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By-product synergy projects: regional collaboration engines driving innovation.

U.S manufacturers literally throw away millions of dollars in resources every year. As one recent report has noted, "even the leanest manufacturing process does not eliminate the problems of yield loss or occasional off-specification products" (Gromacki 2009, 50). By-product synergy solutions offer the possibility of recapturing this lost value by identifying new uses for these cast-off resources, potentially resulting in savings "in the six-figure range or more" (Gromacki 2009, 50) and offering obvious environmental benefits. Still the technical, economic, and social challenges of implementing synergies often are hard to overcome, despite the potential cost savings and environmental benefits. The by-product synergy (BPS) process developed by the United States Business Council for Sustainable Development (BCSD) offers one avenue for developing innovative solutions, matching undervalued waste or by-product streams from one facility with potential users at another facility to create new revenues or savings with potential economic, social, or environmental benefits (Mangan and Olivetti 2010).

BPS shifts the paradigm for waste, seeing it not as a necessary cost of doing business but as a potential feedstock for other processes. The BPS structure, which was pioneered by the BCSD in the 1990s, establishes collaborative regional networks that allow businesses and other organizations to share information to identify opportunities for beneficial use of by-products. A facilitated methodology is used to help participants establish bilateral collaboration that recognizes that one company's waste could be another company's raw material, and to think of waste as a by-product that can bring business opportunities (Lee, Troffell, and Gordon 2009). The process fosters long-term business relationships among the participants that lead to the open sharing of information and collaborative problem solving to address technical and social challenges (Mangan and Olivetti 2010).

The U.S. Environmental Protection Agency (EPA) has supported BPS since its inception in 1997 through technical expertise, funding, coordination of resources, and training. The U.S. Department of Energy (DOE) has also been supportive, co-funding a project with the Dow Chemical Company that identified potential annual cost savings of $15 million and found opportunities to reduce fuel use by 900,000 MMBtu per year (Fitzgerald 2010).

Regional BPS networks have been established in Montreal, Canada; Tampico, Mexico; and in North Texas, the Gulf Coast, New Jersey, the Puget Sound area, Ohio, Kansas City, Chicago, and Houston, with several more in the early planning stages. Each regional BPS project includes 20 to 30 diverse companies as fee-paying participants, with local, state, and federal government agencies engaged as supporters. Additional project participants typically include business, environmental, and legal representatives.

In the initial working meetings, participants use input-output data collection sheets to discuss informal material balances for their facilities and describe material streams and by-products. The BCSD database of synergy opportunities developed from all BPS regional projects is used to supplement discussions and help identify potential synergies. Working groups are formed to focus on common interests, such as chemicals, combustibles, construction debris, or related issues like transportation or energy consumption (Mangan and Olivetti 2010). A business plan, initiative charter, value proposition, materials details, disposal costs, obstacles, and ideas for overcoming barriers are developed for implementing selected strategies. Synergy teams work together to complete the evaluation work. Ongoing working meetings allow the regional team to assess progress, identify additional synergies, and discuss challenges and solutions.

Strong technical expertise is needed on these teams to track and characterize material flows and work through technical and economic issues, barriers, and challenges. Establishing the technical feasibility of potential synergies requires the tracking and characterizing of material flows; R&D may be required to evaluate the feasibility of implementing synergies (Mangan and Olivetti 2010). This may include pilot tests to evaluate the composition, performance, reliability, and risks of new material compositions using by-product ingredients. It may also include evaluation of process redesign alternatives to use by-product materials and estimated costs or savings impacts. To support cost-benefit analysis of alternatives, R&D input is often needed to help characterize the size, scope, and consistency of feedstock supplies if by-products are used as feedstock for another commercial process. Such input can also characterize risks or performance issues if by-products are blended into another stream. Where synergy implementation barriers exist, R&D teams can identify and evaluate alternative solutions.

BPS Benefits and Opportunities

BPS networks create new business opportunities by identifying new markets. Manufacturing innovations may improve efficiency and productivity, boosting revenue. BPS can eliminate or reduce waste disposal and treatment costs and cut the cost of energy, transportation, and materials while improving internal processes. Sending less material to the landfill reduces taxes, site charges, and transportation costs while freeing up landfill capacity. Under ideal conditions, wastes can produce new revenues through connections to new markets. These savings also help the environment through reductions in waste streams, air emissions, and water pollution. Reduced resource use can result in savings of natural resources, including water, energy, and fossil fuels. Reuse of existing materials also reduces carbon emissions related to carbon-intensive extraction or production processes. Companies sharing inventory information through BPS networks can often find raw materials locally rather than importing them from other regions (Mangan and Olivetti 2010).

Participating in BPS can also bring opportunities for assuming regional or national leadership in sustainability and showcasing sustainable practices and processes. This can present a substantial competitive advantage, as consumers become more green aware.

Synergistic exchanges can include food wastes, plastics, solvents, chemicals, paper, construction materials, soils, and metals. InnerGlow Surfaces and Manufactured Glass Products, two participants in the Chicago Waste-to-Profit Network, are proving that the process can work; Manufactured Glass Products is now sending heat-coated glass scraps that were previously landfilled to InnerGlow Surfaces, where they become feedstock for countertops made from recycled glass (Fitzgerald 2010). AkzoNobel, another Chicago network participant, worked with a Missouri cement kiln to use its gritty waste paint material in a power wash for the kiln's tanker trucks and railroad car interiors. The waste grit was then collected from the power wash and used as supplemental fuel in the cement kiln. That transaction provided the kiln a highly cost-effective cleaning solution and reduced AkzoNobel's waste disposal costs by one-third (Gromacki 2009). Two participants in the Alberta BPS project, a Weyerhaeuser Kraft mill and a Husky refinery, discovered that spent caustic (NaOH) with contaminants from the refinery, which was being deep-well injected at a significant cost, could be used in a Kraft process, replacing virgin caustic purchased from Dow Chemical. A careful investigation and due diligence process revealed that the Husky caustic was almost a perfect chemical fit for the Kraft mill; the synergy saved both companies a significant amount of money.

Conclusions

By-product synergy is a source of economic, environmental, and social advantages to the companies and regions where it has been implemented. The process takes time and effort from a variety of technical and business disciplines to make these networks work, but the return on investment from the long-term relationships established is high (Mangan and Olivetti 2010). Other nations have also seen the benefit; similar programs now exist in the United Kingdom (the National Industrial Symbiosis Program, a government-funded national synergy program based in Birmingham, which was inspired and encouraged by the BCSD synergy networks), Japan (the Institute of Advanced Industrial Science and Technology), and elsewhere.

Reducing wastes by reusing byproduct streams will become even more important as we deal with increased restraints on carbon emissions and the dual pressures to reduce production costs and preserve natural resources.

References

Fitzgerald, J. 2010. Emerald Cities: Urban Sustainability and Economic Development. Oxford: Oxford University Press.

Gromacki, M. 2009. By-product and waste utilization. In Process Efficiencies: Segment Report 2, 39-56. The Catalyst Group Resources.

Lee, D., Troffell, M. W., and Gordon, R. 2009. Cook Composites and Polymers Co. Case Study 9-608-055. Harvard Business School.

Mangan, A., and Olivetti, E. 2010. By-product synergy networks: Driving innovation through waste reduction and carbon mitigation. In Sustainable Development in the Process Industries: Cases and Impact, ed. J. Harmsen and J.B. Powell, 81-108. New York: Wiley.

Mary Anne M. Gobble, Editor

Andy Mangan is the Executive Director of the US Business Council for Sustainable Development (US BCSD). He has led by-product synergy initiatives since the mid-1990s. He helped form BPS networks across the U.S. and in Canada and Mexico, has supported the United Kingdom's National Industrial Symbiosis Program, and is working with the Chinese Business Council for Sustainable Development to develop a similar program in China.

Susan Fernandes is an independent consultant and writer in Austin, Texas, who has been involved with US BCSD programs for more than 10 years.

Rich Chapas is an independent consultant and adjunct professor at the University of Delaware who has been involved with US BCSD programs for more than 10 years; he is a longtime IRI member who has served on the Executive Board.
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Title Annotation:PERSPECTIVES: Views and News of the Current Research-Technology Management Scene
Author:Mangan, Andy; Fernandez, Susan; Chapas, Rich
Publication:Research-Technology Management
Geographic Code:1USA
Date:Nov 1, 2010
Words:1461
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