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

Author

Listed:
  • Albert Banunle

    (Kwame Nkrumah University of Science and Technology, University Post Office, PMB, KNUST)

  • Bernard Fei-Baffoe

    (Kwame Nkrumah University of Science and Technology, University Post Office, PMB, KNUST)

  • Kodwo Miezah

    (Kwame Nkrumah University of Science and Technology, University Post Office, PMB, KNUST)

  • Nana Ewusi-Mensah

    (Kwame Nkrumah University of Science and Technology)

  • Uffe Jørgensen

    (Aarhus University
    Aarhus University Centre for Circular Bioeconomy, Aarhus University)

  • Robert Aidoo

    (Kwame Nkrumah University of Science and Technology)

  • Alice Amoah

    (Kwame Nkrumah University of Science and Technology)

  • Patrick Addo-Fordjour

    (Kwame Nkrumah University of Science and Technology)

  • Robert Clement Abaidoo

    (Kwame Nkrumah University of Science and Technology)

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.

Suggested Citation

  • Albert Banunle & Bernard Fei-Baffoe & Kodwo Miezah & Nana Ewusi-Mensah & Uffe Jørgensen & Robert Aidoo & Alice Amoah & Patrick Addo-Fordjour & Robert Clement Abaidoo, 2024. "Economic Viability Assessment of Small-Scale Biomass Composting Project Within a Developing Country Context," Circular Economy and Sustainability, Springer, vol. 4(2), pages 951-971, June.
    • Handle: RePEc:spr:circec:v:4:y:2024:i:2:d:10.1007_s43615-023-00328-4
    DOI: 10.1007/s43615-023-00328-4
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    References listed on IDEAS

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    1. Teotónio, Inês & Oliveira Cruz, Carlos & Matos Silva, Cristina & Lopes, Rodrigo Ferreira Reis, 2023. "Bridging CBA and MCA for evaluating green infrastructure: Proposal of a new evaluation model (MAGICA)," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    2. Yi-Tui Chen, 2016. "A Cost Analysis of Food Waste Composting in Taiwan," Sustainability, MDPI, vol. 8(11), pages 1-13, November.
    3. Dotanhan Yeo & Kouassi Dongo & Adeline Mertenat & Phillipp Lüssenhop & Ina Körner & Christian Zurbrügg, 2020. "Material Flows and Greenhouse Gas Emissions Reduction Potential of Decentralized Composting in Sub-Saharan Africa: A Case Study in Tiassalé, Côte d’Ivoire," IJERPH, MDPI, vol. 17(19), pages 1-15, October.
    4. Modupe Stella Ayilara & Oluwaseyi Samuel Olanrewaju & Olubukola Oluranti Babalola & Olu Odeyemi, 2020. "Waste Management through Composting: Challenges and Potentials," Sustainability, MDPI, vol. 12(11), pages 1-23, May.
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