(517l) Designing Sustainable Supply Chains in Light of Planetary Boundaries: A Case Study of Bioethanol Production from Sugarcane in Argentina

Galán-Martín, Á., ETH Zürich
Wheeler, J. Sr., Facultad de Ciencias Exactas y Tecnología, Departamento de Ingeniería de Procesos y Gestión Industrial, Av. Independencia 1800, 4000
Mele, F. D., Universidad Nacional de Tucuman
Guillén-Gosálbez, G., Imperial College London
With the increase of international trade and the quest for sustainable development, supply chains (SCs) worldwide are facing significant transformative changes to integrate sustainability concerns into their design and operation. Traditionally, the methodological approach to design sustainable supply chains has been through Life Cycle Optimization (LCO) approaches, which consists of incorporating Life Cycle Assessment (LCA) principles into mathematical programming models. In essence, the optimization models allow representing the SC problem through a set of equations, while LCA allows quantifying all the material and emissions inputs and outputs throughout the whole lifetime of the SC which are converted into relevant environmental impacts. This LCO approach undoubtedly provides valuable insights into the decision-making process to identify SC configurations showing improved sustainability performance. However, the question that arises is whether the environmental impact of these optimal SC is low enough to be considered truly sustainable, and if not, by how much the environmental pressure should be further reduced. This kind of insight is out of the reach of the traditional LCO approach, which calls for new approaches coupling LCA with absolute measures and ultimately incorporating absolute sustainability assessment into the design of future SCs.

In this context, the planetary boundaries (PBs) concept provides a theoretical basis to evaluate systems referring to the absolute carrying capacity of the Earth, i.e., to assess whether the Earth is able to cope with environmental burdens from human activities. In essence, the PBs framework identifies a set of critical environmental processes and their respective maximum perturbation limits which altogether define the so-called safe operating space (SOS), which can be used as the absolute sustainability reference. In this work, we incorporate the PBs concept into the design of sustainable SCs by relying on a recently proposed set of life cycle assessment (LCA) characterization models which allow expressing all impacts and burdens of the SCs in terms of the control variables of the PBs. The proposed modelling framework allows finding the optimal solution for the whole network minimizing the transgression of the PBs, which need to be previously translated to the regionally-operating scale of the SC using distributive fairness principles. The overall approach, therefore, allows quantifying the performance of SCs in terms of maximum thresholds, thereby providing information on their absolute sustainability level.

To demonstrate how the proposed framework would work in practice, we apply it to a case study which considers the optimal design of the bioethanol production from sugarcane in Argentina to satisfy an increased blending mandate in the transportation sector. To do so, we modified our previously developed mixed-integer linear programming model by incorporating the PBs framework. Our results show that, due to the stringent downscaled PBs imposed, there is no SC configuration capable of satisfying all planetary boundaries concurrently. However, the transgression to critical PBs such as climate change and acidification would be significantly reduced. We hope that our work opens up new avenues for research and business applications to operationalize the design of future SCs in light of PBs towards decision-making aligned with absolute sustainability.