(790h) Multi-Objective Synthesis of Biofuels' Processes by a Novel Concept of Eco-Profit, Extended to Eco-Net Present Value

This paper’s contribution introduces and discusses a novel concept of eco-net present value (Eco-NPV), also called eco-net present worth (Eco-NPW). Our recently proposed sustainability metric, based on the concept of eco-profit (Čuček et al., 2012; Kravanja and Čuček, 2012), which is on a yearly basis, has now been extended to Eco-NPV, which is based on the full lifetime of a particular project. Eco-profit is defined as the difference between unburdening (eco-benefit) and burdening (eco-cost) of the environment, where eco-benefit and eco-cost calculations are based on life cycle assessment (LCA). Since eco-profit is expressed in monetary units similarly to economic profit, they can be merged together into so-called ‘total profit’. When the synthesis of a process, the complex of processes, or even a regional supply network is performed using e.g. the mixed-integer programming approach, the optimal solution is the one with the maximal total profit. The intention is not only to find economically the more attractive and environmentally least-burdening solutions, but also those that unburden the environment the most.

This concept has now been extended to the net present value (NPV). NPV is an economic measure which properly takes into account the complete economics of the project throughout the project’s life-cycle; the initial investment expenditure, all the expected future annual cash flows, the time value of money, and the salvage value. Maximization of the NPV with a discount rate equal to the minimum acceptable rate of return (MARR), is probably the more appropriate method for making capital budgeting decisions, and for the optimization of process flow-sheets or their subsystems (Novak Pintarič and Kravanja, 2006). The Eco-NPV is an analogy of the economic NPV, where income in the NPV’s yearly cash flow is now represented by unburdening (eco-benefit) and outcome by burdening (eco-cost) of the environment. Similarly as economic and eco-profit are merged into total profit, the economic NPV and Eco-NPV form total NPV, and the preferred solutions are those with maximal total NPV.

In this paper, this novel concept of eco-NPV is compared with the concept of eco-profit. This approach is illustrated through a couple of case studies of the supply chain synthesis for producing biofuels.   

Keywords: Net present value, Eco-net present value, Eco-profit, LCA, Optimization, Biofuels

References

Čuček L., Drobe? R., Pahor B., Kravanja Z., 2012, Sustainable synthesis of biogas processes using a novel concept of eco-profit, Computers & Chemical Engineering, doi: 10.1016/j.compchemeng.2012.01.010

Kravanja Z., Čuček L., 2012, Multi-objective optimization for generating sustainable solutions considering total effects on the environment, Applied Energy, doi: 10.1016/j.apenergy.2012.04.025

Novak Pintarič Z., Kravanja Z., 2006, Selection of the objective function for the optimization of process flow sheets, Industrial & Engineering Chemistry Research, 45, 4222-4232