Smokestacks and huge chemical tanks dominate the landscape, but being an industrial city means something different in Kalundborg than it does in other parts of the world. In this small city directly across Denmark's large island from Copenhagen, industrial players cooperate to help each other, their community and the environment.

In Kalundborg, the various companies cooperate in exchanging energy, reusing water and recycling waste. Seven companies and the municipal government refer to their unique arrangement as industrial symbiosis. Symbiosis is the collaboration between different organisms for mutual benefit. According to Erling Peterson, who runs the Symbiosis Institute, industrial symbiosis is the collaboration between different economic entities for mutual economic and ecological benefit.

Gyproc Corporation, with 170 employees, depends upon the gypsum that comes from the 500-employee electric power plant. EnergiE2's 1,300-Megawatt power station must add the material to clean its air emissions of sulfur. The power-plant waste becomes an input for the plasterboard company.

The huge amounts of hot water developed by producing electricity is piped to the 350-worker Statoil oil refinery where it is used to heat the crude oil to make it flow better and to assist in the cracking process. Hot water is also sent to the Novo Group of companies that produce pharmaceuticals and industrial enzymes. Novo Group has expanded to 2,200 employees in Kalundborg and the cheap source of heat energy as well as waste gas delivered to them from the oil refinery are two reasons for their success.

Like nearly every city in Denmark, the entire city is heated in winter by hot-water pipes. The hot-water heat comes from the power plant, which still has substantial amounts of excess heat.

In addition to recycling waste and sharing energy, the companies also share the water used in their various production processes. Petersen estimated that each liter of water is used three to four times, which has reduced the area's demand on groundwater.

Groundwater near the coast can be damaged if it is drawn down too much because saltwater can infiltrate into the fresh water. Protecting groundwater by constructing a water pipeline in the late 1960s to a nearby lake, shared by the municipality and the oil refinery, was the first sharing arrangement. Cooperation had been ongoing when in the 1980s the government imposed tough new environmental regulations that pushed sharing further.

Erling Petersen's symbiosis institute communicates the Kalundborg experience as well as assists similar projects in other parts of the world. Here are his rules for success:

• The economic entities must have different markets but their wastes and inputs must fit together.
• Each sharing arrangement must be economically viable on its own.
• There must be large and continuous waste streams.
• There must be a short physical distance among the participants.

But the most important ingredient, he said, is "a short mental distance among the participants."