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Waste is a resource, not a problem.
Learn how Australian companies are finding new opportunities to save costs and sell more products by making their industrial systems mimic the laws of nature.
Worth Recycling saves $4.5 million a year by collecting and converting contaminated water, muds and soils into raw materials.
Weston Aluminium avoids raw material and energy costs of $1.9 million per annum by processing smelter wastes into usable products.
James Hardie is using waste materials from one manufacturing process as virgin raw materials in another – saving more than $1.6 million a year.
Waste has value
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Industrial ecology: giving waste value
Industrial ecology is the idea that one company’s waste is another company’s raw material – where separate industries work together to generate new business opportunities for each other.
The concept is simple. Businesses from different sectors across a particular geographic region explore how their by-products can be used by others as a cheaper input to their production process.
For example, excess steam from an electricity generator can be used as a heat source for a nearby chemical manufacturer. The fly ash from a coal-fired generating station can be used by the cement industry.
The result is less waste, and greater levels of material and energy resource use efficiency for all involved.
While industrial ecology often involves a physical exchange of underutilised resources – such as waste, energy or water – it can also include sharing assets, logistics or expertise.
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Industrial ecology uses inspiration from nature to explore how industrial processes can be more interconnected; where waste from one part of the business ecosystem – gas, liquid or solid – is input for another part of the ecosystem.
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Business has come to realise that it must operate within the limits of a finite world. Increasing pressure on the Earth’s natural resources means today’s industrial economies must transform to survive. The irony is that the answer lies with nature.
Natural ecosystems do not generate waste. The wastes produced by one organism become the food source for another.
Industrial ecosystems – in which different companies in proximity to each other exchange waste outputs – can function like natural ecosystems.
Like Mother Nature herself, manmade ecosystems can operate so efficiently that they generate zero waste and exist in harmony with natural ecosystems. Industrial ecology is ambitious, but it is happening today.
What is driving industrial ecology?
Since the days of the industrial revolution, companies have conducted business on two false assumptions – that the Earth has infinite resources, and an infinite capacity to absorb waste.
However, we cannot continue to use the planet’s resources faster than nature can regenerate them. Nor can industry continue to afford the burgeoning disposal costs of by-products from their processes.
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· $2 billion in new sales
· 10 million tonnes less waste to landfill
· $500 million in industry investment
What the Waste Management Association of Australia says industrial ecology can help generate in NSW alone over the next 3 years.
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Industrial ecology gives us the means to innovate through sustainable products and services, while reducing resource and energy-intensive production methods.
While this global imperative is fundamental to the push for industrial ecology, there are many reasons Australian companies are seeking a better way. They understand that waste can have a value; that waste is the result of a flawed process we can fix.
· The rising cost of waste management – such as increasing landfill levies, gate fees and transport.
· The carbon price and the need to reduce carbon intensity in the supply chain.
· Increased competition interstate and overseas from companies using waste resources as alternative raw materials and fuels.
· The increase in voluntary industry product stewardship and producer responsibility schemes.
· The knowledge that partnerships are the pathway to sustainability, and that industrial ecology enables bilateral and multi-lateral partnerships in public-private sector funding.
How to redesign business for a resource-constrained world
The current philosophy prevalent in global manufacturing – take-make-waste – is inefficient and wasteful.
For organisations to reduce waste, they need to rethink and redesign their products and processes – from upstream design and input sourcing to downstream product use and end-of-life disposal.
Redesign on this scale is possible only with the collective intelligence that comes from collaboration within business ecosystems, across corporate boundaries, and amongst traditionally separated departments within organisations.
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Industrial ecology is a way of finding innovative solutions to complicated environmental problems. It promotes communication among scientists, engineers, policymakers, and business managers who are interested in integrating environmental concerns with economic activities.
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Industrial ecology helps companies become more competitive by improving their environmental performance and strategic planning. It helps communities develop and maintain a sound industrial base and infrastructure without sacrificing the quality of their environments. And it helps government agencies design policies and regulations that improve environmental protection while building business competitiveness.
Introduction to industrial ecology through Sustainability Advantage
“Looking over the fence” is now a critical business survival skill
Realising that industrial ecology is an emerging area of interest for many Sustainability Advantage members, the Office of Environment Heritage introduced industrial ecology to its members through a series of regional “speed-dating” workshops in 2011.
The purpose of the workshops was to explore the potential for companies to exchange their waste materials, energy, or water; and to promote the shared use of assets, logistics or expertise between businesses.
The speed-dating provided real value for all attendees, with more than 100 matches at each workshop. A match occurred when one company’s waste or by-products were recognised as a potential resource by another participant.
The Office of Environment & Heritage is now working with over 50 Sustainability Advantage members across four industrial ecology clusters in Sydney, Newcastle, Wollongong and the Riverina. They are all investigating ways to find value in waste.
Why industrial ecology is good business
The opportunity to find hidden profit
Everything coming into a company is a cost. Everything that leaves a company is an opportunity to sell. Industrial ecology is a compelling business strategy centred on four main beliefs:
· To reduce costs or increase revenue
· To improve long-term resource scarcity
· To find new business opportunities
· To meet current and future regulatory obligations
Industrial ecology can help companies improve their resource productivity and competitiveness. The ecosystem perspective industrial ecology promotes can help companies find ways to add value or reduce costs both within their own production processes, and up and down the supply chain.
Businesses that practice industrial ecology in Australia are already reporting significant new sales and cost savings. (See case studies).
The size of the prize
Industrial ecology provides huge financial and environmental opportunities for Australia. The Waste Management Association of Australia (WMAA) has estimated that industrial ecology is a $1-2 billion opportunity in NSW alone over the next three years.
Embracing the idea that everything is a product, with a value, and that it is possible to find ways to turn the useless into the useful, Australia stands to gain from industrial ecology in many ways.
Economic benefits
Create secure jobs | Increase sales | Improve profitability | Enhance productivity | Save money | Increase investment in industry | Promote innovation | Reduce risk
Environmental benefits
Divert tonnes of waste from landfill| Save energy and water | Reduce greenhouse gas emissions | Minimise pollution and toxicity | Limit use of virgin materials | Decrease use of potable water
Social benefits
Create secure jobs | Build capacity among local communities | Give communities the opportunity to create the sustainable future they prefer.
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How Sustainability Advantage promotes industrial ecology synergies between businesses
In conjunction with the Waste Management Association of Australia (WMAA), Sustainability Advantage conducted six regional industrial ecology events in Wagga, Griffith, Dubbo, Newcastle, Wollongong and Sydney in 2011-12.
Gary Foster, from the UK National Industrial Symbiosis Programme (NISP) was the keynote speaker and moderator for the networking events in four of these workshops.
In April 2012, the Office of Environment & Heritage commissioned Databuild to independently validate and verify the actual savings achieved through industrial ecology projects that Sustainability Advantage was conducting with eight different companies – Boral Cement, Dunlop Flooring, James Hardie, Owens Illinois, Tapex, Weston Aluminium, Weston Matrix, and Worth Recycling.
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Sustainability Advantage members said they could attribute 82 per cent of the waste savings they achieved in their industrial ecology projects directly to the support they received from the Sustainability Advantage program.
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The projects included activity to recover and utilise more:
· old mattresses and carpets
· timber wardrobes and kitchen cabinets
· crushed glass fines
· farm plastic waste, e.g. irrigation pipes and silage wrap film
· timber packaging, pallets and crates
· organic and food waste
· coal combustion products e.g. fly ash
· foundry sands and smelter scrap
The Databuild research concluded that:
(1) Members of the Sustainability Advantage program achieved significant economic and environmental results over the last three years, including:
· More than 680,000 tonnes of material diverted from landfill
· 1.8 million kilowatt hours of energy saved
· cost savings of $23 million
· nearly $30 million of capital investment supported across NSW
(2) The resource savings were achieved through collaboration between 26 businesses that created 79 new jobs
Summary of outputs verified by the Databuild report
Metrics / Outputs for industrial ecology projects supported by SA / Outputs attributed to SA supportDiversion from landfill / 679,803 tonnes / 82%
Virgin raw materials saved / 679,803 tonnes / 82%
Energy use savings / 1,820,000 kWh / 67%
Reduction in potable water / 40,000 Kl / 100%
Capital Investment / $29,800,000 / 44%
Cost savings / $23,102,987 / 66%
Additional sales / $1,000,000 / 100%
Jobs created / 79 / 82%
Attribution was assigned to each verified project based on the views of the member participants on the importance of Sustainability Advantage’s involvement. The high level of Sustainability Advantage attribution confirms the strategic role the Office of Environment & Heritage played in facilitating resource exchange synergies.
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Case study 1
Transforming waste to wealth – a partnership approach
Dunlop Flooring and Ontera Carpets joined forces with the Salvation Army and Mission Australia to turn a landfill problem into a business opportunity.
Dunlop Flooring is using recycled carpet off-cuts from Ontera and mattress ticking from The Salvos and Mission Australia as an alternative to raw materials for foam underlay manufacture.
Used mattresses and carpet are recyclable materials that contain polyurethane and rubber.
“Sustainability Advantage helped us to look over our fence for new opportunities to invest, compete and grow,” says Joe Fernandes, National Operations Manager, Dunlop Flooring.
Dunlop invested $500,000 in new equipment and is now saving $1.5 million a year by incorporating 92 per cent recycled content in its foam underlay – without reducing product quality.
Dunlop plans to build on its success and expects to process an additional 5,000 tonnes of old carpet and used mattresses in 2012-13. The Salvos are investigating new technology to recover more mattresses.
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Case study 2
Money from mud
Worth Recycling invested $4 million in plant and infrastructure to divert drill mud from landfill and extract potable water from oily and contaminated water.
This allows Worth Recycling to divert up to 200 tonnes of drilling mud from landfill per day. By 2013, Worth Recycling plans to recycle 200,000 tonnes of drilling mud, oily water and sludge every year.
Worth Recycling reduced its own use of potable water by 40,000m3 per annum and the company is also sending 500 tonnes of water per month to CSR bricks, and 1,320 tonnes month to Boral Bricks.
This foray into industrial ecology created four new jobs at Worth Recycling, and is saving the company $4.5 million in avoided landfill costs per year.
“Sustainability Advantage drove the process and without them it would not have happened,” says Worth Recycling Operations Manager, Mario Tesoriero. “The SA network has been crucial in developing opportunities and finding other companies we can tap into.”
Worth Recycling is constantly looking for other partners, and the chance to grow the market for its products. For example, the company is already evaluating projects with other potential customers for recycled muds.
“Our hope is to expand our operations and capture greater returns for products that would otherwise have been dumped,” says Tesoriero.
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Industrial ecology around the world
Today, there are many organisations embracing the principles of industrial ecology to improve their resource efficiency and reduce their waste emissions. Unilever, Johnson & Johnson, Nike, AT&T, and Novo Nordisk are some of the better-known companies exploring industrial ecology. Unilever plans to simultaneously double its output and halve its environmental impact by 2020.
The Ellen MacArthur Foundation told the 2012 World Economic Forum in Davos that using a new approach it called the “circular economy” – where nothing is wasted – could generate annual net material cost savings in manufacturing of US$630 billion for Europe alone. (Towards The Circular Economy: Economic and business rationale for an accelerated transition, McKinsey & Company).
US-based manufacturing consultants, Orr and Boss, estimate that the tangible value of the “wastes” generated by the US manufacturing sector is US$400 billion – annually.
Where Australia fits in
Australia maintains links to industrial ecology efforts overseas through the Waste Management Association of Australia (WMAA) and the Australian Council of Recyclers (ACOR).
The Australasian Industrial Ecology Network (AIEN) is a working group of the Waste Management Association of Australia (WMAA). It was established in 2009 with the support of Sustainability Advantage through its Sydney-based building products cluster.
Currently, over 50 Sustainability Advantage members participate in AIEN and Sustainability Advantage cluster activities across the Sydney metropolitan region, and throughout the coastal and western regions of NSW.
AIEN membership continues to grow in NSW and interstate, with support from ACOR, and from Federal Government organisations Enterprise Connect and Regional Development Australia.