Industrial symbiosis is the idea that one company’s waste can be another’s raw material – the first saving on disposal and the second on procurement. The efficiency gains can be enormous: food waste burned for electricity, or sewage sludge fuelling a combined heat and power plant.

The concept is not new: perhaps the best-known example dates to the 1960s in the Danish town of Kalundborg. A power plant, oil refinery, plasterboard manufacturer and chemical and pharmaceutical companies started exchanging by-products, and massively reduced both their bills and environmental footprints.

But it is only now that industrial symbiosis is really starting to make waves: last year the Organisation for Economic Co-operation and Development called it “vital” for green growth, and environmental group WWF recognised it as one of the top 20 business innovations that benefit the environment.

“Industrial symbiosis is getting more and more into the fabric of policy,” says Peter Laybourn, head of the company International Synergies, which in 2005 set up the world’s first national industrial symbiosis programme (NISP), in the UK.

Laybourn’s work is one of the reasons for the new-found popularity of industrial symbiosis. His contribution was not to create the idea, but rather to develop a way of putting it into action. Financed by the UK’s landfill tax, his company pioneered the method of bringing together people from different companies, getting each to list the resources that they have and that they need, and then, using a special software programme, working out how they could help each other.

In the first five years of operation, this has delivered impressive results, including diverting 35 million tonnes of waste from landfill and saving 30 million tonnes of carbon dioxide (4% of UK industrial CO2 emissions). The companies involved – 14,000 today, almost all small and medium-sized – saved over €1.1 trillion. A report by Manchester Economics, a consultancy, showed that for every €1 invested, the British government enjoyed a return of almost €9.

Funding problems

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Laybourn attributes NISP’s success to three factors: it engages rather than preaches; it benefits companies economically; and it has so far received adequate public funding. Funding is the main factor stopping the spread of NISP to the rest of Europe, suggests a draft report on the economics of resource-efficiency policies carried out for the European Commission.

Within Europe there are fledgling NISPs in Hungary, Romania and Slovakia, and examples exist further afield, in Brazil, China and South Africa. In Europe, the most advanced – after the UK – is in Romania. Getting the scheme off the ground has not been easy in the throes of the economic crisis: “It was very hard to convince people to take part…when they were mainly trying to save their businesses,” says Iulia Degeratu from Romania’s environment ministry.

But in Romania’s Suceava county, where forestry is a major industry, the programme has helped local companies collect waste sawdust and send it to processors that turn it into briquettes for heating. So far, 178 companies have reused half a million tonnes of waste – mainly wood – and saved 135,000 tonnes of CO2.

Laybourn says the biggest challenge for all NISP programmes is funding. “It has been declining [in the UK]. But it is difficult to move to a commercial model.”

If companies had to pay to take part, International Synergies Ltd would no longer be a neutral third party entrusted with commercially sensitive information. There would be a risk of looking for synergies with the biggest economic benefits.

For Romania and Hungary, which have both received funding through the Commission’s EU Life+ scheme, the funding crisis is “just around the corner”, predicts Laybourn. But he is optimistic – the results to date are a powerful argument for further investment, he believes.

In the future, Laybourn hopes to see cross-border synergies as well as new NISPs. He is also working with policymakers in the UK to better embed the programme in their decisions. The idea is that regional policymakers should always fully exploit existing resources before investing in new ones.