The Kalundborg Symbiosis A model of progressive resource exchanges

Jay and Jeanne Bragdon visited the Kalundborg Symbiosis on September 23, 2011, where they talked with project officer, Berndt Jespersen. Two of the original corporate members of the symbiosis – Novo Nordisk and Statoil – are constituents of the Global LAMP Index and a third, Novozymes, is a related company.

“Today humanity uses the equivalent of 1.5 planets to provide the resources we use and absorb our waste. This means it now takes the Earth one year and six months to regenerate what we use in a year.”
-The Global Footprint Network, September 2011

Long before the world began to run short of oil, water and other strategic resources, a group of pioneering companies, in partnership with the municipality of Kalundborg, Denmark began a far-sighted experiment. Rather than paying fees to dispose of their wastes into the environment, they decided to mine each other’s waste streams as a means of generating value.

This public-private symbiosis began modestly in the early 1970s in an effort to conserve fresh water supplies and reduce operating costs. It has since grown into a progressive generator of value. Today the Kalundborg eco-industrial park is fast becoming a north European “Biocon Valley,” wherein leading companies and research institutions develop new products and technologies by exchanging biological knowledge and byproducts.

The earliest tenants of the symbiosis a Statoil refinery, DONG Energy’s Asneas power station, Novo Nordisk, Gyproc and the municipality of Kalundborg began by recycling and re-circulating water, stack gases, biomass and fly ash. As the following conceptual map of the project illustrates, the number, scope and bio-sophistication of exchanges has grown year by year. The successes of participating companies are now such that other innovative companies want to join in order to test new technologies on a large scale.

Kalundborg Symbiosis

The resource savings of the symbiosis are prodigious and growing. In 2010, it reduced CO2 emissions by about 265,000 tons per year and water consumption by an estimated 30 percent. Gyproc used scrubbed stack gases from Asneas to produce 100,000 tons of gypsum for wallboard construction. Nearby cement manufacturers used recycled fly ash to produce concrete. Local farmers got the benefit of waste yeast from Novo Nordisk’s insulin production, which converted to food for about 800,000 pigs per year; and they received approximately 150,000 tons of fertilizer from the wastewater plants of Novo Nordisk and Novozymes. Sludge from the municipality’s water treatment plant was used as an additional soil nutrient. Inbicon makes bio-ethanol from organic waste material from the farms, using the waste steam from Asneas plus enzymes and yeast from Novozymes.

Cluster Biofuels Denmark (CBD), one of the newest members of the symbiosis, is a bio-refinery research partnership between the municipality, Inbicon, DONG and the European Union. Its goal is to produce fuels and high-value products from biomass to replace oil-based chemical and pharmaceutical products. One promising new venture (REnescience) uses enzymes to treat non-sorted household waste into bio-ethanol, biogas, electricity and heat with reprocessed metals and glass as residue. Another uses microalgae to extract from wastewater bio-fuels plus high value pharmaceutically active compounds.

Replacing brute industrial force with intelligence

The brute force of traditional industry practice abetted by its voracious appetite for virgin materials, aggressive marketing and prodigious waste is no longer practical or acceptable. As indicated by the Global Footprint Network, the earth cannot sustain present rates of resource extraction and waste generation. Its biological carrying capacity is declining at an accelerating pace.

The simple truth is: infinite resource extraction is impossible on a planet with finite resources. Something has to give. The horrifying alternative to business as usual is accelerating ecological decline, species extinction, public health epidemics, economic disruption and social upheaval.

The Kalundborg symbiosis offers some hope of escaping this awful fate by addressing both the biological and economic challenges before us. Although not a total solution, it nevertheless stands as a practical step forward. The core idea is to leverage the abundant resources of human ingenuity while conserving the finite ones we’re currently depleting. The goal is to create an industrial metabolism that mimics a biological metabolism in the sense that little or nothing is wasted.

Companies that mimic life in the ways they organize and operate are particularly skilled at doing this. Their highly integrated open networks allow information and knowledge to spread quickly; their servant leadership cultures grow individual knowledge and team capacity; and their life-affirming missions, values and visions inspire employees to work with their hearts as well as their minds. By so leveraging human intelligence and creativity these companies are quick to learn and adapt as the world about them changes. (For more on this topic, see the text of my September 21, 2011 talk in Copenhagen.)

Bio-innovation leaders, such as Novo Nordisk and its offspring Novozymes, have been at the forefront of this revolutionary reimagining of corporate culture. Others in the symbiosis are catching on quickly

From Intelligent Solutions to Profit Leadership

All five primary corporate tenants of the symbiosis have exemplary records of performance. Beyond the cost savings they achieve by virtue of their resource frugality, they have been consistent innovation and profit leaders.

Novo Nordisk’s total investment return has been nearly 4,000% over the past two decades far above its key competitors in the pharmaceutical industry. Novozymes, which was spun out of Novo Nordisk in 2001, tripled its profits over the past decade and remains the world leader in industrial enzymes plus a rising force in biotech. Statoil generates more than double the oil industry’s net income per employee and its return on investment has been nearly 50% higher (2006 2010). Gyproc is a subsidiary of Saint Gobain, the European or world leader in all its activities.

DONG Energy, which is principally owned by the Danish government, is a world leader in wind energy with a low gearing ratio (43% in 2010) and a credit rating (BBB+/A1) that is above average for the utility industry (BBB). Although it doesn’t have a base of public shareholders, its profit growth has supported a commendable growth of net equity. Inbicon, a subsidiary of DONG Energy, was voted the “Bioethanol Company of the Year” at the 2011 World Refining Association.

Denmark, which is a significant player in the Kalundborg symbiosis, has a coveted AAA/Aaa credit rating and has the world’s fourth highest risk rating by Euromoney well ahead of the US in both categories. Risk is predominantly based on the 10-year credit default swap premium

These bona fides should deflect criticisms that the Kalundbord symbiosis is an unrealistic model for a capitalist economic system. The concept works because it is fundamentally sound.

Returning to the current global reality of ecological and economic decline, we are compelled to ask: How long can conventional business/economic thinkers continue to pretend that business as usual is the right way? Especially when a more viable model with a 40-year history of success is here for the whole world to see.

It is time we put aside outdated thinking and adopt the symbiosis model.