Eco-Industrial Parks:
One Strategy for Sustainable Growth

(Reprinted with permission from the January 15, 1997, issue of Developments,
the newsletter of the National Council for Urban Economic Development, Washington DC)

Representatives from 16 eco-industrial parks (EIPs) under development in the United States and Canada met October 17-18, 1996 at Cape Charles VA to discuss their projects. The workshop was co-sponsored by the President's Council on Sustainable Development and by the Port of Cape Charles Sustainable Technologies Industrial Park, itself an EIP.

Defining EIPs

While there is no widespread agreement on a single definition of what constitutes an EIP, attendees generally agreed that an eco-industrial park is characterized by closely cooperating manufacturing and service businesses that work together to improve their environmental and economic performance by reducing waste and increasing resource efficiency. Firms coordinate activities to increase efficient use of raw materials, reduce outputs of waste, conserve energy and water resources, and reduce transportation requirements.

This resource efficiency translates into economic gains for the businesses while the local community benefits from the resulting improvements in its environment and from the creation of new jobs.

"The probable enhanced economic performance of participating businesses will make EIPs a powerful economic development tool for communities," according to Ernie Lowe of the Indigo Development Corporation, the managing entity for the Oakland, California EIP.

Although both economic and environmental gains are natural outgrowths of EIP-type organization, the level of gains depends on the mix of firms and how tightly they coordinate their production processes. One EIP under development estimated potential benefits if it were to include an electric power plant, a petroleum refinery, an asphalt plant, a wallboard company, a tank farm and waste treatment and recovery facilities - the same industries represented in the functioning EIP at Kalundborg, Denmark.

Under a scenario in which some firms co-locate to exchange wastes and materials are recycled onsite, the net annual economic benefit is estimated at $8.2 million; and the return on investment is 55 percent, with a payback period of 1.68 years. Wastes recovered and reused instead of being sent to the landfill include 365 tons from asphalt, 65 tons of plastic and 60 tons of gypsum.

This example is consistent with the actual performance of the Kalundborg EIP. Some experts project average payback times of less than five years for this type of investment.

Conference participants consider it a market advantage for firms to be able to claim to be part of an eco-industrial park but expressed concerns that the term not become a "greenwash". Performance standards are the issue here, such as the level of environmental gains that must be achieved by participating industries in order for them to validly claim to be an EIP. While participants crafted several definitions of the EIP concept during the meeting, the group did not develop a consensus definition.

Types of Parks in Development.

Besides the level of coordiation among participants, a major variation among the different EIPs is the degree to which participants are co-located on the same site. For example, Brownsville, Texas, is developing one type of eco-industrial park, the virtual eco-industrial park, which is an affiliation or network of related regional companies. Although they are not physically located in the same park, by working together, companies in a virtual park can create economies of scale. For instance, they can cooperatively buy goods with a higher recycled content, or hire a shared engineering efficiency expert or compliance auditor. Affiliated companies participating in waste exchange will pay lower prices for secondary raw materials and realize savings in hazardous waste disposal charges. For example, Mobil sells styrene/ethylbenzene for 50 cents to a recycler, whereas it used to cost $1 per gallon to dispose of it. In addition, clustered companies that are co-located in the same region can enjoy reduced transportation costs, whether the firms are industrial, commercial or retail establishments.
In Virginia, the Port of Cape Charles is developing a second type of park, the zero-emissions eco-industrial park. The zero emissions, also called closed-loop manufacturing, design is the most ambitious type of EIP, having as its goal the total elimination of emissions, another term for waste. Just as with the virtual EIP, participants reap a certain level of resource efficiency through cooperative buying, waste exchange, and so forth.

But the zero-emissions park can achieve further incremental gains in efficiency because firms are located close enough that water, heat and energy sharing, as well as recycling of low-value byproducts, become physically and economically feasible.

"EIPs are an appealing redevelopment option for brownfields because they offer the community sustainability, economic growth and lower environmental impact than traditional industry," according to Ed Cohen-Rosenthal, director of the Work and Environment Initiative at the Cornell University Center for the Environment. "They often offer industry proximity to existing industrial centers and access tto transportation."

Further approaches to achieving additional environmental and economic efficiency include the use of "green" buildings in the facility, landscape design, and the physical layout of the park itself. Zero emissions can be accomplished by attracting companies whose processes do not generate waste, or by co-locating companies that are willing to co-ordinate their production processes so that one company's waste products can become another company's raw materials.

Most of the planned EIP projects fell somewhere in between these two extremes.

Diversity

The EIP concept has caught on nationally. Communities with parks under development include: Baltimore, MD; Burlington, VT; Chattanooga, TN; Civano, AZ; Londonderry, NH; Minneapolis, MN; Oakland, CA; Plattsburgh, NY; Port of Cape Charles, VA; Raymond, WA; Skagit County, WA; Youngsville, NC; and Halifax, Nova Scotia. A site has not been selected for Shady Side, Maryland, while virtual EIPs are planned for Trenton, New Jersey and Brownsville, Texas/Matamoros, Mexico.

These EIPs reflect a broad spectrum of goals, physical structure, managing entities and strategies to achieve resource efficiency, illustrating that there is more than one way to conceptualize and implement the new eco-industrial park approach to sustainable development. Whether all these approaches will prove successful is uncertain.

Parks are in various stages of completion, with a few still in the design stage, some with baseline studies underway or completed, and several already in the recruitment phase. No park is fully implemented, as yet.

Physical features are highly variable from park to park. As noted above, two parks are not places but are virtual EIPs with materials exchanged on a regional network basis. EIPs with physical parks range in size from 3.5 to 7000 acres.

"The Fairfield Ecological Industrial Park in Baltimore's Empowerment Zone has more than 1,300 acres zoned for heavy industrial development, with approximately 60 businesses already opening within the EIP's primary boundary," said Michael J. Palumbo of the Baltimore Development Corporation.

The physical settings also vary: six of the parks will retrofit old industrial or military sites, others will be new developments. While most EIPs are based on manufacturing, two focus on agricultural products, one includes marine technology and aquaculture, and one involves sustainable harvesting of a second growth coastal forested area. Three parks plan to provide scenic landscape or other recreational use in addition to a commercial use.

The government and private sectors typically collaborate to initiate and manage EIP projects. Cities, counties, towns or their development authorities, local economic development corporations, private non-profit organizations and private for-profit organizations have all gotten into the game.

Many conference participants felt that a private sector lead offered advantages of economic efficiency, business buy-in and a source of capital. Environmental performance standards, on the other hand, may be best set by a community-based board, according to some practitioners. Ideally, both public and private sectors will work together.

Goals and Barriers

Economic objectives, such as creating local jobs and increasing the tax base, are stated goals for almost all of the parks. Several EIPs have education as one of their explicit goals. Some parks are visionary, with goals such as: becoming the first multi-modal EIP with an ISO 14000 total environmental management system in the US; becoming a zero-emissions or closed-loop manufacturing EIP; having all major tenants producing sustainable products with a sustainable manufacturing practice, eventually becoming totally energy independent of fossil fuels or outside electricity. However, these goals require identifying and recruiting the types of companies that could enhance each other's resource efficiency.

A common problem is how to design the EIP's industrial ecosystem. Communities need technical expertise to identify possible linkages among firms and their production processes. With rare exceptions, each individual EIP will need to develop its own industrial ecosystem.

Many EIP practitioners felt that obtaining adequate financing can be difficult, because the financial community is often unfamiliar with EIPs and brownfields as investment opportunities. The reason: time frames are longer than those addressed by the typical conventional market rate financing. Several participants expressed a need for a "tool kit" to demonstrate the financial safety of these types of investments in sustainable communities. Measures of financial and environmental success are also needed.

More Information

This thumbnail sketch does not fully reflect the variety in the EIP concept. New projects continue to spring up around the country and not all existing parks were represented at the workshop.

Participants agreed that practitioners should communicate regularly. Although, to date, no formal mechanism has been developed to ensure this, the EIPs will likely organize future meetings on their own. To this end, Brownsville is sponsoring a meeting March 6-7, so interested parties should contact the Brownsville Economic Development Council for more information on the conference at (800) 552-5352.

To enhance communication among EIPs, the U.S. Environmental Protection Agency's (EPA) Urban and Economic Development Division is publishing profiles of the EIPs, including website addresses and contact names on the $mart Growth Network web page at http://www.sustainable.org/ SGN/sgn_index.html.

Contributed by Suzanne Giannini-Spohn, senior policy analyst with the EPA's Office of Policy, Planning and Evaluation.