How government policies can make waste cooking oil-to-biodiesel supply chains more efficient and sustainable

Abstract

In China, more than 14 million tons of edible oils are consumed each year, which could result in a staggering amount of waste cooking oil that needs to be discharged. Converting the waste cooking oil to biodiesel can reduce environmental emissions and achieve economic value. As the recycling supply chain is not matured, the Chinese government is trialing various policies to improve the management of waste cooking oil. However, evidence shows that current policies have shortcomings, which reduce the efficiency and sustainability of the supply chain, recycling and biorefineries capacities. It is not trivial to quantify the impacts of policies and only limited amount of research has reported the supply and value chain of waste cooking oil to be used as biodiesel. To bridge this gap, this paper proposes an optimization-based model to quantify the likely impacts from policy interventions, i.e. integrating and opening the third party take-back supply chains, motivation policies, subsidy policies and demand adjustments due to policy changes. A case study, which includes 63 stakeholders in Shandong Province, China, is selected to demonstrate the impacts such changes can have. The new research method and computational results of the economic and environmental assessments show that the integration of stakeholders and markets increase efficiency and sustainability. Whilst the opening markets option does make fairer profit allocations across the stakeholders, but does not increase efficencies to the same level. In addition, and to the best of authors’ knowledge for the first time, it is shown that unfair profit allocations will decrease the amount of recycled materials. This research has wider applications to policy developments and governmental interventions that aim to promote cleaner production of goods and services. For example, the optimization model can be applied to other circumstances such as electricity supplies, raw material extraction or the recycling of other materials like construction and demolition wastes or plastics.