Eco-Industrial Parks: The Case for Private Planning.

• Author: DESROCHERS, PIERRE

An eco-industrial park (EIP) is a community of companies, located in a single region, that exchange and make use of each other's by-products or energy. Currently, EIPs are being promoted as a means of achieving sustainable development. Proponents argue that such a symbiotic community, of businesses produces more environmental benefits than each company could realize on its own. Numerous EIPs have been planned in North and South America, Southeast Asia, Europe, and southern Africa (Ayres 1996; Gertler 1995; Indigo Development 1998; Lowe 1997).(1)

Advocates of EIPs consider the Danish coastal city of Kalundborg a model. There, the main industries and the local government turn by-products into raw materials by trading and making use of their waste streams and energy resources. Although the Kalundborg community and other similar cases developed entirely through market forces,(2) many policy analysts argue that public planners can copy and even improve on Kalundborg. Thus, Paul Hawken (1993) speculates: "Imagine what a team of designers could come up with if they were to start from scratch, locating and specifying industries and factories that had potentially synergistic and symbiotic relationships' (63). Similarly, Sim Van Der Ryn and Stuart Cowan (1996) suggest that the potential of planned industrial ecosystems is even greater than that of the industrial ecosystem that evolved in Kalundborg. Ernest A. Lowe (1997) points out that "while industrial ecosystems must be largely self-organizing, there is a significant role for an organizing team in educating potential participants to the opportunities and in creating the conditions that support the development" (58).

Despite such endorsements, the movement toward public planning of EIPs is misconceived. It rests on a misreading of the Kalundborg experience, and it reflects insufficient knowledge of how market forces historically have promoted resource recovery. In this essay, I show that Kalundborg is simply a contemporary example of how industrial loops have always worked. I compare private and public mechanisms in the development of industrial loops, and I argue that greater reliance on market forces would be a more effective way of replicating the Danish experience.

The Rationale for Planning Eco-Industrial Parks

Although some people consider all waste a hazard to health and the environment that must be destroyed or prevented, many others consider waste an economic resource (Sinha 1993). Many who view waste as a resource label themselves "industrial ecologists," drawing on an analogy with the natural world, in which living organisms consume each other's wastes. The premise of industrial ecology is that modern industrial economies should mimic the cycling of materials in ecosystems throughout the processes of raw-material extraction,

manufacturing, product use, and waste disposal Industrial ecologists view industries as webs of producers, consumers, and scavengers, and they encourage symbiotic relationships between companies and industries. The ultimate goal of industrial ecology is to reuse, repair, recover, remanufacture, or recycle products and by-products on a very large scale (Allenby and Richards 1994, Ayres and Ayres 1996, Frosch and Gallopolous 1989, Garner and Keoleian 1995, Graedel and Allenby 1995).

Some industrial ecologists and public planners envision EIPs as networks of companies and other organizations that exchange and make use of by-products. By integrating principles of industrial ecology with principles of pollution prevention and sustainable design, such regionally localized firms should, in the view of industrial ecologists provide one or more of the following benefits, relative to traditional, nonlinked operations: reduction in the use of virgin materials; reduction in pollution; increase in energy efficiency; reduction in the volume of waste products requiring disposal; and increase in the amount and types of process outputs that have market value (Gertler 1995).

The Kalundborg Experience

Most industrial ecologists believe that Kalundborg, a small city on the island of Seeland, seventy-five miles west of Copenhagen, is the first recycling network in history (Garner and Keoleian 1995; Gertler 1995; Lowe, Moran, and Holmes 1996; Schwarz and Steininger 1997). In this city of twenty thousand people, the four main industries--a coal-fired power plant (Asnaes), a refinery (Statoil), a pharmaceuticals and enzymes maker (Novo Nordisk), a plasterboard manufacturer (Gyproc), as well as the municipal government and a few smaller businesses--feed on each other's wastes in transforming them into useful inputs.

This local synergy began to form in the 1970s and now operates as follows. The Asnaes power company supplies residual steam to Statoil refinery and, in exchange, receives refinery gas that formerly was flared as waste. The power plant burns the refinery gas to generate electricity and steam. It sends excess steam to a fish farm that it operates, to a district heating system that serves 3,500 homes, and to the Novo Nordisk plant.(3) Sludge from the fish farm and pharmaceutical processes becomes fertilizer for nearby farms. The power plant sends fly ash to a cement company, and gypsum produced by the power plant's desulfurization process goes to a company that produces gypsum wallboard. The Statoil refinery removes sulfur from its natural gas and sells it to Kemira, a sulfuric acid manufacturer.

A Gradual Development

Consultants did not design, nor did Danish government officials finance Kalundborg's industrial symbiosis. Rather, it resulted from many separate bilateral deals between companies, each of which sought, on the one hand, to reduce waste treatment and disposal costs and, on the other, to gain access to cheaper materials and energy while generating income from production residue. Even today, no higher level of administration exists to manage the interactions (Lowe 1997, 59). Jorgen Christensen, a spokesperson for Novo Nordisk, is explicit on that point: "I was asked to speak on `how you designed Kalundborg." We didn't design the whole thing. It wasn't designed at all. It happened over time" (qtd. in Lowe 1995, 15).

Henning Grann, a Statoil employee, reinforces the point: "The symbiosis project is originally not the result of a careful environmental planning process. It is rather the result of a gradual development of co-operation between four neighboring industries and the Kalundborg municipality" (qtd. in Garner and Keoleian 1995, 28). As Nicholas Gertler (1995) sums it up, the basis of the Kalundborg system is "creative business sense and deep-seated environmental awareness," and "while the participating companies herald the environmental benefits of the symbiosis, it is economics that drives or thwarts its development" (n.p.). Much of Kalundborg's "industrial metabolism" rests on the physical proximity of plants that are compatible in terms of their material flows, plus a few well-established and widespread industrial practices, including the cogeneration of electricity and heat, the hydrodesulfurization of gas, the heating of greenhouses from excess power-plant heat, and the use of standard transportation and purification technologies.

Using Kalundborg as the model, EIP advocates often argue that public planners, following a hierarchy of consciously chosen objectives, can outperform private agents, whose priority is to maximize profit rather than to promote sustainable development (Hawken 1993, Van Der Ryn and Cowan 1996). The idea of planning EIPs has garnered increasing support in academic, business, and political circles. Numerous EIP projects are now under way in North and South America, South Africa, Asia, and Europe. In the United States, the concept has won the support of the President's, Environmental Technology Initiative (PETI), the President's Council on Sustainable Development (PCSD), and the Environmental Protection Agency (EPA), which created an Eco-Industrial Park Project in 1994. Several areas have been designated "demonstration sites" for EIPs in the United States.(4)

Reading Too Much into Kalundborg

EIP advocates fail to recognize that Kalundborg's industrial symbiosis is not self-sufficient and is not limited to the industrial park. For example, Statoil (sulfur) and Asnaes (fly ash and clinker), both located in Kalundborg, sell some of their byproducts to Kemira and the Aalborg Portland cement company, whose plants are located on the Jutland Peninsula. Gyproc imports its supply of virgin gypsum, still significant input, from 2,500 miles away in Germany and even from Spain, and in the early 1990s Asnaes fish farms exported to the French market most of the two hundred tons of trout and turbot they produced annually.

Furthermore, many of Kalundborg's plants are subsidiaries of foreign-owned corporations (for example, Statoil is a Norwegian firm, and Gyproc is owned by Dutch company). In short, Kalundborg is a typical industrial city, a nexus of trade whose firms import and export numerous components and products on a worldwide scale (Gertler 1995, Lowe 1995, Lowe, Moran, and Holmes 1996, Tibbs 1992).

No Kalundborg company ever acted on its own to exploit opportunities that did not fit within its core business, no matter how environmentally attractive those opportunities were. And when government intervention forced a linkage, the venture lost money.(5) Moreover, even though each company considers the others when making decisions, it still evaluates its own agreements independently. There is no "Kalundborgwide" assessment of performance because participating companies believe that such performance would be a complex and unrewarding standard (Lowe, Moran, and Holmes 1996, C7). A final point that EIP planners should note is that the development of Kalundborg's "industrial ecosystem" required environmental regulatory flexibility.(6)

As interest in EIPs has increased, so has research, which has brought other...