Indigo Development
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Eco-Industrial Parks (EIP)

Benefits | Strategies for EIP Development | Critical Success Factors | Shanghai Cases  | theme EIPs

Indigo Development introduced the concept of eco-industrial parks (EIP) to pollution prevention staff at the US-EPA in 1993. The Agency then embodied this concept in an Environmental Technology Initiative project, which led to the President's Council on Sustainable Development adopting EIPs as demonstration projects in 1995. By early 2005 communities in the US, Asia, Europe, South America, and Africa have initiated EIP or other eco-industrial development planning processes. The Circular Economy initiative in China has made it a principle strategy for multiplying efficiency of resource use. 

In our Eco-Industrial Park Handbook for Asian Developing Countries (download it)  we have updated the concept and strategies and incorporated cases from Asia.  (This work was supported by the Environment Department of the Asian Development Bank.) We now define the EIP concept as:

"An eco-industrial park or estate is a community of manufacturing and service businesses located together on a common property. Member businesses seek enhanced environmental, economic, and social performance through collaboration in managing environmental and resource issues. By working together, the community of businesses seeks a collective benefit that is greater than the sum of individual benefits each company would realize by only optimizing its individual performance.

"The goal of an EIP is to improve the economic performance of the participating companies while minimizing their environmental impacts. Components of this approach include green design of park infrastructure and plants (new or retrofitted); cleaner production, pollution prevention; energy efficiency; and inter-company partnering. An EIP also seeks benefits for neighboring communities to assure that the net impact of its development is positive."

Communities and businesses that  create eco-industrial parks will have a foundation for industrial development that is more competitive, more efficient, and cleaner than traditional industrial parks. In addition, new business niches will be opened for recruitment or incubation of new companies.
A grindstone hole along the Tule River in California
where members of the Yaudanchi Native
American tribe ground acorns into meal.
Benefits of EIPs

Communities embracing the EIP concept are seeking benefits for all public and private stakeholders.
  • Business derives cost savings and new revenues; shared services; reduced regulatory burden; and increased competitiveness.
  • The community enjoys a cleaner, healthier environment; business and job development; an attraction for recruitment; and an end to conflict between the economy and the environment.
  • Government receives increased tax revenues; reduced enforcement burden; reduced costs of environmental and health damage; and reduced demand on municipal infrastructure.
  • For the environment there is reduced demand on finite resources; decreased local and global pollution; increased use of renewable energy and materials; and an overall renewal of natural systems.

Strategies for Designing an Eco-Industrial Park

Several basic strategies are fundamental to developing an EIP or industrial ecosystem. Individually, each adds value; together they form a whole greater than the sum of its parts.

Integration into Natural Systems

Design the EIP in harmony with the characteristics and constraints of local ecosystems;
Minimize contributions to global environmental impacts, i.e. greenhouse gas emissions.

Energy Systems

Maximize energy efficiency through facility design or rehabilitation, co-generation (the capture and use of otherwise wasted heat from the electrical generating process), and energy cascading (the use of residual heat in liquids or steam from a primary process to provide heating or cooling to a later process: steam from a power plant, for example, is used in a district heating system);
Achieve higher efficiency through inter-plant energy flows; and
Use renewable sources extensively.

Materials Flows and "Waste" Management for the Whole Site

Emphasize pollution prevention, especially with toxics;
Ensure maximum re-use and recycling of materials among EIP businesses;
Reduce toxic materials risks through integrated site-level waste treatment; and
Link the EIP to companies in the surrounding region as consumers and generators of usable byproducts via resource exchanges and recycling networks.


Design water flows to conserve resources and reduce pollution through strategies similar to those described for energy and materials.

Effective EIP Management

In addition to standard park service, recruitment, and maintenance functions, park management does the following:

  • Maintains the mix of companies needed to best use each others' by-products as companies change;
  • Supports improvement in environmental performance for individual companies and the park as a whole;
  • Operates a site-wide information system that supports inter-company communications, informs members of local environmental conditions, and provides feedback on EIP performance.


New construction or rehabilitation of existing buildings follows best environmental practices in materials selection and building technology. These include recycling or reuse of materials and consideration of lifecycle environmental implications of materials and technologies.

The first pioneers who are developing eco-industrial parks are applying previously tested concepts and practices in an innovative whole system. You can find the separate components of the EIP vision working effectively in industry today. In some cases (energy efficiency in new process, equipment, and plant design, e.g.) there is an obvious contribution to competitive advantage. Many of these "new" approaches are becoming best business practices. Many of these ideas are simply applied common sense:
Why pay money to create a product you can't sell, call it a waste, and pay someone to dispose of it?

Why not use the energy of the sun and wind when you locate a building and design its heating and cooling systems?

Challenges of EIP development and critical success factors

There are national projects to develop new eco-industrial parks or to tranform existing parks in China, Korea, Thailand, and Vietnam and many smaller projects in other Asian, European, and Latin American countries, as well as the projects in North America and Australia. 
One major issue in EIP planning and development is that some players definite it in very narrow terms as "companies utilizing each others' 'wastes' or by-products." The one advantage of this limited definition is that it is easy to explain. In too many cases this tactic is not feasible and fails to achieve the full benefits of a an EIP developed according to our more systemic definition. See our paper, prepared for the Chinese State EPA, discussing the value of a more holistic approach and some of the major obstacles we have observed in EIP projects.

While working with the Korean national EIP initiative, Indigo's team defined critical success factors for that project that are generally applicable.

Shanghai EIP Cases

Indigo collaborated with the Sustainable Development Institute, Tongji University, in conducting two case studies in Shanghai, one of Shanghai Chemical Industrial Park and the second of Shanghai Caohejing Hi-tech Park. These cases may be downloaded as MS Word files. They both illustrate many of the challenges just noted.

Themes for EIP development

Chapter 6 of the EIP Handbook identifies a variety of eco-industrial parks organized around particular industrial themes. These include:
  • A resource recovery EIP;
  • An agro-EIP:
  • A renewable energy EIP;
  • A petrochemical EIP;
  • An EIP build around a coal-fired power plant.

The real innovation in creating eco-industrial parks is bringing such ideas together in a whole system. Indigo publications provide more detail on the planning of eco-industrial parks. Indigo services include strategic planning, EIP strategic reviews , and workshops for communities and developers considering eco-industrial parks.

Indigo Development collaborated with Berkeley resource recovery pioneer, Urban Ore, to envision an eco-industrial park anchored by a cluster of resource recovery companies that could utilize streams of discards from home, industry, government, and farm sources. See the resulting paper. The Alameda Country Waste and Recycling Commission is seeking tenants for this EIP.

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