Circular Value Chains & Business Models II

Sustainable business model innovation is gaining interest among researchers and practitioners. However, the conceptualization of how sustainable business model innovation can contribute to system-wide transitions remains weak (Aagaard et al., 2021). Our paper addresses this gap, through a study of circular business model innovation linked to water and wastewater management. Our work is grounded in a four-year innovation action funded by Horizon 2020, and discusses the interaction between business model innovation, inter-sectoral linkages, and wider system change in six cases, in Norway, Netherlands, Czech Republic, Sicily, and Ghana. Data was collected through interviews and workshops, where the Triple-Layered Business Model Canvas (TLBMC), and Ecologies of Business Model Experimentation (EBME) (Bocken et al., 2018) were applied. The key questions we explore are: 1) To what extent do the emerging business models implicate novel value chains, and change at a wider system level? 2) What are the main factors influencing these dynamics? All the studied cases involve new interactions across at least two sectors, however, the scope of business model innovation varied. In the Dutch case, biocomposite production utilising resources from water and wastewater treatment was in focus, involving experimentation with new products, with multiple suppliers and customers, on a commercial, short-term basis. The is radical innovation in business model content, but also structurally, through a changed role for water utilities, and new connections with the building and construction sector. In two Norwegian cases, focused on energy and nutrient recovery, new companies and couplings between actors and sectors were established. Thus, there was innovation along the three axes of the activity system, at a meso-level. In Ghana, where sludge-based biochar for energy is promising, national policymakers were engaged, to ensure that the product is legally recognized. Reuse of treated wastewater, in Sicily and the Czech Republic, requires new relations between utilities and the user sectors. While the value propositions are clear, regulatory barriers have been overriding. By addressing these challenges in dialogue with relevant authorities, the business model innovation here related to a strategic, macro level, with potential impacts on a wider scale. Our study further highlights the dynamic nature of multi-system interactions. We discuss how relations have been changing over time and exhibit both symbiotic and competitive aspects. Following Aagard et al. (2021), we are concerned with how the duality of system structures and (current and planned) patterns of action shape transitions. We argue, however, that impacts of business model innovations do not necessarily evolve from micro to macro level. Fluctuations in scope and scale are linked to changing policy developments, regulatory frameworks, and market conditions. They are also strongly influenced by the positions and resources of leading actors. In the studied cases, the available volumes and qualities of the key resources and their interaction with the resource systems and requirements in the user sectors is another crucial factor, needing more research attention. References: Aagaard, A., et al. (2021). Business Models for Sustainability Transitions – How Organisations Contribute to Societal Transformation. Palgrave Macmillan. Bocken, N., et al. (2019). Sustainable business model experimentation by understanding ecologies of business models. Journal of Cleaner Production, 208, 1498-1512.

Wastewater treatment plants (WWTPs) are shifting from pollution control facilities to increasingly recognized resource hubs, contributing to circular economy strategies through the recovering of water, nutrients and other valuable resources available on the wastewater inflows. But, in order to evaluate the potentialities of integrating new valorization stages on conventional WPPTs, it is needed to develop the appropriate assessments aiming at analyzing its economic viability, environmental loads and circularity enhancement. In this regard, this research delves into the evaluation of the sustainability and circularity performance of a WWTP located in Cyprus integrating additional process stages aiming at recovering sludge nutrients for fertilizer production, enabling the production of irrigation water for agricultural activities by the implementation of adequate pollutants removal units and chemicals recycling within the process for reducing the use of external resources. The environmental and economic analysis were made by following the Life Cycle Assessment (LCA) and Life Cycle Cost (LCC) methodologies, standardized on ISO 14044 and ISO 15686, respectively. With respect to the circularity assessment, the guidelines provided by the ISO 59004 were followed, considering the scoring of both “resource flow indicators” (including resources, energy and economic flows) and “circular actions indicators” (based on process optimization, repurposing, cascading and regeneration actions). Once all the methodologies have been applied, the outcomes showed both benefits and trade-offs. While the alternative WWTP case study (ACS) improves circularity given the enhancement of the resources recovery and the production of high-added value products for the agricultural sector, it is also highly energy intensive, which implies significant environmental loads and economic costs compared to the already stablished WWTP (BCS). The integration of advanced treatment technologies, such as distillation, reverse osmosis and nanofiltration, are the responsible of the increases the environmental effects and operating costs, mostly because of energy demand and high-level maintenance requirements. In order to improve the environmental and economic sustainability potential of the ACS, sensitivity assessments were performed based on increasing the use of renewable energy, reducing process units (by eliminating those that require more energy), and optimizing the system. These adjustments improved the LCA and LCC results by reducing environmental impacts and costs, but not enough to improve the results obtained by the BCS. However, these optimizations also resulted in a decrease in circularity benefits due to lower recovery rates of resources. It is therefore necessary to consider a trade-off between greater resource recovery and the resulting impacts. However, it is important to keep in mind that the long-term benefits are assured when considering a prospective evaluation that shows the potential of a WWTP system to be considered as a cascading production system. But, in order to move towards the establishment of WWTPs as resource hubs, it is believed that more research is needed to optimize the valorization processes, as well as more incentives and economic support from policy makers.

The LIFE BRINE-MINING project (LIFE18 ENV/GR/000019) is a European Commission-funded initiative demonstrating an innovative Zero Liquid Discharge (ZLD) system for coal mine wastewater treatment. Over its 64-month duration (2019–2024) and with a budget of €6.4 million, the project has developed and tested a system that enables high water recovery and the production of marketable salts, minimizing environmental impacts. The system integrates multiple advanced treatment technologies, including Ultrafiltration, Multivalent Ion Removal, Nanofiltration, Electrodialysis, Reverse Osmosis, Evaporation, and Crystallization, and has been piloted at the Ziemowit coal mine in Poland. A key outcome of the project was the development of a holistic business and value model, aligning technological feasibility with market needs. This was achieved through a design cycle methodology, incorporating technical, financial, and policy aspects. A comprehensive market analysis (SWOT, PEST, and Porter’s Five Forces) identified key barriers, competitive dynamics, and regulatory drivers, emphasizing the role of stricter wastewater discharge policies in supporting technology adoption. Furthermore, stakeholder-driven iterative validation refined the business model, ensuring alignment with industry needs and investment feasibility. One of the most significant challenges was estimating the Capital Expenditures (CAPEX) for full-scale implementation, given the scale-up factor of over 1,000 from the prototype. To address this, a methodology was developed using data gathered from project partners, industry interviews, and literature review, including cost estimation principles from Peters et al.'s "Plant Design and Economics for Chemical Engineers". The financial evaluation considered CAPEX, Operational Expenses (OPEX), Revenues, Net Present Value (NPV), and Circular Water Value, with best- and worst-case scenarios assessed. Additionally, the selection of a discount rate was crucial to avoid inaccurate conclusions. The Weighted Average Cost of Capital (WACC) was used as a more comprehensive discount rate, considering both equity and debt financing, ensuring a realistic reflection of investment risks and returns. However, challenges remain. The ongoing transition away from coal mining creates investment uncertainties, necessitating strong policy frameworks to drive adoption. Additionally, while financial models provide valuable insights, full-scale deployment introduces variables that require further validation, particularly concerning operating expenses and revenue streams. LIFE BRINE-MINING demonstrates a replicable model for sustainable brine management, showcasing how specific industrial wastewater can be transformed into valuable resources, supporting both environmental goals and the circular economy. Keywords: wastewater treatment, Zero Liquid Discharge, circular economy, coal mining, resource recovery, brine management, techno-economic analysis.