Success and failure of the Chemical Leasing model in addressing sustainability challenges: Evidence from practice

Schwager, Petra; Dunjic, Branko; Kaltenegger, Ingrid

doi:10.1016/j.cogsc.2017.08.001

Cited by 7 publications

(1 citation statement)

References 4 publications

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“…To review the global experience of ChL, the UNIDO published a report on its performance in cleaning operations [20], assessing core ecosystem health variables such as Biochemical Oxygen Demand (BOD). Finally, more recent works on ChL examine its improvement potential [21] via questionnaire models that are user-friendly for businesses, ChL's integration with Sankey diagrams, and empirical ChL value-added examples [22]. In the above context, ChL allocates and optimizes a chemical product's recovery cost between manufacturers and end users, in compliance with the EPR principle.…”

Section: Chemical Leasing (Chl)mentioning

confidence: 99%

Chemical Leasing (Ch.L.) and the Sherwood Plot

Karakatsanis,

Makropoulos

2024

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Although the Circular Economy (CE) has made remarkable technological progress by offering a wide range of alternative engineering solutions, an obstacle for its large-scale commercialization is nested in the adoption of those business and financial models that accurately depict the value generated from resource recovery. Recovering a resource from a waste matrix conserves natural reserves in situ by reducing demand for virgin resources, as well as conserving environmental carrying capacities by reducing waste discharges. The standard business model for resource recovery is Industrial Symbiosis (IS), where industries organize in clusters and allocate the process of waste matrices to achieve the recovery of a valuable resource at an optimal cost. Our work develops a coherent microeconomic architecture of Chemical Leasing (Ch.L.) contracts within the analytical framework of the Sherwood Plot (SP) for recovering a Value-Added Compound (VAC) from a wastewater matrix. The SP depicts the relationship between the VAC’s dilution in the wastewater matrix and its cost of recovery. ChL is engineered on the SP as a financial contract, motivating industrial synergies for delivering the VAC at the target dilution level at the market’s minimum cost and with mutual profits. In this context, we develop a ChL market typology where information completeness on which industry is most cost-efficient in recovering a VAC at every dilution level determines market dominance via a Kullback–Leibler Divergence (DKL) metric. In turn, we model how payoffs are allocated between industries via three ChL contract pricing systems, their profitability limits, and their fitting potential by market type. Finally, we discuss the emerging applications of ChL financial engineering in relation to three vital pillars of resource recovery and natural capital conservation.

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Section: Chemical Leasing (Chl)mentioning

confidence: 99%