Circular Economy Model: Insights from a Case Study in South Italy

Abstract

This study aims to analyze the economic and environmental sustainability of a case study of an energy power plant that produces electricity from pruning residues of olive groves from nine municipalities in southern Italy. To assess the economic sustainability of the agro-energetic chain, the profitability and efficiency ratios are calculated. Moreover, the GHG emissions of the agro-energetic pruning supply chain due to both the pruning collection at the field level, and their combustion for energy production at the power plant, are calculated. To put together the environmental and economic evaluations, the ecoefficiency ratio was calculated to measure the value added per 1Mg of GHG emitted into the atmosphere. The findings show the whole agro-energetic chain, namely the power plant and the collection company have both a good return on owner’s equity (ROE) ratio (15.89% and 31.48%, respectively) and ROI ratio (4.34% and 6.14% respectively). Moreover, the power plant’s ecoefficiency ratio (2.64€ per 1Mg of GHG) is slightly lower than harvest firm one (2.91€ per 1Mg of GHG). The findings could be useful to develop new business models based on the circular economy concept. In fact, the business model proposed could push entrepreneurs towards new income opportunities, at the same time, helping local farms and reducing the environmental impacts.