An algorithm for waste and pollutants reduction in reactor design is presented in this paper. This algorithm use potential environmental impact balance (PEI) and PEI rate-law expression to track the generated PEI throughout reaction process within a reactor; and study how reaction conditions (temperature, pressure, concentration, etc.) and various engineering factors (heat and mass transfer, and back-mixing and so on) affect process environmental performance. The form of PEI rate-law expression should be consistent with the method for calculating the overall PEI of mixtures of chemicals inside reactors. The algorithm can be used as a tool to aid in designing chemical reactors with environmentally friendliness processes. The use of the methodology is illustrated with the reaction system of allyl chloride production. (C) 2004 Elsevier B.V. All rights reserved.