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Eco-Industrial Parks 2.0: Building a common global framework

Sinem Demir's picture
Eco-Industrial Park in Republic of Korea. @KICOX
Eco-Industrial Park in Republic of Korea. @KICO

Eco-industrial parks (EIP) refers to putting in place serviced industrial infrastructure conducive to attracting new investments, especially in manufacturing, while at the same time promoting environmental sustainability.
 
Industrial development has been perceived as the fundamental enabler for the economic growth and poverty reduction in developing countries. Technological development and boosting job creation are major contributors to achieving an industry oriented economic growth. However, for a sustainable and resilient development, environmental and social sustainability aspects have equal importance. Eco-industrial parks are an emerging contributor to an environmentally and socially sustainable, and economically sound industrial development.
 
Although eco-industrial parks have been around for some time, the concept has lacked a solid footing due to competing interpretations as to what qualifies as an EIP. In some cases, the label may signify nothing more than some form of green initiative within an industrial park. This lack of clarity has hampered development of truly “green” industrial sites—that is, industrial parks that engage in action in a range of areas, from energy efficiency to solid waste disposal to employee safety and wellbeing.
 
The World Bank Group, UNIDO and GIZ have developed a common understanding of eco-industrial parks as reflected in a new publication, “An International Framework for Eco-Industrial Parks”.
 
While strict guidelines would be impractical due to varying country conditions and industrial park frameworks, adapting a set of common parameters to different local contexts could increase the sustainability of industrial development and enhance the credibility of EIP.  
 
Some industrial park frameworks already exist at the national level, as analyzed in this recent Bank Group’s publication.
 
China, for instance, has adopted three different frameworks to promote climate action and sustainability within its industrial zones. Korea has adopted an EIP approach focusing primarily on “industrial symbiosis.” Kalundborg, in Denmark, is another famous example which developed the concept of EIP organically, from the ground up, with synergetic industry evolution without implementing a developed national framework.
 
The new WBG-UNIDO-GIZ framework is significant in several way, as it:
  • Encompasses economic, social, environment and park management performance requirements.
  • Provides clear prerequisites for EIPs and suggests specific performance requirements that can be adjusted to the national framework.
  • Provides examples on how the framework can be enhanced or converted into a grading scheme (e.g., “platinum” for those that incorporate the most encompassing guidelines; “bronze” for those that include a minimum set of less stringent requirements).
  • Is applicable in both developed and developing countries.
  • Is applicable to both newly built EIPs (greenfield) and retrofitting IPs (brownfield)
An example of such work is in Turkey, where the Bank Group is working with the government to develop a country-wide framework for eco-industrial parks. The Government of Turkey wants to raise manufacturing productivity while developing leaner and more innovative production processes. A set of partner industrial zones, such as those in Bursa, Ankara, Adana and Izmir, are keen to join the program. The establishment of EIPs would offer them new revenue streams and an opportunity to gain national and international recognition as centers of manufacturing excellence, as global buyers are leaning towards green procurement and sustainable supply chain. Considering Turkey has 284 operational industrial zones, the potential impact of adopting an EIP framework in response to climate change is promising.
 
In Vietnam, UNIDO and the Bank Group are developing national criteria for EIPs. The two institutions will also pilot EIP framework in one of Vietnam’s industrial parks to demonstrate the social and environmental impacts and economic returns created.
 
In both Turkey and Vietnam, the development of EIPs will draw heavily from the joint global framework, adapted to national conditions.
 
With the framework now available to policymakers and park operators, certain steps are needed to scale it globally:
 
1. Rely on a detailed technical and financial analysis that helps build the business case for eco-industrial parks: Industrial park operators are eager to promote their parks, increase services to their tenant firms and ultimately increase their profit margins. Detailed technical and financial analysis should be conducted while executing the EIP Framework to provide ample evidence that beyond an economic rate of return, there is a clear business case for these industrial parks to convert to an EIP.

2. Ensure regulations match EIP ambitions: Beyond financial viability, countries may have regulatory frameworks that may limit or hinder certain actions within EIPs. A recurring example is the limitations on recirculating treated waste water or the reuse of certain waste streams as inputs. Countries need to ensure that their regulations and institutions facilitate and support these EIP actions.

3. Nurture and monitor the EIP framework: Countries should transparently update and modify the framework to ensure there is gradual improvement of performance of EIPs and that lagging EIPs are given a chance to catch up.  Having an EIP framework in place that only encourages a very select number of industrial parks to improve their EIP performance would be limiting; efforts should be made   by public authorities, zone developers and private sector participants to push the entire framework to improved environmental and social performance. 
Infograph for EIP blog
Source: World Bank staff

4. Leverage public-private dialogue from start to finish: Industrial parks require a wide range of collaboration across national and private actors. Eco-industrial parks make this an even more ambitious undertaking requiring a wider range of actors dealing with environment, energy, labor, and other related issues. The Bank Group recently published 6 global principles for climate actions that can be used by governments in developing their EIP framework.

The public and private sectors must take active steps to promote industrial development in an environmentally-sustainable manner. Proceeding with a more robust framework of what an EIP entails should build confidence that our aspirations for environmentally sustainable growth are attainable. The framework marks the beginning of what we anticipate will be an iterative and evolving process leading to an updated ‘EIP 2.0’ global framework and continuing improvement and refinement in the years to come.

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