Economic and Risk Assessment of New Circular Economy Business Models

Abstract

AbstractCircular economy business models are key enablers of the circular economy. However, they must also be economically viable to materialize in reality, since profitability is a major business driver. Assessment of the economic potential of circular economy business model is subjected to significant uncertainties and to a range of risks, due to their novel nature. This chapter firstly discusses the economic assessment of the circular business models specifically for composites, based on five business model cases from various sectors, focusing on the identification of the major causes of uncertainty and then performing sampling-based sensitivity analysis to investigate the viability of the circular economy business models under uncertainty. The findings show that the proposed circular economy business models are not always more profitable than the existing models. Thus, in some instances new market stimulus would need to be identified and implemented to increase attractiveness of the proposed solutions. As a consequence, the chapter identifies and prioritizes risk factors for new circular economy business models for composites. The risk analysis uses input from industry experts and the literature to come up with a key risk factors list relevant to circular economy business models for composite materials. The risk analysis concludes that the key risk factors are both from the demand/market and supply side.