Sustainable Circular Bioeconomy—Feasibility of Recycled Nutrients for Biomass Production within a Pulp and Paper Integration in Indonesia, Southeast Asia

Round 1

Reviewer 1 Report

The objective of the paper is very interesting, however there are three important problems with it:

• Costs are based on very old database, in consequence the analysis developed can not be considered for publication.
• In relation to environmental "cost" and "benefits" for different scenarios, the assessment of social NPV (NPV s ) should be proposed to account for all benefits that are hard to monetize because they do not represent an effective annual cash flow.
• Finally, the investigation of the range of model results in order to determine the variability, the trend, and the performance of the results obtained under uncertain conditions should be included. For example Monte Carlo tool could carry out a simulation of 10 yearsto determine NPV financial and NPV social , using costs and benefits as inputs.

In consequence, I consider this paper does not have enough quality to be publish in present form; I also consider that major revisions could not be enough to improve it according to the quality of the journal.

 

Author Response

Dear Sir/Madam,

Thank you very much for the constructive feed-back. We will specify the consequent modifications to the manuscript below.

We fully agree with the importance of the social NPV and the importance of a quantified environmental and social analysis that go beyond the scope of this research. We clarified our research scope and setting with the new figure 2, page 5. Our research setting was outlined on the basis of our findings that there relatively limited number of previous financial analyses related to this type of operational model. Hence, we considered necessary to build a generalizable operational model based on publicly available data to promote circular economy. We applied two methods by analyzing qualitatively the number of open sustainability issues in this phase. The data related the application of sludge was based on cost estimates. The focus was less on the future uncertainties. Consequently, we did not estimate the potential value of environmental benefits even though we admit this to be a clear limitation of the research setting. We excluded larger environmental and social costs from this model due to limited data for long-term simulations. Furthermore, we perceived that, for example, a case study approach would be very fruitful to analyze the social NPV tied with a certain type of location with more precise understanding of socio-economic and environmental parameters to be included in the analysis.

We note this valuable comment in Discussion part, p. 20, rows 16-25, and discussed the limitations of the research setting. We also list the need for a comprehensive analysis, including social NPV as an essential theme for further studies. We hope that the research setting and this type of framing is acceptable to give a basis for the further analysis which are definitely essential to understand properly various circular economy models.

The objective of the research was to build a circular economy model. The financial analysis tested the financial profitability of the application of sludge as a recycled nutrient when replacing artificial fertilizers. The variability of the core analysis was tested with the sensitivity analysis. We expected that all other factors do not change significantly which is, of course, a very simplified expectation. Monte Carlo tool is a very interesting option to analyze uncertain data. We applied a narrower research setting with as reliable basic data as available to be able to build a financial model. The chosen research setting excluded further uncertainty analyses with a large set of uncertain parameters. We clarified the limitation of the research setting on page 20, rows 16-25. We hope that this type of research framing can be considered as an opening for further analyses with large variability and trend analysis.

Reviewer 2 Report

According to the author, the study is carried out in the case of Southeast Asia, but the paper addresses Indonesia. It would be better to clearly state that this study evidences a case of one country and to focus on the discussion of this country, such as national specifics of biomass production, challenges, gaps, whatever, but all those related specifically to Indonesia. In the Discussion, the author should demonstrate how such country-related findings could be implemented in other locations and adopted in diverse international frameworks.

Author Response

Dear Sir/Madam,

Thank you very much for the constructive feed-back. We will specify the consequent modifications to the manuscript below.

We appreciate the encouraging comment to clarify the study area. We changed South-East Asia to Indonesia throughout the paper. Furthermore, we discussed futher on the generalizability of the findings liker recommended on pages 19-20, rows 48-27. To address the importance of the generalizability of the findings, we adjusted the chapter title as 5.1 Financial profitability and generalizability of the results.

Reviewer 3 Report

The paper is well structured, methodologically sound, and I believe that it provides valuable insights into the circular economy's potential. I will opt for the acceptance of the paper. Nevertheless, I would like to make some proposals to the authors which I believe can further improve an already good paper.

• Please try to incorporate a figure in the "Material and methods" section in which you will explain graphically which exact method is used for every kind of evaluation you conduct. It is crucial to show here which elements of the circular economy model are considered by your research design and which are left out. By providing this information, future researchers on the topic will be able to replicate or complement your approach more easily.
• In the same vein, I believe that it would be great if you incorporated a table with all the assumptions described in Section 2.2. You very well provide such tables in Sections 3.1 and 3.2 (Tables 1 and 2).
• I also have a proposal for improving the evaluation framework of the study. Please consider this comment only as a suggestion for your future research on evaluating circular economy models. More precisely, your paper could be much benefited by setting a more integrated research structure, where the results of the quantitative analysis at the first stage would be incorporated in the second one. More precisely, in the first stage, you compare the profitability of the sludge fertilization method with the conventional one. It would be very nice if this type of comparison was realized in the succeeding analysis. Therefore, instead of presenting the pros and cons of the circular economy under the various criteria (environmental, economic, etc.), it could be interesting to do that on par with the conventional practices. You could also incorporate in the valuation framework the results of the profitability analysis. In this way, the analysis would be more holistic and the messages of your work more straightforward. Perhaps, incorporating a type of multicriteria analysis with the three scenarios examined in the profitability analysis would also be a very nice idea.
• A minor comment: Page 3, Line 4, the term "is" is redundant.

Once again, congratulations on your very nice work, and good luck with all your future publications.

Author Response

Dear Sir/Madam,

Thank you very much for the very constructive feed-back that allowed us significantly strengthen the argumentation. We specified below how we considered the suggestions:

We illustrated the research setting by adding a figure 2 to specify the coverage of the analysis. p. 5.

We added two tables, 1 and 2, to clarify the assumptions in Section 2.2., pp. 5 and 6.

We strengthened the argumentation in Section 4. The qualitative analysis evaluates potential social and environmental benefits followed by scenario 3, partly 2, too. Hence, the expectation is that the benefits do not exist with the basic case. Thus, the qualitative analysis is not fully an independent analysis but it has been incorporated in the financial analysis focusing mainly on expected pros after applying Scenario 2 and 3. Cons are discussed marginally in this context, but we fully agree that a comprehensive approach combining the financial result with proper pro and cons is definitely needed in order to understand the entire feasibility of the presented operational model.

A multicriteria analysis would definitely strengthen the analysis. We perceive that the applied data does not allow to carry out a proper multicriteria analysis in this phase. Hence we notice this analysis in the discussion section as a potential further analysis for different circular economy models, p.20 rows 25-27.

Reviewer 4 Report

The reviewer fully supports the theme. The long-term return on investment of the circular economy requires very thoughtful preconceptions and complex calculations. We think this is a good direction, but perhaps the public understanding should be strengthened. Apart from some minor errors, we have not found any substantial problem for improvement. (The source of the 1. figure is missing.)

Author Response

Dear Sir/Madam,

Thank you for the very constructive feed-back. We fully agree that the theme requires a significant amount of future analyses. However, we do appreciate that you see the importance of the theme and our opening to discuss and analyze further with different data this type of models. We up-dated the missing source of the figure 1 accordingly.

Round 2

Reviewer 1 Report

I appreciate the authors' effort to improve and clarify some doubts about the paper. Nevertheless I still have some doubts about the references used to determine costs. References are too old. Some of them from 90's. In the case of the inflation rates it has been considered between 1996 and 2013 but we are in 2021. From my point of view it would be necessary to update costs according to references of the last years before the publication of the paper.

Author Response

Dear Sir/Madam,

We fully agree with you that the data is old. We up-dated the inflation rate accordingly, see p. 8, Fig. 3.

The inflation rate of 2000's have been relatively steady. This observation encourage us to keep the cost data as it is. We concluded based on this that the cost levels have remained relatively steady causing no major hazard in our hypothetical, financial model. The current cost data is gathered from various scientific, peer-review sources. Hence, we rather kept the reliable data instead of up-dating the analysis with possible non-validated figures that could be available. See our response on p. 19, rows 8-14.

Author Response File: Author Response.pdf

Reviewer 2 Report

My recommendations have been addressed by the authors

Author Response

Dear Sir/Madam, thank you very much for the positive answer.