Economic sustainability of biogas production from animal manure: A regional circular economy model

In the context of the circular economy, cooperation among agriculture, animal farming and bioenergy production based on local second generation biomass use and by-product exchange may yield innovative regional business models. Actors from such different sectors can enhance the development of a circular economy on a local level, gaining economic advantages for themselves and contributing to generate environmental benefits. However, as second generation biomass is not produced upon demand but emerges as secondary output, spatial, technical, and technological variables cause uncertainties on economic benefits for the actors involved. These uncertainties may impede local actors to get engaged with innovative circular economic business models, thus hindering the generation of environmental advantages.
This paper proposes a circular economy model where animal manure is used to produce biogas and alternative fertilizer, where the latter, in turn, is used in agricultural activities in a regional network of suppliers and producers. The empirical case of this study is based on the use of cattle and pig manure in biogas production in a case example. The impacts of the above-mentioned variables on the economic returns for each actor are investigated numerically using an enterprise input-output approach. The analysis identifies under which conditions cooperation can be beneficial for all actors involved. Accordingly, different cooperation modes are proposed from an organizational perspective.
The paper provides theoretical, practical and managerial contributions for the regional actors to design such circular economic business models with reduced environmental impacts. Implications derived from resource and energy savings in the specific case of biogas production are also interpreted from a regional policy-making perspective.