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Why there could be cash in your trash

Why there might be cash in your trash

In the late 19th century, a German chemist named Justus von Liebig discovered that yeast could be concentrated. That discovery led to the invention of one of the UK’s most famous brands, Marmite. And significantly, the first factory was founded in 1902, just a few miles away from its main source of ingredients – the used-up yeast from the Bass brewery in Burton-on-Trent.

It’s one of the most famous examples of industrial symbiosis – one firm or entity making productive use of another firm or entity’s waste or by-product. The advantages are obvious: it’s better for the environment if a material isn’t being extracted from the ground or transformed in some way. No ecosystem is being disrupted, and recycling rather than creating from new means less energy use and carbon emissions.

“Industrial symbiosis – or cradle to cradle, or the circular economy – is a simple concept,” says industrial ecology specialist Jennifer Howard-Grenville, Diageo Reader in Management Studies at Cambridge Judge Business School. “It’s nothing new. It’s been going on in some industries, like farming, for centuries. There are seemingly obvious economic and environmental benefits. But, like many things, it’s difficult to achieve in practice.”

The National Industrial Symbiosis Programme (NISP), an independently run commercial enterprise which was formerly government-funded, can put some numbers on those benefits: between April 2005 and March 2013 its methodologies have helped to achieve £1.1bn cost savings and £1.4bn generated in additional sales, as well as recovering and reusing 45 million tonnes of materials.

“So what holds companies back?” asks Howard-Grenville. “Lack of knowledge, of course – not knowing that there might be another source of this material out there. Trust is a big one: ‘I know about this source – but do I really want to input someone else’s by-product into my highly tuned, high-quality manufacturing process?’ Then there’s uncertainty: no manufacturer in this world only has a single source of material. ‘What happens if I enter into an industrial symbiosis relationship and the source factory goes down?'”

These problems may be difficult, but they’re not insurmountable, Howard-Grenville says. Often, just a new, non-linear way of thinking is required. She points to the small Danish town of Kalundborg, where the DONG power plant is at the centre of a web of industrial symbiosis. It sells steam to pharmaceutical firm Novo Nordisk, while its warm water has provided perfect conditions for a fish farm in the bay. Fly ash, a by-product of coal burning, is used to build roads and make cement. It’s an entirely informally developed approach, and it’s estimated to reduce CO2 emissions by around 270,000 tons a year.

It’s become a model for successful industrial symbiosis. What makes it work? “There was no master plan in Kalundborg,” says Howard-Grenville. “That’s the beauty of it. But proximity is important. If you’re trying to exchange steam with someone, you have to be neighbours. And there’s that trust factor. It’s a small town; everyone knows each other. They all talk to each other. They have close social ties.”

And while Kalundborg-style cross-pollination between sectors – from fish farming to energy production – is vital, Howard-Grenville’s research has explored the long-held assumption that the best way to find someone who can use your waste is to look outside your sector.

“If I’m an auto manufacturer, I have certain types of problematic wastes that I’m trying to deal with. If I go to all of my existing auto manufacturer peers and all my existing suppliers, we’re all dealing with the same stuff. We all have the same problems. There aren’t any synergistic opportunities because we’re too similar. So there is this argument you need to go outside the industry to really find the creative opportunities.”

But in fact, Howard-Grenville’s research with colleagues has found that many industrial symbiosis exchanges actually occur within an industry or with closely related industries. They speculate that the explanation lies in the social ties that already exist between these parties.

“That isn’t to say that the potential to find exchanges outside one’s industry isn’t enormous, but it’s hard to learn about and make the connections,” says Howard-Grenville. “A third-party facilitator like NISP can make it easier to find opportunities between industries.”

The Denby pottery in Derby, for example, creates ceramic waste. It’s sharp and it has a lot of different materials, so it’s hard to recycle. When the company contacted NISP, it was put in touch with a recycling company that recycled the waste into aggregates for the construction market. This has saved around £10,000 and generated additional sales of £110,000, according to the case study on NISP’s website.

Adapting this way of thinking requires effort, says Howard-Grenville. All waste is not equal – sawdust is one thing, while paint sludge is quite another. Yet it seems that once that cultural shift has taken place within an organisation, industrial symbiosis is something that employees become more committed to the more it takes place.

“Companies and managers get excited about industrial symbiosis projects based on the potential economic return, even though at the end of the day those returns tend to be lower, as it’s hard to do these things,” she points out. “Maybe there is new equipment needed, maybe there are new things that are needed to treat the material in the interim in order to make it usable again. But even though the economic benefits are not fully realised, many companies still get hooked. They realise that they’ve got a new way of thinking about waste, and they go off and search for other opportunities with other materials.”

And the best systems will be those that are able to change and adapt, finding innovative solutions to new problems. “When I visited Kalundborg, the power plant was scheduled to be decommissioned at some point,” says Howard-Grenville. “But they weren’t worried. They had a number of other solutions – a new company moving in which could supply the steam, for example. What struck me was the resilience of the system. It was like nature. You can destroy an individual species or link in an ecosystem but the ecosystem overall will persist.”