Abstract: Sustainable management of industrial plastic waste is crucial in the transition to a circular economy. Today, most industrial plastic waste is incinerated, whereas it could be recycled. As a consequence, governments increasingly make use of incineration taxes to improve current waste management practices. This paper presents an econometric panel analysis that studies the effects of an incineration tax on industrial plastic waste in Flanders (Belgium). Not only is this study the first econometric analysis on industrial plastic waste management in which firm heterogeneity is explicitly taken into account by including firm-specific characteristics, but this study also provides policymakers with insights into the effectiveness of an incineration tax to change current waste management practices. Empirical estimates imply that heterogeneous firms generate industrial plastic waste in different ways and that heterogeneous firms reduce their waste generation in different ways after the incineration tax rate increases. The estimates also show that the unique decrease of the incineration tax in 2007, did not change waste management practices. These estimates show that firms do not disinvest or indicate that loss aversion theory, i.e. a preference for avoiding losses over acquiring equivalent gains, might apply to firms that are faced with environmental taxation in a waste management context.

Abstract: A new reductive catalytic fractionation biorefinery process (RCF) is currently being developed transforming wood into high-value end-products. RCF is considered to be in the pilot stage with a technology readiness level of 5–6. Apart from the RCF-process characteristics, the economic feasibility also depends on the investment decisions that are made upstream and downstream within the wood value chain, increasing the level of uncertainty. Two investment options within the value chain are considered: an option to invest in harvesting equipment and an option to invest in the RCF. To understand the impact of multiple sources of uncertainty on the decision to invest in an innovative RCF-driven wood value chain, an analytical two-factor real options model is presented, accounting for correlated cost and price uncertainties. Two different scenarios, separated and united investments in harvesting equipment and RCF, are analyzed. In both scenarios, market uncertainty postpones investment in comparison to the traditional NPV approach. When both investments are considered separately, the investment in RCF is expected to be earlier than the investment in harvesting equipment. When both investment decisions are united, the probability of investment increases. The study reveals that RCF has the potential to stimulate investments from different investors, –upstream and midstream–, within the wood value chain. Besides, the introduced real options model proofs its ability to assess the economic feasibility of innovative technologies (e.g RCF) individually or within the value chain, taking into account multiple sources of uncertainty.

Abstract: A new lignin-first biorefinery with a reductive catalytic fractionation process, which targets the valorization of the lignin and the carbohydrate fraction into higher value end-products, is currently being designed. To identify the various R&D drivers for projects with a low technology readiness level (TRL), we developed an integrated techno-economic assessment (TEA) that directly integrates the results of lab studies with economic costs and benefits. Furthermore, different linkages are made to upstream wood availability and downstream demand to understand its fit into existing wood value chains. By making the relations across the wood value chain explicit within the integrated TEA, we find that the scale of the plant, the feedstock-specific output quantities, and output prices highly determine the economic feasibility. Furthermore, this detailed analysis reveals the importance of assessing different types of feedstock. If only virgin wood is available as feedstock, minimum capacity levels between 190 and 234 kilotons per year are needed for the investment to be profitable. Waste wood proves to be the most profitable feedstock with an NPV of M€ 59 and an IRR of 26%. Using only waste wood as feedstock makes the investment profitable at a lower capacity level of 80 kilotons per year and economic shocks can be absorbed. Based on these results we show that an integrated and detailed TEA is indispensable to define future development paths for early-stage, innovative technologies.

Abstract: Buildings are responsible for 40% of our worldwide energy consumption and 50% of this energy is converted for Heating Ventilation Air Conditioning (HVAC) systems in buildings. The increasing share of renewable energy production required to make the transition towards a carbon neutral energy system challenges the stability of the grid. Through demand response it becomes possible to activate these systems in support of grid balancing. However, this flexibility is currently not rewarded in the market. We simulate a domestic water heater participating in the balancing of the electricity net and calculated the revenue from this action. We simulate a water heater in connection with an Economic Model Predictive Controller (EMPC) which takes future usage, energy cost, and reward for delivering balanced power into account. We show that the choice of an EMPC controller is valid as it allows the setpoint to change if certain conditions are met, leading to a more optimal revenue stream from selling flexibility. We find that the economic benefits of participating in delivering balancing power is considerable and offset an increase in energy costs. The increase in energy consumption could be justified as the participation in net stabilisation allows the macro-system to integrate more renewable energy sources. More importantly, the simulations also show that the poorer the energy performance of the water heater, the more flexibility can be sold. From a policy point of view, a minimal energy performance should be determined before allowing participation in net stabilisation.

Abstract: Deep geothermal energy appears to be currently on the edge of a take-off in Belgium. However, the actual emergence of this technology is subject to developments in legislation and incentives from regional governments. Different risk/return expectations across stages of the investment continuum exist and the financial structures that are employed at each stage may require different types of public support. In this context, the ALPI project aims at developing a geological-economic model to calculate the impact of different policy instruments on development of the Belgian geothermal energy sector. Due to the lack of underground information describing the Campine Basin, economic methods are used to deal with these large geological uncertainties.

Abstract: A wide range of rules, algorithms, and models are available to design an effective pump and treat remediation system. Often, one refers to the effectiveness of the developed pump and treat system to demonstrate how valuable the use of a groundwater model can be. An economic valuation of the groundwater model is usually missing. This study provides a framework that puts the discussion concerning the use of groundwater models in an economic perspective. It is not only demonstrated that a more effective pump and treat system can be designed using a groundwater model, but also the economic implications of using a groundwater model are calculated. A set of economic decision rules is applied to determine the economic value of a groundwater model. It is shown that investing in a groundwater model can be economically worthwhile. The remediation time is reduced, remediation costs are saved and the property can be sold more early. These benefits outweigh the costs of developing a groundwater model, and hence a positive net benefit (NB) is determined.

Abstract: In 1999, phytoremediation was applied at the site of a Belgian car factory to contain two BTEX plumes. This case study evaluates the cost effectiveness of phytoremediation compared to other remediation options, applying a tailored approach for economic evaluation. Generally, when phytoremediation is addressed as being cost effective, the cost effectiveness is only determined on an average basis. This study however, demonstrates that an incremental analysis may provide a more nuanced conclusion. When the cost effectiveness is calculated on an average basis, in this particular case, the no containment strategy (natural attenuation) has the lowest cost per unit mass removed and hence, should be preferred. However, when the cost effectiveness is determined incrementally, no containment should only be preferred if the value of removing an extra gram of contaminant mass is lower than 320. Otherwise, a permeable reactive barrier should be adopted. A similar analysis is provided for the effect determined on the basis of remediation time. Phytoremediation is preferred compared to no containment if reaching the objective one year earlier is worth 7 000.