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Integrating Ecosystem Services in Circular Economy through Eco-Industrial Parks

With large scale industrialization taking place throughout the world; the excessive use of natural resources is leading to its exploitation, taking a toll on our ecosystems and their services. Ecosystem services are defined as the benefits that humans derive from natural ecosystems.

Millennium Ecosystem Assessment (MEA) has classified ecosystem services into four categories: provisioning are the direct output obtained from the ecosystems, such as food and water; regulating services are the benefits obtained from the regulation of ecosystems such as regulation of climate; cultural services are the non-material benefits obtained from the ecosystems, like, religion and aesthetic values and supporting services are needful for the production of other services in the ecosystems, such as soil formation (MEA, 2005). Ecosystem services form an integral part of human well-being and are considered as the foundation for sustainable development. The heavy cost industrial development has on the natural environment and healthy ecosystems are often overshadowed by the impact on economy and GDP.

Figure 1. Ecosystem services. Source: MEA, 2003

To address such an adverse impact of industrial development on nature it is imperative to adopt an approach that incorporates industries and environment together for the betterment of our cities. One such approach is to adopt the model of the eco-industrial park. There is no pre-defined definition of an eco-industrial park (EIP), yet, it is broadly understood as “a community of manufacturing and service businesses located together on common property. Members seek enhanced environmental, economic, and social performance through collaboration in managing environmental and resource issues” (Lowe, 2001). This definition reflects importance on the three pillars of sustainability: economic, social and environment.

Despite industrial parks offering greater collaboration opportunities and increase in work efficiencies although they have a negative influence on the physical and social environment. However, adopting an EIP framework mitigates these negative effects, leading the cities to a path of sustainable development. One biggest advantage of an EIP development is that the weakness of one firm can be the strength of another leading to enhancing the efficiency (UNIDO, 2017). The synergy created in the industrial area leads to lesser use of resources hence, impacting the environment and the economy positively (Jain, 2015).

A shift from a linear economy to a circular economy (CE) requires committed participation of the government, industrial partners and the local community. Implementation of an EIP is a step closer to making cities circular from an industrial perspective. Since natural assets are considered as the basis for the industrial development of an economy, it is important to maintain the functioning of ecosystem services through the lens of a circular economy. Therefore, eco-industrial parks are contributing to the circular economy by adopting the cradle-to-cradle design - making a significant contribution to the ‘sustainability’ of the cities.

The Kalundborg industrial symbiosis in Denmark, considered as the world’s first eco-industrial park since 1972, comprises of a partnership between public and private companies in Kalundborg working towards a circular approach to production. This industrial symbiosis is functioning on the principle that a residue of one company is used as a resource for another. For example, the process steam of a power station is used by oil-refinery and biotechnology companies; while the ash from the same power station is used by cement and construction companies (WWF, 2012).

The Kalundborg symbiosis did not go through a top-bottom initiative but rather evolved gradually due to stricter environmental regulations which motivated the firm owners to use each other’s by-products and share resources, thus, lowering the cost of compliance. Hence, all the companies exchange material, water, energy steams between the partners leading to a reduction in environmental impact and expenses, along with an increase in economic gains (Kalundborg Symbiosis).

Figure 2. Kalundborg Industrial Symbiosis. Source: Kalundborg Symbiosis.

Currently, the symbiosis is working towards achieving its mission of creating sustainable development by fully implementing ten circular economic projects by 2025 (Sönnichsen, 2018). One could say that the trust between the partners formed an essential element for the success of the Kalundborg industrial symbiosis.

The success of Kalundborg eco-industrial park led to thorough researches carried out by various ministries and environmental organizations of the United States of America and the European Union, leading to successfully planned and developed EIPs. Another example of a successful EIP is the Rotterdam Harbor industrial park with the main aim to capture CO2 emissions (Baas, 2010).

The Role of UNIDO in establishing EIPs

Eco-industrial parks were adopted as an initiative by the United Nations Industrial Development Organization (UNIDO) to contribute to the sustainable development goals (SDGs), hence, working towards ensuring CE. Since the past three decades, UNIDO has been promoting Resource Efficiency and Cleaner Production (RECP) in industries through pilot projects in developing and emerging economies.

Different parties understood the concept of EIP in a different way resulting in achieving different aims. To avoid this confusion and lack of awareness, UNIDO proposed an international framework which focuses on both new and existing industrial parks with main focus in transitioning and developing nations (UNIDO, 2017). The major beneficiaries of EIPs are the companies and industries, employees, local/indigenous community, environment and, the government at national and local levels.

By implementing its international framework, UNIDO has undertaken work in Zhenjiang Economic and Technological Development Zone (ZETDZ), in China, having ten industrial parks in this region. Thus, it serves as an opportunity along with many challenges to implementing RECP and industrial symbiosis.

However, there are very few examples of the eco-industrial parks which have considered the concept of ecosystem services specifically during the planning of an EIP. Keeping in mind the constant degradation and erosion of ecosystem services in China, Liu (2017) proposed a framework that integrates ES into EIPs. The framework is divided into two components where one component emphasizes on government policies and the efficiency of government officials and R&D centres. The second component looks into the effort put in by the key actors, they are, government officials, industrial park managers, business leaders and research institutes. The integration of these two components aims at resulting in the protection of existing ecosystems services and restoration of degraded ones.

Figure 3. Framework for incorporating ES in China’s EIPs. Source: Liu, 2017.

It is a flexible and comprehensive framework which would need leadership and commitment form the government. The framework is not only applicable to China but rather any country that is aiming to include ecosystem services in policies of developing EIPs (Liu, 2017).

Another eco-industrial park initiative under UNIDO’s international framework is seen implemented in the country of Vietnam, with the major environmental aim to reduce greenhouse gas emissions in the country with water consumption, water pollution along with other chemicals of global concern (UNIDO, 2020). The industrial zones of three different provinces were targeted: Ninh Binh, Can Tho and Da Nang (UNIDO, 2015).

One of the earliest EIP initiatives was implemented in India in 2010 (UNIDO, 2017). While the EIP approach was already implemented in Gujarat, UNIDO appointed the centre for the responsibility of RECP and industrial symbiosis, implemented in two industrial parks, namely: Nandesari Industrial Estate (NIE) and Dahej Petroleum, Chemicals and Petrochemicals Investment Region (Dahej PCPIR), managed by the industrial associations (UNIDO, 2017). The pilot project is ongoing, with a successful implementation of activities and further commitment and awareness amongst government representatives.

Industrial Parks to Eco-Industrial Parks in India

Industrial development has provided a well-sustained economic growth within our country, India. however, the industrial estates, if not planned and maintained appropriately possess huge environmental risks for the entire nation. With several small and medium enterprises and special economic zones for bigger companies; our industrial estates need an approach that reduces the environmental and economic risks (GIZ, 2012). This led to the adoption of the EIP framework in Gujarat.

The transformation from industrial parks to eco-industrial parks is a pathway to finding environmentally friendly solutions along with strengthening organizations. The key elements of improving infrastructure and services, eco-performance of every industry for establishing industrial symbiosis and overall industrial park management, are to be embedded for effective implementation of an EIP.

Along with the industrial belts in Gujarat, this transformation is also being seen in two pilot projects of Telangana and one in Andhra Pradesh (UNIDO, 2017). From 2008, there has been an increase in the staff dealing with environmental issues and efforts have been expanded in other industrial belts as well.

The highlights of the pilot measures taken up in Telangana and Andhra Pradesh Industrial parks are installation of solar street lamps, construction of stormwater drains, construction of sewerage systems for carrying industrial effluents (GIZ, 2012). Several companies benefitted by using each other’s by-products thus lowering the cost of operations and saving the environment. Overall improvement environmental helps to reduce the illegal discharge of wastes and effluents hence leading to the betterment of the parks.

Special focus on plantation measures in these estates have not only added to the aesthetics of the industrial estates but also improves climate at the micro-level (GIZ, 2012). Silva (2016) mentions in her research paper on how the placing green areas, by planting native vegetation, in the industrial belt and, use of light paint colours on the buildings will ensure landscape integration. This results in two benefits: It is an important technique to serve the local community which otherwise is affected by the industries and, preservation and enhancement of the existing ecosystem services (Silva, 2016).

Hence, from the above-mentioned transformations from industrial to eco-industrial parks worldwide, one can derive that valuation of ecosystem services can possess as an important indicator for successful impact assessment at policy and program levels for industrial development. This can further enhance the concept of the circular economy at an industrial level in our country, adding up to the sustainability of our cities.

About the Author

Nehmat Singh (LinkedIn) is a geographer and urbanist with interest areas in an urban environment, ecosystem services and sustainability. She pursued her master's in urban management and development from IHS, Erasmus University Rotterdam. Along with being an urban enthusiast, she is constantly trying to improve her baking skills.


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