Creating a P2 Program

By Steve Bunsen and Michael B. Place

Steve Bunsen is senior project manager for Continental Placer Inc. (Glen Ellyn, Ill.) and Michael B. Place is president ofContinental Placer Inc. and CPI Environmental Services Inc.

In this era of heightened concern by government and the public regarding environmental deterioration, scrap processing businesses must move away from end-of-pipe environmental controls to pollution prevention, or P2, programs that integrate environmental controls into daily operations.

Preventing pollution is certainly not a new concept, but specific programs targeting pollution prevention as a standard operating procedure or part of a strategic business plan tend to be undervalued and underutilized.

P2 programs have created a new model of environmental management that’s replacing the old way of attempting to maintain compliance with an ever-changing list of environmental regulations. In short, P2 programs encourage business operators to take proactive, value-added, environmentally conscious steps that aren’t mandated.

Implementing a P2 program will benefit more than just the environment. Better pollution prevention can also enhance your firm’s financial performance. Make no mistake about it—even if your company hasn’t yet realized the financial benefits of a P2 program, your competitors have.

Assessing the Situation

The primary goals of a P2 program are to minimize the release and/or disposal of byproducts—especially those that are potentially hazardous—and maximize the reuse and/or recycling of those byproducts. A comprehensive P2 plan also addresses air emissions, waste water discharges, storm water management, and the management of solid and hazardous wastes.

The initial step in developing a program is to conduct a P2 assessment to identify potential opportunities. This assessment begins with identifying your firm’s operating procedures, recycling activities, and waste management practices, including quantities generated and unit costs for disposal of each waste or byproduct.

To ensure an accurate assessment, you should review certain items, including:

• a facility diagram that shows storage areas and material flow;
  
• an inventory of byproducts and wastes, specifying the ultimate planned destination or reuse of each one; and
  
• a list of operations that could potentially release hazardous substances.
  

After outlining this information, you’ll be able to evaluate the efficiency of your existing recycling and reuse programs, and identify where potential improvements can be made.

Because standard accounting systems don’t adequately track environmental costs, a total cost analysis may be necessary as part of the assessment. A final P2 assessment document should be made available to operations personnel.

Getting With the Program

The next step in the process is to develop a P2 program.

Operations managers must participate directly in developing a P2 program because they’ll be responsible for its implementation, can anticipate problems, and can best understand how the program will affect the flow and management of material.

When evaluating P2 and waste minimization opportunities at your facility, you must consider the economic feasibility of each proposed activity by examining such factors as total cost, payback period, return on investment, net present value, implementation period, effects on other operations, and reliability of the activity.

Before you can accurately evaluate the cost-efficiency of P2 activities, certain items require review, including:

• the amount of potential environmental, health, and safety-related fines your operation could face (including attorneys’ fees);
  
• liability insurance costs;
  
• site operation and maintenance costs;
  
• cleanup costs for past releases; and
  
• the estimated difference in property value for a clean versus an environmentally impacted site.
  

An implementation schedule and performance measurements should be agreed upon as each activity is selected. If planned properly, a P2 program can be implemented in an organized and phased manner.

Implementing a P2 program doesn’t have to impose technological or economic burdens. Most P2 procedures are practical and easily implemented, and your scrap processing operation may already be performing some of them. The best P2 management practices, for instance, consist of good housekeeping, preventive maintenance, P2 training for employees, and specific techniques based on the particulars of your operation. It should be noted that implementing a P2 program is an ongoing process that requires periodic review and adjustment.

State and local regulations should be consulted prior to implementing a P2 program since other regulations may be affected by a change in your waste management or operational practices. It’s worth noting that if a regulatory enforcement case has begun, suggest a supplemental environmental project—available from many state agencies—for P2 and direct future benefits back to the company rather than paying a fine to the government. P2 proj-ects normally reduce such fines and can result in payback to the operation due to increased efficiencies or more complete recycling of byproducts and/or wastes.

To ensure the success of your P2 program, top management should issue a clear policy statement in support of the program and demonstrate commitment through cash rewards or a recognition system for successfully implemented ideas. If this isn’t done, employees will quickly assume that the P2 program is just the latest management fad, and they will soon return to the old ways of doing things—with negative financial results.

Reaping the Benefits

In the long run, implementing a sound P2 program can benefit your business by reducing its risk and adding value to its operations.

Financial benefits, for example, can include:

• reduced waste disposal costs;
  
• lower risk of off-site Superfund liability;
  
• sale or reuse of materials that were formerly considered wastes;
  
• reduced or eliminated regulatory fines;
  
• lower regulatory compliance costs and less paperwork associated with wastes;
  
• reduced or eliminated on-site environmental cleanups;
  
• reduced compliance costs for related environmental regulations;
  
• lower insurance premiums thanks to improved safety performance; 
  
• higher production capability;
  
• increased property value resulting from less contamination;
  
• lower energy and utility costs;
  
• reduced waste transportation costs;
  
• increased product quality and higher revenues; and
  
• enhanced public image, which could result in fewer citizen complaints.
  

Given all of these potential financial advantages, it’s clear that P2 practices shouldn’t be viewed as overhead expense. 3M, for one, estimates that it has saved $810 million in the past 10 years thanks to its Pollution Prevention Pays program.

Scrap processing companies that recognize the benefits of using environmental controls to gain a competitive advantage have done so by identifying the strategic business value of environmental performance, accurately measuring the benefits in financial terms, and communicating effectively with employees and the investment community. These businesses look beyond the cost of environmental compliance and incorporate environmental planning into their ongoing business planning and decisions.

Auto shredding operations, in particular, have great potential for effective application of a P2 plan, especially in the steps prior to shredding. 

Shredding operations typically remove batteries, gas tanks, catalytic converters, CFC refrigerants, and sometimes tires to comply with regulatory requirements or capitalize on opportunities for strategic recycling. However, the removal of crank-case oil, oil filters, antifreeze/coolant, brake and transmission fluids, windshield wiper fluid, and air bag cartridges can reap additional benefits. When these are removed, the automobile shredder residue (ASR) will contain fewer contaminants and shredder air emissions will be reduced, resulting in potentially lower pollution control costs and reduced likelihood of regulatory violation.

The advantages of prestripping vehicles prior to shredding can be realized only when proper accounting of environmental costs versus pollution control costs are understood and documented. Some of the segregated materials can be reused onsite, though some will require filtering or reprocessing and others can be sold directly. The economic realities of segregating these materials must be carefully evaluated to ensure that a financial benefit will result.

Additional examples of P2 activities that can be implemented at scrap processing facilities include recycling wire chopping residue; using on-site recovered gasoline and oil; using wire chopping residue or shredded tires as landfill daily cover; crushing wood pallets for use as a secondary fuel or in a waste-to-energy program; and sending ASR containing shredded tires to a waste-to-energy facility.

The bottom line is that there’s growing recognition of the benefit of shifting from traditional environmental controls to economic opportunities of environmental stewardship. Operators of scrap processing facilities must begin to look at each byproduct and waste as a potential revenue stream or cost savings.

With landfill disposal costs continuing to rise and the rules for acceptance into landfills becoming increasingly stringent, implementation of a P2 program isn’t a question of if, but when. Operations that continue to view disposal and/or release as the primary alternatives—or merely a cost of doing business—will be outperformed by enlightened operations that practice P2 in every aspect of their business. •