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Material and Energy Flow Case Study

Kalundborg

One of the classic examples of industrial ecology is the community of Kalundborg, 80 miles west of Copenhagen, Denmark, where an industrial ecosystem evolved naturally as a local community of businesses developed relationships that enabled them to reduce environmental and economic costs by sharing resources as wastes. The Asnaes coal-fired power plant had been emitting steam into the local fjord. In the 1980s, Asnaes diverted its process steam to the Statoil refinery as a source of energy, while extracting waste heat from the steam and funneling it through the community's district heating system. Waste water and cooling water from the Statoil refinery, which previously was a chemical and thermal pollutant to Lake Tisso, and waste gas which had been an air pollutant, was diverted to the power station for power production. Waste gas from the power plant was shipped to a local Gyproc wallboard plant, but because its sulfur content was too high, the sulfur was extracted and shipped to the Kemira sulfuric acid plant, Kemura. Some heat was still wasted at the power plant itself; this was taped to heat water to create a fish farm, which raised trout and also produced sludge, which was used as fertilizer by local farmers. The complex industrial ecosystem was not planned; it emerged spontaneously as a result of communications among the close-knit members of the community. It is doubtful that planners from either government or business could have designed such an efficient system in advance.

Larry's Markets

Larry's Markets is a five-store grocery company based in Seattle, Washington. With strong company support, this small grocery has become a national leader in environmental programs for supermarkets. The Environmental Affairs Program began formally in 1990 with a focus on solid waste issues, but has expanded into a broader program to evaluate and minimize the impact of the company on the environment. For example, the program has expanded to examine the "ecology of markets", seeking to reduce impacts on energy and water use, as well as natural resources. The efforts of Larry's Markets is based on an environmental policy that emphasizes reducing waste, educating customers and staff, and community outreach. A key component of the program is setting long-term goals that provide leadership for environmental quality in grocery stores. In 1992, the program led to savings of more than $20,000 in the first nine months.

Reusable Containers

Reusable containers for shipping products and parts offer significant savings in both costs and resource use. Some examples:

A medical care equipment company purchased 182 reusable shipping containers for delicate instruments, avoiding disposal of 1,100 single-use boxes a year. The containers paid for themselves in two months with the savings in reduced instrument damage.

Replacing waxed cardboard containers used for shipping produce with a reusable plastic container system saves money and reduces landfill disposal. The monthly cost of a reusable system for a farmer in a Washington pilot project, was $692, compared to $2,580 for monthly purchase of waxed cardboard containers. The payback period is 3.5 months. In addition, even small retailers that have produce delivered in reusable containers can save over $100 per month on disposal.

A manufacturing company arranged for parts from a materials supplier to be delivered in a portable returnable container, eliminating 9,100 lb. per year of waste. The new system had a ROI of almost 300%, and a payback of four months. In addition to the cost benefits, the manufacturer did not have to dispose of residue in the container as waste, and they found that the new containers provided for easier material handling and storage.

The Diamond Star Motors facility in Illinois has switched to reusable pallets for parts shipment. The program startup cost was $100,000, while the materials cost savings was almost $600,000. The program paid for itself in less than two months, resulting in savings of $40,000 monthly and an annual ROI of 600%. As a result of this change, the company avoids landfill disposal of about 48,000 pallets annually.

Xerox Corporation initiated a program for reusable parts shipping containers and carts, reducing the need for new cartons and wood pallets. The program saves up to $15 million annually, and avoids the generation of 10,000 tons of waste. Baltimore Gas & Electric's waste prevention and recycling activities saved over $145,000 in 1993, with much of the savings resulting from the use of returnable wooden cable reels and reconditioned pallets.

Proven Alternatives: Energy Efficiency Upgrades

Proven Alternatives, an energy efficiency consulting company based in San Francisco, conducted an energy efficiency pilot program for Portland General Electric energy savings. Proven Alternatives conducted assessments of 15 buildings in the area, and installed a number of improvements -- primarily lighting systems with T8 energy efficient compact fluorescent lamps and electronic ballasts. Other changes such as custom lenses and reactors and programmable thermostats were installed. These projects resulted in a total savings of 3.7 million kilowatt hours, almost 40% more than expected, and total savings of $215,000 a year. The upgrades cost $100,000 after a utility rebate of almost $50,000, and annual savings of $21,000, for a five year payback at one commercial office building in the project. Results in other buildings were similar. What the results do not show, however, is the improved efficiency and productivity that often accompany lighting upgrades, as documented in Lean and Clean Management.

Lockheed Building 157

Lockheed's Building 157 in Sunnyvale, completed in 1983, is a prime example of the broader benefits of energy efficiency. The building was designed by Leo J. Daly with energy efficiency in mind. While this added $2 million to the overall $50 million price tag for the building, the energy savings due to the daylighted facility and lighting improvements were nearly $500,000 a year. More important, the improved productivity from reduced absenteeism, due in large part to the lighting, as well as the layout of the facility and noise control measures, paid for all of the extra cost of the building in the first year. Productivity rose 15% on the first major contract done in the building, and the improved productivity may have played a major role in Lockheed's winning a $1.5 billion competitive contract. Source: Joe Romm, Lean and Clean Management.

EPA Green Lights

Green Lights is a voluntary program for businesses, institutions, and others to reduce energy consumption through the use of improved lighting systems. Those that sign a Green Lights Memorandum of Understanding agree to: survey domestic facilities, upgrade lighting where profitable, complete the upgrade within 5 years, assign an implementation director, and endorse the Green Lights concept. The basic concept is that reducing commercial/industrial lighting use can reduce overall electricity use nationwide by 10%, resulting in substantial reductions in carbon dioxide, nitrogen oxides, and sulfur dioxide emissions, and this can be done at a profit for the company. Participants report their plans and progress to the EPA, and may use promotional materials about Green Lights. There are almost 500 corporate participants. The investments typically involved changes in the type of fluorescent lamps, switching from magnetic to electronic ballasts, using compact fluorescents rather than incandescent lamps, and using timed or motion sensor switches. Lighting electricity reductions among the 12 companies that were highlighted in an EPA report ranged from 25% to 82%. These companies received grants or rebates of up to $2 million for the investments made.

In addition to the cost savings, the Green Lights program has resulted in energy savings, and reductions in carbon dioxide, nitrogen oxides, and sulfur dioxide emissions. Lighting upgrades also result in improved productivity. For example, at the Cosmair Inc. Clark Manufacturing Facility for L'Oreal products, production more than doubled after the Green Lights. The increase was due to equipment improvements, reduced energy use, and a new chilled water system financed by energy savings from lighting improvements.

Sources: U.S. EPA, Green Lights, An Enlightened Approach to Energy Efficiency and Pollution Prevention. July 1993 and EPA, Green Lights Update, November 1994.

DuPont's Energy Policy Programs

DuPont's Jump Start program exemplifies the benefits of starting with the easy options first. Jump Start operated for three months in the fall of 1993 as a small component of the broader long term goal of 15% improvement in energy efficiency by 2000. The goal was to reduce DuPont's purchase of electricity and energy fuels by 5% within the 120 day period, with a goal of saving $10 million. By making a number of improvements with low to no capital cost, the savings exceeded the goal, reaching almost $13 million. An energy network was established across DuPont's locations, and using a series of energy tools such as surveys and guidelines, identifying energy savings options for each of the 25 plants with the greatest energy consumption. Actions included shutdown of spare or unneeded equipment, tune-up and optimization of systems and processes, re-negotiation of fuel, electricity and services contracts, electrical peak management, fuels inventory reduction, HVAC system management improvements, and other system or process improvements.

Hyde Tools: Pilot Projects

Hyde Tools, a 300 employee manufacturer of cutting blades, conducted a pilot for their lighting upgrade. In one area of the facility, Hyde switched to high-pressure sodium -vapor and metal-halide fixtures. The project had a total cost of $98,000, with about $48,000 covered by a utility rebate. The energy savings were an estimated $48,000, for a payback of about 1 year. Hyde left the original lighting in place, and after a six-month trial period, turned back on the old lights, at which time there was a "near riot of disapproval." Because new lights made it possible to see dirt that was damaging the blades, the quality of the product and employee satisfaction were improved. The improved quality was worth another $25,000 a year to the company.Source: Joe Romm, Lean and Clean Management

GM's Saturn Facility, Spring Hill, Tennessee

GM designed a new system into the Spring Hill facility to increase efficiency and improve productivity -- that also reduce waste. Where purchase orders and invoices were once the norm, there is no paper involved in the process of ordering and paying for components purchased from suppliers. Information technology, including a production schedule database and electronic data interchange have enabled Saturn and their suppliers to operate essentially as one company. The on-line manufacturing database is accessible by component suppliers -- who consult the production schedule and deliver the appropriate parts to the plant as needed. After the parts are shipped, the vendor sends an electronic message to Saturn identifying the parts that have been sent, the clerk receiving the goods scans a bar code to identify them, including where in the plant to send the goods, and initiates payment to the vendor -- all without paper.Source: Michael Hammer and James Champy, Reengineering the Corporation, 1993.

Dow Chemical's Continuous Improvement

Dow Chemical's Louisiana Division exemplifies continuous improvement. In 1982,the Louisiana Division began a yearly contest for employees to find energy saving projects that paid for themselves in less than a year and that cost less than $200,000. In the first year, employees came up with 27 winning ideas with an annual ROI of 173% and a cost of $1.7 million. While many at the facility felt that additional savings could not be found, the second year results were even better, as illustrated in the table, below. The contest rules were changed after the first two years to eliminate the $200,000 cost limit and to include savings from increased production yield or capacity,and all types of waste reduction. The results of this ongoing effort have been impressive. The number of winners has increased five-fold in the twelve years of the program. Since 1982, the Louisiana Division has audited 575 energy and waste reducing projects, ranging from simple energy saving ideas to sophisticated process redesign. The average ROI is 204%, and the annual savings is over $110 million.Louisiana Division Waste and Energy Reduction Award Project Summary

The program is institutionalized now as part of Dow's Waste Reduction Always Pays (WRAP) program, which officially began in 1986. Dow publishes a Waste Elimination Ideas Book, and set up a 2 1/2 day "Continuous Process Improvement Workshop." After the workshops were set up, the number of winning projects in the Louisiana Division's annual energy/WRAP contest increased significantly. Dow expanded the program to all their facilities, still with an emphasis on continuous improvement. Some example projects at Dow facilities:

The Barrier Films Department in Ohio made a variety of equipment changes and adopted a new roll grinding system that yielded a 500,000 lb. a year reduction in materials going to landfills, and a cost savings of $130,000 a year.

A task force at the DowBrands facility in Wisconsin developed a material yield program that included daily waste measurements, establishment of goals to reduce waste, and problem identification. Production line waste was reduced by 77% -- and 85% of the waste that is generated is recycled. Project savings are over $300,000, and the quantity of material landfilled each quarter dropped from about 150 tons to 5.

At the Anion Exchange Resins Plant in Michigan, the plant's waste reduction team identified product losses to process water as an area with great reduction potential. After reviewing the process control system, the team modified the control scheme to recover methanol that was previously lost to water. The team also identified additional equipment needs that eliminated production capacity losses during distillation. Methanol loss was reduced by 660,000 lb. a year, saving $59,500 in product and $30,000 in waste water treatment costs.

A waste reduction team at Dow's Western Division in California identified opportunities to increase the recovery and reuse of a reactant that was previously incinerated after one use. The process has reduced consumption of fresh reactant by 80%, reducing the amount of waste to be treated by 2.5 million pounds, and saving well over $750,000. At full capacity, the savings from yield, raw materials, environment, and labor are expected to be $8 million annually.

CFC emissions were reduced by 87% from 1986 to 1990, saving over $1.6 million while production at the FilmTec plant tripled. A waste reduction team identified a number of projects to reduce CFCs, including addition of distillation equipment, a carbon absorptive system, and specialized equipment to remove water from recovered CFCs so it could be reused. The team also upgraded equipment, improved process controls, and increased operator training.

Employees at a DowBrands manufacturing facility in Rhode Island identified defective STAINSTICK® , which was at about 2% of total product -- and incinerated -- as a waste reduction opportunity. They introduced a variety of continuous improvement tools such as statistical process control to provide data and identify and prioritize problems. The team worked with suppliers and various departments to reduce losses by 75% and 58% for the two sizes of STAINSTICK®, resulting an an annual savings of $150,000.

Employees at the latex plant in Michigan saw a number of opportunities to reduce waste by evaluating each aspect of latex production -- both equipment and procedural steps. Improvements ranged from complex chemical engineering changes to common-sense housekeeping options. Ideas were generated by individuals and teams, and none required major capital investments, while several decreased operating costs. The changes resulted in an 80% reduction in latex waste to the landfill, 50% reduction in waste to the incinerator, and a 78% reduction in air emissions, saving $700,000 a year in environmental costs and improved yield. The lessons learned at the Michigan plant have been applied at other Dow latex plants, including a new facility in Thailand.

Employees at the Dow facility in Pittsburg, California modified the production process to scrub the hydrochloric gas with water and then with caustic, salvaging a portion of the hydrochloric acid wastestream for reuse elsewhere in the plant. The project cost $250,000, and saves $2.4 million annually, a 960% ROI and payback of only 5 weeks.

Sources: Mark H. Dorfman, in Pollution Prevention Review, Autumn 1992, and Joe Romm, Lean and Clean Management.