Economic Viability Assessment of Small-Scale Biomass Composting Project Within a Developing Country Context

Albert Banunle; Bernard Fei-Baffoe; Kodwo Miezah; Nana Ewusi-Mensah; Uffe Jørgensen; Robert Aidoo; Alice Amoah; Patrick Addo-Fordjour; Robert Clement Abaidoo

doi:10.1007/s43615-023-00328-4

Economic Viability Assessment of Small-Scale Biomass Composting Project Within a Developing Country Context

Albert Banunle^*, Bernard Fei-Baffoe, Kodwo Miezah, Nana Ewusi-Mensah, Uffe Jørgensen, Robert Aidoo, Alice Amoah, Patrick Addo-Fordjour, Robert Clement Abaidoo

^*Corresponding author for this work

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaper › Journal article › Research › peer-review

Abstract

Promoting investment in biomass composting is necessary to halt finite resource depletion and transition consumption and production processes into sustainable circular bioeconomy paths. This notwithstanding, there is a lack of demonstrable evidence of the economic viability of such investment, which often disincentivises the adoption of composting and other greener production technologies by entrepreneur. To address this problem, this study evaluates the economic viability of composting as technology for valorising biowaste and tropical aquatic invasive plants in the Owabi catchment in the Ashanti Region of Ghana. Using data from interviews with key informants, pilot study findings and market survey, a cost–benefit analysis (CBA) was performed to determine the economic viability of composting organic waste under public and private ownership models (M1P1 and M1P2, respectively) as well as aquatic invasive plants under similar models (M2P1 and M2P2). The findings show that a positive net present value (NPV) of GHS 507,520.31(US $64,243.08) to GHS 1,217,358.77 (US $154,095.92) is achievable from the alternative scenarios modelled. Each of the scenarios analysed (M1P1, M1P2, M2P1 and M2P2) resulted in a benefit–cost ratio (BCR) greater than 1 and an internal rate of return (IRR) greater than 28%. These results remain robust even with sensitivity analysis based on pessimistic assumptions about costs, benefits, discount rate and project lifespan. The study thus concludes that investing in a small-scale compost production technology with biowaste and aquatic invasive plants as feedstock is a feasible business with positive social, economic and environmental net benefits. Future development in the carbon credit market will make biomass composting even more economically viable to investors and thereby contribute to sustainability and the transition to a circular economy.

Original language	English
Journal	Circular Economy and Sustainability
Volume	4
Issue	2
Pages (from-to)	951-971
Number of pages	21
ISSN	2730-597X
DOIs	https://doi.org/10.1007/s43615-023-00328-4
Publication status	Published - Jun 2024

Keywords

Biowaste
Composting
Ghana
Invasive plants
Profitability

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10.1007/s43615-023-00328-4

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title = "Economic Viability Assessment of Small-Scale Biomass Composting Project Within a Developing Country Context",

abstract = "Promoting investment in biomass composting is necessary to halt finite resource depletion and transition consumption and production processes into sustainable circular bioeconomy paths. This notwithstanding, there is a lack of demonstrable evidence of the economic viability of such investment, which often disincentivises the adoption of composting and other greener production technologies by entrepreneur. To address this problem, this study evaluates the economic viability of composting as technology for valorising biowaste and tropical aquatic invasive plants in the Owabi catchment in the Ashanti Region of Ghana. Using data from interviews with key informants, pilot study findings and market survey, a cost–benefit analysis (CBA) was performed to determine the economic viability of composting organic waste under public and private ownership models (M1P1 and M1P2, respectively) as well as aquatic invasive plants under similar models (M2P1 and M2P2). The findings show that a positive net present value (NPV) of GHS 507,520.31(US $64,243.08) to GHS 1,217,358.77 (US $154,095.92) is achievable from the alternative scenarios modelled. Each of the scenarios analysed (M1P1, M1P2, M2P1 and M2P2) resulted in a benefit–cost ratio (BCR) greater than 1 and an internal rate of return (IRR) greater than 28%. These results remain robust even with sensitivity analysis based on pessimistic assumptions about costs, benefits, discount rate and project lifespan. The study thus concludes that investing in a small-scale compost production technology with biowaste and aquatic invasive plants as feedstock is a feasible business with positive social, economic and environmental net benefits. Future development in the carbon credit market will make biomass composting even more economically viable to investors and thereby contribute to sustainability and the transition to a circular economy.",

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author = "Albert Banunle and Bernard Fei-Baffoe and Kodwo Miezah and Nana Ewusi-Mensah and Uffe J{\o}rgensen and Robert Aidoo and Alice Amoah and Patrick Addo-Fordjour and Abaidoo, {Robert Clement}",

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month = jun,

doi = "10.1007/s43615-023-00328-4",

language = "English",

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Economic Viability Assessment of Small-Scale Biomass Composting Project Within a Developing Country Context. / Banunle, Albert; Fei-Baffoe, Bernard; Miezah, Kodwo et al.
In: Circular Economy and Sustainability, Vol. 4, No. 2, 06.2024, p. 951-971.

Research output: Contribution to journal/Conference contribution in journal/Contribution to newspaper › Journal article › Research › peer-review

TY - JOUR

T1 - Economic Viability Assessment of Small-Scale Biomass Composting Project Within a Developing Country Context

AU - Banunle, Albert

AU - Fei-Baffoe, Bernard

AU - Miezah, Kodwo

AU - Ewusi-Mensah, Nana

AU - Jørgensen, Uffe

AU - Aidoo, Robert

AU - Amoah, Alice

AU - Addo-Fordjour, Patrick

AU - Abaidoo, Robert Clement

N1 - Publisher Copyright: © The Author(s), under exclusive licence to Springer Nature Switzerland AG 2023.

PY - 2024/6

Y1 - 2024/6

N2 - Promoting investment in biomass composting is necessary to halt finite resource depletion and transition consumption and production processes into sustainable circular bioeconomy paths. This notwithstanding, there is a lack of demonstrable evidence of the economic viability of such investment, which often disincentivises the adoption of composting and other greener production technologies by entrepreneur. To address this problem, this study evaluates the economic viability of composting as technology for valorising biowaste and tropical aquatic invasive plants in the Owabi catchment in the Ashanti Region of Ghana. Using data from interviews with key informants, pilot study findings and market survey, a cost–benefit analysis (CBA) was performed to determine the economic viability of composting organic waste under public and private ownership models (M1P1 and M1P2, respectively) as well as aquatic invasive plants under similar models (M2P1 and M2P2). The findings show that a positive net present value (NPV) of GHS 507,520.31(US $64,243.08) to GHS 1,217,358.77 (US $154,095.92) is achievable from the alternative scenarios modelled. Each of the scenarios analysed (M1P1, M1P2, M2P1 and M2P2) resulted in a benefit–cost ratio (BCR) greater than 1 and an internal rate of return (IRR) greater than 28%. These results remain robust even with sensitivity analysis based on pessimistic assumptions about costs, benefits, discount rate and project lifespan. The study thus concludes that investing in a small-scale compost production technology with biowaste and aquatic invasive plants as feedstock is a feasible business with positive social, economic and environmental net benefits. Future development in the carbon credit market will make biomass composting even more economically viable to investors and thereby contribute to sustainability and the transition to a circular economy.

AB - Promoting investment in biomass composting is necessary to halt finite resource depletion and transition consumption and production processes into sustainable circular bioeconomy paths. This notwithstanding, there is a lack of demonstrable evidence of the economic viability of such investment, which often disincentivises the adoption of composting and other greener production technologies by entrepreneur. To address this problem, this study evaluates the economic viability of composting as technology for valorising biowaste and tropical aquatic invasive plants in the Owabi catchment in the Ashanti Region of Ghana. Using data from interviews with key informants, pilot study findings and market survey, a cost–benefit analysis (CBA) was performed to determine the economic viability of composting organic waste under public and private ownership models (M1P1 and M1P2, respectively) as well as aquatic invasive plants under similar models (M2P1 and M2P2). The findings show that a positive net present value (NPV) of GHS 507,520.31(US $64,243.08) to GHS 1,217,358.77 (US $154,095.92) is achievable from the alternative scenarios modelled. Each of the scenarios analysed (M1P1, M1P2, M2P1 and M2P2) resulted in a benefit–cost ratio (BCR) greater than 1 and an internal rate of return (IRR) greater than 28%. These results remain robust even with sensitivity analysis based on pessimistic assumptions about costs, benefits, discount rate and project lifespan. The study thus concludes that investing in a small-scale compost production technology with biowaste and aquatic invasive plants as feedstock is a feasible business with positive social, economic and environmental net benefits. Future development in the carbon credit market will make biomass composting even more economically viable to investors and thereby contribute to sustainability and the transition to a circular economy.

KW - Biowaste

KW - Composting

KW - Ghana

KW - Invasive plants

KW - Profitability

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Economic Viability Assessment of Small-Scale Biomass Composting Project Within a Developing Country Context

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