Sustainability assessment of bio-based innovations: Monetizing externalities to facilitate decision-making towards a circular Bio-Economy

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Poster Number:  36 

Main Presenter:    Jesús Ibáñez 

Co-Authors:                                                  

The transition to a circular bio-economy presents challenges for bio-based products in market competitiveness compared to fossil-based counterparts, due to higher research costs, production equipment expenses, and lower technical development. However, bio-based products offer potential advantages like the reduction of raw material costs and environmental impact. The Horizon2020 BIOMAC project, addresses these challenges by establishing an Open Innovation Test Bed (OITB) focused on upscaling technologies using nano-enabled bio-based materials (NBMs).
BIOMAC evaluates the environmental and economic viability of bio-based production processes at a pilot scale using Life Cycle Assessment (LCA) and Techno-Economic Analysis (TEA). It strategically identifies critical aspects considering various biomass sources before industrial implementation, addressing uncertainties in prices and impending regulations. The project integrates Life Cycle Costing (LCC) methodology to monetize LCA results, ensuring environmental impacts are considered in decision-making.
This holistic approach contributes to a nuanced understanding of environmental and economic dimensions, offering stakeholders a broader scale analysis of potential economic advantages associated with sustainable innovations. The integration of LCA results into the cash flows allows for the calculation of financial indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), and Return on Investment (ROI) for bio-based production processes. Sensitivity and uncertainty analyses enhance assessment robustness, considering potential risks in future cash flows.
Determining optimal plant capacity and unitary production costs forms the basis for evaluating environmental and economic impacts from pilot to industrial scale, identifying critical hotspots for producers during upscaling. Comparison with fossil-based processes, including the monetary values of environmental impacts in NPV and other financial indicators, determines whether the innovation improves sustainability and feasibility over conventional processes.
This research underscores the significance of developing sustainable and circular processes in the bio-economy, emphasizing how the monetary valuation of environmental impacts can facilitate access to funds crucial for investing in cleaner production technologies. The project bridges the gap between environmental concerns and financial analysis, promoting a balanced perspective for decision-makers in the bio-based value chain.

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