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Uncertainty analysis in the financial assessment of an integrated management system for restaurant and catering waste in Spain

  • ENVIRONMENTAL LCC
  • Published:
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Abstract

Purpose

The goal of this study is to analyze the economic performance of an alternative system for waste management proposed by the European Integral-b project. Its aim is to treat both used cooking oil (UCO) and solid organic waste (SOW) from the hospitality sector by biodiesel production and anaerobic digestion, respectively. A cogeneration engine adapted to use glycerol as a fuel is implemented. These results complement others from a previous life cycle assessment (LCA).

Methods

The system proposed (scenario A) is compared to a system consisting of average waste management options (scenario B) by means of life cycle costing (LCC). The functional unit (FU) is the amount of UCO and SOW from hospitality produced per person and year in Spain. The profits generated by the FU under the two scenarios are calculated from a financial point of view. It is assumed that co-products from both scenarios translate into revenues for waste managers. Scenario analysis assesses different rates for the electricity output, subject to market regulations, and different levels of UCO availability. Monte Carlo simulations are carried out to analyze parameter and price uncertainty.

Results and discussion

The profits in all the scenarios are negative, and those of scenario A are lower than those of scenario B under all the scenario formulations. Scenario A generates greater income than scenario B but also higher expenses, mainly due to SOW collection. The new electricity rates are detrimental for the financial performance of the Integral-b since the overall profits mostly depend on the sale of electricity. Readier UCO availability benefits both scenarios to a similar extent. The uncertainty analysis reinforces the comparative results, although there is some likelihood scenario A will generate greater profits. The sensitivity analysis allows for the key parameters to be identified in order to optimize the process further. Possible trade-offs between the LCC and LCA results have been evaluated.

Conclusions

Results from the financial analysis show that the Integral-b process delivers greater losses as compared to a reference scenario. Both generate net costs, meaning that stakeholders have to finance the functions provided. Uncertainty in the electricity regulations constitutes an obstacle for such projects as these to be implemented. As in LCA, the definition of the system boundaries and FU is critical in LCC.

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Abbreviations

AD:

Anaerobic digestion

CHP:

Combined heat and power

DTD:

Door-to-door

EU:

European Union

EVA:

Economic value added

FU:

Functional unit

GDP:

Gross domestic product

GHG:

Greenhouse gas

GW:

Global warming

KLEMS:

Capital, labor, energy, material inputs and purchased services

LCA:

Life cycle assessment

LCC:

Life cycle costing

MSW:

Municipal solid waste

PERT:

Program evaluation and review technique

SOW:

Solid organic waste

UCO:

Used cooking oil

WFD:

Waste Framework Directive

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Acknowledgments

The authors acknowledge all the Integral-b partners and also the Generalitat Valenciana for providing the funds for N. Escobar’s research contract (ACIF/2010/200) and for the financial support under the project PrometeoII/2014/005.

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Authors and Affiliations

  1. Grup ASPA. Departament de Tecnologia d’Aliments, Edifici 3F, Universitat Politècnica de València, Camí de Vera s/n, 46022, Valencia, Spain

    Neus Escobar, Gabriela Clemente & Neus Sanjuán

  2. Departament d’Economia i Ciències Socials, Edifici 3P, Universitat Politècnica de València, Camí de Vera s/n, 46022, Valencia, Spain

    Javier Ribal

  3. Ainia Centro Tecnológico, Parque Tecnológico de Valencia, C/ Benjamin Franklin 5-11, 46980, Paterna, Valencia, Spain

    Alfredo Rodrigo & Andrés Pascual

Authors
  1. Neus Escobar
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  2. Javier Ribal
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  3. Gabriela Clemente
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  4. Alfredo Rodrigo
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  5. Andrés Pascual
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  6. Neus Sanjuán
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Correspondence to Neus Escobar.

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Responsible editor: Guido W. Sonnemann

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Escobar, N., Ribal, J., Clemente, G. et al. Uncertainty analysis in the financial assessment of an integrated management system for restaurant and catering waste in Spain. Int J Life Cycle Assess 20, 1491–1510 (2015). https://doi.org/10.1007/s11367-015-0962-z

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  • DOI: https://doi.org/10.1007/s11367-015-0962-z

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