Eco-Industrial Parks Emerge as an Effective Approach to Sustainable Growth

There are about 250 self-styled eco-industrial parks operating or under development worldwide today, while just as recently as 2000, there were fewer than 50. Eco-industrial parks (EIP) offer the business advantages of traditional industrial parks while also using resources more efficiently, improving productivity, supporting the achievement of firms’ social responsibility goals, and lowering exposure to climate change risks.
a year ago

Washington, DC, January 23, 2018

Eco-industrial parks (EIP) are on the rise. There are about 250 self-styled eco-industrial parks operating or under development worldwide today, while just as recently as 2000, there were fewer than 50.

Eco-industrial parks (EIP) offer the business advantages of traditional industrial parks while also using resources more efficiently, improving productivity, supporting the achievement of firms’ social responsibility goals, and lowering exposure to climate change risks.

However, despite their proliferation, there hasn’t been an internationally accepted definition of what makes an EIP an EIP, until now.

A new publication written by the World Bank Group, United Nations Development Organization (UNIDO), and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH developed the first joint international framework on EIPs, An International Framework for Eco-Industrial Parks, which defines the minimum parameters for environmental, social, and economic performance of EIPs.

“By coming together, our three organizations aim to pave the way for creating a common vision for eco-industrial parks, which countries can use and modify according to their own needs,” said Ceyla Pazarbasioglu, Senior Director of the Bank Group’s Finance, Competitiveness and Innovation Global Practice (FCI). “We hope this common framework fills the current void in the understanding of eco-industrial parks and encourages their development on a global scale.”

Industrial parks cluster industrial businesses in a dedicated location to achieve efficiencies and take advantage of collaborative opportunities. But concentrating economic activity in one area runs the risk of also concentrating negative environmental and social impacts, such as pollution, greenhouse gas emissions, and poor labor standards.

The EIP framework describes the minimum expectations for eco-industrial centers across four categories:

  • Park management performance
  • Environmental performance
  • Social performance
  • Economic performance

As a baseline, EIPs must comply with all applicable local and national regulations. They must also meet the broader minimum expectations set out within this framework.

“This EIP framework aims to strike a balance between meaningful and achievable performance requirements,” says Etienne Kechichian, Senior Private Sector Specialist for the World Bank Group. “The requirements need to be meaningful to make a difference in key areas, but they cannot be so high that parks with some successful initiatives can’t qualify as EIPs.”

Examples of South Korea’s Ulsan Mipo and Onsan Industrial Park

The potential beneficial impact of the EIP model is being demonstrated in the Republic of Korea where 1,000 companies in industries as diverse as vehicle manufacturing, shipbuilding, and oil refining call the Ulsan Mipo and Onsan Industrial Park in South Korea home. Collectively, these companies employ 100,000 people and the industrial park serves as South Korea’s industrial capital.

Ulsan Mipo and Onsan is part of South Korea’s Eco-Industrial Park Initiative, which seeks to transform traditional industrial complexes into sustainable EIPs.  Firms in Ulsan Mipo and Onsan have invested some $520 million in energy efficiency, industrial symbiosis, waste management, and other eco-friendly improvements. To date, the investment has yielded $554 million in savings, while firms in the EIP generated $91.5 billion in revenues.

Photo: Aerial view of the Republic of Korea’s vast Ulsan Mipo and Onsan Industrial Park, an example of an eco-industrial park. Photo courtesy of the Republic of Korea.

Spurred by government investment of $14.8 million, companies in the park reduced their CO2 emissions in 2015–2016 by 665,712 tons, reused 79,357 tons of water, and saved 279,761 tons of oil equivalent in energy use. These changes have enhanced relations with local communities by improving the negative image of industrial complexes as polluters.

Ulsan Mipo and Onsan Industrial Park is one example of how EIPs can overcome challenges related to inclusive and sustainable industrial development.

Many barriers exist in designing and building new EIPs or in retrofitting existing parks, but one of the most critical was a lack of clear indicators or international benchmarks to guide the process, which prompted the effort that culminated in this newly published framework.

Source: The World Bank

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