Life cycle costing and externalities to analyze circular economy strategy: Comparison between aluminum packaging and tinplate

Abstract

In the circular economy (CE), the importance of the evaluation of costs, benefits, and externalities capturing the variables involved in a product's life cycle are gaining attention both in the literature and with practitioners. In many cases, costs are isolated across the various life cycle stages and addressed in fragmented ways. The literature indicates the importance of developing and implementing life cycle costing methods from the perspective of the product/material flow life cycle. Numerical application of the product structure-based integrated life cycle analysis (PSILA) with the externalities demonstrates how this method can assist in the management of circular businesses. Therefore, this paper aims to analyze the benefits of using aluminum packaging in the food sector by combining the life cycle costing (LCC) model and externalities in the CE. The results obtained through the LCC concept and externalities indicate an economic benefit and CO2 reduction. This paper seeks to fill the research gap regarding expenditures and benefits for the analysis of production costs, environmental impacts, and externalities in an integrated manner.