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By Lillian Childress

LILLIAN CHILDRESS examines the growth of eco-industrial parks and the circular economy in China.

China’s largest sugar refining plant is also its most forward-thinking. Since 1956, the Guitang Group, located in the heart of southern China’s Guangxi Zhuang Autonomous Region, has slowly evolved from a single refinery to a large industrial park. What makes this industrial park different from the myriad of others in China is that all the factories in the park are working together. Like an interconnected web of symbiotic interactions in an ecosystem, each factory is participating in a complex change of input and output flows, using the waste from one process as the inputs for another, and sharing infrastructure between multiple firms.

   Today, the Guitang Group is China’s premier example of an eco-industrial park, a new paradigm for organizing co-located factories that uses waste reduction and energy efficiency as its guiding principles. For example, after sugar cane passes through the main refinery, the leftover fibrous stalks—called bagasse—are sent to a pulp plant and then a mill to be turned into paper. Leftover bagasse is sent to an alkali recovery facility to be used as an input for the adjacent cement plant. Initially developed as a profit-gaining mechanism, incorporating firms that used by-products of existing factories was key for the Guitang Group to establish relationships with suppliers and the local government. Today, the State Environmental Protection Agency hails the Guitang Group as a model for eco-industrial parks around the country.

   By building factories around the original sugar refinery that use locally produced wastes as their principal inputs, the Guitang Group has succeeded in employing thirty percent of the five million residents in the city of Guigang, contributing to one third of the area’s GDP and dramatically reducing emissions of air pollutants. For a country that produces almost a quarter of global manufacturing output, eco-industrial parks like the Guitang Group provide a valuable window into the future for more sustainable and ethical methods of production.

   The intellectual underpinnings of eco-industrial parks like the Guitang Group began to take shape decades before any physical factory networks were built in China. In 1989, Robert Frosch and Nicholas Gallopoulos, two researchers at the General Motors Research Laboratory, published their seminal paper “Strategies for Manufacturing,” in which they laid down the intellectual framework for a radically different guiding principal of manufacturing called “industrial ecology.” In order help reduce resource depletion and waste accumulation, Frosch and Gallopoulos suggested that industrial activity should be transformed into a more integrated model involving an industrial ecosystem.

   “In such a system the consumption of energy and materials is optimized, waste generation is minimized, and the effluents of one process…serve as the raw material for another,” wrote Frosch and Gallopoulos. Over the next few decades, the field of industrial ecology grew to include any academic discipline that uses ecological systems as a tool to optimize and evaluate material and energy flows. Industrial ecology is a marriage of two concepts that have historically been in opposition with one another.

   Ultimately, industrial ecology is a stepping stone towards a circular economy. This model moves away from the linear logic of putting raw materials in one end of the production cycle and getting waste at the other end. Instead, the circular economy focuses on creating a loop of energy and material flows, where waste is simply recycled as input for a new process.

   Academics from prestigious Chinese universities like Tsinghua and Fudan are embracing the concept of the circular economy. In a recent address to the Global Research Forum on Sustainability, Production, and Consumption, Professor Zhu Dajian of Tongji University in Shanghai expressed confidence that China is moving towards a circular economy. Suggestions he gave to further this transition included increasing recycling operations in the agriculture and manufacturing industries, making product reuse easier for consumers, and moving towards a more service-based economy.

   The Guitang Group is not the only eco-industrial park in China — currently over 60 eco-industrial parks have been approved by relevant government ministries. The majority of these are mixed industrial parks, as opposed to sectoral industrial parks, such as sugar, mining, or petrochemical industries. However, the number of eco-industrial parks is rather small when compared to a total of around 1560 industrial parks in China.

   Eco-industrial parks that use industrial symbiosis as their guiding framework of operation are the cornerstones of a circular economy. While many symbioses arose spontaneously out of mutual cooperation among private enterprises, the growth of eco-industrial parks in China has largely been fueled by government planning.

   There are currently three separate government incentive programs that guide the development of eco-industrial parks. While none of these programs mandates standards for existing parks, voluntary participation is encouraged through promises of government subsidies and assistance from technical experts.

   The Guitang Group is a prime example of how government intervention can stimulate symbiosis. The city government in Guigang sets a price floor for the amount that the company pays local sugar farmers. This policy helps farmers keep financially afloat through China’s rapid shift towards industry and manufacturing. Additionally, the government mandates these local sugar producers to send their by-products of bagasse and molasses to the Guitang Group for production of paper and alcohol.

   Of course, challenges still remain for the growth of eco-industrial parks in China. Cooperation with local governments and communities is critical for maintaining interconnection. However, these linkages can be difficult to forge in a short timespan. More momentum towards sustainable industrial development also needs to be built, either through increasing research funding or training new expertise. Additionally, some developers are wary of the short-term losses of transitioning towards an industrial symbiosis, despite long-term gains.

   Although the financial gains of industrial symbiosis are difficult to quantify due to the complex nature of both the exchanges themselves and other less tangible added-value benefits, a variety of studies have shown the financial gains due to transitioning to an industrial symbiosis model. One study estimates that that from 2010 to 2013, revenue for the Tianjin Economic Development Area, China’s largest eco-industrial park, experienced a 1,500-fold increase, while carbon dioxide abatement increased by over 400 times. A comprehensive analysis of the amount of money the Guitang Guanxi Group has saved over its history due to industrial symbiosis has not been carried out, but according to estimates, it was able to sell its sugar at a 10-30% premium due to higher quality.

   As China’s economy continues to grow, it is critical that existing eco-industrial parks continue to be funded and new parks continue to be built. Directing China’s economy towards a more circular flow of materials and energy will not only reduce pollution but also provide a more sustainable foundation for future economic growth.

Lillian is a senior at Yale College. Contact her at lillian.g.childress@yale.edu.

Illustration // Zishi Li