Traditional applications of exergy analysis have focused upon the design and optimization of parameters in thermal systems. The success of the technique as applied to these systems is well documented. In this paper, an extended form of exergy analysis is introduced in which the basic principles of traditional analyses are applied generically to industrial energy and material flows. This Extended Exergy Analysis produces an energy-based metric useful for the assessment of the potential environmental impacts of industrial processes. This information can be used to evaluate the environmental performance of industrial systems of varying degrees of complexity. Several important points emerge from the discussion. The first is the importance of the ground state in determining a material stream’s exergetic value. It is shown that by qualifying the definition of these states to include provisions for environmental acceptability, exergy analysis can be used to provide insight into the environmental compatibility of industrial processes. Secondly, the paper demonstrates the importance of two distinct ways of calculating exergy. The process path approach, a method based upon envisioning idealized thermodynamic processes that transform residual streams from harmful to environmentally benign states, is shown to be useful in cases where rigorous design optimization is the goal. A second approach involving use of property data in conjunction with standard exergy equations and efficiency factors, represents an expedient alternative for instances where order-of-magnitude data will suffice. Finally, it is shown that the technique’s usefulness is not limited solely to industry. Use of Extended Exergy Analysis by legislators and policy analysts can help these groups understand the impacts that changes in environmental standards and legislation are likely to produce. The paper concludes with the discussion of a simulated example in which the Extended Exergy Analysis is applied to analyze the environmental impact of material flows through a metal machining process.

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