclusion of greywater and consideration of emissions. Additionally, sensitivity analyses are performed in order to assess the complexity level of energy recovery. The results demonstrate that waste and water energy recovery can provide high contributions to energy generation. Furthermore, greywater use can be vital to cover the water demands in scarcity periods, thus saving potable water and enabling the use of technology. Regarding the transition to hydrogen technologies, resource energy recovery and management have an even higher effect than in the original setup. However, without appropriate resource management, a reduction in emissions cannot be achieved. Furthermore, the sensitivity analyses indicate the existence of complex relationships between energy recovery technologies and other energy system operations.