Implementation of a circular economy-based business model for landfill management companies

Abstract

Demand for raw materials by the world economy could increase by a further 50% in the next 15 years. In order to reverse the trend, a circular development model has to be adopted, which would keep materials and their value in circulation. This is the only solution able to maintain sustainability alongside economic growth.

The Latvian waste management system currently relies heavily on landfilling, with a landfilling rate of over 70% in 2014. In a period when waste policies guarantee the supply of secondary raw materials and prevent valuable materials from getting lost in landfills or incineration, it is of vital importance to start shifting to a circular economy-based business model, particularly for landfill management companies.

The purpose of the research paper is to develop a business model for a landfill management company that will facilitate efficient management of resources and their sustention within the economic cycle. The authors have developed the research based on mathematical modelling of resource flows for maximum economic benefit from their management. The model is dynamic as it depends on a wide range of parameters and the economy – changes in independent variables directly affect the model output.
The methods used in the paper will be economic assessment with material flow analysis as well as systems dynamics for decision making. The research is limited to analysis of municipal waste. One of the main findings and practical implications will be a tool for decision-making based on the authors’ industrial symbiosis model. Industrial symbiosis fits perfectly into the circular economy concept and is an option for Latvian landfill management companies in promoting resource efficiency, especially taking into account that Latvia is underperforming in the management of primary resources.

The originality of the paper is underscored by the lack of similar studies in Latvia. The research will be of a value for specialists in the municipalities, responsible for waste management, and for waste management companies, allowing them to improve their business model as well as to foresee and decrease operational risks and optimize transportation costs. The paper is designed as a research paper.