Towards economic and environmental performance with Eco-Industrial Park pre-feasibility assessment in Moldova

Industrial Parks (IPs) have long been acknowledged as an efficient means to bring together industrial activities, businesses, infrastructure, and services. Whether they are called industrial zones, parks, corridors, special or free economic zones, these clusters of co-located industrial activities share a vital common attribute: they are planned and developed to foster economic growth and competitiveness through collaboration and a commitment towards efficiency.[1]

IPs or special/free economic zones (SEZ or FEZ) are also important drivers for industrialization. By grouping businesses together, they offer productivity and collective opportunities, including industrial synergies. However, these “communities of businesses” carry both positive and negative impacts, as; they can affect the environment through air and water pollution, degradation of resources, land contamination, and many others.[2] To address this, it is paramount to couple an economic performance with an environmental one, and to help IP and FEZ establishments become Eco-Industrial Parks (EIPs).

By becoming EIPs, industrial sites enjoy a wide range of benefits (economic, environmental, and social), as EIPs focus on mitigating and managing the adverse impacts of the sites whilst maximizing sustainable development and shared economic opportunities, improving ecosystems and innovation practices, and fostering synergies. Hence, EIP benefits are not only environmental but also commercial and strategic. They help industries become more competitive, reduce exposure to resource and licensing risks, promote business developments, and build a firm reputation for stakeholders and producers. In turn, this leads to EIPs attracting better financial and technology investments, enjoying improved economic gains, and building synergies at the local, regional, and national levels.[3]

Pre-feasibility and the transition towards Eco-Industrial Parks in Moldova

In the European Union’s Eastern Partner (EaP) countries, EU4Environment is working with selected industrial sites to help them in the transition towards EIPs – two of them are located in the Republic of Moldova. Here, the assignment for undertaking the EIP feasibility assessment takes place in the Free Economic Zone Valkaneș and Industrial Park Tracom, which have been designated as pilot territories. The activity is performed by UNIDO with the support of International EIP Experts from DSS+ (former Sofies) and national experts, in agreement with the Ministry of Economy and Infrastructure and the Ministry of Agriculture, Regional Development and Environment in Moldova.

The activities began in July 2021 with a two-day online workshop on the methodology of resource-efficient and cleaner production (RECP) and industrial symbiosis. Soon after, the two sites received approval to take part in the EIP feasibility assessment. Since then, active collaboration has been fostered among the stakeholders, leading to the first field mission to FEZ Valkaneș and IP Tracom at the end of June 2022.

This comes at a time when industries and consumers alike feel more and more pressure to reduce resource consumption and focus on sustainability. While regions and countries are affected disproportionately, the world as a whole is in a state of climate emergency, that is – we are using too many resources, emitting too many greenhouse gases, and producing too much waste. Because today’s manufacturing takes resources and turns them into products using a “take-make-use-discard” model – known as linear economy, industrial production is enormously inefficient.[4] To respond to it, new business models and circular practices must be adopted, both individually and in clusters, to help retain value in products and materials by closing production loops, giving by-products a second life, and, as much as possible, reusing, re-manufacturing or, as a last resort, recycling materials and goods.[5]

 Currently, the IP laws in Moldova do not contain any specific requirements on waste, energy, water, climate change or even social aspects. This makes it challenging to regulate and facilitate better environmental management, especially as each IP/FEZ has a different type of ownership and administration. Moreover, within some administrations, there are also intermediate agencies overseeing the tenant companies, making decision-making harder and control mechanisms less efficient.

During the field mission, important meetings with the Ministry of Agriculture, Regional Development and Environment of Moldova, and the two pilot sites were organized. The discussions, both fruitful and pragmatic, revealed several deficiencies and challenges in the two pilot industries, as well as ongoing efforts and commitment to accelerate the EIP assessment process.

In the case of IP Tracom (established 11 years ago on a historical tractor manufacturing site), there are 71 tenant companies working in various sectors (construction, technology, vehicle repairs, paper-based products, textile and garments, food production, pharmaceutical activities, thermal energy, and logistics services). A state of art IT hub is also located there, making IP Tracom a highly attractive destination for technology companies.

As for FEZ Valkaneș (a sub-zone with nine active onsite industries), the FEZ offers customs-free business to its tenant companies for any businesses they conduct outside Moldova. This makes it a very attractive site for tenant companies to attract investments and initiate partnerships.

Current challenges

Reflective challenges in both IP Tracom and FEZ Valkaneș are those related to development plans, the need to improve the infrastructure to attract new tenants, or the limitations within legal requirements when it comes to waste management. On top of those, larger events (the pandemic, followed by the Russian invasion of Ukraine), have had a substantial negative impact on the tenant businesses, prompting them to be against added expenses that may result from investments towards becoming an EIP.

On its own, IP Tracom is facing growth challenges as the new development plan is under design. Much of the infrastructure (including the electric grid) is several decades old and would need upgrading to reduce electricity losses. There is also a strong need to have waste and wastewater management facilities for the tenants – an issue not previously considered due to a lack of legal clarity and a requirement for funding. Another major challenge is that the administration only has a direct contract with about 50% of the tenants. The rest are subcontracted by existing tenants, thus limiting the control and influence of the administration. The on-site IT hub also attracts many services-based companies (rather than manufacturing ones), but there is an opportunity here to use the IT companies to modernise the zone’s industrial tenants and help them move towards Industry 4.0 (e.g., smart meters, automated data collection, etc.).

Separately, FEZ Valkaneș has significant challenges in terms of limited infrastructure and facilities to make it attractive (so that the tenant companies are willing to make investments). On top of it, there are limitations in terms of legal requirements and the lack of formal facilities for waste and wastewater management. The intent of the administration to convert the FEZ into an EIP is very high, but external investment might be needed.

 New and ongoing opportunities

The field mission highlighted several openings for industrial synergies in both IP Tracom and FEZ Valkaneș. For IP Tracom, collaboration could happen in the supply of by-products (paint/pigments), a joint procurement of certain raw materials by neighbouring companies, or by using waste as raw material between two companies (one company becoming a customer of another one through industrial symbiosis, IS). Other concrete examples would be the use of common car washing services; an e-waste collection hub; using end-of-life wooden pallets to make furniture across the IP; or the common use of electric scooters. Three tenant companies were also visited during the site visit to IP Tracom, namely Alphatherm (construction materials producer), Arama (furniture producer) and Cartnord (producer of paper and cards). All companies showed some good examples of RECP (reuse of raw materials; consideration of waste from off-cuts; advanced machinery for energy efficiency, air purified system, energy (heat) generation from waste; etc). Several RECP opportunities were also identified by the expert team (wastewater treatment; installation of ultra-filtration units in car repair shops; etc.). Vested to make the transition towards an EIP a reality (key focus area in its three-layered strategy for growth by 2030), IP Tracom has already started taking steps to increase its safety and improve common spaces, biodiversity and habitat preservation.

 In the case of FEZ Valkaneș, the new administration has taken measures to install security systems across the site. As its sub-zone is extremely large, it has plenty of sites that are occupied by tenants but are not used or are in poor condition. A canal running dry through the middle of the site also showcases the importance of water management in the industrial zone and the nearby areas. A railroad entering the FEZ in various locations makes it an excellent infrastructure to move goods in different parts of Moldova and neighbouring countries (despite, currently, not being in use). Two tenant companies were also visited: DK Intertrade (wine and brandy manufacturer) and ICS Terra Impex (construction and insulation materials). Both companies are already implementing some good examples of RECP practices (e.g., sending packaging materials back to customers). In addition, new opportunities can arise to make the FEZ and its operations more resource efficient (baling of waste; reuse of waste pigments; insulation of pipes for chillers, etc.).

A detailed list of all identified potential industrial and urban synergies will be highlighted in the full technical EIP report. (Note: the in-depth feasibility studies need to be carried out to check the full potential of all IS opportunities)

 Ways forward

Through pilot parks, the EIP concept provides an integrated approach for industrial sites to embrace Resource Efficient and Cleaner Production and industrial symbiosis. Concomitantly, this path also strengthens the role and oversight of park administrations and contributes to healthy, competitive and sustainable environments for the tenant industries.

In the case of both IP Tracom and FEZ Valkaneș, the field mission allowed the team to assess and validate the zones’ performance towards the international framework for EIP and to acknowledge important challenges and opportunities. Both pilots face common as well as individual struggles in their transition to becoming EIPs, but, at the same time, showcase notable commitments and openings to embrace resource efficiency and foster industrial synergies. Once additional feedback and information are provided from the zones and the EIP recommendations are finalised, a roadmap for EIP will be developed. Afterwards, a second mission will be planned for the later part of 2022 to discuss the EIP roadmap, and share the results and lessons learned. This will be followed by a regional event where a wide group of stakeholders will discuss Moldova’s experience with other countries from the EU’s Eastern Partnership region.

[1] Source: https://www.unido.org/sites/default/files/files/2019-02/UNIDO_EIP_Achievements_Publication_Final_0.pdf

[2] Source: https://www.unido.org/our-focus-safeguarding-environment-resource-efficient-and-low-carbon-industrial-production/eco-industrial-parks#:~:text=An%20eco%2Dindustrial%20park%20is,managing%20environmental%20and%20resource%20issues.

[3] Source: https://openknowledge.worldbank.org/bitstream/handle/10986/35110/156450.pdf?sequence=4&isAllowed=y

[4] Source: https://www.unido.org/sites/default/files/files/2020-02/IRE%20and%20Circular%20Economy_0.pdf

[5] Source: https://www.unido.org/our-focus-cross-cutting-services/circular-economy

Опубликовано на 30/08/2022

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