eco industrial net

7/29/2019 Eco Industrial Net

1/17

Corporate Social Responsibility and Environmental ManagementCorp. Soc. Responsib. Environ. Mgmt 9, 170185 (2002)Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/csr.20

REGIONAL INDUSTRIALRECYCLING NETWORK IN

ENERGY SUPPLY THE CASE

OF JOENSUU CITY, FINLAND

Jouni Korhonen,1* Heikki Niemelainen2 and Kyosti Pulliainen2

1 Lahti Polytechnic, Finland2 University of Joensuu, Finland

Industrial recycling networks offer anexample of the practical application ofsome of the industrial ecology (IE)principles. In the industrial ecosystem andeco-industrial park approaches thematerial cycles and energy cascades in anatural ecosystem serve as the metaphoric

vision for a local/regional industrialsystem in which waste material and waste(residual) energy are utilized throughcooperation between the actors in thesystem. In this paper, a local/regionalrecycling network scenario is presentedwith the energy supply system of the cityof Joensuu in Finland. The conditions ofsuccess include the co-production of heatand electricity (heat and power, CHP),waste energy utilization for industrialsteam and renewable flow use as fuel.Some difficulties in the industrialecosystem-type development of thesystem are discussed. Methodologicalsuggestions for industrial ecosystem andeco-industrial park case studies are

* Correspondence to: Dr Jouni Korhonen, Department of Eco-nomics, University of Joensuu, PO Box 111, 80101 Joensuu,Finland. E-mail: [email protected]

Copyright 2002 John Wiley & Sons, Ltd and ERP Environment.

considered and the experience from thisFinnish case is discussed in terms of widerapplication of IE in local/regionaleconomic energy systems. For futureresearch on the theme, it is suggested thatregional industrial ecology may benefitfrom regional economics theory and, vice

versa, regional economics theory may finda new area of application in regionalindustrial ecology. Copyright 2002 JohnWiley & Sons, Ltd and ERP Environment.

Received 14 March 2001Revised 9 November 2001Accepted 13 January 2002

INTRODUCTION ON THE

ECONOMICS OF THE WORLDSENERGY PRODUCTION

DEVELOPMENT

Energy production and use is an impor-tant focus point for environmentaland ecological economics, environmen-

tal policy and industrial or corporate environ-mental management, because on a global scale,it still relies to a large extent on the use ofnon-renewable and emission intensive fossil

raw materials. Carbon dioxide (CO2) emissions


2/17

REGIONAL INDUSTRIAL RECYCLING NETWORK IN ENERGY SUPPLY

increase the risk of climate change and otheremissions from fossil fuel use such as sul-

phur dioxide (SO2) create various forms ofenvironmental burden, e.g. acidification.

If we consider the evolution of global energyproduction and fuel use from the perspec-tive of environmental or ecological economics,policy and management, the following pointsdeserve attention. First, the industrial revo-lution has substituted the use of renewablesand biomass with non-renewable fossil fuelssuch as coal and oil. This has been consideredas economical, because it has been possible

to rapidly produce large amounts of energyfrom fossil fuels that have higher energy con-tent than biomass fuels. Second, during thelast two decades, environmental concerns haveraised awareness on the need to substitutethe non-renewables with renewables or withwaste fuels to control the risks involved, e.g.with climate change. Third, despite the factthat approximately 80% of the worlds energyproduction is still based on fossil fuels, thereare countries, regions and locations wherealready for decades considerable amounts ofthese fuels have been substituted with renew-able flows. Renewable natural resources and(renewable) waste fuels can reduce the fossilfuel consumption, and, therefore, the emis-sions, but it must be noted that most of thesearrangements have been made on the basisof straight economic profitability calculationswith few, if any, concerns for environmentalissues.

Fourth, in addition, of course, there still existregions in the outskirts of urban conglomer-

ates where the use of renewable sources forenergy has been and continues to be the onlyavailable alternative. In these cases, the sub-stitution between fossil fuels and renewablefuels is simply impossible. Neither environ-mental awareness nor environmental policyand management have played any major rolein the energy decisions of these areas or ruralareas. Renewable flows have been the onlyalternative.

RESEARCH QUESTION

It seems that the already existing examplesof fossil fuel reduction need to be identifiedmore clearly and documented in order to

benefit when developing environmental pol-icy and material and energy flow manage-ment for energy systems in other parts ofthe world. Heat and electricity are neededpractically everywhere to support residentialrequirements as well as industrial processes.This paper adopts an approach for local indus-trial recycling networks, which have been dis-cussed under the emerging field of industrialecology, particularly with the local/regionalindustrial ecosystem (IE) or eco-industrial park(EIP) concepts. In the local industrial ecosys-tem vision, the effort is to consider the poten-tial in and facilitate the emergence of a localco-operative material and energy flow manage-ment scenario, in which companies and otheractors involved use each others waste materialand waste (residual) energy flows.

The important point in IE is that the focus ison the environmental burden of the system as awhole, such as an energy supply system withvarious producers and industrial as well ashousehold consumers instead of an individualcompany, a process, an individual product ora waste flow. We consider this approach with acase of an existing situation and with a scenariofor arranging a local/regional energy supplysystem into waste utilization. The case comesfrom the region and the city of Joensuu locatedin Eastern Finland. The final part of the paper

identifies conditions of success of the recyclingefforts and discusses some of the problemsinvolved. Initial suggestions for methodologyon local recycling network research are brieflyconsidered. We also suggest that industrialecology and industrial ecosystem studies couldgain from regional economics theory and, viceversa, regional economics theory could find anew area of application in industrial ecosystemcase studies.

Copyright 2002 John Wiley & Sons, Ltd and ERP Environment Corp. Soc. Responsib. Environ. Mgmt 9, 170185 (2002)

171


3/17

J. KORHONEN H. NIEMELAINEN AND K. PULLIAINEN

INDUSTRIAL ECOLOGY AND

RECYCLING NETWORKS

Industrial ecology as a field and the industrialecosystem approach as its most commonlyused practical application surfaced into popu-lar industrial environmental management dis-cussion with the publication of a Scientific

American article by Frosch and Gallopoulosin 1989 (Strategies for manufacturing). Theappeal in the concept lies in the analogywith a natural ecosystem, when designingindustrial structures. In nature, a local ecosys-

tem operates according to material cycles andenergy cascades, i.e. waste material and resid-ual energy utilization through co-operationwith producers (plants), consumers (animals)and decomposers or recyclers (bacteria, fungi)(see Husar, 1994).

The IE analogy is perhaps easiest to under-stand and grasp with the local industrial recy-cling network perspective, the approach ofan eco-industrial park or a local industrialecosystem (Cote and Hall, 1995; Gertler and

Ehrenfeld, 1996; Ehrenfeld and Gertler, 1997a;Cote and Cohen-Rosenthal, 1998; Baas, 1998).In a local industrial ecosystem, analogously toa local natural ecosystem, the actors involvedutilize each others waste material and residualenergy flows through co-operation. If success-ful, the virgin input as well as the waste andemission outputs from the system as a whole isreduced, when waste serves as a resource withvalue to the actors involved. The potential inthe highly visualized picture of a local indus-trial ecosystem is obvious. Indeed, it seems thatsuch a co-operative industrial system, wherethe system as a whole is a more importantfocus point than an individual actor, processor product, could constitute a common goalor a desired outcome of the various strategies,approaches, techniques and tools now appliedin corporate environmental management. IEmight provide a vision toward which environ-mental policy instruments, e.g. taxes or directlegislation, should aim.

Some features that under certain conditionscan yield industrial ecosystem-type develop-

ment can be discussed (Korhonen, 2000, 2001a,2001b), but it must be acknowledged that anykind of universal design principles will be verydifficult to construct for regional industrial net-works that naturally are different from eachother. It is clear that the development of coop-erative industrial ecology-type material andenergy flow structures is always dependent onthe various situational factors that are distinctfor the region and for the industrial system inquestion.

However, with the IE literature and with thefew case studies it can be concluded that anoptimal local industrial ecosystem facilitatesthe emergence of material cycles and energycascades for utilizing the wastes of the actorsin the system. The system would also include adiversity of firms as well as other societal actorssuch as a municipal organization or house-holds. Diversity in the supply of waste (sup-pliers) and demand (customers, cooperationpartners) for waste could contribute to the sta-

bility and to the continuation of the recycling

activity of the system and could hence secureits sustainability, when one actor departs forexample. Instead of competition, the diversityin the actors involved and in their material andenergy flows would result in co-operation andinterdependent relations between the compa-nies. To minimize the side-effects of recyclingsuch as transportation and the consumptionof energy, an industrial ecosystem would notonly recycle, but in addition rely on, mate-rials and energy (wastes) that originate fromand are also consumed within the geographi-cal boundaries of the local system (Korhonen,2000, 2001a, 2001b).

JOENSUU CITY ENERGY SUPPLY

SYSTEM

As with all analogies or metaphors, theirusefulness must be carefully considered. Itseems that in philosophical or metaphoric


172


4/17


terms, industrial ecology can be very fruitfulfor the comparison of two material and

energy flow based systems, of which the otherone is sustainable while the other one isnot (Ehrenfeld, 2000). In practical terms, thesuccess of the approaches that the conceptyields must be considered in light of theability to reduce the environmental burdenof an industrial (societal) system. Only fewdocumented case studies exist on the localindustrial ecosystem, the most famous beingthe Kalundborg industrial district in Denmark(Tibbs, 1992; Gertler and Ehrenfeld, 1996;Ehrenfeld and Gertler, 1997a; Schwarz andSteininger, 1997). In Kalundborg, the firmshave developed complex waste material andwaste energy utilization networks throughspontaneous and self-organized developmentin the course of 30 years.

In this part of the paper, the Joensuu cityenergy supply system in Finland is presentedto serve as an example of a recycling network.

Joensuu is the centre of eastern Finland,with a population of approximately 55 000, auniversity and a region with forest products,

metal and plastic industries and vast forest andpeat reserves. As noted above, the experienceson the application of the industrial ecosystemapproach are still very limited. Finland canpresent suitable conditions with which one candevelop the concept and consider sustainablematerial and energy flow arrangements inpractice. There are vast renewable naturalresources and a low population density in thecountry.

In Finland, the annual cuttings of the forestsare less than the annual growth. The forestecosystem is able to bind more carbon dioxidefrom the atmosphere than the amount ofcarbon that is released through cuttings andnatural drain (Kauppi et al., 1992). The forestindustry corresponds to approximately 30% ofthe national exports. Around 90% of the mainproduct of the forest industry, which is paper,is exported, for instance, to Central Europe,e.g. to Germany. One-third of the land areain the country is covered by peatlands and

the annual use of peat is less than its growthif integrated over all peatlands in Finland.

Therefore, some argue that peat can be definedas a slowly renewable natural resource inFinland and it can also serve as a carbonsink (see Selin, 1999; Savolainen et al., 1994;Lappalainen and Hanninen; 1993). Of course,in a certain local peatland, the reproductionof the amount of extracted peat can takethousands of years.

One should also note that Finland is a north-ern country with a cold winter. Because of thewinter, there exists demand for heating sys-tems, among which the district heating systemis the most important in terms of suppliedenergy in Finnish towns and other denselypopulated areas such as Joensuu city and

Jyvaskyla, another middle class size city ofapproximately 80 000 inhabitants located insouthern Finland (Korhonen et al., 1999). Theconsumption of external fuels in the Jyvaskylaenergy supply system, e.g. of imported fossilcoal and oil, is 40% lower than it would bewithout waste utilization strategies, and thishas reduced the costs of the district heating net-

work (Korhonen et al., 1999; Korhonen, 2000).Waste material and residual energy utilizationis now relatively common in Finnish cities.This has secured the economics of district heat-ing networks that require heavy investments(Myllyntaus, 1991; Korhonen et al., 1999). Inthe Finnish industries, the utilization of wastesand the sustainable use of local renewableresources have been enhanced by the increasein the price of round-wood in the marketand the high costs of imported fossil fuelssuch as coal and oil. There are also energyintensive sectors, e.g. forest, pulp and paperproduction, where the demand for heat (pro-cess steam) extends beyond the cold part ofthe year. These sectors provide various formsof wastes that are suitable as local fuels inenergy production (e.g. saw mill and pulpmill wood wastes, black liquors, paper wastesetc).

Figure 1 describes the utilization of wastematerial and residual energy within the


173


5/17


Sirkkala powerplant

- co-production ofheat, electricityand industrialsteam (fuel

efficiency 82%)

Valiomilk

productsfactory

Schaumanplywood mill

Wasteheat asprocess

steam

The city,consumers,

households,services, industry

The city,consumers,

households,services, industry

householdwastes for fuels

electricity

Districtheat(wasteenergy)

uelKuhasalo waste

water treatment plant(internal biogassutilisation forenergy)

Separatedsolid particlesfrom waste

Localagriculture

wastederivedfertilizer Wood waste

as fuel from 0km (10% ofthe Sirkkala

fuels)

Renewableflows as fuelsfrom 10-80 km:

-peat (50% ofthe Sirkkalafuels)-forest residues

(40%)

Waste ashfor fertilizer

Landfill gas(CH4) for fuel

Kontiosuo

landfill

Figure 1. Utilization of waste material, local renewables (within the radius of 10 80 km) and residual energy in theJoensuu energy supply system. The use of external fuels is non-existent. The system is able to supply all of the district

heat and process heat required and approximately 60% of the electricity demand of the local actors

Joensuu city energy supply system. The pic-ture is based on a scenario that is cur-rently (spring 2001) being considered bythe companies and the public authoritiesin the city (City of Joensuu, 2000). In thelast part of our paper, we shall discussthe other alternatives and the final deci-sion made in the region. However, manyof the described elements in Figure 1 arealready in place in the Joensuu energy supplysystem.

In the scenario, the Sirkkala power plantand its owner, The Joensuu Energy Company,

produce and distribute electricity and districtheat to the city, to all consumer households,services and industry. The plants capacitymeets the requirement for all heating andtwo-thirds of the electricity need, the rest ofwhich will be bought from elsewhere, e.g. froma national electricity grid. It also generatesindustrial steam to be used in the Schaumanplywood mill and in the Valio dairy and milkproduct factory located in the same block as

the power plant. The power plant applies themethod of co-production of heat and electricity

(CHP, Cogen, 2000, 1997; Lehtila et al., 1997),in which the waste energy from electricityproduction is used for district heat and forindustrial process heat and steam insteadof dumping the energy into the local watersystem or into air.

In Table 1, the fuel input and the fuelprocurement distances of the energy supplysystem are given (City of Joensuu, 2000).Approximately 50% of the fuels are localpeat resources derived from within the radius

of approximately 10 80 kilometres. The useof imported fossil coal and oil is virtuallynon-existent, because the remaining 50%, or

Table 1. Fuel input to Joensuu energy supply systemand the fuel procurement distances

Peat 500 GW h (50%)/year, 10 80 kmForest residues 400 GW h (40%), 1060 kmWaste wood 100 GW h (10%), 0 km

Total 1000 GW h


174


6/17


possibly up to 60%, of the fuel demand ismet with local wood wastes. The Schauman

plywood mill wood wastes constitute 10% ofthe fuels and forest residues from cuttingslocated within the radius of approximately60 kilometres constitute up to 40%. A smallfraction of the fuels can be gathered from localKontiosuo landfills when biogas (methane,CH4) is transferred through pipelines. In alocal Kuhasalo waste water treatment plant,solid material particles are separated from themunicipal and industrial waste waters andmanufactured into solid products suitable forfuels in the Sirkkala power plant (alternativelyfor fertilizer in the local agricultural farms).The waste water treatment plant also recovers

biogas from the sewage and waste waters tosatisfy its own demand for heat and electricity.These activities are likely to increase in the nearfuture and further substitute the peat use of theenergy supply system.

Table 2 describes the energy production inthe Sirkkala power plant based on the fuelinput of peat and waste wood in Table 1. Ina normal power plant, where only electricity is

produced, about 40% of the energy embeddedin the fuels can be utilized while the rest isdumped as waste (heat) into the environment.The Sirkkala power plant can achieve afuel efficiency of up to 85%, because of thecombined production of electricity, districtheat and industrial steam (i.e. from waste heat).The remaining 15% is released in the formof waste water into the local Pielinen riverecosystem.

In Table 3, the SO2 and CO2 emissions of theenergy supply system are presented. Because

Table 2. Energy produced and the fuel efficiencyof production in the Joensuu energy supply system(based on fuel use in Table 1)

Electricity 230 GW h (28%)/yearDistrict heat 480 GW h (59%)Industrial process steam 110 GW h (13%)

Total 820 GW h

Fuel efficiency 82%

Table 3. SO2and CO2 emissions andincineration ash output of the Joensuuenergy supply system

SO2 emissions 520 t/yearCO2 emissions 440 000 tIncineration ash 12 000 t

no fossil fuels are used in the Sirkkala plant,the emissions are relatively low. A similarstudy on the Jyvaskyla city energy supplysystem showed that the CHP method andthe input waste wood fuel share of 20%(the rest mainly peat) created a situation

in which the SO2 emissions are more than50% lower and the CO2 emissions morethan 30% lower than without these twofeatures of waste utilization (waste heat, wastewood) (Korhonen et al., 1999). In addition,incineration ash is created in the energyproduction in Sirkkala. The ash is transportedand placed in the Kontiosuo landfill of thecity. As noted above, the wastes also includethe remaining 15% fraction of the fuel energythat cannot be utilized. Minor amounts ofother wastes, e.g. oils from the machines ofthe power plant or hazardous wastes, aregenerated.

SOME CONDITIONS OF SUCCESS

In the following section, some conditions ofsuccess of the Joensuu system are consideredin terms of waste utilization and these arecompared with the difficulties involved. Thefinal section presents some initial proposals for

research methodology in the light of IE and EIPcase studies.

Renewable flows as fuels

The Sirkkala power plant applies the tech-nique of fluidized bed burning, which, whencompared with older techniques of pulver-ized coal burning in use in many powerplants, enables a relatively diverse fuel basis.Biomass and other heterogeneous fuels such


175


7/17


as waste derived fuels can be used in theproduction of energy. It can be argued that

the power plant is highly advanced in envi-ronmental terms when its fuels are consid-ered. All the fuels are local renewable flowresources and the use of imported fossil fuelsis non-existent. In other words, through sus-tainable use of local renewables (peat) andwaste flows the demand for heat and electric-ity within a city of 55 000 inhabitants can besatisfied.

The ability of the system to rely entirelyon renewable flows as inputs is important interms of the industrial ecosystem approach.The often cited Kalundborg system (Ehren-feld and Gertler, 1997a) is an example ofa waste utilization network, which can off-set the environmental gains that are achievedthrough advanced recycling because of eco-nomic growth. Kalundborg still relies on twokey actors, a coal-fired power plant and an oilrefinery, that use non-renewable and emissionintensive fossil fuels (imported) as the systeminput.

Co-production of heat and electricity

The CHP method has been applied on alarge national scale in only three countriesin the world. The share of co-generationfrom the total national electricity generationin 1999 was 50% in Denmark, 40% in TheNetherlands and 35% in Finland, while theEU average is approximately 8% (Cogen,2000, 1997; Lehtila et al., 1997). Because ofthe UN framework convention on climatechange and the Kyoto protocol, it is likelythat the EU targets for CHP will rise con-siderably in the near future. The utilizationof waste energy from electricity productionfor district heating is an environmentally

benign alternative for energy supply of manyregional energy systems. The climatic condi-tions and other factors that create demandfor district heating, e.g. concentrated demand,exist in many parts of the industrializedworld.

Industrial steam production from waste energy

As noted above, a normal electricity plant

can achieve a fuel efficiency of approximately4045%. The Sirkkala plant can have anefficiency of up to 85%. The waste heatfrom electricity production is used for districtheat and industrial process heat/steam. Theold Schauman power plant that is currentlyproducing energy for the Schauman plywoodmill has a lower efficiency compared with thenew plant and it is able to produce energyonly for industrial requirements. Because ofcombined production of the three products,

the fuel efficiency of the city energy supplysystem can be increased and the emissions areeasier to monitor and manage. There is onlyone main source of emissions in the proposedscenario.

The integrated production model of the sys-tem could open the eyes of environmental pol-icy planners and industrial managers towardswider combination of heavy industrial sys-tems and end-consumption systems such ascity or residential heat and electricity sup-ply. There are 11 large local forest industry

systems in Finland called integrates, whichapply the CHP method and wood waste (e.g.from saw mills, pulp mills) utilization for theindustrial electricity and heat demand. Manyof these are located near a city or a residen-tial concentration. Given certain conditions,e.g. close proximity and increase in the energyefficiency, the waste heat from these indus-trial systems could be sold outside, to thecity district heating networks. In addition, thewood waste from the forest industry operation

could be used as fuel in the city energy supplysystem. Correspondingly, the city could pro-vide household wastes (source separated) to

be used as fuels in the forest industry energyproduction.

In the Joensuu system, the energy can beutilized in three quality, temperature andpressure levels: the highest level for electricity,the second for industrial steam and the thirdfor district heat. The fourth level is releasedinto the local water ecosystem. The energy


176


8/17


utilization serves as an example of the cascadechain approach (Sirkin and ten Houten, 1994),

where the aim is to extent the utilization timeand the economy of a resource. The use ofwaste energy (and waste material) creates costreductions, because the costly and importedfossil fuels can be minimized.

Local conditions

Finland may provide the ideal of industrial-ecosystem-type sustainable material andenergy flow structures with a fruitful testing

ground. This is because of the many situa-tional factors. As noted above, in Finland, thelow population density with vast renewableresources, demand for heating as well as forindustrial energy, the existence of industriesthat generate wastes that can be used as rawmaterials and for energy and costs of round-wood or imported fuels are contributing to theefforts to develop material cycles and employenergy cascades.

DIFFICULTIES IN THE INDUSTRIALECOLOGY DEVELOPMENT OF THE

SYSTEM

Peat use

The use of peat reserves for fuel must be seenas a problem of industrial-ecology-type systemdevelopment in Joensuu. Peat is, at most, a veryslowly renewable natural resource, althoughthe reserves are vast in Finland. Substitutes forpeat fuels could be developed through the useof household wastes from the city, but theseefforts are still only at an experimental level.In theory, the burning technology for thesepeat substitutes exists, but problems occur ifthe wastes, e.g. wood or paper originated,are not separated adequately. Furthermore,the separation of landfill gas for energy is apotential future option as well as the separationof solid particles from municipal waste watersthat can be used as fuels.

Nutrient cycles of forest ecosystems

From a perspective of CO2 and other emissions

as well as the reduction of imported fossil fuelsin the energy supply system, the utilization oflocal forest residues from cuttings seems likea preferable alternative, also for substitutingpeat fuels, but forest residues, e.g. twists,

bark, branches or needles, contain the highestamount of bace cation (BC) nutrients, such ascalcium (Ca2+), magnesium (Mg2+), potassium(K+) and sodium (Na+), in trees. Therefore,when increasing the share of industrial fuelsderived from forest residues, the amount of

important nutrients that are isolated from theecosystem nutrient cycle is increased. It will bevery difficult to determine whether the alreadyhigh share of renewable flows should befurther increased by using the forest residuesand hence risk a problem displacement in thenutrient removal. Some studies have indicatedthat it is possible to use the power plantgenerated incineration ash (wood origin) asfertilizer in the forest ecosystem and in thisway return some of the bace cation nutrientsto the ecosystem cycle (Ranta et al., 1996).

However, the ash contains cadmium and otherheavy metals and the storage, spreading andoptimal release rate may cause problems,also in the forest ecosystem. For example,imbalances in the pH levels, reduced growthof trees or acidification can result when ash isused as fertilizer.

Waste heat in water

The environmental impact assessment per-formed for the Sirkkala power plant project(City of Joensuu, 2000) revealed only minorimpacts that arise because the plant releaseswaste heat in the form of water flows tothe Pielinen river ecosystem. For instance,the heat might reduce the natural formu-lation of ice in the river. However, alter-native options for the waste water dis-posal could be considered. At Kalundborg,waste heat from energy production is usedfor heating a local fish farm, which can


177


9/17


benefit from increased growth and reproduc-tion (Ehrenfeld and Gertler, 1997a). Similarly,

in the Jyvaskyla energy supply system, wasteheat is used for heating local greenhousesand the horticultural centre (Korhonen et al.,1999).

Landscape and scenery

On the basis of the publicly discussed envi-ronmental impact assessment for the Sirkkalapower plant project (City of Joensuu, 2000)it seems that perhaps the biggest public con-cern among the local inhabitants of Joensuuwill arise because the power plant pipes arealmost 80 metres high and hence affect thelandscape and the aesthetic value of the neigh-

bourhood. The plant building is 50 metres highand it will be located quite near to the citycentre. Some argue that, because the townpopulations in Finland are still in many casesfirst generation city dwellers, people find itdifficult to accept heavy industrial arrange-ments near houses and prefer factories andplants to be isolated from households. There

seems to be no other technologically feasibleand cost efficient power plant technology thatwould result in smaller and lower pipes andsmaller plant building. On the other hand,the high pipes might be preferable for thelocal inhabitants, because emissions are dis-tributed over larger geographical areas (whichof course does not reduce the total amount ofemissions).

Economic and employment issues

As noted above, the described Sirkkala powerplant is currently at a scenario level. The envi-ronmental impact assessment for the projecthas been discussed in various forums (Cityof Joensuu, 2000). Currently, the Kontiosuopower plant produces energy for the cityincluding electricity and district heat. Thematerial and energy flow structure is to a largeextent the same as in the proposed systemdriven by the Sirkkala power plant. Therefore,

the situation is already relatively advanced inenvironmental terms. The main difference is

the ability of the new proposed Sirkkala plantto integrate the production of electricity anddistrict heat to the production of industrialsteam.

Today industrial steam is produced sepa-rately in the old Schauman plywood mill boilerwith lower fuel efficiency. In the integratedscenario, one could close the operation of the

boiler. Therefore, only one power plant wouldexist in the region, and perhaps in this way thecontrol and operation costs could be reduced.

As noted above, improvements in the monitor-ing of the emissions could also be achieved. Ithas been argued in the discussion between thedecision-makers in Joensuu that this new solu-tion with the Sirkkala power plant is prefer-able to the Joensuu energy company. In thespring of 2001, the company was buying itsenergy from the Kontiosuo power plant andwas only in charge of the distribution of elec-tricity and district heat to the consumers. Itmight be in the companys interests to pro-duce the energy it distributes itself. As notedabove, the Sirkkala power plant is a scenario.In the last part of our paper, we shall discussthe other alternatives and what was the finaldecision.

Some conflicting interests might occur if theKontiosuo power plant were closed and substi-tuted with the Sirkkala power plant and withthe related system scenario described above,

but some views have also been presented argu-ing that the Kontiosuo power plant wouldcontinue to produce only electricity to be sold

to Joensuu energy company, which handles thedistribution. Some argue that Fortum energy,which has been the owner of the Kontiosuopower plant currently in operation and supply-ing the energy to the city, will lose in terms ofmarkets and in terms of employment in Joen-suu if the Sirkkala plant is established. Thefact that this new plant would derive approx-imately half of its fuel inputs from the localforest residues can be seen as a significant


178


10/17


factor promoting local employment opportu-nities. Hence, although important nutrients

are removed from the ecosystem through for-est residue use as fuels, this might be themost preferable solution for further substitut-ing peat fuels in the new plant. The use offorest residues is considerably more employ-ment intensive (separation, recovery, transportetc) than the use of saw mill or plywood millwood wastes. If the entire wood waste shareof the fuel input of Sirkkala plant (50%) could

be satisfied with local forest residues, up to90100 additional jobs could be created, whencompared with a situation in which all of the

wood wastes are derived from plywood millsor saw mills.

METHODOLOGICAL IMPLICATIONS

FOR RESEARCH ON INDUSTRIAL

ECOSYSTEM CASES

The concepts of eco-industrial park and indus-trial ecosystem are mostly at an early devel-oping level with only a few observed casestudies in practical industrial environmen-

tal management situations. There seem tobe two broad approaches in the researchon local recycling networks. Some scholarstry to map out initial design principles orsuggestions with which one could intention-ally plan a new eco-industrial park projectfrom the beginning, while others choose todescribe existing cases and draw propos-als for further development of other sys-tems from these or build on the existingstrengths when developing the actual sys-

tem under study (Lowe, 1997). Within thissecond approach, it is often argued thatthese cases are unique and only few. How-ever, some argue that in fact these cases doexist in many industrial systems or networks,

but only a few have been identified, doc-umented and placed under the conceptualindustrial ecosystem framework (Schwarz andSteininger, 1997).

It seems that many industrial contexts suchas forest, pulp and paper sectors, energy

supply systems, petrochemical or food indus-tries (see Lowe, 1997; Frosch and Gallopoulos,

1989) provide fruitful examples on existingand relatively long-term industrial ecosystem-type development in practice. A functioningindustrial ecosystem will be a complex struc-ture with diverse firms and diverse materialand energy flows. With this amount of empir-ical material, it seems that it might be helpfulto first try to find more of these examplesof different existing systems for case studiesand proceed with theory building alongsidethese. The formulation of the design principlescould be pursued after the vision or the overallgoal is more clearly identified and the con-ditions of success of various existing systemshave been presented (see also Ehrenfeld andGertler, 1997b; for discussion see Johansson,1997).

Experiences from Kalundborg, Jyvaskyla, orStyria (Schwarz and Steininger, 1997) seemto illustrate that the emergence of industrialecosystem-type development has been nat-ural or spontaneous development. In otherwords, such diverse regional networks seem

to self-organize rather than arise out of aspecific planning process. For instance, theKalundborg system evolved without inten-tional plans or environmental managementframeworks, because waste utilization waseconomic. Because the documented cases arestill only few, it might be beneficial for IEresearch to proceed with theory building fromcase studies in order to describe the sponta-neous development of a case system or thesuccessful outcomes of the development of thissystem in terms of cooperative waste utiliza-tion. This kind of case research can contributeto the building of the vision of a desiredindustrial ecosystem. A research project on acase study system could include the followingsteps:

(i) Selecting a potential case study based onexisting knowledge on recycling struc-tures, waste management or industrialnetworks drawing from the documented


179


11/17


cases in the literature. Local forest industryand energy systems can provide examples

of relatively advanced waste materialand waste energy utilization, which isarranged into interdependent relationsamong the actors in the system.

(ii) Drawing up a systems flow picture inorder to identify the main (waste) mate-rial and energy flows and the societalactors that mobilize the flows within thelocal/regional system boundaries.

(iii) Identifying the success of material cyclesand energy cascades, i.e. the efforts by thecompanies and other actors in the systemto substitute virgin resources with wastematerial and residual energy.

(iv) Identifying prices, costs and market con-ditions for raw materials, outputs andwastes as well as other economic issuesaffecting the system, such as economicsof scope and economics of scale andregulation.

(v) Identifying the most important places forimproving waste utilization. For example,although a certain power plant already

uses a relatively high amount of wastewood as its input, it could also seek usersfor its waste heat, for example with localfish farms or horticultural centres.

(vi) Considering some of the most importantconditions of success, or external condi-tions that have been vital for the evolutionof the system. These may include the localconditions such as the existence of wastesthat can be used, regulatory structures,cost or fuel price-related issues, technicalcapacity, factors related to firm location,ownership structures and other situationalfactors. In addition to the conditions ofsuccess, the difficulties in further enhanc-ing cooperative waste utilization could bediscussed. The final phase would try togeneralize the experience from the casestudy and hence serve the cause of learn-ing from the case in some other indus-trial ecosystem or an eco-industrial parkproject.

TOWARD REGIONAL ECONOMICS

OF INDUSTRIAL ECOLOGY

Importance of documented case studies

It can be important for industrial ecology casestudies, or cases on eco-industrial parks andindustrial recycling networks, to focus morethoroughly on the above point (vi). This is inorder to use the experiences gathered from acertain case in another case and expand IEapplication. The common assumption seemsto be that IE cases are rare and only certainlocal or regional systems, e.g. those with vast

renewable natural resources, provide a suitabletesting ground for the theory. However, weargue that this is not the case. Rather, thenumber of documented cases, unfortunately,is low, and includes, for example, thosementioned earlier in this article.

Practically, every local or regional economicsystem in the world requires energy, electricity,process steam and heat or district heat. Thereare many examples in the industrial worldof successful waste utilization, e.g. with for-est, pulp and paper industries, agriculture and

food industries, even with petrochemical appli-cations. Of course, the share of CHP in worldsenergy supply systems is still relatively low,as is the use of renewables or wastes to substi-tute for fossil fuels, but the Kyoto protocol andthe international and national energy, climateand environmental policy and legislation arevery likely to affect this situation, and if theydo the importance of IE studies becomes moreevident.

Most of the Central European countries, such

as UK, Belgium, Germany, Switzerland andAustria and the Eastern European countries aswell as a large part of North America havesuch climatic conditions that district heating,heating of office buildings, commercial build-ings, blocks of flats and raw-houses is required(Korhonen and Savolainen, 2001). Further, allof these countries have local systems andregions in which a concentrated demand existsto make district heating networks economic.Correspondingly, in industrial processes, the


180


12/17


demand extends beyond the cold part of theyear and all of these countries have demand

for economic and fuel efficient CHP appli-cation in industry, e.g. in chemical or pulpand paper industries. Although the supplyof renewables is relatively unique in Finland,other parts of the world also have renewablenatural resources that can be used as fuel. Inparticular, wastes seem to exist everywhere,and often the potential or value in them iswasted, although also successful utilizationexamples can be found. In addition to neededsupply and demand, the prices of round-woodin the market and fuel costs have enhanced theuse of local renewables and wastes in Finlandto control or reduce the cuttings of forests andincrease fuel efficiency.

Consider three main economic sectors ofa national economy: households, agricultureand manufacturing. Practically, all countries inthe world have economic systems that includethese actors, and there exists waste utilizationpotential and examples in all of these sectors.Household wastes can be recycled for the mate-rial content, and in addition used as fuel, when

suitable incineration techniques are in place. InFinland, 250 or 300 landfills will be closed in510 years, because of EU and national legis-lation. It is important to consider the energypotential of wastes to reduce the landfill bur-den. This is also true for many other Europeancountries lacking landfill capacity, e.g. Ger-many. Industrial waste materials and wasteenergy can be used both for raw materials,e.g. for paper production, and for energy asin waste fuel based CHP application. Agri-culture and food industry life cycles producemany biowastes that can be used for compost-ing or for fertilizer or through methane (CH4)and biogas treatment for energy. Agriculturalcrop wastes can also be burned for energy.A closed-cycle-type development might bepossible, when the food product wastes atend-consumers are returned to the agriculturalor cultivated ecosystem to participate in thevery first steps of the food product life in thefield.

Regional economics, clusters and industrialecology

Regional economics traces and measures theproduct flows of the economic actors in aregion and costs and market potential aswell as employment questions related to theseflows. Industrial ecology traces and measuresthe physical material and energy flows ofthe regional economic actors, e.g. those ina regional energy supply system. Industrialecology, then, also studies the environmen-tal impacts and virgin resource use of theregional product flows. It can also contribute

to economics analysis. Consider that successfulwaste utilization can reduce waste manage-ment costs, raw material and energy or trans-portation costs that are substituted with wasteutilization within the local/regional system

boundaries. Similarly, those costs that resultfrom the implementation of measures required

by environmental legislation can also bereduced in the IE vision. Even the marketabil-ity of the region as a green region may beincreased (for regional green labels or brand-ing, see Welford and Gouldson, 1993). In the-

ory, then, a regional economicenvironmentwinwin-type system development can bepossible.

Literature on regional economics can con-tribute to study those factors that can provide asuitable ground for industrial ecosystem devel-opment, e.g. in energy systems, but it seemsthat regional economics and industrial ecol-ogy have been developing in isolation fromeach other in the literature. Regional economicsstudies colocation of companies and the bene-

fits that may arise for the individual firms andfor the entire region in such a process. Theseinclude cooperation, innovation opportunities,lower transportation costs and joint utiliza-tion of those services that the emergence ofa network of companies has attracted to locatein the particular region. Regional economics,when reflected in the particular example of

Joensuu city, can help in explaining the devel-opment of the industrial ecosystem. As withthe experiences from Kalundborg and from


181


13/17


Jyvaskyla, there has been no specific masterplan or IE management system in place in

Joensuu. Rather, industrial ecology develop-ment can be described as self-organization andspontaneous development that has emerged

because of economic reasons (Korhonen andSnakin, 2001).

Before 1986, the district heat used in Joensuuwas derived from several individual oil boil-ers and from a fuel peat boiler. Electricity was

bought from the national electricity grid. Thenational energy company Imatran Voima (cur-rently Fortum Power and Heat) acknowledged

the economics of CHP in the case of the Joen-suu region. The demand for electrical powerhad increased in the country to such an extentthat it could no longer be met with the com-panys nuclear and condensing coal plants. In

Joensuu, with a population of around 55 000,it was economic to apply CHP. It was not eco-nomic to produce only electricity. The CHPwould be using domestic peat to substitute forimported and costly oil. The CHP plant startedits operation in 1986.

In 2000, a large investment (60 million FIM)was made on the technique of fluidized bed

burning. This enables a more diversified fuelbasis. Finland was the first country in theworld to adopt a CO2 tax and this meantthat wood fuels became more competitive thanpeat fuels. In policy, wood is defined as CO2neutral, while peat is not. Wood wastes areabundant in Finland and in Joensuu. Thediverse fuel basis also enabled the creationof a competitive situation between differentsuppliers and reduced risks involved when

relying on a single fuel or on a single supplier.In his theory on clusters, Michael Porter

(1998; Cohen-Rosenthal, 2001) defines clus-ters as geographic concentrations of intercon-nected companies and institutions in a partic-ular field (p. 78). Porter asserts that clustersaffect competition in three broad ways. Theyincrease productivity, e.g. by allowing com-panies to operate more productively in sourc-ing inputs. Clusters can enhance innovation,

because the ongoing relationships between dif-ferent companies within a cluster can help the

participants to learn, e.g. about evolving tech-nology. In addition, Porter notes that withinclusters it is easier for new companies toemerge and grow than when compared withisolated locations, where no such cluster-typecooperation opportunities exist.

Arguably, the Joensuu regional economicsystem and its development provides signsthat suggest that the points raised by Porterscluster theory may also be important forregional industrial ecology or for regionalindustrial recycling networks. First, the incre-ase in the productivity, e.g. related to efficiencyin input and fuel input use, has been enhancedin the Joensuu system through industrialecosystem-type cooperation between the actorsin the system. The actors in the networkuse each others waste material and wasteenergy flows. The inputs are local and thereexists a sufficient supply of these as well assuppliers to provide the inputs to the users.Second, there are also signs of innovationopportunities that have emerged, because

of cooperation and networking. Perhaps therecent experiments in utilizing biogas fromlandfills or solid particles from municipalwaste waters can serve as examples of this.Third, it can be argued that the existenceand supply of local wood fuels and theireconomics as well as the existence of demandand the cooperation benefits in general createdsuitable preconditions for investments intoCHP, and recently, also into the technique offluidized bed combustion. Furthermore, thepossible involvement of local agriculture touse waste water derived fertilizer indicatesthat industrial-ecology-type development canalso yield opportunities to establish new areasof economic and business activity within thenetwork.

Planning industrial ecosystem investments

How then to plan industrial ecology invest-ments? When considering the location of a


182


14/17


CHP investment, the local conditions seemto be the key for industrial-ecosystem-type

development. In terms of regional economics,one could use the notion of plant localiza-tion optimization. It would seem that usuallythe preferred situation is that the raw material

basis, the fuel or the input basis of produc-tion are local. For reducing transportation andassociated energy use and emissions, the fuelsneed to be there in a certain local system towhich to locate a CHP plant. Correspondingly,the demand must exist in the local system.Again, it is not environmentally benign to pro-duce locally and consume globally. Therefore,it is the question of regional planning andregional policy to plan ahead and considerwhether these preconditions exist in a cer-tain region before making a capital intensiveinvestment such as CHP. Before the invest-ment, it is possible to consider the optimallocation for the plant to contribute to the sus-tainability of the industrial ecosystem and itslong term operation. Before the investment ismade it is much easier to move the invest-ment between different locations than it is to

create local conditions if they do not alreadyexist.

However, the final decision that has just beenmade in Joensuu city (after the first roundof review of this article) indicates that thereare also other factors that affect the localiza-tion of an investment or of a power plant,i.e. the human side of industrial ecology (seeCohen-Rosenthal, 2001). Industrial ecology isnot just about the tangible issues of materialand energy flows. Neither is industrial ecol-ogy only a question of the economics of thesystem. It now seems, that in Joensuu, theSirkkala plant will not be built. This is mainly

because the citizen groups and the NGOs inthe city resisted the location of the plant sonear to the centre of this small city. Accord-ing to their view, the large plant with highpipes would have endangered the scenery andthe landscape of Joensuu. One could note that

Joensuu inhabitants have rural origins, tradi-tions and a mind-set that is quite different

from densely populated or heavily industri-alized regions. In other words, these softer

issues and the attitudes of people also affectsuch diverse structures and network systemsas in the industrial ecosystem vision. How-ever, nearly all of the waste utilization featurespresented in the Sirkkala system are in placein Joensuu although the Sirkkala scenario isnow unlikely to happen. The fuel basis isin local/regional renewables and peat fuelsand CHP is applied to satisfy the heat andelectricity demand of the regional actors. The

Joensuu energy company chose to buy theKontiosuo power plant from Fortum Power

and Heat.

CONCLUSION

We are not arguing, nor do we think it is nec-essary to argue, that IE is easy to achieve. Itis not: note the conflicting interests and pref-erences of network actors and many otherproblems that relate to unique regional eco-nomic, social, ecological and cultural factors.However, it must also be noted that there are

many cases of IE, although not documented,and many more isolated examples of IE-typedevelopment (e.g. waste utilization in differenteconomic sectors). There is potential to developthe IE approach further. For this purpose, andto include IE better in regional economics lit-erature and in policy planning and corporateenvironmental management, the documenta-tion of cases is needed. We hope the Joensuuexample can contribute to this effort.

ACKNOWLEDGEMENTS

This research has been supported by the Academy ofFinland and the National Technology Agency. The helpfrom Joensuu Energy is also gladly acknowledged.

REFERENCES

Baas L. 1998. Cleaner production and industrialecosystems: a Dutch experience. Journal of CleanerProduction 6: 189197.


183


15/17


City of Joensuu (Paavo Ristola Engineering). 2000.Environmental Impact Assessment of the Scenarios onSirkkala Industrial District. Joensuu.

Cogen. 1997. European Cogeneration Review 1997, a studyco-financed by the SAVE Programme of the EuropeanCommission. Cogen Europe: Brussels.

Cogen (Dr Simon Minett, Director, Cogen Europe). 2000.Unlocking the full potential for co-generation. CleanEnergy 2000 World Conference and Exhibition, 2000.

Cohen-Rosenthal E. 2001. A walk on the human sideof industrial ecology. American Behavioral Scientist

October.Cote P, Cohen-Rosenthal E. 1998. Designing eco-

industrial parks: a synthesis of some experience.Journal of Cleaner Production 6: 181188.

Cote R, Hall J. 1995. Industrial parks as ecosystems.

Journal of Cleaner production 3(1/2): 41 46.Ehrenfeld JR. 2000. Industrial ecology: paradigm shift

or normal science? American Behavioral Scientist 44(2):229244.

Ehrenfeld J, Gertler N. 1997a. The evolution ofinterdependence at Kalundborg. Industrial Ecology 1(1):6780.

Ehrenfeld J, Gertler N. 1997b. Authors reply to AllanJohansson re Industrial ecology in practice: theevolution of interdependence at Kalundborg. Journalof Industrial Ecology 1: 1.

Frosch D, Gallopoulos N. 1989. Strategies for manu-facturing. Scientific American 261(3): 94.

Gertler N, Ehrenfeld JR. 1996. A down-to-earth approachto clean production. Technology Review February-March: 4854.

Husar RB. 1994. Ecosystem and the biosphere:metaphors for human-induced material flows. InIndustrial Metabolism Restructuring for SustainableDevelopment, Ayres RU, Simonis U (eds). UnitedNations University Press: Tokyo; 2129.

Johansson A. 1997. Response to: J. Ehrenfeld andN. Gertler, Industrial ecology in practice: theevolution of interdependence in Kalundborg. Journalof Industrial Ecology 1: 1.

Kauppi PE, Mielikainen K, Kuusela K. 1992. Biomass

and the carbon budget of the European forests. Science256: 7074.

Korhonen J. 2000. Industrial Ecosystem: Using the Materialand Energy Flow Model of an Ecosystem in an IndustrialSystem, Ph.D. thesis. Jyvaskyla Studies in Business andEconomics 5. University of Jyvaskyla; 131.

Korhonen J. 2001a. Four ecosystem principles for anindustrial ecosystem. Journal of Cleaner Production 9(3):253259.

Korhonen J. 2001b. Industrial ecosystems someconditions of success. The International Journal ofSustainable Development and World Ecology 8: 2939.

Korhonen J, Savolainen I. 2001. Cleaner energyproduction in industrial recycling networks. Journalof Eco-Management and Auditing 8: 144153.

Korhonen J, Snakin J-P. 2001. An anchor tenantapproach to network management consideringregional material and energy flow networks.International Journal of Environmental Technology and

Management October/November.Korhonen J, Wihersaari M, Savolainen I. 1999. Industrial

ecology of a regional energy supply system the caseof Jyvaskyla Region. Journal of Greener ManagementInternational 26: 5767.

Lappalainen E, Hanninen P. 1993. The Peat Reserves ofFinland, Report of Investigation 117. Geological Surveyof Finland: Espoo (in Finnish).

Lehtila A, Savolainen I, Tuhkanen S. 1997. Indicators of

CO2 Emissions and Energy Efficiency: Comparison ofFinland with Other Countries. VTT, Technical ResearchCentre of Finland: Espoo; 1418.

Lowe EA. 1997. Creating by-product resource exchanges:strategies for eco-industrial parks. Journal of CleanerProduction 5(1/2): 57 66.

Myllyntaus T. 1991. Electrifying Finland the Transfer ofa new Technology into a Late Industrializing Economy.Macmillan.

Porter M. 1998. Clusters and the new economicsof competition. Harvard Business Review Novem-

ber/December: 7790.Ranta J, Isannainen S, Wihersaari M. 1996. Recycling of

ash in extensive utilisation of biomass. Biomass forEnergy and the Environment, Proceedings of the 9thEuropean Bioenergy Conference, Commission of theEuropean Communities, Vol. 1. Pergamon: Oxford;706711.

Savolainen I, Hillebrand K, Nousiainen I, Sinisalo J.1994. Greenhouse Impacts of the Use of Peat and Wood forEnergy, VTT Research Notes 1559. Technical ResearchCentre of Finland: Espoo.

Schwarz E, Steininger K. 1997. Implementing natureslesson: the industrial recycling network enhancingregional development. Journal of Cleaner Production5(1/2): 47 56.

Selin P. 1999. Industrial Use of Peatlands and the Re-Use of Cut-Away Areas in Finland (Jyvaskyla Studiesin Biological and Environmental Science 79) our owntranslation (originally in Finnish).

Sirkin T, ten Houten M. 1994. The cascade chain atheory and tool for achieving resource sustainabilitywith applications for product design. Resources,Conservation and Recycling 10: 213277.

Tibbs HBC. 1992. Industrial ecology: an environmentalagenda for industry. Whole Earth Review Winter; 419.

Welford R, Gouldson A. 1993. Environmental Manage-ment and Business Strategy. Pitman: London; 189203.


184


16/17


BIOGRAPHY

Dr. Jouni Korhonen (corresponding author)can be contacted at Lahti Polytechnic, Facultyof Business Studies, P.O. Box 106, FIN-15101,Lahti, Finland.E-mail: [email protected]

Heikki Niemelainen and Kyosti Pulliainencan be contacted at the University of Joensuu,

Department of Economics, P.O. Box 111, 80101Joensuu, Finland.


185


17/17

eco industrial net

Documents