6-8 May 2015, Regional Workshop

Fostering the Green FDI Opportunity in Asia & the Pacific Seoul, Republic of Korea

Eco-industrial Park Best Practices in Korea:

Case of Ulsan

Hung-Suck Park
Professor, Department of Civil and Environmental Engineering, University of Ulsan, Ulsan, South Korea
Co-Chair , Green Growth Committee of Ulsan Metropolitan City, Ulsan, South Korea
In this presentation….

1. Korea Green Growth Strategy

2. Korea Eco-Industrial Park Initiative

3. Ulsan Eco-industrial park

4. Challenges to sustainability

2
The Korea Green growth policy
The concept of Green Growth

Comparison of the 1st and 2nd plans for Green growth

3
Vision and Goal of the 2nd Plan for Green Growth

Vision
Realization of People’s Happiness through the Harmonious Development between
Economy and Environment

3 Strategies

Establishing a Low-carbon
Socioeconomic Infrastructure
Achieving a Creative
Building a Pleasant Living
Economy through the
Environment Safe from the
Convergence of Green
Harms of Climate Change
Technology and ICT

⇒ 5 Directions and 20 Core Tasks plan to materialize the Presidential Vision for
“Low Carbon Green Growth”

4
5 Direction 20 Core tasks of 2nd plan for Green Growth

“Low Carbon Green Growth”

Forming an
Establishing a Realizing a Strengthening
Effective Ecosystem for
Sustainable Sustainable Global Green
GHG Reduction Green, Creative
Energy System Green Society Cooperation
Industries

Systematic implementation Strengthening the capacity

Reinforcing energy Developing cutting-edge Effectively responding to
of GHG reduction for climate change
demand management green technology climate talks
roadmap adaptation

Extending regional
Establishing the ETS and Enlarging the basis for
Increasing the supply of Fostering green, cooperation in green
vitalizing the carbon eco-friendly living
new and renewable energy creative industries growth and its global
market environment
spread

Setting an economic Enhancing cooperation

Setting a long-term Building a dispersion type Forming green space in the
structure for resource with developing countries
national reduction target generation system national territory
circulation and internal stability

Expanding the bases Reinforcing cooperation

Securing the safety of Rationalizing regulation
Expanding carbon sinks for green welfare and with and support of
energy facilities and cultivating green talent
governance GGGI and GCF
5
GHG reduction target for Green Growth
4% reduction by 2020 from the 2005 levels (30% reduction of the 2020 BAU
levels), announcement on 17 November 2009. Unit : million ton CO2e

2012 2013 2014 2015 2016 2017 2018 2019 2020

Business as usual
- - 694.5 709.0 720.9 733.4 747.1 761.4 776.1
(BAU)
Emission targets - - 659.1 637.8 621.2 614.3 604.4 585.3 543.0
Reduction 1.6% 3.3% 5.1% 10.0% 13.8% 16.2% 19.1% 23.1% 30.0%
Source : 2nd plan of Green Growth plan, PCGG, 2014.06

Emissions Prospect and Three Different Reduction Scenarios

6
1. Korea Green Growth Strategy

2. Korea Eco-Industrial Park Initiative

3. Ulsan Eco-industrial park

4. Challenges to sustainability

7
What is EIP’s ?

Raw Material Energy Raw Material Energy

Integrated Optimising
Production Center Resource & Energy
Efficiency

Waste Waste

Heat ,Waste ,Water, Air etc 3R + Tech w/Co’s Zero Emission

Conventional industrial complexes
Economic benefit
Focused on raw material, products
Disposed by individual or groups
Large quantity
Causes pollution
Environmental conflict
Eco industrial park
Criteria Economic & Environmental consideration
Network Focused on raw material, products, & by-
products, waste heat
Waste disposal Reuse and recycle
Waste generation Minimal/zero quantity
Social image Eco-friendly industry
Community Community friendly

8
Concept of Eco-Industrial Park

Max ∑ Product ＆ Service ; Min ∑ Resources ＆ Energy ; Min ∑ Waste

RE2
PE2
RE1 Company 1 RI2 = WI1 Company 2
WE1 + WI1 = f(PE1 + RI1) WE2 + WI2 = f(PE2 + RI2)

RI1 = WI3 Product

Resources
PE2 ＆Service
＆ Energy
PE1 + PE2+PE3
RE1 + RE2+RE3
EE1 + EE2+EE3 RI3 = WI2

RE3 Company 3 PE2

WE3 + WI3 = f(PE3 + RI3)

WE1 WE3 WE2

Wastes
WE1 + WE2 + WE3

Synergies identified to exchange wastes,

resources, GHG gases & byproducts

www.rti.org/pubs/case-study.pdf

9
EIP Initiative 3 Stage Master Plan : (’05~’19 )

2005. 11 : 1st Phase Pilot EIP with 5 industrial complexes

Diffusion on 46 industrial complexes with a Standard EIP model

2010. 06 : 2nd Phase
(EIP design project for Bangladesh Chittagong Economy Processing Zone : ‘12)

2015. 01 : 3rd Phase EIN. EIP Model including all industrial complexes

1st phase Pilot period 2nd phase Diffusion period 3rd phase Completion period
2005.11~2010.5 2010.6~2014.12 2015.1~2019.12
Pilot on 5 industrial complexes Diffusion on 38 industrial complexes Construction of national EIP network

10
KICOX Administration Hierarchy

Annual progress
Establishment of EIP general policy evaluation of EIP
projects

Assessment committee KICOX

project evaluation, Review Planning & budget management,

of key issues Evaluation of performance of regional
offices

Gyeonggi, Ulsan,
Regional advisory review , advise and
Chonnam, Chungbuk
committee recommendation for
Kyungbuk, Busan Regional project
Daegu, Chonbuk, Daejun,
KwangJu, Incheon

Network implementation &

Administration Network identification
monitoring

11
How the Funding System is Enabled?
Project Financing Source
Main Gov.(70%) & Local Gov.(20% : matching), Private Co.(10% : participation fee)
Process
Identification Feasibility study Commercialization

Technology fee
(20~40% of government funding)

Budget for EIP projects

Support for project
management
9 EIP Centers Main Co

Top-down Assessment board Research funding

proposal (project selection for funding) (within 70% of necessary budget)

Selection based on
Finding : IS Project Commercial Design
Feasibility Potential
Research funding Research funding
10% 20%
Profit Sharing
Bottom-up Negotiation among Co’s
Project suggestion Project Co.

University/Research
institute/Company Local Gov.

12
1. Korea Green Growth Strategy

2. Korea Eco-Industrial Park Initiative

3. Ulsan Eco-industrial park

4. Challenges to sustainability

13
Overview of Ulsan Industrial Park
Dudong industrial
complex

Dudong agricultural
complex
Ihwa industrial complex

Sangbuk agricultural Duseo agricultural Dalcheon agricultural

complex complex complex
Jungsan 1,2 industrial
complex

Gilcheon industrial Maegok industrial

complex Ulsan City hall complex

Gilcheon 2nd industrial Modularize industrial

complex complex

High-tech vally industrial

complex New industrial complex

Ulsan Mipo national

Industrial complex

Agricultural complexes : 4
Onsan national Industrial
Local Industrial complexes : 9 Complex

National industrial complexes : 2

14
Overview of Ulsan National industrial Parks

Area(km2) 45.653
Number of companies 854
Production
137.2
(Billion USD$)
Export
68.01
(Billion USD$)
Number of Employees 103,911
Petrochemical,
Type of industry Automobile, Heavy
industry, etc

Area(km2) 19.765
Number of companies 337
Production
45.34
(Billion USD$)
Export
21.81
(Billion USD$)
Number of Employees 16,892
Petrochemical,
Type of industry chemical, pulp,
Metal, etc
15
Ulsan EIP Project - Governance Structure

Ministry of
Ulsan Administrative Policy Making Trade,
Metropolitan Support Industry and
City Energy
Project Fund
Project Fund
Ulsan EIP
Environmental Center
Regulation

Policy Education
Companies making NGO
Education Education

Cooperation
EIP Project

Park
management Technology R&D
Support Support
Policy
information

R&D
KICOX, Ulsan
Center

16
IS Development - Role of Ulsan EIP Center
Step 1
Exploring new networks
Data collection to explore new
synergy networks
Review of data reported
by companies
Encouraging participation
through seminars
& business meetings
Collecting on-site information
from companies
Project identification through
Top-down or Bottom-up
approach
Step 2
Feasibility Study
Support feasibility study for
network establishment
Supporting feasibility
investigation team
Co-authoring research
proposals with stakeholders
Monitoring the progress
of the feasibility study
Final report as a Business model
that includes the stakeholders
requirements
Commercialization &
network expansion
Step 3
Commercialization
Stakeholder participation &
overcoming barriers
Coordinating benefit sharing
among participants
Project financing sources
(ESCO, WASCO etc)
Evaluate potentially linking
project with GHG emission
reduction projects
Highlight Success story
17
Sample Outcomes of EIP Project
Sungam MWIF – Hyosung Company steam network (2008, 2012)

Scenario 1:
Condensed Water
Condenser Implementation of
Recovery
11 ton/h
Top-Down IS Network
Warm
Water Electricity
11 ton/h 23 ton/h
Steam
Sung-am MWIF 45 ton/hr
1,500 kwh Economic benefit (Kw)
Steam supply Expansion of incineration plant
(Capacity : 250 ton/day)
Warm Pressure : 16 ㎏f/㎠ Increase in supply after
the construction of more 5.9 5.9
Water Steam
Temp. : 203℃ plants billion billion
11 ton/h
45 ton/hr
Sung-am MWIF 3.0 3.0 60 t/h
34 ton/h billion billion 60 t/h
1.8
billion 30 t/h
15 t/h
Steam 15 t/h

 1 phase 2008 2009 2010 2012 2013

• Investment: 5.0 million US $

• Economic benefit: 7.1 million US$/yr (steam selling and B-C replacement)
• Environmental benefit: 55,500 ton CO2/yr, 176.8 ton air pollutants/yr
• Establishment of new factories (Employment for 140 people)
18
 2nd Phase (2012)
• Investment: 8.2 million US $
• Economic benefit: 14.7 million US$/yr (steam selling and LNG replacement)
• Environmental benefit: 39,427 ton CO2/yr
SKC SK Energy
Korea PTG-SKC
Steam Feeder Line

Steam Highway
SK chemical – SK Energy
Steam Feeder Line
TPA PU
Hyosung
Sung-Am 1st 25 ton/h Yongyeon 10 ton/h
Incineration plant 16 kg/cm2g 2nd Factory 16 kg/cm2g
20 ton/h
35 ton/h 45 kg/cm2g
15 ton/h
16 kg/cm2g 45 kg/cm2g
35 ton/h
45 kg/cm2g
Hyosung Hyosung
Yongyeon Yongyeon
1st Factory 3rd Factory
PP/DH PU Optical Film PU
Korea
PTG
Neochem PU
Sung-Am 2nd
Incineration plant
(extension in 2012)
SKC
Sample Outcomes of EIP Project
Carbon dioxide and steam network (2010)

Air emission
CO2 Supply

CO2 generation CO2 reuse CO2 generation

BOILER
Cogeneration
Plant &
PROCES BOLIER PROCES
S S
Steam Supply STEAM supply
Outside steam

Outside sale Implementation of

Top-Down IS Network

• Economic benefit : 6.6 million US$/yr (Steam

selling and B-C replacement)

• Environmental benefit: Reduction of 63,643 ton

CO2/yr, 1,691.5 ton /yr air pollutants
20
Sample Outcomes of EIP Project
Yoosung – Hankook Paper steam network (2007)

Steam generation
22ton/hr (Improved)
Scenario 2:
Vapor pressure (12kg/cm2g)
Bolier outlet temperature
Implementation of
(870 ℃ 220 ℃) Bottom-Up IS Network
Existing
Waste heat boiler Equipment Waste heat boiler
Steam (after improvement)
generation
Steam generation
enhancement Steam supply line
8~12ton/hr
by 50%
(Existing equipment)

5~10 ton/hr 10~15 ton/hr 5~10 ton/hr

E company H Company E company

(Drying equipment) (Drying equipment)
• Initial investment for the waste-heat recovery : 0.85 million US$ (Boiler complement
and piping new installation)
• Economic benefit : 2.32 million US$/yr (Steam selling and B-C replacement)
• Environmental benefit: Reduction of 14,810 ton CO2/yr, 20 ton SOx/yr, 3 ton NOx/yr
21
Sample Outcomes of EIP Project
Steam Network project (2009)

45 kg/cm2 (High pressure)

30 ton/hr

5 kg/cm2 (Low pressure)

20 ton/hr 19 kg/cm2 (Medium pressure)
10 ton/hr
Scenario 3:
Implementation of
Hybrid IS Network

• Economic benefit : 6.4 million US$/yr (Steam selling and B-C replacement)

• Environmental benefit: Reduction of 44,468 ton CO2/yr, 314.1 ton /yr air pollutants

22
Sample Outcomes of EIP Project

Steam Networks by Public-Private Partnership(2013.11)

Deokyang

Hyosung

Koentech

Steam Highway for industrial competitiveness and energy efficiency

Expectation:
- (Economy) $19.7million/year energy supply & cost cut
- (Environment) 100,000 ton GHG (CO2) Reduction /year
 IS PPP:
- (Public sector) invested a steam pipeline(highway) with several entrances and exists, to facilitate steam
networking among companies in the area( 25.7 million $ for Steam distributes, Steam condensate Pipe
facility at 6 km)
- (Private sector) participated in the network development to reach their own facility
13
 SK Energy SKC

SK Energy
100 Ton/h
45 kg/cm2g

[step 1]
35 Ton/h
75 Ton/h
Sung-Am #1 16 kg/cm2G
25 Ton/h 45 kg/cm2g
incineration plant 16 kg/cm2G
SKC
Hyosung #2 [step 4]
Sung-Am #2 Yongyeon plant
incineration plant 35 Ton/h 20 Ton/h
(extension in 2012) 45 kg/cm2g 45 kg/cm2g
55 Ton/h
45 kg/cm2g
15 Ton/h
45 kg/cm2g 10 Ton/h
SK Energy 16 kg/cm2g
[step 3] [step 2]
FCC Plant
Hyosung #2 15 Ton/h
3 kg/cm2g
Yongyeon Plant

Sung-Am #1 30 Ton/h
SK Energy Hyosung #1 45 kg/cm2g
Incineration Plant
Hyosung #1 Yongyeon plant
Yongyeon Plant Korea
PTG
Sung-Am #2 Hyosung #3
Incineration Plant 10 Ton/h Hyosung #3
Yongyeon Plant Yongyeon plant Korea PTG
7 kg/cm2g
KP Chemical

Hansol Chemical
Hanwha Chemical
10 Ton/h
18 kg/cm2g
Eastman [step 5]
20 ton/h
5 kg/cm2g
KP chemical 30 Ton/h Hansol EME
45 kg/cm2g
25 Ton/h (extension
SK Chemical 5 kg/cm2g in 2014)
25 Ton/h
Hanhwa 45 kg/cm2g
Chemical 70 Ton/h
45 kg/cm2g

Eastman SK Chemical

24
EIP Project Benefits in Ulsan (by 2014) (Operating 31 Projects)

Economic benefit Environmental benefit

Research/
R&D Fund
Negotiation
From Intermediate processing To (million Investment Profit CO2 Air pollutant
Period
US$) (million (million reduction reduction
(month)
US$) US$/y) (ton/y) (ton/y)

Yoosung Corp. - Hankuk Paper 07/04 0.04 0.85 3.85 12,491 88.2

Sung-am MWIF - Hyosung Yongyeon 2nd plant 04/21 0.01 5 7.1 60,476 427.1

KP Chemical, Hansol EME Korea PTG SKC 12/12 0.10 14 4.0 34,906.7 246.6

SK energy EnvironSoft Noksan MWWTF 07/02 0.04 0.13 1.99 NA NA

Dau metal Sunkyuong Watech Teakwang industry(I) 12/NR 0.06 0.1 3.69 NA NA

POSCO Ilsin Polytech LS-Nikko 12/ NR 0.15 0.05 1.15 NA NA

Dongnam fine, Hanjoo metal Ajin Metal Dongnam fine, Hanjoo metal 12/ NR 0.20 0.1 3.30 NA 1,325

Petrochemical cluster Sinheung Teawon Mulsan 12/ NR 0.06 0.5 1.67 NA NA

Poongsan metal, GB metal, Kunsul chemical industry,

TNC 12/ NR 0.19 2 5.43 315.7 NA
TNC Sigma Samsung

Hyundai Motor, Hyundai

Hyundai Heavy Industry - 12/34 0.08 6 3.20 10,188 273.2
Hysco

Korea Zinc - Hankuk Paper 12/06 0.12 21 6.60 63643 1,692.0

Oil Spill Restoration

SK Energy SGR Tech 24/ NR 0.31 0.2 0.12 NA NA
Company

Aekyung petrochemical Hanju Evonik Headwaters Korea 12/06 0.1 1.5 2.82 33,094 NA

SK petrochemical
Dong-shin chemical CNT, Hansol Chemical 12/ 0.15 0.8 1.19 NA NA
Sam Nam Petrochemical

ISU chemical Encore networks Korea Zinc, LS-Nikko 14/03 0.23 0.6 5.97 NA NA

25
EIP Project Benefits in Ulsan (by 2014) (Operating 31 Projects)

Research/ Economic benefit Environmental benefit

R&D Fund
Negotiation
From Intermediate processing To (million Investment Profit CO2 Air pollutant
Period (million (million reduction reduction
US$)
(month) US$) US$/y) (ton/y) (ton/y)
Bumwoo Korea petrochemical 12/NR 0.09 10.0 5.56 25,084 NA
Hyosung Ulsan plant Hyosung Ulsan plant 12/NR 0.21 1.0 0.52
Taekwang petrochemical 1st
SK energy Hyosung Ulsan plant 15/ 0.15 6.0 9.2 50,396
plant
Korean styrolution, Sinwha chem, Youngwon
KMT 12/NR 0.08 0.52 1.28
Kumho petrochemical tech
Yongsan chemical Bomyung Corinox 14/NR 0.04 - 0.40
Hyosung Yongyeon 2nd Hyosung Yongyeon 1st
Seong-am MWIF #2 Plant Plant 1/NR 0.01 8.2 14.7 39,427
Korea PTG SKC
Bangeojin sewage treatment
S-Oil Su engineering 12/ 0.11 0.25 0.65 949.0
plant
Jokang Paint, Samhwa Paint,
Sinheung, Busung Chemical Serim 12/NR 0.06 - 0.25 NA
Buksan Paint
Ulsan Onsan WWTF Hankuk paper 15/6 0.04 1.2 0.9 4,756 NA
GS Ecometal, Hanwan
Korea Zinc 12/NR 0.04 2.11 1.34 15,242 NA
chemical
LG Chemical Hangil Jinyang Chemical 12/51 0.10 0.16 1.0 NA NA
SK Energy, Taekwang
SK Chemcial petrochemcal 1st Plant, 19/31 0.47 33.0 21.0 100,000 NA
Hyosung
Poongsan LS Nikko 26/41 0.21 NA 0.24 NA NA
Kumho P&B Neo Kumho P&B 32/17 0.19 3.0 1.7 NA NA
Dongyang, Taesung
SK Energy, S-Oil Dong-A hwasung 17/6 0.10 5.6 0.75 NA NA
Environmental institute
Lotte Chemical Eastman 12/11 0.04 2.86 2.43 NA NA
Total 3.74 160.1 11.8 487,626 4,052.6
EIP Project Benefits in Ulsan (by 2014)
• Economic Benefits * Currency Exchange Rate(\1,000=$1) was applied

Business Cost cut Revenue Total

(by project) (million US$/yr) (million US$/yr) (million US$/yr)

31 73.76 44.55 118.31

• Environmental Benefits

By-Product Wastewater Energy Air pollution CO2

(ton/yr) (ton/yr) (toe/yr) (ton/yr) (tonCO2/yr)

38,544.0 79,007.0 196,102.4 4,052.1 487,626.2

• Social Benefits

Investment Job Creation

(million US$) (person)

160.15 184

27
 Energy Waste Water Before EIP initiative
Symbioses existing in Ulsan EIP After EIP initiative

Shinheung Enertec Serim Samhwa Paint JoGang Paint Dongbu Hitec Samyangsa
Waste treatment Chemical Chemical Chemical Chemical Food manufacture (2010)
(2009)
(2008)
(2007)
(2013)
(2012)
(2011)

Hyundai Heavy Hyundai Hysco Hyundai Motor Hyosung

SK Petrochemical Shinwha Chemical Korea Stytrolution
industry Steel Automobile
(Ulsan Factory)
Industrial waste incinerator Petochemical chemical Chemical Petrochemical

Yongsan Chemical Bomyung Corinox Samnam KMT Hanwha

Samsin chemical
Petrochemical Petrochemical
Chemical Chemical manufacturer Steel petrochemical
Chemical Waste treatment Petrochemcial

Onsan WWTF Samsung Korea Alcohol

Hanjoo Metal Dongnam fine Kumho Teakwang Industry
Petrochemical Industrial Petrochemcial (1st factory)
Wastewater treatment Petrochemical Chemical
Aluminum manufacture Metal Petrochemical Petrochemical

GB Metal HW I&C Dongsin chemical Ajin Metal Hyosung Dau Metal

Sungam MWLF (Yongyeon 1st factory)
Steel Chemical Chemical Aluminum manufacture Municipal waste landfill
Chemical Metal recovery

Sungam MWIF 1st Hyosung Hyosung Daehan Jedang

Poongsan Metal TNC Sigma Samsung (Yongyeon 2nd factory) (Yongyeon 3rd factory)
Nonferrous metals Municipal waste incinerator Chemical
Metal Petrochemical Chemical Chemical
Sungam MWIF 2nd

Taewon Mulsan Shinheung Yongyeon WWTF Korea PTG SKC Hanhwa Chemical Ulsan Pacific chemical
Nonmetal Chemical Wastewater treatment Chemical Chemical Chemical Chemical

Evonik Headwaters Hangil Kunsul chemical Hansol EME SK Energy Taeyoung

KP Chemical
Korea Chemical Chemical Chemical Chemical Petrochemical Petrochemical
Petrochemical

Hanju Utility POSCO LG Chemical SGR tech SK chemical Koentec NCC

Utility supplier Steel Chemical Waste treatment Chemical Waste incinerator Waste incinerator

Aekyung LS-Nikko Korea Zinc Bumwoo Korea Environsoft Busan Noksan

Petrochemical Petrochemical MWWTF
Petrochemical Non-ferrous metals Non-ferrous metals Waste incinerator Petrochemical Chemical manufacture Sewage treatment

Jinyang Chemical Encore network ISU chemical Hankuk Paper Yoosung S-Oil Bangojin MWWTF
Chemical Chemical Chemical Paper mill Waste incinerator Petrochemical Sewage treatment
28
Contribution to Environmental Quality by Ulsan EIP project

Industrial Industrial Industrial

Industrial Waste
Wastewater Energy Greenhouse Gas
(ton/day, 2013)
(m3/day, 2012) (toe/yr, 2013) (ton CO2-eq/yr, 2011)

Emission or
Consumption 5,482.2 432,000 23,332,000 38,677,000
(Energy) in Ulsan

Outcomes from
1st Stage 86.9 101.5 51,767 118,378
EIP Project in Ulsan

Outcomes from
2nd Stage 18.7 115.0 144,788 369,249
EIP Project in Ulsan

Outcomes from Total

105.6 216.5 196,515 487,627
EIP project in Ulsan

Contribution
1.9% 0.05% 0.8% 1.3%
(%)

29
1. Korea Green Growth Strategy

2. Korea Eco-Industrial Park Initiative

3. Ulsan Eco-industrial park

4. Challenges to sustainability

30
Challenges to Sustainability

• Consensus on Low Carbon City

• Institutional Challenges

• Technological Challenges

• Financial Challenges

• Customized Green Investment Strategies

• International collaboration

31
 Welcome to the 4th
Green Industry Conference (2016GIC)
in Ulsan

Thank you
Co-Chair , Green Growth Committee of Ulsan Metropolitan City, Ulsan, South Korea
Professor, Dept Civil & Environmental Engg.
University of Ulsan
93 Dehakro, Nam-Gu, Ulsan, Korea 680-749
Tel: 052-259-1050
Fax: 052-221-0152
E-mail: parkhs@ulsan.ac.kr