CLEANER PRODUCTION AND
INDUSTRIAL PARKS
Prepared by:
Prof. Dr. Heinz
Leuenberger
Dr. Tran Van Nhan Vietnam
Cleaner Production Center
1.
INTRODUCTION
In many countries the
development of industrial parks (estates) are seen as a powerful tool for to
promote rapid industrialization by attracting private investments, reducing
capital costs, eliminating delays in developing facilities and administrating
procedures and reducing environmental impacts. Often, high polluting
industries are relocated from residential areas to new established industrial
parks outside the city center for to avoid complaints from the
public.
If industrial parks have no
proper and efficient environmental management system, impacts on the
environment and human health and safety are still serious and will be not
consistent with the goals of sustainable industrial development.
As we have seen in previous
presentation, a good environmental management system for an industrial park
includes the following key issues:
- the precautionary principle
-
integration
- environmental planning
- ecological design
- total
quality management
- cleaner production and resource recovery
-
industrial ecology
In the following
presentation we would like to show, how cleaner production strategy and
methodology can be integrated in the environmental management system and the
regulation of an industrial park. For to get the best result, CP-strategy must
be considered already in thc planning and designing step of a new production
process, and not only for to improve existing units. Therefore, CP-strategy
should be implemented in the application procedure for new industries
(compliance purpose) and in the regular controlling work (monitoring of
emissions to (lie environment). In the first case it is the technology
assessment, in the second case it is the CP-audit for a unit.
2. WHAT IS CLEANER
PRODUCTION
- It is a new and creative
approach (way of thinking) towards products and production
processes.
- It is the continuous
application of an integrated, preventive strategy to processes,
products and services to increase efficiency and reduce risks to
humans and the environment.
For production processes:
Cleaner production
includes conserving raw materials and energy, eliminating toxic raw
materials and reducing the quantity and toxicity of all emissions and wastes
before they leave a process.
For product:
The strategy focuses on
reducing impacts along the entire life cycle of a product from raw materials
extraction to the ultimate disposal of the
products.
For services:
CP reduces the environmental
impacts of the service provided over the entire life cycle, from system
design and use to the entire consumption of resources required providing the
services.
Cleaner production requires
mainly applying know-how, changing attitudes, improving the existing
technology and changing to new, better and cleaner technologies. It is
important to introduce CP-strategy in this priority and in this
order!
Many preventive terms, such
as pollution prevention, waste minimization, source reduction or
Eco-efficiency, are in use today. At UNEP, the term "Cleaner Production" was
chosen to encompass a comprehensive approach to production. This cleaner
production covers processes, products and services and their impacts,
including their design, utilization and usage of raw materials and energy. It
covers all wastes - hazardous/toxic or not whether emitted into the air, water
or onto the land. The term acknowledges that cleaner production requires not
only improving efficiency and material substitution-using tools such as
technology and know-how but new managerial skills and policies as well. It
also acknowledges the importance of design and use of products as well as
services.
CP-opportunities can be
divided in following main categories:
1. Impact
material substitution: Change of input materials by less toxic or renewable
materials or by materials with a longer service time.
2. Good
housekeeping: Appropriate provisions to prevent leaks and spills (preventive
maintenance, good maintenance) and to enforce the existing working
instructions (through proper supervision, training).
3. Better
process control: Modification and optimization of the working procedures,
machine instructions and process parameters in order to run process in
higher efficiency and lower waste and emission generation
rates.
4. Equipment
modification: Modification of the existing productive equipment and
utilization - for instance by the addition of measuring and controlling
devices, - in order to run the process at higher
efficiency.
5. Technology
change: Replacement of the technology, processing sequences and/or synthesis
pathway in order to minimize waste and emission generating during
production.
6. On-site
recovery and reuse: Reuse of wasted materials in the same process or for
another useful application within the company.
7. Production
of useful by-products: Modification of the waste generation process in order
to transform the lasted material into a material that can be reused or
recycled for another application outside the company.
8. Product
modification: Modification of the product characteristics in order to
minimize the environmental impacts of the product deriving or after its use
(disposal) or to minimize the environmental impacts of its
production.
3. WHY IS CP IMPORTANT FOR
THE INDUSTRY?
In the long run, cleaner
production is the most effective way to design and operate industrial
processes and to develop and produce products and services. The costs of
wastes and emission, including negative environmental and health impacts, can
be avoided or minimized by applying the cleaner production concept from the
beginning and apply it continuously and throughout the entire life cycle of
production.
Cleaner production is not
only good for the environment because it reduces pollution. There are also
some direct benefits to the companies that follow this approach, such
as:
- Cost saving through reduced wastage of
raw materials and energy -> production costs can be reduced.
- Improved operating efficiency of the
plant.
- Better product quality and consistency
because the plant operation is more predictable.
- Recovery of some wasted materials.
- Possibility to improve the working
environment.
- Better position for an enterprise in
negotiation with the authorities.
- Improvement of the enterprises image.
- Cost savings for the end-of-pipe waste
treatment.
Also it is most of the time
not possible to meet the environmental standards only with CP-measures, it
will help to reduce this additional costs for end-of-pipe treatment.
En-of-pipe treatment always adds costs without additional value to the
products produced. In contrast. when cleaner production is applied, processes
become more efficient because they require fewer raw materials and/or generate
less waste. The continuos application of CP-strategy will help A
company to be more competitive in the market:
4. WHAT ARE THE DIRECT
BENEFITS FOR A COMPANY IMPLEMENTING CLEANER PRODUCTION?
As mentioned earlier, CP is
good business. The lesson from the past is simple: it is less costly to
prevent pollution at the source than to clean it up after it has been produced
and in most of the cases, CP implementation will help to reduce production
costs directly by using less raw materials, less energy or auxiliary chemicals
for the production of the same amount of products.
Example 1:
A leather tannery installed
a simple five-step chrome recovery procedure. The step included: collect of
spent tanning liquor, add magnesium oxide and poly-electrolyte, control
acidity and stir, stop stirring and settle, decanting, add sulfuric acid,
control acidity and stir - ready for use as tanning agent. Investment cost was
$40.000 but annual savings were $43.500 within the first year. The pay back
period was 11 months.
Example 2:
A textile company reduced
its dye, water and energy use and volume of wastewater discharge releases by
reusing dye baths at the end of a cycle to prepare for the next cycle.
Investment cost were $15.000 but annual savings were $100.000, so the pay back
period was only 2 months.
Example 3:
A combination of 8 processes
changes in a brewery reduced the. overall COD and suspended solid loads to its
waste facility by 19% (a combined measurement in cubic meters). The savings in
effluent charges alone were US$ 96,000 per year.
Besides these direct
financial benefits and the already mentioned, a company will have the
following advantages and benefits by implementing CP :
* Better access to
finances
Financial institutions are
awakening to the problems of environmental degradation, and now scrutinize
proposed modernization or expansion projects for which loans are sought
>From an environmental angle. CP programs project a positive environmental
image of your mill to lenders, thereby improving access to financial
support.
* Better compliance with
environmental regulations
Regulatory standards for
discharge of waste (liquid, solid or gaseous) are continually becoming
stricter. Meeting these standards often requires installation of expensive and
complex pollution control systems. CP makes the treatment of residual
effluents, and thus compliance with discharge standards, easier, simpler and
cheaper.
* New and improved market
opportunities
Increasing consumer
awareness of environmental issue demands that mills, especially those
competing in international markets, demonstrate the environmental friendliness
of their products and production processes. The appeal of meeting
environmental standards, such as ISO 140001, or other market requirements such
as Eco-labeling, can motivate companies to pursue CP.
* Better media and public
image
The media plays a key role
in establishing a company's public image. An adverse media report can
instantly damage a reputation built over years. With public interest in
environmental issues on the rise, many non-governmental organizations (NGOs)
gain a high profile by acting as watchdogs and informers against polluters.
CP, being a positive pro-active approach to environmental management,
demonstrates environmental responsibility, and promotes confidence in company
conducted by NGOs, pressure groups and media. .
5. HOW CAN THE CP-STRATEGY
BE IMPLEMENTED INTO THE ENVIRONMENTAL MANAGEMENT SYSTEM OF AN INDUSTRIAL
PARK?
A wide range of
environmental, health and safety issues created by industrial parks are
encouraging government agencies and industrial park/zone managers to adopt a
comprehensive environmental management framework including CP.
There are two stages where
CP-strategy can be implemented:
1. in the application
procedure of a new company (Technology assessment)
2. in the environmental
services provided by the IP management for his clients (CP-audit for a
company)
a/ Application
procedure
According to the new rules
in Vietnam, new companies applying for an industrial park are not anymore
forced to work out an Environmental Impact Assessment. This was done when the
industrial park was planned and created. For a new industrial park it is
therefore a must to define the environmental standards and loads for th6'
acceptance of new clients. The sum of the emissions of the units will
determine the environmental performance of the site, and this performance is
the baseline used in the environmental impact assessment stage for the park.
Clients and ETA will directly determine the environmental services that the
park must of for to clients.
A technology assessment
allows to compare the expected emissions with standards from Best available
technology and Cleaner production Benchmarks. This technology evaluation will
prevent the import of second on third hand technology.
Know-how and experience for
this CP-technology assessment can be bought by external centers and
agencies.
b/ Providing CP-Audits as an
environmental services
The provision of
environmental services will help an industrial park meet its environmental
performance objectives, (defined in the EIA), earns the park new revenues and
enhance the marketability of the park itself. The nature and externals of the
environmental services is determined partly by the values and principles
adopted by the industrial park, the nature of the state legislation or
environmental performance, and the availability of financial and human
resources.
These services may include
the following areas:
- water services
- sewage
collection
- sewage
treatment
- industrial liquid waste
collection and treatment
- hazardous waste
collection, storage and destination
- solid waste collection and
disposal
- energy from
waste
- environmental
monitoring
- environmental audit
service's (CP-audits)
- multi-material resource
recovery
- environmental training and
education
- environmental operation
and information center
- emergency preparedness and
response capability.
Interesting for the
environmental performance and CP-strategy is the environmental audit
services.
CP-audits as we have seen
arc a powerful tool for to improve the efficiency of a company and to reduce
the environmental pollution load. Therefore this service provided by the
industrial parks is another means of helping businesses 'and improving the
environment at the same time.
An innovative approach for
paying for audits is a contractual management between the auditor and the
company in which the former receives a percentage of the savings resulting
from improvements in efficiency.
6. CP AND ISO
14001
An industrial park aiming
for higher efficiency and quality will also be a cleaner one. With the
increasing attention given to environmental issue by governments and industry,
a new ISO set of standards is evolving. The ISO 14000 services will include
environmental policies, life cycle analysis, environmental auditing, waste
management, emergency planning and prevention. ISO 14001 and other
environmental management systems were developed for use by individual
enterprises. Some adaptation is required before they can be easily applied by
an entire industrial park, however, the concept of an EMS is just as valid as
for companies. Industrial parks receiving ISO 14001 certification should in
principle be attractive to companies which are also committed to an
environmentally sound approach to the manufacture of goods and provision of
services.
Environmental performance
objectives normally include overall pollution loads, resource efficiency and
industrial safely. However, they can also be applied to factors such as
habitat, landscape, bio-diversity and species protection.
Audits arc being
increasingly required by lending institutions and regulatory agencies for
compliance purposes. Energy, health and safety, and environmental audits have
in the past shown that there are many opportunities for improving efficiency,
reducing waste and protecting the environment at the same time.
Cleaner production and ISO
14001 both aim at improved environmental management, CP on the operational
level and ISO 14001 on the overall management level. Whole CP programs usually
make it easier for companies to meet the requirements for an ISO 14001
certification, a CP program may be just as effective without certification. An
important feature of CP is that CP program does not have to be certified or
monitored by any outside organizations or authorities.
7. CLEANER PRODUCTION
CONSTRAINS
Despite attractive economics
and significant reductions in environmental impact, the widespread adoption of
Cleaner Production in developing countries still remains to take place.
Several studies have addressed the barriers for the adoption of Cleaner
Production at the level of individual enterprises, and most often categorized
these as "conceptual", "organizational", "economic" and "technical". It makes
however sense to subdivide the "economic" constraints in "economic" and
"financing" constraints, and to add constraints related to the
policy-environment. "Economic" constraints are related to the
cost-effectiveness of Cleaner Production opportunities, whereas "financing"
constraints are related to the financing of Cleaner Production investments.
Table I provides typical subcategories of each type of constraints, from the
perspective of industries considering adopting Cleaner Production. The
constraints for credit providers to make finances available for Cleaner
Production investments, might coincide with these, but have not yet been
systematically assessed. So far, most efforts for promoting Cleaner Production
in developing countries (including the NCPC program and alike initiatives from
other donor agencies (e.g. USAID, NORADD, DANCED, GTZ)) targeted at the
technical, organizational, conceptual, and to a lesser degree, policy related
and economic constraints, primarily by providing technical information on
Cleaner Production techniques and technologies.
According to many Cleaner
Production promoters, little progress has been achieved in directing already
available finances from domestic and international sources into Cleaner
Production investments in developing countries. This may have been caused
by:
- difficulty for financiers
and industrial authorities (in particular those in charge for industrial
licensing) to distinguish Cleaner Production investments from other types of
investments;
- frequently encountered
habit to mix up 'economic' and 'financing' constraints in the debate on
barriers and incentives for Cleaner Production in developing countries: it is
often presumed by governmental organizations and public financiers that since
Cleaner Production can save costs or generate benefits, it is in the
businesses' own interest to invest in Cleaner Production and hence there is no
further need to consider special financing arrangements for Cleaner Production
investments;
- tendency to relegate
problems encountered in funding Cleaner Production investments to other types
of constraints, such as "misunderstanding that Cleaner Production is always a
costly affair" (conceptual), the "non-involvement of accounting and financial
departments in executing the. Cleaner Production assessment" (organizational)
and "limited cost - effectiveness of Cleaner Production options, due to low
prices of natural resources or lack of enforcement of environmental
regulations" (policy-related);
- the complex nature of the
financing issue: stakeholders in developing countries may argue that the
environment is a luxury concern, and therefore, environmental measures,
including Cleaner Production, can only be undertaken with financing from
developed countries;
Table 1: Six categories of
constraints for Cleaner Production investments (from the perspective of
industries considering adopting Cleaner Production).
|
Type of
constraints |
Sub-categories |
|
1. Financial |
- High cost of external capital for
investments in industry.
- Lack of funding mechanisms
(lending schemes etc.) appropriate for Cleaner Production investments.
- Perception that investments in
Cleaner Production present a high financial risk due to the innovative
nature of Cleaner Production.
- Cleaner production not properly
valued by credit providers in their evaluation procedures for lending,
equity participation etc.)
|
|
2. Economic |
- Cleaner Production investments
not sufficiently cost effective (compared with other investment
opportunities), given present resource prices.
- Immaturity of the company's
internal cost calculation and cost allocation practices.
- Immaturity of the company's
internal capital budgeting and capital allocation procedures.
|
|
3. Policy-related |
- Insufficient focus on Cleaner
Production in environmental, technology, trade and industry
development and strategies.
- Immaturity of the environmental
Policy framework (including lack of enforcement, etc.).
|
|
4. Organizational |
- Lack of leadership for
environmental affairs.
- Perceived management risk related
to Cleaner Production (i.e. no incentives for managers to put their
efforts into implementation of Cleaner Production).
- Immaturity of the environmental
management function in the company's operations.
- (General) immaturity of the
organization structure of the company and its management and
information systems.
- Limited experience with employee
involvement and project work.
|
|
Type of
constraints |
Sub-categories |
|
5. Technical |
- Absence of a sound operational
basis (with well established production practices, maintenance schemes
etc.).
- Complexity of Cleaner Production
(i.e. need to undertake comprehensive assessment to identify
appropriate. Cleaner Production opportunities).
- Limited accessibility of
equipment supportive to Cleaner Production (e.g. high quality
engineering small wares for process instrumentation etc.).
- Limited accessibility of reliable
technical information tailored to the company's needs and assimilative
capacities.
|
|
6. Conceptual |
- Indifference: perception
regarding the own role in contributing to environmental improvement.
- Narrow interpretation or
misunderstanding of the Cleaner Production concept.
- (General) resistance to change.
|
- a lacking supply of
financing services customized to Cleaner Production investments diminishes the
demand for Cleaner Production assessment services from industries: it has
turned out to be difficult for Cleaner Production promoters to convince
entrepreneurs in developing countries to undertake a Cleaner production
assessment, as the entrepreneurs claim not to have own finance for
implementation of the feasible options, nor to have access to external funds
for doing so.
- international donors and
development banks would be willing to finance Cleaner Productions projects,
but lack Cleaner production investment proposals that fit in the present
lending schemes most often due to limited size of Cleaner Production
investments.
Given this complex nature of the debate on financing
constraints for Cleaner Production in developing countries, there is a need of
systematic and organized testing of strategies and mechanisms to finance
Cleaner Production investments in developing countries.
It makes sense
doing so in dialogue with the international private and public sectors.
Concentrating on financing issues is also a recognition of the fact that
concerns for financing might have been overlooked in the recent past, when
awareness for Cleaner Production was raised and basic capacity developed for
conducting Cleaner Production assessments.
8. CLEANER PRODUCTION
INVESTMENTS
Cleaner Production
investments are investment designed to incorporate the Cleaner Production
strategy into production processes, products and services. A Cleaner
Production investment may thus include a wide variety of actions (equipment,
managerial improvements, training, etc.), and hence Cleaner Production
investments have to be interpreted widely. A key problem in talking about
Cleaner Production investments is that such investments normally have an
incremental nature, in a sense that the application of Cleaner Production
principles increases the costs for a "regular" investment. For the case of a
brewery replacing for instance its worn-out bottling line by an up-to-date
bottling line, it can be argued that the entire investment is a Cleaner
Production investment, since the new bottling line will consume less water and
energy, and spill less beer. However, it can at the same time be argued that
this reduction of water and energy consumption and of the waste water
generation, is the result of a regular business decision not including
environmental considerations, since all available new bottling lines are
"better" than the ones they replace. A Cleaner Production investment would in
this case only be made once the brewery selects a more expensive new bottling
line, with below average water and energy consumption and/or waste water
generation. The issue of defining the incremental costs and benefits due to
the application of Cleaner Production principles is not yet solved by the
international community and needs to be further clarified in order to avoid
that funds earmarked for Cleaner Production are used for "business as usual"
investments.
In case of existing
production facilities, a Cleaner Production investment is - for the time being
- interpreted as an environmental project designed to capture commercially
valuable emissions and waste, to avoid the use and creation of hazardous
components and / or reduce the use of inputs (materials, energy and water) and
not consisting of the installation of additional production equipment
or the direct expansion of existing production facilities. In case of new
production facilities, the Cleaner Production investment is - for the time
being - interpreted as the part of the total investment aimed specifically at
reducing the waste and emission generation ratios and/or material, energy and
water consumption ratios below levels normally achieved with being new
production facilities designed on the basis of "business as usual" engineering
and conventional economics. In case of products, the Cleaner Production
investment is - for the time being - interpreted as the additional costs for
the environmental assessment of the reference product and for the inclusion of
environmental product attributes in product design and preparation for
manufacturing.
At first sight there are
many differences in financing of Cleaner Production in respectively existing
and new industrial establishments.
- As regards Cleaner Production
investments in existing facilities, experience has shown that much
can be achieved through no-cost good housekeeping measures. However, once
the no- and low-cost options have been implemented, financing even small
investments with the low pay back periods can be difficult. These projects
are not realized due to, inter alia, lack of capital, poorly developed
banking system, lack of appropriate financing mechanisms, lack of knowledge,
technology risks, and management's unwillingness to borrow money. Few
countries have developed financing mechanisms targeted at financing these
projects with resources from the international donor community (e.g. Sri
Lanka, China, etc.). Most available credit lines serve larger enterprises,
environment is not a priority investment area and the size of the
investments is too small to be considered by commercial banks and
international financing institutions. Experience indicates that there is
need for financing mechanisms that can be used to finance smaller
investments with short pay back periods.
- As regards inclusion of Cleaner
Production in new investment projects there is far less experience.
Although Cleaner Production can in principle easily be integrated in new
industrial establishments, there are serious concerns that this is not
happening so far. Investors generally feel inclined to cut initial
investment costs, at the expense of lower productivity/ efficiency, and
hence higher environmental impact, e.g. by:
- using superseded process
technologies;
- reusing second-hand
equipment;
- utilizing low quality pipes, valves,
etc.; and/or
- minimizing on process instrumentation
and automation.
This has to be
analyzed in greater detail, in order to make a case for the international
community to direct investment flows into Cleaner Production
investments.
In industrial parks and
zones, Cleaner Production presents a tremendous opportunity as all or most
investment is new and the choice of technology not finalized. A park / zone
can promote cleaner production in many ways, for instance:
- by including
cleaner production technology assessment as a part of the application
process for new investment;
- by promoting
cleaner production assessments in enterprises already located in the
zones;
- by pricing
the services for water, electricity and use of common effluents treatment
facilities to levels which encourage savings and
minimization;
- by providing
advisory services to entrepreneurs on the availability of alternative
solutions to end-of-pipe (by organizing workshops and campaigns, by
establishing a core group of expertise in the zone with the help VNCPC and
other relevant institution, etc.)
- by including
cleaner production as an explicit policy for the development of the park
enhancing the image as a "green park/zone" (and by signing the cleaner
production declaration); and
- by preparing regularly an environmental
report on the zone for the public.
9. CLEANER PRODUCTION
NETWORK
Since its Inception in 1989,
the UNEP Cleaner Production program has played a catalytic role in
establishing an international network for the promotion of Cleaner Production.
The activities undertaken by the network participants contributed to putting
Cleaner Production on the agenda of national governments, multilateral
organizations and development banks, donor agencies, industrial organizations
and various other non-governmental organizations. Without having evaluated the
UNEP Cleaner Production program in detail it appears fair to conclude that the
program has catalyzed the establishment of a global network of Cleaner
Production promoters and practitioners. The network encompasses
representatives from governmental organizations, multilateral organizations,
industrial stakeholders, development banks, academia and other
non-governmental organizations (including professional associations such as
the World Cleaner Production Society, World Environment Center, World Business
Council on Sustainable Development, etc.). Individual players in this network
have launched their own Cleaner Production initiatives, and meet every second
year under the auspices of UNEP to exchange results and experiences. Tablet 2
gives an impression of key activities of participants in the Cleaner
Production network.
A bird eye's view of
activities undertaken by the network participants, easily discloses the most
valuable achievements, in particular (in random order):
- building general awareness among key
decision makers in governmental organizations, industrial organizations and
other non-governmental organizations of the need for, and opportunities of a
preventive strategy for industrial environmental management;
- developing capacities for conducting
Cleaner Production assessments in host institutions in developing countries
and countries with economies in transition;
- generating company-level case studies
on the successful application of the Cleaner Production approach in
different industry sectors, in a growing number of countries around the
globe;
- developing and distributing information
dissemination and training materials for various target groups.
Table 2: Key activities of selected
international participants in the global Cleaner Production
network.
|
Category |
Organizations |
Key activities in promoting Cleaner Production in
developing countries |
|
United Nations agencies |
UNEP |
- Networking with (inter) national
governmental, industrial and other non-governmental stakeholders to
raise awareness of Cleaner Production.
- Exploration of new approaches and
tools for promoting Cleaner Production, such as Life Cycle Assessment,
Eco-Design, Environmental Technology Assessment and Environmental
Management Systems.
|
|
|
UNIDO |
- Setting up of a global network of
national Cleaner Production centers (in collaboration with UNEP), in
particular to develop a national capacity for conducting Cleaner
Production assessments and for providing training and policy
advice.
|
|
|
UNDP |
- Integration of Cleaner Production
into preparation and implementation of sustainable development plans,
mainly for poverty alleviation and social and rural
development.
|
|
Development banks |
World Bank, IFC, ADB, IBD, AFDB, EBRD,
etc. |
- Providing company-specific
technical assistance for Cleaner Production assessment.
- Financing selected Cleaner
Production investment projects.
|
|
Donor Agencies |
NORADD, DANIDA, GTZ, USAID etc. |
- Providing technical assistance
for conducting plant-level Cleaner Production assessments and for
development and implementation of Cleaner Production fostering
policies.
|
|
Other international organizations |
e.g. OECD, ICC, ILO, etc. |
- Provide a platform for dialogue
on Cleaner Production fostering strategies and
policies.
|
