By-product synergy (BPS), a process that turns one company’s waste into valuable raw materials for another, offers an innovative, collaborative way to divert waste from landfills, cut costs and improve the environment.
The United States Business Council for Sustainable Development (US BCSD) has created an expanding network of BPS projects by bringing together groups of 15 to 20 companies and organizations from diverse industries to seek synergies with quantifiable economic, environmental and societal benefits. These benefits extend to both the participants and the communities in which they are located. The process breaks down the barriers to cross-industry communication, as well as the barriers between government and industry and between small and large companies, by fostering dialogue among groups sharing common objectives.
The need for such collaboration is clear. The U.S. Environmental Protection Agency reports that industrial facilities in America generate and manage 7.6 billion tons of nonhazardous industrial waste annually in landfills. At the same time, the cost of raw materials is escalating. As these trends squeeze their bottom lines, corporations have focused sustainability efforts on using resources more efficiently and keeping materials out of landfills.
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By-product synergy projects are helping corporations achieve those goals. Among the examples is a cement manufacturer using slag from a neighboring steel mill in its production process, increasing production output by 10 percent and decreasing nitrogen oxide emissions by nearly 40 percent. Meanwhile, a major U.S. chemical company identified synergies among six of its own plants with an estimated annual savings of $15 million and total annual energy savings of 900 billion BTU.
BPS networks have benefitted communities by spurring economic development, improving air quality and creating jobs. The Greater Houston Region has experienced $4.5 million in annual cost savings and an annual reduction of 19,000 metric tons of C02e and 32,000 metric tons of non-renewable resources. In Chicago, the economic impact has totaled $5.5 million per year, with a reduction of 50,000 tons a year in C02e emission.
The US BCSD uses an online database to facilitate, simplify and manage synergies between project participants. All of the data connected in the synergy database is treated as confidential, and participants choose the data they wish to report. The process differs from a waste exchange, which requires participants to know from the outset what materials they are looking for. In by-product synergy, linkages are discovered between industries that might never have thought to look across their boundaries. And when necessary, participants can adjust their processes to allow potential synergies to emerge.
Progress on an International Scale
This project methodology is being introduced around the world. In May 2012, the US BCSD and the China Business Council for Sustainable Development initiated a BPS project in Hebei Province in northeast China. The Hebei BPS project is modeled after the US BCSD’s network of successful projects in regions across the United States and will address several objectives of China’s 12th Five-Year Plan. Those include a 16 percent reduction in energy use per unit of GDP, a 17 percent reduction of CO2 emissions per unit of GDP, and an 8 percent absolute reduction in sulfur dioxide and organic water pollutants. Three to four dozen Chinese companies will be invited to join this network and are expected to produce synergies valued at US$5 million to $10 million in new revenues, savings and investments in 2013.
These goals are also being advanced on a global level by the World Business Council For Sustainable Development’s Vision 2050 project, which offers specific steps to help ensure that a planet of around 9 billion people will have enough food, clean water, sanitation and shelter to live well over the next four decades. The project, developed by 29 member companies from 14 industries, also outlines ways that this can be done with available natural resources and without further harm to biodiversity and climate. As the World Council’s plan points out, one key strategy, closed-loop recycling, makes the concept of waste obsolete.
Among the steps that are recommended in the plan are incorporating the cost of externalities such as carbon, ecosystem services and water, and doubling agricultural output without increasing the amount of land or water used. The transformation the World Council plan describes will offer significant opportunities for businesses in developing and maintaining low-carbon, zero-waste cities and infrastructures, improving and managing biocapacity and ecosystems, and mining existing landfills to extract resources.
By-product synergy offers one approach toward achieving those goals. It goes beyond traditional recycling efforts to help participants identify profitable new markets and processes, to engage with other sustainability-oriented business leaders, and to advance economically, environmentally and socially beneficial priorities.