Cost-benefit analysis of a circular economy project: a study on a recycling system for end-of-life tyres
Introduction
Nowadays, end-of-life vehicles (ELVs) constitute a massive waste source in Europe, even if ELV recycling is a priority of Union waste legislation, as underlined in the ELV European Directive, 2000/53/EC (European Commission, 2000).
End-of-life tyres (ELTs) constitute a major portion of the ELV waste: every year, about 3.4 million tonnes of old tyres are disposed of in Europe, most being dumped or sent to landfill, in direct contravention of the EU rules banning landfilling of both whole and shredded tyres (EASME, 2015; ETRMA, 2015; European Directive, 2000).
The Italian law defines the legal framework and assigns the responsibility to the producers (tyre manufacturers and importers) to organise the management chain of ELTs (DM, 2011; DM, 2012). The crucial steps are collection, sorting, transformation and recovery in authorized treatment companies. The treatment and the recovery process of ELTs is primarily aimed at recovering triturated rubber in various sizes and types, which represents the main portion of the ELT material (Ramarad et al., 2015; Schnubel, 2014; WBCSD, 2010). During the treatment of tyres, two other sub-products are generated in significant quantities, namely steel and textile fibre (Pacheco-Torgal et al., 2012; Ecopneus, 2013).
Regarding the textile fibre's recycling, the main problem is the presence of rubber within the ELT fibre (40–60%), which makes it impossible to obtain a pure product economically and qualitatively useable. The cleaning practice is not commonly adopted due to the absence of a market that justifies the required efforts and resources. The main consequence is that both ELT treatment companies and end-users are discouraged to invest in fibre's recycling; thus, the dirty fibre goes to landfill or to waste incineration plants and cement production furnaces (ETRMA, 2015; Ecopneus, 2013).
Besides these problems, the use of fibre as recovery material presents mechanical and technological limitations. After the process, the textile fibre takes the form of “soft bundles”, which poses numerous problems such as: 1) the fibre bundle materials cannot be mixed and dispersed uniformly within any material (such as plastic compounds or bitumen conglomerates); 2) due to the accumulation of electrostatic charge within the bundles, an electrostatic effect is generated (called “bridge effect”), which, together with the fibre morphology, tends to obstruct the loading and extruding phases; 3) the low specific weight of fibre bundles (140 kg/m3) makes their transportation too expensive, hence strongly limiting the possibility of selling them in the market. For these reasons, as mentioned, ELTs are usually disposed.
The present paper focuses on the use of the ELT fibre as reinforcement in asphalt. The value of roads and infrastructures realized with the reinforced asphalt mix is expected to be higher due to a longer lifetime (a lifetime of 40–50 years is expected, while the lifetime of “normal” asphalts is 6–7 years) (Gonzalez et al., 2012; Liang et al., 2015). Moreover, the new conglomerates can be used in different climatic conditions ensuring wider market opportunities as well as replication across the EU. Furthermore, due to its mechanical properties, the new asphalt will consistently reduce the public procurement costs related to the rehabilitation and maintenance of roads and infrastructures (Blessen et al., 2016).
Besides presenting this new technological process, the aim of this paper is to assess its environmental and economic sustainability, by conducting a Life Cycle Assessment (LCA) analysis as well as a cost-benefit analysis (CBA).
This research draws primarily on the European Commission's “Guide to Cost-Benefit Analysis of Investment Projects” and on the European Investment Bank's “Economic Appraisal of Investment Projects at the (EIB)”. The former illustrates principles and rules to apply the CBA approach in different sectors, while the latter presents the economic appraisal methods that the EIB adopts in order to assess the economic viability of projects.
The present paper is organized as follows: Section 2 illustrates the project background, the cost-benefit methodology and Life Cycle Assessment methodology. In Section 3 results of the two analyses are presented, while in section 4 the financial sustainability and the economic performance of the process are discussed, together with the results of the risk assessment. Lastly, in Section 5 conclusions and recommendations are drawn.
Section snippets
Background of case study
Three phases compose the usual ELT disposal process. The first phase is the production of ground particles accompanied by the removal of the metallic fraction. For this phase, a double shaft grinder (which includes single knife elements), as well as electricity, water and oil are employed. The second phase consists in grinding the ground particles to reduce their dimensions. The equipment used in this phase is a fixed external cylinder (equipped with blades) which contains a rotating cylinder
LCA: life cycle interpretation
In Fig. 5 and Table A1, the average contribution of both scenarios for each impact category is reported. At first sight, neither scenario presents a clear environmental benefit.
Solely specific impact categories have been considered in this analysis, as some categories have not gained a world-wide recognition in the scientific community, differently from “toxicity” category (Renou et al., 2008). Other categories related to terrestrial transformation and terrestrial occupation have not been taken
Financial sustainability
Financial sustainability is a key feasibility condition for any typology of project. More specifically, “a project is financially sustainable when the risk of running out of cash in the future, both during the investment and the operational stages, is expected to be nil” (European Commission, 2014). To assess the financial sustainability, inflows are measured against outflows.
In the present analysis, in the first year the net cash flow is negative, due to relevant disbursements occurred in this
Conclusions
End-of-life tyres are one of the main source of waste in ELV sector. One aspect of fundamental importance for ELT recycling and valorisation of recovered materials is the proper implementation of European legislation regulated at the Italian national level by the DM Environment April 11, 2011, n. 82. The European Directive, 2000/53/EC is aimed primarily at preventing the production of waste resulting from vehicles, including tyres (classified as CER160103), and to encourage the reuse, recycling
Acknowledgements
This study is part of the activities carried out in the context of the “REFIBRE” Project (LIFE14 ENV/IT/000160) funded by the European Union within the Life Framework Programme. Special thanks are expressed to Steca S.p.A, Tires S.p.A and Toto Costruzioni S.p.A for the precious contribution.
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