Risk Management: Sustainably Managing a Common Resource

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Introduction

Danfoss is a global manufacturer of hermetic compressors, pumps, valves, motors and other electrical control units. The company owns a major manufacturing facility located on a small island, Als, in the Baltic Sea. In 1983 the company was routinely withdrawing two million cubic meters of fresh water from the sole aquifer which supplies the entire island, home to 50,000 residents. This was well within the limit of three million cubic meters authorized by local officials.

In 1983, Danfoss discovered a crack in a settling tank in its wastewater treatment system. The company was concerned that polluted water might permeate down into the fresh water supply. The company repaired the leak immediately but began an extensive investigation of the groundwater and the aquifer. The good news was that the leak had not polluted the aquifer; the bad news was that the level of the aquifer had dropped to a dangerously low level. So low, in fact, that the risk of salt water intrusion had become a real possibility. Danfoss's management recognized that the company was the biggest fresh water user on the island and as such it had a responsibility to all the private citizens who used this common resource. 

Furthermore, its business depended on the aquifer. Abusing its use would represent a severe risk for the facilities continued operations. There was also the risk that local authorities would decrease the volume of water Danfoss was allowed to withdraw.

Through a steady program of water efficiency improvements, Danfoss has reduced water use by 80% and has stayed one step ahead of ever increasing regulatory stringency.

Managing an Underground Aquifer

Danfoss initiated a series of water savings programs and completely revised its waste-water treatment system. All pipes were placed above ground so that even the smallest leak could be detected immediately.  A new purification plant was installed with a pipeline leading the purified wastewater directly from the purification plant to the sea, 700 meters from the coast.

In 1989, the local authorities reduced the allowable fresh water extraction rate to 1.5 million cubic meters, its current allowable extraction rate. This was not a problem, as Danfoss had already reduced its consumption to below one million cubic meters. 

In the same year Danfoss substituted trichloroethylene, used to clean metal surfaces, for soap and water, saving much cooling water. This also removed the risk of penetration of wasted trichloroethylene into the underground aquifier, and strongly reduced the environmental impact on the external and working environment.

Even with a production increase of 260% between 1983 and 1997, Danfoss has continued to find ways to reduce its water consumption even further. By 1994, it had cut consumption to 0.4 million cubic meters, a reduction of more than 80% compared with 1983 levels. During this same period, the level of the aquifer rose by 1.7 meters and the threat of salt-water intrusion virtually disappeared. The substantially improved freshwater reserves indicate a consumption level that can be sustained indefinitely. Fresh water supply was assured, both for the company, its 7,000 employees and its 50,000 neighbors on the island of Als.

Results are summarized in the following table and graph.

(Units in 106m3)

1983

1986

1992

1994

1996

1997

EFY 1998

Process water

0.67

0.62

0.19

0.14

0.12

0.12

0.12

Cooling water

1.16

0.78

0.10

0.10

0.08

0.16

0.12

Sanitary water

0.13

0.13

0.12

0.12

0.12

0.10

0.10

Sundries

0.04

0.04

0.05

0.05

0.05

0

0

Total consumption

2.00

1.57

0.46

0.41

0.37

0.38

0.34

Upper level of lower magazine (Meters above sea level) *

0.00
0.09
1.41
1.66
1.43
1.54
1.8

* The variation over years depends on rainfall, ambient temperature/evaporation rate and water consumption

 

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