Win-win situation

India's Environment Minister Jairam Ramesh has often spoken out about the need for his rapidly-industrializing country to pursue “a low-carbon growth path.”

That holds especially true for India's booming energy-intensive industrial sectors such as paper, cement, electricity, fertilizers and textiles. Many of the energy-guzzling factories are concentrated in government-owned industrial parks, often causing serious pollution and land degradation.

One way to tackle such large-scale industrial pollution is to set up “eco-industrial parks.” It refers to an industrial complex in which businesses cooperate with each other to efficiently use and share resources such as land, infrastructure, material, transport, know-how and energy.

Green technologies also play a big role in eco-industrial parks - the idea being to get companies to reduce their carbon footprint and contribute to sustainable development.

Teething troubles

The German Agency for International Cooperation (GIZ) has initiated such an eco-industrial park project in Andhra Pradesh, a state in southeastern India.

It aims to upgrade existing industrial parks, which are more than 30 years old and home to hundreds of small and medium sized firms across sectors such as chemicals, food processing and engineering. The retrofit includes adding modern sewage systems, solar lighting, green landscaping and storm water drains.

But convincing the organization that runs the park as well as the companies involved to make the necessary investments has not been easy.

“In addition to a lack of basic infrastructure and awareness, the biggest problem is that in India each company, even within an industrial park, thinks of itself as an individual entity with individual responsibilities,” N. Raghu Babu, an Indian expert on sustainable industrial development at the GIZ who is involved with the project, said.

“So, there is little understanding of the need to pool and share resources.”

'More relevant than ever'

The principle of collaboration and sharing of resources and know-how between companies underpins the development of eco-industrial parks around the world.

Though variations of the concept are found increasingly in the developing world, most of them are located across North America and Europe.

Ray Coté, professor emeritus at Dalhousie University in Halifax, Canada, who has been studying eco-industrial parks since the early 1990s, pointed to one in Devens, Massachusetts in the US as a particularly good example.

The local municipal authorities there transformed a former army base into an eco-industrial park, helping to revitalize the area. The companies on the site are encouraged to utilize by-products and waste, share costs of joint training and transportation.

In Germany, Coté says, several chemical giants have turned their operations into energy-efficient industrial parks. For example, the Höchst facility near Frankfurt, provides a complete supply chain, logistics and common waste disposal all in one place for on-site chemical and pharmaceutical companies.

“Such parks are more relevant than ever today,” Ray Coté said. “We have to find a way to develop industrial capacity within ecological limits and compensate ecosystem services that are lost when we use resources. That can be done by using systems that recover and re-use resources.”

Pioneering zero-waste model

One eco-industrial park that's widely seen to be doing that is in Kalundborg, near Copenhagen. Set up in 1961, it's grown over the decades to include some 30 companies and is considered one of the world's most cutting-edge eco-industrial projects.

Here, the waste from one company provides a resource for the other. For instance, steam from a power plant is captured and used by a pharmaceutical company. Excess heat is used to heat local homes. Another by-product from the power plant, gypsum, is used by a plasterboard manufacturer. A by-product of the pharmaceutical company, yeast cream, is used to feed pigs at a local farm.

“The companies get all the material they need, the materials get recycled and the production process is thus much cleaner,” Berndt Jespersen, technical advisor at the Kalundborg project said.

“So, we're basically taking resources from the earth and returning them to the earth.”

Clean growth

For the companies involved in eco-industrial parks, it's undoubtedly a chance to boost their green credentials. But there's a more compelling argument to for them to join such parks – a boost in bottom lines.

Lykke Schmidt is the international program manager at Danish pharmaceuticals giant Novo Nordisk, whose core insulin production plant is based at the Kalundborg eco-industrial site. She said the company had made “substantial savings” because it had avoided the need to set up its own steam production factory thanks to the park.

Schmidt added that in recent years, Novo Nordisk's Kalundborg site had attracted increased interest from non-western nations, particularly from China.

“That's because it's a demonstration of how business can grow and at the same time minimize its ecological impact,” Schmidt said. “That's very interesting to the developing world.”

'Good business sense'

It's a view echoed by N. Raghu Babu. During a training program for 14 companies at the eco-industrial park project in Andhra Pradesh, he said the businesses changed their mind and agreed to invest in a common waste treatment plant.

The reason for the change of heart, he said, was a calculation he offered them - that they could save 25 million Rupees (around $556,000) within eight months if they cut energy losses due to bad insulation, piping and cooling.

“It simply makes good business sense to become more energy-efficient because the payoffs are huge. Such investments are more cost-effective and viable in the long run,” N. Raghu Babu said.

“And along with it, you're making a positive impact on the environment and climate.”

Author: Sonia Phalnikar
Editor: Ranty Islam