Indigo Development

          Creating systems solutions for sustainable development through industrial ecology

One of the favorite cases presented by industrial ecologists is the story of the spontaneous but slow evolution of the "industrial symbiosis" at Kalundborg, Denmark. This web of materials and energy exchanges among companies (and with the community) has developed over the last 20 years in a small industrial zone on the coast, 75 miles west of Copenhagen. Originally, the motivation behind most of the exchanges was to reduce costs by seeking income-producing uses for "waste" products. Gradually, the managers and town residents realized they were generating environmental benefits as well, through their transactions. (A student team working on an Earth Day project in the early 90s mapped the network of by-product exchanges with yarn and showed it to the plant managers!)
The Asnaes Power Station is the hub of the network of materials and energy by-product exchanges at Kalundborg. The pipes in the foreground include the conduit for steam to the town of Kalundborg. The Statoil refinery is to the North, beyond the stacks. Novo Nordisk and Gyproc plants are about a kilometer to the South.

The Kalundborg system comprises five core partners:

• Asnæs Power Station, Denmark's largest power station, coal-fired, 1,500 megawatts capacity;
• Statoil Refinery, Denmark's largest, with a capacity of 3.2 million tons/yr (increasing to 4.8 million tons/yr);
• Gyproc, a plasterboard factory, making 14 million square meters of gypsum wallboard annually (roughly enough to build all the houses in 6 towns the size of Kalundborg);
• Novo Nordisk, an international biotechnological company, with annual sales over $2 billion. The plant at Kalundborg is their largest, and produces pharmaceuticals (including 40% of the world's supply of insulin) and industrial enzymes; and
• The City of Kalundborg supplies district heating to the 20,000 residents, as well as water to the homes and industries.

The symbiosis started when Gyproc located its facility in Kalundborg to take advantage of the fuel gas available from Statoil. Today, Gyproc is still the only company to have located there to take advantage of an available supply.
 
The Kalundborg Network 1995
The following diagram illustrates the network of companies in the symbiosis, showing the extent of the material and energy exchanges 1995, currently about 3 million tons per year. Image © Douglas B. Holmes

The Asnæs power station is coal-fired and operates at about 40 percent thermal efficiency. Like all other fossil-fuel power stations, the majority of energy generated goes up the stack. At the same time, another large energy user, the Statoil refinery flared off most of its gas by-product.

Then, starting in the early '70s, a series of deals were struck:

• The refinery agreed to provide excess gas to Gyproc, which had seen Statoil's flares and recognized that this burning gas was a potential low-cost fuel source.
• Asnæs began to supply the city with steam for its new district heating system in 1981 and then added Novo Nordisk and Statoil as customers for steam. The district heating, encouraged by the city and Danish government, replaced about 3,500 oil furnaces (a significant non-point source of air pollution).
• The power plant uses salt water, from the fjord, for some of its cooling needs. By doing so, it reduces the withdrawals of fresh water from Lake Tissø. The resulting by-product is hot salt water, a small portion of which is supplied to the fish farm's 57 ponds.
• In 1992, the power plant began substituting fuels, using surplus refinery gas in place of some coal. This only became possible after Statoil built a sulfur recovery unit to comply with regulations on sulfur emission; the gas was then clean enough to permit use at the power plant.

In 1976 the Novo-Nordisk plant started the pattern of materials flows, matching the evolving energy flows at Kalundborg.

• Sludge from Novo Nordisk's processes and from the fish farm's water treatment plant is used as fertilizer on nearby farm. This is a large portion of the entire Kalundborg exchange network, totaling over 1 million tons per year.
• A cement company uses the power plant's desulfurized fly ash. Asnæs reacts the SO2 in its stack gas with calcium carbonate, thereby making calcium sulfate (gypsum), which it sells to Gyproc, supplying 2/3 of the latter's needs.
• The refinery's desulfurization operation produces pure liquid sulfur, which is trucked to Kemira, a sulfuric acid producer.
• Surplus yeast from insulin production at Novo Nordisk goes to farmers as pig food.

This pattern of inter-company reuse and recycling has reduced air, water, and ground pollution, conserved water and other resources, and generated new revenue streams from the byproducts exchanged.

Through 1993, the $60 million investment in infrastructure (to transport energy and materials) has produced $120 million in revenues and cost-savings. 
 
Lessons from Kalundborg

What can we learn from the Danes' experience over the past two decades? Here are some comments from those directly involved:

• All contracts have been negotiated on a bilateral basis.
• Each contract has resulted from the conclusion by both companies involved that the project would be economically attractive.
• Opportunities not within a company's core business, no matter how environmentally attractive, have not been acted upon.
• Each partner does its best to ensure that risks are minimized.
• Each company evaluates their own deals independently; there is no system-wide evaluation of performance, and they all seem to feel this would be difficult to achieve.

• Industries must be different and yet must fit each other.
• Arrangements must be commercially sound and profitable.
• Development must be voluntary, in close collaboration with regulatory agencies.
• A short physical distance between the partners is necessary for economy of transportation (with heat and some materials).
• At Kalundborg, the managers at different plants all know each other.

Kalundborg is a harbor town with buildings dating back to the 12th Century. District heating that uses steam from the Asnaes power station replaced highly polluting oil burning heaters in individual homes.
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Last modified: June 12, 2003