FEATURE
When Pollution Prevention Meets the Bottom Line Cost savings are not always enough to convince industry to adopt prevention actions.
LINDA GREER CHRISTOPHER LÖBEN SELS
AND VAN
hat if a manufacturer learned that there were untapped opportunities to reduce waste and emissions within a plant that would also significantly cut costs? Conventional wisdom is that the company would seize on such opportunities and implement them. But the reality is those opportunities are not always taken. A case study completed in 1996 at a Dow Chemical facility showed that certain pollution prevention strategies would save the company more than $1 million a year, approximately 10-20% of the existing environmental expenditures at the plant. Process changes would have eliminated 500,000 pounds (lb) of waste and allowed the company to shut down a hazardous waste incinerator. Surprisingly, these benefits were not enough of an incentive to outweigh other corporate priorities and the potential loss of future business that might have accompanied the incinerator's shutdown. These findings came out of a collaborative study. In 1993, the pollution prevention pilot program (4P) was begun by the Natural Resources Defense Council (NRDC), an environmental advocacy group, and Dow Chemical, Monsanto, Amoco, and Rayonier Paper. Study participants, who were all interested in pollution prevention in a real-life industrial setting, wanted to know the reason for the lack of widespread reliance on promising pollution prevention techniques. Was it because there was not much to be gained environmentally or economically by using this environmental management technique? Was it because there were government regulations acting at cross purposes, incorporating barriers to implementation? If these factors did not explain the problem, what did? Pollution prevention is conceptually quite different from pollution control, which relies on capturing emissions generated in processing before their release into die environment. Pollution prevention seeks opportunities to minimize reliance on toxic chemicals, increase efficiency, and decrease waste and emissions. Instead of focusing on changes required for environmental and health reasons, pollution prevention planners also identify opportunities to save money, making the process a potential "win-win" for industry and environmentalists. This approach has failed, however, to take hold in the business world and at EPA and most state agencies. In fact, total waste production reported to the Toxics Release Inventory (TRI) in 1995 is up 6% from 1991, even though industry's TRI emissions have decreased. Some believe that, ironically, EPA's regulations are responsible for this trend, because its highly prescriptive end-of-thepipe nature discourages companies from implementing more holistic, innovative ideas at their plants. Others believe the more
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important obstacles to pollution prevention lie within the companies themselves. They suggest that the companies do not prioritize waste reduction initiatives in their business operations.
Texas chemical plant selected The study organizers picked a Dow Chemical Company facility in La Porte, Tex., as the primary site to evaluate. Located near the Houston ship channel, this relatively small, well-run Dow Chemical's plant in La Porte, Tex., nearly halved its release of wastes covered unchemical manufacturing operation der the Toxics Release Inventory. (Courtesy Dow Chemical) produces methylene diamine diisocyanate (MDI), the major ingredient of foamed and At the time of the study, MCB was the leading thermoplastic polyurethane. Polyurethane foams apchemical released annually from La Porte. In 1993, pear in a variety of rigid foam products, from auto406,000 lb of MCB (80% of the facility's total remobile parts to insulation in water heaters and picleases) were emitted (Table 1). In addition to being nic coolers. Polyurethane thermoplastic resins are a toxic chemical, MCB is a volatile organic comused in tool handles and other clear plastics. pound, emissions of which affect the region's ability to meet its ozone attainment levels. (After this Dow sells most of the MDI from the plant as raw study was completed, MCB emissions were substanmaterial to companies that combine it with various tially reduced; most are now captured and vented to polyols to create foam and plastic; the rest is comthe hazardous waste incinerator.) bined with polyols on site for some smaller volume Dow product lines. The La Porte facility's gross anLa Porte treated about 1.5 million lb of TRI waste nual revenues are more than $350 million per year, at the site in 1993, nearly three times as much as it and its estimated annual environmental expendireleased to the environment. Almost all of this treattures are $5 million to $10 million. ment occurred in an on-site hazardous waste incinerator, covered by a Resource Conservation and ReDow has several voluntary environmental imcovery Act (RCRA) permit. Phosgene and methanol provement goals: reduction of dioxin emissions; deprovided the largest quantities of wastes burned, folcreased reliance on incinerators throughout the comlowed by 170,000 lb of MCB (see box). (The amount of pany; and, by 2005, a 50% decrease in the amount MCB burned today is greater than 170,000 lb, beof waste generated prior to treatment. The La Porte cause additional quantities are now being captured.) facility's environmental staff are more interested in pollution prevention than most people in industry, making them good study participants. Because the La Assessment of pollution prevention Porte facility's manufacturing operations are not esLa Porte already had a pollution prevention plan, as repecially unusual, study organizers thought that the required by the state of Texas, and Dow was planning to sults of this case study would be broadly applicable. capture most of the remaining MCB air emissions and Dow La Porte's basic manufacturing process first incinerate them on site. However, this action was on combines formaldehyde and aniline to form methhold pending a decision to upgrade the plant's secylenedianiline (MDA). The carbon atom from formtion that produced these continuing emissions. All the aldehyde forms the methylene bridge between the other chemicals in Dow's existing pollution preventwo aniline molecules. MDA is then purified, placed tion plan were ozone depleters, required to be phased in solution in monochlorobenzene (MCB), and redown under the Montreal Protocol. acted with phosgene (produced on site) to form moConventional wisdom suggests that good oppornomeric and polymeric methylenebis(phenylisocyatunities to reduce waste and emissions have alnate) (MDI and PMDI, respectively). In the final process ready been identified by large, environmentally senstep, MDI and PMDI are purified and then sold. sitive companies. In fact, when this study began, plant p e r s o n n e l said they believed no o t h e r "lowIn 1993, La Porte's TRI releases for this process tohanging fruit" remained at the plant; that is, no other taled 506,457 lb, well below the 1989 level of 1,137,300 opportunities to reduce wastes and emissions relb (Table 1). Most of these releases were to air, folmained that could be readily implemented to the filowed by water. Because these emissions put the Dow nancial or environmental benefit of the facility. La Porte facility in the top 4% of TRI facilities for total releases and transfers, its industrial operations Pollution prevention literature, however, sugwere significant locally and nationally. gests that conventional wisdom might be wrong, and VOL. 31, NO. 9, 1997 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS • 4 1 9 A
TABLE 1
Toxic releases and transfers, in thousands of pounds, from a Dow Chemical facility Toxic releases from Dow Chemical's facility in La Porte, Tex., have declined steadily since 1989. Much of the decline has come from cutting monochlorobenzene (MCB) releases. Year Category
1987
1988
1989
1990
1991
1992
1993
MCB air releases MDI transfers Water releases Other air releases Other transfers
712.0 620.0 89.7 167.9 137.0
980.0 426.0 4.8 135.1 226.3
1036.0 630.4 4.0 97.3 122.0
876.0 181.0 3.1 106.7 72.8
520.0 462.0 230.0 182.6 3.2 0.7 224.7 184.7 125.5 147.8
TOTALS
1726.6
1772.2
1889.7
1239.6
1103.4
977.8
406.0 227.0 0.1 100.3 227.0 960.4
Source: Dow Chemical
TRI wastes (in pounds) incinerated at Dow Chemical facility in 1993 Ammonia Aniline Chlorine Monochlorobenzene Methanol Phosgene 1,1,1 TCA
15,000 6800 1400 170,000 630,000 840,000 2575
TOTAL
1,665,775
that various barriers within companies (1-3) or in government regulations (4) keep many important opportunities from being identified or implemented. To find out whether this was the case at La Porte, the study team first examined its pollution issues, reviewed existing pollution prevention plans, and assessed further opportunities for prevention. Once the "fact pattern" was established, we identified various barriers to expanded use of pollution prevention and sought agreement on recommendations to further its use. In the first phase of the project, to understand its environmental impact, the coverage of existing regulations, and the plant's view of opportunities and barriers to additional environmental improvement, we submitted written questions to the facility and obtained an extensive, documented response. We then toured the plant to clarify the written responses to our questions. From this work, we characterized the status of the plant before the project's pollution prevention assessment. In the second phase of this 18-month project, a third-party pollution prevention assessor, Bill Bilkovich of Environmental Quality Consultants, Tallahassee, Fla., went to the plant to seek pollution prevention opportunities. Bilkovich spent about 300 hours at the plant, talking with the staff and investigating opportunities. Our group met many times with the consultant. Pollution prevention assessments begin with an inventory of all wastes generated at a plant before treatment, recycling, or emission. They also require a chemical-use inventory for the site, which in4 2 0 A • VOL. 31, NO. 9, 1997 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS
cludes consumed chemicals that do not contribute to waste and emissions. The inventory at La Porte required considerable work, as is common in a pollution prevention assessment. Even though major waste streams had been identified and tracked at the facility for pollution control (regulatory) purposes, data on their chemical composition were lacking. Such information is necessary for pollution prevention. For example, to continue the pollution prevention potential for one waste stream, we needed to know what components were present in the waste stream in less than 5% concentration. In another waste stream, a high degree of confidence in the distribution of minor constituents was required. Because this sort of information often is of no regulatory or process significance, it is not gathered. Much of the data could have been easily collected, however, if made a priority at the plant. Following the waste and chemical-use inventory, we assessed opportunities for reduction through substitution, efficiency improvements in the process, recycling, and other options. Priorities can be set on the basis of financial considerations by working first on those projects that would deliver the highest rates of return. At La Porte, we set priorities primarily according to potential human health and environmental impact, which translated into high interest in MCB emissions to the air and the wastes burned in the hazardous waste incinerator. For each chemical or waste being assessed for reduction opportunity, the team had to identify the reason the waste was generated. Answering this question required in-depth knowledge of the manufacturing process and basic plant chemistry as well as the conditions under which waste was generated (e.g., was it generated continuously or intermittently, under upset or normal conditions, etc.). Because these critical pollution prevention issues are considered of little or no relevance in conventional assessments of a plant's environmental issues, it becomes critical to engage the production engineering personnel, especially the process chemistry experts, in pollution prevention planning. At La Porte, meetings with process engineers were key to developing a process flow diagram that showed material flow throughout the plant and indicated where each priority waste was generated (Figure 1).
Pollution prevention opportunities After examining the process flow and waste information, project participants concluded that the site's single largest environmental opportunity would involve capturing and recycling MCB and ending the incineration of 500,000 lb of chlorinated hydrocarbons. If all of the other waste streams to the on-site RCRA incinerator (called a thermal oxidizer, or TOX) could also be reduced, recycled, or otherwise managed, the TOX could be closed altogether, a broader prospect with superb environmental and costavings benefits. (The cost saving from eliminating the TOX was determined to be substantial, in light of upcoming re-permitting requirements, soon-to-berequired upgrades in the unit, and operation costs.) Thus, we had found an option that would be good for the environment and save the company a lot of money.
To proceed on the TOX closure opportunity, six major waste streams that entered the TOX had to be examined: methanol contaminated with amines and ammonia, MCB air emissions captured by the pressure swing absorption/carbon adsorption system, other organic compounds captured on carbon, a phenyl isocyanate/MCB waste, phosgene manufacture vent gases (phosgene and carbon monoxide), and MCB from a groundwater pump-and-treat system that processed historical contamination from a previous owner. A pollution prevention assessment was undertaken for each of these waste streams. What follows is a consideration of options for the first two wastes, methanol and MCB, which offered the most interesting opportunities for reduction. We determined that the others were best addressed by using alternative treatment options.
FIGURE 1
Wastes generated in chemical production The production of methylene diamine diisocyanate (MDI) creates several waste streams that go to the incinerator at Dow Chemical's La Porte facility. The waste stream is shown in red; the raw materials and intermediates used to make MDI follow the green arrows. (Courtesy Dow Chemical)
Dealing with waste streams At La Porte, options for conventional end-of-thepipe alternative treatment of the methanol waste stream include processing in the wastewater treatment plant or sale as a product. Incineration, however, had been considered the best option because methanol is essentially a clean fuel, and its use reduced the need for TOX operations' supplementary fuels. The pollution prevention assessment started with a different set of questions about methanol, and it presented some interesting options. First we asked, Where does the methanol originate? Although methanol is a major waste stream generated at the plant, a flow chart of the basic process chemistry does not show an obvious source. Interviews with plant personnel revealed that methanol enters the process in the formaldehyde-water solution (formalin) used to manufacture MDA. Formaldehyde is manufactured from methanol; and some residual methanol, in this case about 0.5%, is kept in the commercial product as a stabilizer. This methanol must be removed by La Porte before the phosgenation step. Because La Porte uses millions of pounds of formaldehyde each year, the amount of methanol waste being burned in the TOX reaches hundreds of thousands of pounds annually. The next obvious question was, Can we substitute formaldehyde with a less toxic chemical that does not generate a waste stream? Formaldehyde is used in the plant to provide a carbon atom to connect two aniline molecules and form the intermediate MDA. Perhaps carbon dioxide (C02) could be used to achieve the same end. The assessor researched the use of C02 and found that, although there was a patent on the use of C02 in the manufacture of toluene di-isocyanate (TDI), the process had never been commercialized and was not applicable to the manufacture of MDI. Other alternative sources of the carbon bridge atom were discussed with Dow research and development personnel, but we found no other good options and stopped this line of inquiry. The next option was to look for ways to reduce or eliminate the methanol in the formalin. But conversations with a major formaldehyde manufacturer indicated that, under the temperature, humidity, and transit time conditions common in the Gulf Coast, at least 0.3% methanol is necessary to prevent the in-transit polymerization of formaldehyde. Thus, we could not
decrease methanol waste to insignificant quantities by using this approach at this plant. The identification of an alternative stabilizer, one that might be effective at part-per-million (ppm) levels, was not explored for La Porte; the driving force for developing an alternative would have to come more broadly from other formaldehyde users across the country. However, the assessment did raise interesting questions about the treatment and disposal costs incurred nationwide for the management of waste methanol at plants that use formaldehyde as a raw material. Approximately 8 billion lb of formaldehyde are used annually in U.S. manufacturing, and calculations show that 40 million lb of methanol are being handled or disposed of by the plants purchasing this chemical. Full-cost accounting of the cost per pound of formaldehyde purchased as a raw material could reveal that the cost for residual waste methanol management is as high as or higher than the raw material cost—and open a market opportunity for higher priced, methanol-free formaldehyde. Next we asked, If methanol is needed to stabilize the formaldehyde, might there be a way to remove the methanol as a clean waste stream before the formaldehyde enters production and comes in contact with aniline? Interest in this option was depressed by the low value of recovered methanol and the high cost of constructing and operating separation equipment to process millions of pounds of formaldehyde each year. Because the trace quantities of aniline and other nitrogenous compounds make the waste methanol difficult to sell, we then asked whether the aniline could be removed from the methanol. Even though trace quantities of aniline could be removed and yield a salable methanol-water mix, the assessment team did not believe that aniline could be eliminated to levels considered safe for unrestricted commercial use of the methanol waste. Project organizers then asked whether a customer could be found for methanol containing aniline. A cursory review of TRI data revealed no facility close to La Porte that had methanol and aniline emissions, and we did not pursue an in-depth review. VOL. 3 1 , NO. 9, 1997/ ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS 1 4 2 1 A
The final option we evaluated was returning the waste methanol to the formalin manufacturer for future processing into the formalin product. Dow was interested in this option and would consider a "take back" provision in its purchase contract quite favorably, although this option has not been pursued to date. MCB waste stream Analysis of MCB took the same initial path: identifying the use of MCB in processing (solvent carrier in the phosgenation step of the process) and seeking less toxic-chlorinated alternatives for this purpose. Finding no alternatives, we shifted our focus to recycling MCB instead of incinerating it. Plant personnel reported they had briefly considered this alternative when they decided to capture the MCB air emissions to reduce their air pollution, but they decided to incinerate the solvent because it was convenient and legal to do so, and they did not believe this practice would pose significant risk. The plant personnel also believed that the presence of water in the used MCB would preclude recycling. The assessor researched this and found that water was not actually the principal barrier to recycling. To the contrary, the virgin MCB purchased by the plant is routinely treated on site A pollution to remove water introduction in a molecular sieve bed before introducprevention plan tion into the process. Production staff then raised a more important conthat saves cern: If the waste MCB contained any impurities, mey could build up money and is in the system if MCB were recycled. Impurities were possible, but good for the sufficient information was not available about the time course of their environment is buildup. The uncertainty raised by issue could be easily resolved by not always this analysis of the actual level and idenquickly tity of trace contaminants in this stream, however. implemented. At the end, the assessment team's short-term recommendations included recycling the MCB waste stream that is currently incinerated; selling the methanol or burning it at an alternative, off-site incinerator; reducing levels of phosgene sent for treatment; and scrubbing the remaining waste phosgene instead of incinerating it. If all these wastes streams could thus be addressed, and several very minor waste streams were sent off site, Dow La Porte could conceivably shut down its on-site hazardous waste incinerator and avoid the cost of RCRA re-permitting. Dow personnel estimated the rate of return on investment for this project at 20-70%. The investment would pay for itself somewhere between 15 months and 5 years, depending on how the various projects were configured. Estimated savings are $1 million a year, derived from reduced raw material costs, incinerator operating costs, and re-permitting costs with regulatory authorities. Virgin solvent purchases alone might drop by 90%. Barriers to implementation There were no significant regulatory barriers to adopting this plan. The problem lay within the company. 4 2 2 A • VOL. 31, NO. 9, 1997 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS
Specifically, these opportunities were weak candidates in the capital investment process at Dow. The project was considered for implementation twice by the urethane business group within Dow Chemical and was put off both times because other, more financially attractive business opportunities were given higher priority. Had EPA required that Dow reduce these waste streams, the 4P projects would have been mandatory, and the rate of return of the project would have been irrelevant to Dow's decision making. However, because these were voluntary opportunities, they were considered in the same way as other business opportunities would be. To succeed, these opportunities needed to do more than reduce waste and save money; they needed to be superior to other options for capital investment. Although Dow hopes to implement the pollution prevention plan in the future, the La Porte pollution prevention project rests in an odd position: It is not required for the purposes of environmental compliance, and it is not of central interest to production engineers whose main priorities are in capacity building. Nor is the project highly compelling to business line personnel with profit-and-loss authority. They are more concerned with maximizing profit for their business among various Dow plant locations around the world. Conventional wisdom that says most good opportunities to reduce waste and emissions have already been identified, but that belief was incorrect in this case: The 4P project found very promising opportunities that had not been identified by Dow. More significantly, once pollution prevention opportunities were found, corporate business priorities and decision-making structures posed formidable barriers to implementing those opportunities. Most environmental professionals outside of industry incorrectly assume that a pollution prevention plan that actually saves money and is good for the environment will be quickly seized upon by U.S. businesses. This work shows mat at least in one firm, such opportunities may not be sufficiently compelling as a business matter to ensure their voluntary implementation. References (1) Porter, M. E.; van der Linde, C. Harvard Business Review September-October 1995, 120-34. (2) New Jersey Department of Environmental Protection and Energy. Industrial Pollution Prevention Planning: Meeting Requirements Under the New Jersey Pollution Prevention Act; Office of Pollution Prevention, State of New Jersey: Trenton, July 1993. (3) Little, A. D. "Hitting the Green Wall," Perspectives; Arthur D. Little: Cambridge, MA, 1995. (4) Schmitt, R. E. Natural Resources and Environment 1994, 9, 11-13, 51.
Linda Greer, senior scientist with the Natural Resources Defense Council, has worked for more than 15 years on the regulation of toxic chemicals and hazardous waste. Greer initiated this collaborative study to explore alternatives to conventional regulatory mechanisms aimed at reducing toxics in the environment. Christopher van Löben Sels is a senior project analyst in the Natural Resources Defense Council's San Francisco office.
