The Industrial Green Game. 1997. Pp. 148–153.
Washington, DC: National Academy Press.
Hydro Aluminum's Experience with Industrial Ecology
The recent emergence of broad-based ideas such as life cycle analyses, clean technology, environmentally conscious manufacturing, and design for environment indicate a shift from a linear, process-oriented focus to a more systems-oriented view that is characterized by industrial ecology. The industrial ecosystem at Kalundborg illustrates an integrated system of industrial activities consisting of an electric power plant, an oil refinery, a biotechnology plant, a plasterboard factory, sulfuric acid producers, cement producers, local agriculture and horticulture, and district heating (Grann, this volume, p. 117–123). This cluster of industries minimizes energy and studies waste losses from the system.
Other cases from companies around the world show how industry can contribute to sustainable development (Willums and Ulrich, 1994). Beginning with the critical need to formulate goals related to the areas identified for improvement, the case studies demonstrate the organizational dedication and the technical ability required to improve processes and use waste. They also show the value of cooperative alliances with customers, suppliers, and the surrounding community for improving environmental performance. Dow Chemical's Waste Reduction Always Pays program, 3M's legendary Pollution Prevention Pays, and Du Pont's targets to reduce pollution are examples of these practices. These companies have publicly committed themselves to reduce waste and have translated their commitments into intercompany programs for improvement.
The pollution prevention activities of companies fit the industrial ecology context. Industrial ecology has been described as a new approach to the industrial design of products and processes and the implementation of sustainable manufacturing strategies. It is concept in which an industrial system is viewed not in isolation from but in concert with its surrounding systems. Industrial ecology
seeks to optimize the cycle of virgin material to finished material, including components, products, and waste products (Jelinski et al., 1992).
The concept of industrial ecology, therefore, extends beyond the typical flow of materials in a process industry (such as an oil refinery) into the manufacturing industry, where separate companies with different processes, movements of material, and operations contribute to a final product. Manufacturing is a complex system with an almost unlimited number of different but related variables that can influence sustainability. The complexity is best illustrated by the fact that, depending on boundary conditions, a full life cycle analysis of a beer can include as many as 600,000 data items (Pomper, 1992).
Paradoxically, a systems-oriented and sustainable approach to the design of manufacturing and products means that the complexity needs to be simplified. Simplification can be achieved by limiting the number of variables to be tracked through a system or by organizing them so that consequences from different design strategies can be evaluated, such as in Volvo's Strategies in Product Design (Horkeby, this volume).
ONE COMPANY'S EXPERIENCE WITH INDUSTRIAL ECOLOGY
Hydro Aluminum, a fully owned subsidiary of Norsk Hydro, manufactures two classes of product: semifabricated products (such as aluminum sheets) and end products (such as aluminum cans). The company has approached industrial ecology by focusing on understanding its products.
Aluminum offers several benefits in its many applications in the economy. It has a positive strength-weight ratio, is noncorrosive, is a good conductor of heat, and is excellent for food and beverage packaging. In terms of its environmental impact, energy consumption is high for initial production and low for recycling. Typically, 35 kilowatt-hours (kwh) are required for processes leading to primary aluminum and 1.7 kwh are required for recycling. Most of the emissions arising from the extraction, production, use, and recycling of aluminum are from primary production.
These characteristics necessitate a proactive approach to all environmental, health, and safety (EHS) matters and the need to highlight the advantages of aluminum from a life cycle perspective. In 1991, Hydro Aluminum began its program of ecological responsibility, which is based on an understanding of industrial ecology as a systems-oriented approach to EHS management. Under this program, the process-oriented EHS functions are a part—but not of—industrial ecology
Two different dimensions of industrial ecology are important to the firm. One is related to information and education of the company's employees and the general public. The other is related to product, system, and process development defined by market needs and economic and technical feasibility.
Hydro Aluminum initiated several steps to increase awareness about the industrial
ecology of the business: Life cycle data relevant for products and processes were determined; a better understanding of what industrial ecology will mean for aluminum in three sectors—the auto market, the building market, and the can market —was developed; and the company published Aluminum and Ecology, a detailed brochure, and put industrial ecology on the agenda in its internal training programs.
These efforts focused on life cycle considerations, strategic market needs, and training or information needs. They revealed the following:
Industrial ecology provides a good basis for communicating with major customers. Smaller customers tend not to identify the challenge or appreciate the idea of industrial ecology as much as larger companies, such as car makers that operate in more clearly identified markets. Smaller companies, such as builders in loosely defined markets, tend to ask what is in it for them and do not see the broader market forces influencing their future.
Detailed business-related environmental data need to be presented in a detailed usable, easily understandable way.
A detailed and open record related to ecology and environment results in positive media coverage and public response.
To be operational in the business context, the application of industrial ecology has to be simplified.
Environmental concerns are additional factors to consider in technological innovation. The link between the end use of aluminum in the final product (the use of the product by the consumer and its final disposal and recycle) places new and strong demands on the design of products and on cooperation among the different participants in the life cycle of the material.
The integration of environmental considerations within a company begins with small specific steps.
Hydro Aluminum will continue its two-pronged approach of providing information and communicating with the market while engaging in more specific development and design activities.
INDUSTRIAL ECOLOGY AND ALUMINUM
Managing a firm from an industrial ecology perspective encompasses recycling, energy consumption, logistics and use of packaging material, and EHS concerns. These factors cover most of the challenges of developing and judging appropriate processes and strategies for optimizing the use of aluminum in light of the technological, economic, and ecological constrains. These factors are also of concern to society at large, and they pose technical and scientific challenges
that requires a systems oriented approach. The challenge to management includes economic and organizational change as well as opportunities for products and markets.
Industrial ecology also requires the consideration of the relationship between natural ecology and industrially generated emissions, discharges, and wastes. This necessitates that a firm seek answers beyond its boundaries. Hydro Aluminum is working through the Norwegian aluminum industry, in cooperation with Norwegian universities and research institutes, to carry out extensive studies of the effects and, when possible, the dose-response characteristics of emissions and discharges from its aluminum plants. This scientifically demanding task is intended to define targets for future emission and discharge standards, In effect, these studies will define research and development objectives for the company's processes and provide information on the overall life cycle of aluminum.
Hydro Aluminum also recognizes the need for life cycle data on products in the markets for each of the company's operations or divisions. Some data will be common for all downstream activities, others will be specific for a particular division in a particular market. Such data are needed to help the company develop its strategies and to provide specific information about environmental communications material. In cooperation with the European oil industry, Hydro Aluminum is working to establish common life cycle data for typical products.
FROM LEARNING TO DOING
The general findings from the initial projects undertaken at Hydro Aluminum illustrated the complexity of the life cycle perspective. The complexity is revealed in product- and market-specific projects, where the company must identify challenges and needed improvements, consider building new business relationships, and consider expanding cooperation within existing relationships. Taking environmental considerations into account in making business decisions has resulted in improvements in several areas.
Process and In-House Activities
In addition to the ongoing EHS efforts, the focus on process has led to energy-efficiency improvements. The obvious means of improving energy use in processes is to adopt technologies that provide that advantage. Hydro Aluminum has initiated energy-efficiency improvement programs in all its Norwegian plants and is collecting life cycle data to link total energy consumption to products from the various plants. The life cycle perspective also suggests that the company should recover as much aluminum as possible from downstream recycling activities; processing aluminum from recycled aluminum products requires much less energy than does processing aluminum from virgin sources.
Customer and Market Activities
Projects related to customers and markets are aimed at building links to customers to address more effectively the life cycle challenges facing the company. In addition, Hydro Aluminum has gained a much better understanding of logistical challenges and is finding ways to improve distribution and recovery logistics by working with selected customers.
Hydro Aluminum has focus on logistics because material used in packaging contributes to waste, and the public is concerned about overcrowded and environmentally unfriendly transportation systems. Energy data related to the logistics of distributing and recycling aluminum products are needed. In addition to affecting energy use and environmental impact, improved logistics can help realize cost and capital savings. By selecting a few projects and working with customers to analyze the transportation logistics involved, opportunities to improve the use of packaging material and patterns of transport and recycling have emerged.
Cooperation with customers has provided the company with a better understanding of the metallurgy in some markets that favor closed-loop recycling and has highlighted the importance of using systematic approaches to sharing data with large customers and helping more resource-limited customers. In the building market, which consists of smaller customers and fewer social and environmental pressure to recycle, cooperative links are weak. As a big company dealing with many smaller customers, Hydro Aluminum increasingly finds it has to take the lead in defining research and development needs and gathering data for life cycle studies.
THE IMPORTANCE OF INFORMATION AND EDUCATION
The most significant lesson Hydro Aluminum has learned from its industrial ecology experiment is the need to inform and educate. In the mid-1980s, Hydro Aluminum and several other big companies were under attack by environmental groups. Norsk Hydro, Hydro Aluminum's parent company with a turnover of roughly 60 billion NOK (about one-tenth of Norway's GNP of about 650 million NOK), was considered ''a good enemy." It was operating its plants within government regulations but could do better by 1990s standards. The 1980s experience led to a change in information strategy.
Today, the company's policy is to be completely open about EHS matters. The change in policy results from a recognition that environmental groups represent society at large, and the company's employees are also members of society. Because the information the company provides to regulators is passed on to society, it seems prudent to directly communicate with the public. Well-informed employees are a company's best ambassadors, which means that a company needs to inform and educate its own employees. Environmental matters involve complex
scientific facts, uncertainties, and intangibles. An incomplete representation of the facts leads to a loss of public confidence, so there is a need to provide credible information to the public. By improving communications with employees and the public, Hydro Aluminum, like many companies in Europe, has made significant gains in improving relations with a range of stakeholders.
To defend aluminum against biased life cycle analyses, Hydro Aluminum has established programs to educate its employees and the public about aluminum's advantages and disadvantages, its applications, and its environmental effects. This outreach effort also provides information about the company's industrial ecology approach to environmental management. The challenge posed by this education effort is to maintain an openness without leaving a negative image of aluminum.
Industrial ecology adds several dimensions that transcend the traditional scope of environmental communication. Industrial ecology focuses on a totality and an understanding that link environmental problems and consumption to production. Information, therefore, has to link consumers and producers in understanding their roles in implementing options to solve problems. This makes the concept of industrial ecology difficult to understand fully and requires even more information and ways to integrate that information in decision making. The focus of engineering and management training has to move away from single processes toward consideration of whole systems.
Thinking of industrial ecology as a system helps identify areas for improvement, builds links to customers, and identifies potentially competitive markets. Market research in specific major markets, the continued growth in government regulations, and the general response to Hydro Aluminum's environmental reports suggest that ecology is of increasing importance in the marketplace. Technological development is needed to improve processes and products. Long-term, system-based approaches will have to be translated into simple tools for analysis of product, processes, and operations. Stronger links between industry and academia are needed to establish theory and methods that move society toward greater environmental sustainability.
Jelinski, L. W., T. E. Graedel, R. A. Landise, D. W. McCall, and C. K. N. Patel. 1992. Industrial ecology: concepts and approaches. Proceedings of the National Academy of Sciences of the USA 89:793–797.
Pomper, S. D. 1994. Life cycle assessment of aluminum. Paper presented at a workshop on product stewardship. Massachusetts Institute of Technology. Boston. March.
Willums, J., and G. Ulrich. 1994. From ideas to action. Pp. 49–79 in Business and Sustainable Development. Paris: International Chamber of Commerce.