Connecting P2, EMS and regulatory affairs management - a case study of the distilled spirits industry

An IndEco article

By: Raegan Bunker, IndEco Strategic Consulting Inc., Tara Abramson, BACARDI CANADA INC.


This paper explores the connections between pollution prevention (P2), environmental management systems (EMS) and regulatory affairs management in industry, using a case study from the distilled spirits sector. The nature of existing and potential connections are discussed, along with the benefits of these connections both for the individual company or sector as well as for the environment and society as a whole.

Connecting P2, EMS and Regulatory affairs management

Table 1 provides a brief comparison of P2, EMS and regulatory affairs management, including the drivers, approaches and value to business for each. This comparison represents only a surface-level analysis of some of the aspects of P2, EMS and regulatory affairs, however it is clear that areas of overlap exist. Potential opportunities for cost reductions, for example, might be a driver for both P2 and EMS. Likewise, improved public image is a potential value to business from all three initiatives.

Table 1: Comparison of P2, EMS and Regulatory affairs management

Regulatory affairs
What it entailsChanging manufacturing processes (e.g. increase efficiency, substitute hazardous raw materials) in order to eliminate or reduce the production of pollutants.Developing and implementing a system for managing all environmental impacts and aspects within an organization.Ensuring that a company complies with all provincial and federal regulations.
  • improved environmental performance
  • cost reduction
  • public pressure
  • corporate citizenship
  • stakeholder demand
  • supplier demand
  • cost reduction
  • legal requirement
Types of approaches
  • proactive (e.g. voluntary)
  • reactive (e.g. in response to public complaint or new regulation).
  • systematic
  • ad-hoc
  • register to a recognized standard e.g. ISO14001
  • use recognized standard as a basis but not register
  • customized approach
  • ad-hoc
  • systematic
Potential value to business
  • cost reduction
  • regulatory compliance
  • improved public image
  • improved stakeholder relations
  • improved end-product
  • improved public image
  • improved stakeholder relations
  • improved supplier relations
  • reduced liability risk
  • improved public image
  • improved stakeholder relations

Despite the fact that clear connections can be made between these initiatives, even when examined on the most basic of levels, it does not seem that they are routinely integrated when developed and implemented in practice.

In theory, by better connecting P2, EMS and regulatory affairs management facilities could achieve several benefits:
  • Save time/money – All three initiatives may cover the same particular environmental aspect (e.g. air emissions) or use a similar process (e.g. walk-through audit). By looking at the environmental aspect in an integrated way or by undertaking the process for both endeavours at the same time, the facility will avoid duplicating efforts and could save time and money. For example, if a facility does a system review of all inputs and outputs of the facility in order to identify whether regulatory requirements have been met and then does another system analysis in order to identify areas for pollution prevention, they will be duplicating their efforts. By using the same process and results for all three systems, there are opportunities to save resources.
  • Improve results – Connecting the three distinct systems can allow for the identification of any ‘holes’ or overlooked areas. For example, undergoing a compliance audit in the ISO14001 process may help a facility to identify existing regulations which were not being adhered to under the current regulatory management practice.
  • Identify opportunities – Connecting the systems may also allow for the identification of opportunities for improvement. These improvements could be environmental, economic, operational or organizational in nature. For example, by undertaking a comprehensive assessment of impacts and aspects within a facility, as part of ISO14001, opportunities for pollution prevention may be identified which otherwise may not have been.
  • Change value of existing initiatives - Integrating these systems might change the value or cost-benefit analysis associated with individual initiatives. For example, a pollution prevention activity which is not be deemed to be economically viable when looked at simply as an voluntary environmental initiative may be considered worth pursuing if the controlled substance is also subject to an emissions capping regulation.
  • Information exchange - A further possible benefit is that integrating these systems could lead to greater interaction and sharing of ideas between various departments or staff levels within a single facility (or between several facilities or companies within a sector). If one department in a plant is responsible for EMS while another is responsible for regulatory compliance, there may be little communication between them. If the systems are viewed as connected and the departments increase the level of communication and joint action, then there is an increased likelihood that ideas will be shared and further opportunities for improvements will be identified.

The general connections and benefits described above are illustrated in detail using an actual case study from the distilled spirits sector.

CASE STUDY – Emissions reporting in the distilled spirits sector.


Facilities in the distilled spirits sector are required to report emissions of over 270 substances to the National Pollutant Release Inventory (NPRI). As of June 1, 2003, Ontario facilities are also required to report their emissions of over 350 substances to the Ontario Ministry of the Environment under the province’s mandatory airborne contaminants discharge monitoring and reporting regulation (O.Reg 127/01). While distilled spirits facilities have been subject to NPRI since its inception in 1993, many of them will only be reporting for the first time in 2003 due to the addition of criteria air contaminants (CACs) to the NPRI substance list.

To help its members prepare for O.Reg 127/01 and the addition of CACs to the NPRI, Spirits Canada, the national industry association for the sector, established a work group consisting of representatives from each Ontario member company. The purpose of the Spirits Canada Work Group (SCWG) was to develop a “common responsible approach” to compliance with O.Reg 127/011 including:
  1. Agreement on a common list of inputs, processes and outputs for the distilled spirits industry, which highlights potential sources of O.Reg 127/01 contaminants;
  2. Agreement on emission estimation methods; and
  3. Agreement on methodology for narrowing the list of contaminants to be estimated annually at each facility.

The primary objective of the group was to help members meet O.Reg 127/01’s ‘due diligence’ requirement which states that “it is intended that for any given contaminant with emissions that are equal to or greater than the reporting threshold, at least 95% of the total facility emissions are accounted for” (Regulation Step-by-step guideline, Page 2).

Screening substances of concernApproach adopted and key outcomes

The general approach adopted by the SCWG, outlined in Figure 1, was to narrow the list of substances whose emissions would need to be estimated every year. This was accomplished through two main steps; (a) identifying substances that could even possibly be present at a distilled spirits facility (i.e. Industry Map of Substances), then (b) identifying those substances for which the threshold could reasonably be expected to be exceeded (i.e. Significant Substances).

The key outcome of this process was the reduction in the number of substances that members will need to estimate emissions for on an annual basis from 358 to less than 20.

The SCWG used several resources for completing this process, including members’ experience and knowledge of the industry, EMS data from ISO 14001 registered facilities, the O.Reg 127/01 Step-by-step guideline and USEPA AP-422 documents. The specific steps in the overall workgroup process where EMS and P2 data were used are described below.

Integration of EMS and P2 data

One of the key principles used by the SCWG during the development of a common responsible approach for compliance was integration. Members capitalized on the experience and information of facilities with established environmental management systems and pollution prevention initiatives by integrating EMS and P2 data and procedures where possible.

Inputs & outputs
The identification of processes, input and outputs – referred to as the ‘industry map of substances’ – was based primarily on the review of impacts and aspects data from two facilities with existing environmental management systems. Rather than duplicate efforts which had been done before, the members capitalized on the fact that these facilities has undergone and documented thorough analyses of their facility’s operations. By using the impacts and aspects data, the SCWG was able to identify a common list of processes along with all inputs and outputs to those processes that contained O.Reg 127/01 substances. This procedure was particularly helpful for identifying some of the smaller possible sources of emissions, such as the use of solvents, glues and inks. Using this approach, the SCWG was able to eliminate more than 250 contaminants from further consideration, as they are not manufactured, processed, otherwise used or released at distilled spirits facilities.

Emission estimation methods
EMS and pollution prevention data was also used in the development and selection of common emission estimation methods. While the majority of emissions3 from distilled spirits facilities stem from the combustion of fuel, the major emission from production processes (i.e. processes that lead directly to the manufacturing of distilled spirits) is ethanol itself – the end product of the industry. Distilled spirits facilities have two significant incentives for preventing ethanol emissions from their production processes: (1) emissions represent a loss of final product and therefore a loss of revenue; and (2) facilities are required to pay the federal government an excise tax based on system losses of ethanol. As a result, many of the SCWG facilities had undertaken various pollution prevention initiatives related to ethanol loss and had gathered system loss data which was then used by the SCWG to develop an emission factor for various production processes.

Significant substances
After the development of the industry map of substances (i.e. all possible contaminants), the work group identified those substances and/or processes on the industry map that are ‘significant’ where significance is defined as follows: “manufacturing, processing, otherwise using and/or releasing an O.Reg 127/01 substance in or from a specific process is considered significant if it accounts for at least 1% of the substance’s regulation threshold” (SCWG final report, pg.21). The rationale behind this definition is that if the emissions of a particular substance from a particular process accounts for less than 1% of the substance’s reporting threshold, then they will account for an even smaller fraction of the total facility emissions of that substance when total emissions are above the threshold.

The SCWG used EMS data to calculate the activity level that would be required for each process in order for its emissions to be significant. These levels were then compared to actual activity levels from the largest facility within the SCWG. More than 70 substances were deemed insignificant based on this comparison. EMS data used in this process included records on fuel combustion, use of solvent, use of inks, material safety data sheets and transfers of mercury.

Lessons learned

Several conclusions can be drawn from the experience of the SCWG:

P2 and EMS can support regulatory compliance – The primary driver of the SCWG was regulatory compliance. P2 and EMS data were successfully integrated into the development of the common responsible approach to compliance. By using existing data, the work group was able to perform a comprehensive review and analysis of facility emissions in a resource efficient manner.

Regulatory compliance and EMS can support P2 – While the main objective of the SCWG was compliance with an air emissions regulation, the process had several unexpected positive benefits. One of these benefits was that information exchange and networking among SCWG members allowed for the sharing and adoption of several industry ‘best practices’. For example, reviewing the use and disposal of mercury from old or broken equipment lead to several members contacting a fluorescent tube recycling company that was recommended by another SCWG member. Similarly, when discussing procedures for cleaning up mercury spills, one member suggested to another that they use mercury sponges rather than their current practice of using a shop-vac and then having to transfer the entire shop-vac off-site as hazardous waste.

Additionally, the SCWG process has provided members with the tools and capacity for identifying and pursuing further pollution prevention initiatives. Specifically, by developing the Industry Map of Substances, the members achieved a greater understanding of exactly what substances are emitted, what processes they are attributed to and the quantity emitted. This process led to several conclusions about emissions in the distilled spirits sector:
  • The distilled spirits production process is relatively ‘clean’. The only process-related emissions are carbon dioxide, ethanol and other trace alcohols.
  • The majority of substances emitted are due to the combustion of fuel in boilers and engines at the facility.

With this knowledge, members can better focus any pollution prevention efforts. There is limited potential for increasing P2 within production processes. Carbon dioxide emitted during fermentation is part of a short-loop biological cycle – it comes from grain and is reabsorbed from the atmosphere when grain is grown for next year’s production. Ethanol released during the production process is directly related to the characteristic of the final product and there is a intrinsic incentive for facilities to reduce these emissions where possible, as discussed above. The greatest potential for P2 efforts may be with respect to fuel combustion. By improving the energy efficiency of facility operations and/or upgrading fuel combustion equipment, facilities could achieve significant emissions reductions.

Regulatory compliance and P2 may support EMS – Another unexpected benefit of the SCWG process was that the process and results may be of use to members that are currently pursuing (or considering pursuing) ISO 14001 registration. Bacardi Canada Inc., for example, is currently preparing for ISO 14001 registration and the SCWG process helped them to ensure that their inventory of Activities, Aspects and Impacts included all sources of emissions.


The SCWG process clearly illustrates that there can be significant and immediate benefits from integrating P2, EMS and regulatory compliance initiatives. In addition to meeting its regulatory compliance objectives, in a cost-effective and timely manner, the work group achieved several additional benefits related to pollution prevention opportunities and environmental management systems development, as described above. Opportunities exist to expand upon some of the ‘unexpected’ benefits of the SCWG, such as the sharing of best-practices, as well as further integrate the system in order to achieve additional benefits.

1 The original focus of the SCWG was O.Reg 127/01 but was later expanded to include NPRI.
2 AP-42, produced by the US Environmental Protection Agency, is a document containing industry-specific process information and emission factors, including some for the distilled spirits sector.
3 With respect to the number of substances emitted.