The Ecology of Industry. 1998. Pp. 27-44
Washington, DC: National Academy Press
Primary Materials Processing
In industrial ecology, industry sectors and various production processes are viewed as interconnected systems. This view extends environmental strategies beyond individual companies to address the integrated nature of economic activities. An analytical assessment of materials and energy flows forms the basis for improving the overall economic performance of a firm and of the integrated systems of industrial activities in which the firm plays a role.
By transforming and recasting materials and recovering embedded energy, the primary materials processing industry (PMPI) plays a unique role in industrial ecology and in the economy. This industry sector acquires raw materials from mining operations. Some PMPI companies add value to mined ores; others add value to sand and stone. Their products (e.g., copper, aluminum, steel, and cement) are used elsewhere in the economy to make such things as wires, cans, and construction materials. Many PMPI companies recycle and reprocess end products as part of their operations. Their place in an industrial ecosystem does not end there, however. They also use by-products and residues from other industries in their base processes. For example, cement kilns recover energy by combusting waste and use waste (e.g., mill scale, foundry sand, slag, or fly ash) from other industries in cement production. The aluminum industry utilizes low-value materials such as petroleum coke from refiners and coal-tar pitch from coke ovens to form electrodes for aluminum smelting.
The steel industry recycles mill scrap, fabricator waste, automobiles, structural steel, appliances, pipes, industrial machines, and tin-coated steel cans. In fact,
steel is recovered for recycling at a higher rate (by weight) than any other commodity. Sixty-three million tons of steel were collected for recycling in 1993 out of the 100 million tons produced or imported (American Iron and Steel Institute, 1993).
Likewise, recycling is an important part of the aluminum industry. In some applications, such as packaging and automobiles, aluminum is recycled at a higher rate than steel. Over the past 20 years, aluminum-can recycling has taken off. In 1993, 2.9 million tons of aluminum from cans were recovered in the United States. It takes 95 percent less energy to recycle an aluminum can than to produce a new one, making recycling highly cost-effective from a business perspective. Fifty-three percent of today's beverage cans and over 60 percent of the aluminum used in automotive applications are made from recycled metal. In 1993, 63 percent of cans and 85 percent of aluminum automobile scrap were recovered and productively reused (Aluminum Association, 1993).
Energy is used to transform mined material into usable product just as energy is used to produce and deliver electricity, gas, and petroleum. The energy intensity of primary materials processing is exceeded only by the energy used to make energy itself. Energy efficiency improvements, therefore, are important to PMPI. The sector also can and does reduce energy use by burning waste from other industrial sectors in its high-temperature furnaces.
Long considered smokestack industries, PMPI companies handle much of their pollutants through recycling, reuse, and pollution control technologies, which have been put in place largely in response to environmental regulations. More recently, efforts have been made to eliminate pollutants at the source. For instance, the aluminum industry is currently reducing its production of trace polyfluorinated carbon gases in smelting by improving process monitoring and operating practices.
The growth in environmental regulations over the last 25 years has been paralleled by increasing societal demand for cleaner industries and improved environmental performance. In the past decade, global competition for PMPI products has intensified. Like many other industries, PMPI has contained or cut costs to remain profitable. The new set of linked economic and environmental challenges is being met by managers increasingly conscious of the cost, quality, and environmental impacts of their actions.
From an environmental perspective, PMPI companies face the following challenges:
· integrating environmental considerations in business decisions so that they can move beyond day-to-day regulatory compliance to true environmental stewardship;
· dealing with regulations and standards that are not keeping pace with changing practices;
· using environmental life-cycle practices internally to assess and reduce energy and materials use in their operations, even though methodologies have not yet been standardized;
· linking total quality management concepts with environmental decision making to reduce waste, eliminate unnecessary processes, and improve product acceptability and usefulness;
· guarding against the premature adoption of life-cycle assessment for regulatory purposes;
· leveraging external research and development (R&D) resources to offset reductions in internal R&D spending; and
· developing collaborative links (partnerships) with government regulators, environmental interest groups, and universities to address current and future environmental concerns.
Today, companies often frame their environmental efforts in terms of environmental stewardship. According to the dictionary definition, stewardship is the ''careful and responsible" management of operations and property within one's care. Most companies' reports suggest an increased regard for the environment, prompted by the growth in environmental regulations and voluntary and incentive schemes for pollution prevention. The environmental efforts of companies are also driven by economic considerations (such as meeting customer demands) and changing engineering and management practices (such as integrated product development and total quality management).
In the 1970s and 1980s, controlling emissions from processes and facilities was considered sufficient environmental care. In the 1990s, the emphasis is on preventing pollution and on isolating and reducing the environmental impacts of products and processes throughout their life cycles. The life-cycle perspective extends beyond the factory gate to include waste products that might be sent to a landfill or incinerator, materials and products that are sold, and materials and components that are purchased as inputs to products and processes. For management, this perspective means taking into account the practices of one's suppliers and managing the supplier chain. Management also needs to consider the environmental impacts of finished products once they are purchased by a customer.
Efforts to control pollution and reduce waste through prevention have proved fruitful. Environmental gains achieved in the 1970s at U.S. Steel (Box 1) illustrate the effectiveness of control technologies and prevention techniques in reducing environmental impacts. At the same time, other practices that were considered environmentally proper in the 1970s and 1980s are being reevaluated. For example, hazardous waste from the chemical industry and other industries is burned in cement kilns, an approach that reduces the need for other treatment technologies and provides energy to fuel the kilns. Although this practice is considered acceptable and proper in Japan (Box 2), in the United States, differences in regulations affecting these kilns and hazardous-waste incinerators are raising
concerns (Box 3). Currently in the United States, approximately half of hazardous-waste solvents are burned in cement kilns, with the remainder being consumed in on-site boilers and incinerators or commercial waste incinerators.
In the late 1980s and early 1990s, based on anticipated increases in waste volumes, the U.S. waste industry invested significantly in permitted hazardous-waste incinerators. These actions were spurred by the Environmental Protection Agency's (EPA's) policies intended to increase the country's capacity to manage hazardous waste. At the same time, EPA began encouraging pollution prevention, and industries began implementing waste-reduction policies. The combination of industrial waste reduction and construction of hazardous-waste incinerators led to an excess of hazardous-waste incinerator capacity.
The incineration industry contends that a wider variety of waste should be steered to incinerators built specifically to handle hazardous waste and that the "less-regulated kilns" should come under greater regulatory scrutiny. The implication of this argument is that boilers, furnaces, and cement kilns are generally operated under less-rigorous environmental requirements than are commercial hazardous waste incinerators. Under EPA's 1991 rules for boiler and industrial furnaces, however, cement kilns handling hazardous waste must test each batch of waste to be combusted, continuously monitor toxic-metal feed rates, demonstrate destruction of organics, and continuously monitor emissions (all the while ensuring that the facility makes a quality product). In some cases, these requirements exceed the standards that hazardous-waste incinerators must meet.
This debate does not take into account the different functions of the two systems, as summarized in Table 1. Kilns, boilers, furnaces, and waste incinerators perform different services (incinerators incinerate hazardous waste and are reliant on a continuous feed of waste, whereas cement kilns recover energy from waste to make a useful product, cement) and handle different types of waste. Generally, boilers and industrial furnaces require waste with a significant energy value. In contrast, incinerators can take waste with no energy value. Incinerators are also more able to receive and handle wastes of mixed physical consistency, whereas boilers and furnaces preferentially use pumpable waste. Industrial furnaces might sometimes be limited in the types of wastes they use because of chemical criteria imposed to maintain product quality.
As the cement industry has made its case for the advantages of treating waste in cement kilns, it has learned firsthand the importance of effective communication. Most PMPI companies recognize the need to improve their environmental communications, if they are to be successful environmental stewards. Communication is key to implementing new environmental practices within a company, helps educate regulators and communities in which these firms do business, and engages nongovernmental environmental organizations in discussing the scope and complexity of environmental issues and potential solutions. Alcoa's efforts to take into account community views of the environmental life-cycle impacts of operating and closing a bauxite mine in the Jarrah Forest in Australia (Box 4) illustrate effective environmental communications in action.
Intraindustry collaborative efforts have also become an increasingly important aspect of environmental stewardship in the 1990s. Companies competing in the same industry share common environmental concerns. This commonality has led to formal and informal exchanges of nonproprietary technology and information, such as the aluminum industry's current efforts to reduce polyfluorinated
carbon (PFC) emissions (Box 5). Such collaborative efforts appear to be a viable mechanism for moving beyond compliance to pollution prevention. For example, the U.S. aluminum industry is nearing an agreement with EPA to reduce voluntarily by 50 percent emissions of PFCs at their source.
As the PMPI sector continues to improve its environmental stewardship, it faces several challenges:
· working with regulators to ensure that environmental requirements are based on good science and are economically and technically feasible;
· developing mechanisms for working collaboratively with all stakeholders to reach mutually acceptable solutions; and
· implementing pollution-prevention practices in the midst of regulations and standards that are still based on a command-and-control model.
Regulations and Standards
National and international environmental regulations and standards focus primarily on controlling pollution and handling waste from industrial and societal
activities. These statutes and standards have helped advance air and water pollution technologies, landfill design, land remediation technologies, and the development of monitoring devices. Companies have to comply with existing and new regulations or face stiff penalties. Few will disagree that pollution controls are necessary. However, several existing regulations and standards promote control of pollution rather than its prevention. They also impede the creation of industrial ecosystems that minimize waste in clusters of industrial systems or sectors. Part of the problem is the way in which these rules define waste. To change the regulatory mechanisms so that more materials find useful purposes instead of landfill space, the definition of waste might need to be reevaluated.
Materials are defined currently by their fate. Product or process inputs are "useful" materials. Materials for which no useful application has been found are considered "waste." The fate of materials emerging from industrial processes is dictated increasingly by regulatory definition. Pollution control regulations based on the paradigm of linear flows of materials in turn promote linear flows of materials through the economy. Materials emerging from industrial systems are therefore defined as either product or residual material. For example, language in the Resource Conservation and Recovery Act (RCRA), which focuses on the disposal and treatment of waste, sometimes results in recyclable and reusable material being considered waste (Box 6).
Regulations based on a linear materials flow model lead to two assumptions about waste: It has no economic value, and it is of inferior quality. By treating recyclable and reusable material as waste, RCRA inhibits efforts to minimize
waste in industrial systems (Box 7). There are similar laws in other countries, and there are also international laws, such as the Basel Convention, that prevent residual materials from crossing national borders, where they might be used more productively. The Basel Convention is intended to prevent developed countries from dumping hazardous waste in developing countries, a laudable goal. At the same time, however, the agreement prevents the flow of potentially useful materials that are classified as hazardous waste.
The reclassification of waste is not a simple task. It requires the collaboration of government, industry, and other interested communities. Japan's 1991 Law Promoting the Utilization of Recyclable Resources could serve as a model for waste reclassification (Richards and Fullerton, 1994). This law promotes the idea of the recyclable resource, including the recoverability of energy from waste materials. It establishes target recycling rates for each type of recyclable resource, product priorities for specific industry sectors, and standards for recycled material. The law also recognizes the unique role of PMPI in creating industrial ecosystems that minimize waste in interconnected industries. Through this material classification process, annual releases of solid industrial waste from various sectors can be channeled to basic industries such as cement and steel.
In the United States, regulatory compliance is a complicated, time-consuming process that diverts attention from more productive environmental efforts. The complexity involved in determining how residual material should be handled under RCRA is illustrated in Figure 1. The excessive amount of time spent on compliance-related activity and its complications calls for more transparent regu-
a The characteristics of hazardous waste are toxicity, corrosivity, flammability, and ignitability.
lations, better management practices, and better use of information systems within a company. Because regulations have a tendency to become more complicated over time, there is clearly a need for improved methods for handling these information and verification needs.
One outcome of global competition has been the drive to reduce waste, thereby ensuring that as large a percentage as possible of raw materials brought into a company is turned into product. As the cost of complying with regulations escalates, companies are looking for ways to move beyond compliance. In environmental terms, this means minimizing waste and preventing pollution. Once many of the easily identified pollution-prevention measures (such as improving energy efficiency and reducing packaging) are taken, companies look for practical life-cycle approaches to help them in their environmental efforts. Energy-intensive industries such as PMPI recognize that the clean high-temperature burning of waste can reduce energy costs while also benefiting the environment. Ways should be explored to further exploit this potential. At the same time, steps should be taken to devise more sensible regulation and management systems that can streamline compliance with regulations and facilitate pollution-prevention initiatives.
One group working toward improving environmental management is the International Standards Organization's Technical Committee 207, which is developing a set of international environmental management standards known as ISO 14000. It is hoped the standards will help lead to harmonization of such things as rules, labels, use of life-cycle analysis, and environmental auditing. A significant implication of these standards, as with the ISO 9000 series, is that for PMPI facilities to sell their products, they will need to be certified initially in Europe, and then eventually worldwide. In other words, certification could become a de facto requirement for being able to do business in Europe and other regions.
The PMPI sector faces several challenges in dealing with national and international regulations and standards:
· complying with regulations that are at times antithetical to the pollution-prevention approach, which is now hailed as presenting viable solutions to environmental concerns;
· working with regulators to reclassify waste to promote reuse and recycling of materials and energy;
· continuing the search for and implementation of pollution-prevention methods under constrained fiscal and regulatory circumstances; and
· working with international standards-setting organizations to develop reasonable and realistic environmental management systems.
Life-cycle assessment (LCA) is an increasingly important aspect of corporate environmental management, particularly for companies trying to reduce the environmental impacts of their products, processes, or services (Box 8). LCA is a tool
that enables the identification of the polluting effects of the energy, materials, and processes used to make productsfrom the harvesting of the inputs through production, consumption, reuse, and disposal.
Some companies and trade organizations have used LCAs to bolster their green marketing claims. This has led some governments and standards-setting organizations to widen the role for LCA. For example, the European Community is considering a regulation that would make LCA a necessary and sufficient condition for awarding a product a ''green seal of approval." In the United States, EPA envisions a prominent role for LCA in designing its own regulatory programs, and several private environmental groups want to use LCA to develop an environmental labeling system for all products.
LCA has several limitations that must be factored into its use for environmental policymaking and regulation. First, every LCA must deal at the outset with daunting boundary questions. For example, in a typical LCA, it would be appropriate to consider the pollution that results from extracting raw material for a product or the quantity of solid waste left behind when a product has reached the end of its useful life. What about the energy and raw materials that went into manufacturing the equipment used to extract the raw materials? Should that be included? What about the capital equipment and labor required to monitor the landfills? In other words, boundary definitions dictate what gets counted in an LCA and what does not. Second, LCAs are expensive, labor intensive, and time consuming. Third, the dynamic nature of technology and changes in production processes make the useful life span of these analyses frustratingly short.
The results of an LCA can be interpreted in a variety of ways and can be used to prove a preconceived hypothesis. Hence, it is important to first define the problem and then identify an appropriate tool to examine the problem objectively. LCA can be effective in aiding pollution prevention, but its robustness as a legislative, policy, or regulatory tool is questionable. In the environmental area, it is more important to develop and adopt a systematic analytical process, which might not be limited to or fully satisfied by LCA.
The use of LCA as an environmental management tool presents PMPI with several challenges:
· addressing the adoption of LCA as a regulatory tool, when methodologies have not been standardized;
· identifying the limitations of LCA when it is used as a pollution-prevention tool so that accurate and appropriate information can be gleaned from such an analysis; and
· working with various stakeholders to develop a standardized LCA methodology.
Cultural and Organizational Change
PMPI today faces the challenge of responding to society's demands for new, environmentally benign products and processes, and cleaner air, water, and land
amid constrained human and financial resources and rapid technological advances. Some companies are reengineering to respond to these constraints and to
Intense international competition and downsizing have caused many companies to reduce their R&D budgets, including R&D for products and processes that are environmentally preferable. Some have suggested that investment in U.S. national laboratories be used to help offset this reduction in private R&D spending. These laboratories are best known for high-cost, long-range defense- and energy-related R&D. The usefulness of refocusing these efforts to non-defense-related R&D is an important policy question for the United States.
As industry in general grapples with internal pressures, such as reduced R&D capability or reduced human and financial resources, PMPI firms face an additional challenge: their negative image. PMPI companies are seen by many as environmental laggardssmokestack industries belching tons of pollution. This perception has not changed in spite of improved environmental performance by PMPI businesses. PMPI companies have to work hard to change that perception so that they can engage the public in addressing current environmental issues and attract new talent.
Although the face of business has been dramatically transformed by globalization, intense competition, and information technology, the face of government has not changed as dramatically. The anticollaborative nature of government-industry relationships in the United States has forestalled and continues to adversely affect movement toward environmentally sustainable practices.
Perhaps one of the most fruitful approaches for dealing with cultural- and organizational-change questions is to shape tomorrow's engineers and public policymakers. The dramatic changes occurring in industry and the need to develop a more sustainable future have significant implications for academia. In engineering's 4- or 5-year undergraduate curriculum, students acquire the basic scientific and engineering skills to practice their profession. Where do issues such as the generation and control of pollutants, minimization and selection of raw materials, recycling, reduced use of toxic materials, LCA, and the role of public policy fit in this curriculum? What is the role of the professional societies? Although some progress is being made to incorporate these areas of study into undergraduate education, the academic and the professional communities need to pay more attention to environmental education.
Organizational and cultural change is a fact of industrial life. As PMPI companies face the effects of downsizing, globalization, and reengineering, they confront several challenges:
· remaining competitive while adapting to highly volatile business climates that are increasingly influenced by environmental concerns;
· developing mechanisms to leverage external R&D resources to offset downsizing of internal R&D functions;
· identifying ways to use new approaches, such as reengineering, to integrate environmental considerations into organizational changes; and
· working with academia to integrate environmental issues into science and engineering curricula.
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American Iron and Steel Institute (AISI). 1993. Annual Statistics Report. Washington, D.C.: AISI.
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Richards, D., and A. Fullerton, eds. 1994. Industrial Ecology: U.S.-Japan Perspectives. Washington, D.C.: National Academy Press.