Accepted Manuscript

Techno-economic analysis of a food waste valorisation process for lactic acid, lactide
and poly(lactic acid) production

Tsz Him Kwan, Yunzi Hu, Carol Sze Ki Lin

PII: S0959-6526(18)30201-4
DOI: 10.1016/j.jclepro.2018.01.179
Reference: JCLP 11859

To appear in: Journal of Cleaner Production

Received Date: 7 September 2017

Revised Date: 20 January 2018
Accepted Date: 22 January 2018

Please cite this article as: Kwan TH, Hu Y, Ki Lin CS, Techno-economic analysis of a food waste
valorisation process for lactic acid, lactide and poly(lactic acid) production, Journal of Cleaner Production
(2018), doi: 10.1016/j.jclepro.2018.01.179.

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1 Techno-economic analysis of a food waste valorisation process for lactic acid, lactide

2 and poly(lactic acid) production

4 Tsz Him Kwan, Yunzi Hu, Carol Sze Ki Lin*

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6 School of Energy and Environment, City University of Hong Kong, Tat Chee Avenue,

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7 Kowloon, Hong Kong

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9 *Corresponding author: Carol S. K. Lin, School of Energy and Environment, City University

10 of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong, E-mail: carollin@cityu.edu.hk, Tel:

11 +852 3442 7497, Fax: +852 3442 0688

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26 Nomenclature

CEPCI Chemical engineering plant cost index

FAN Free amino nitrogen

FCI Fixed capital investment cost

HKOWRC Hong Kong Organic Waste Recycling Centre

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IRR Internal rate of return

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LA Lactic acid

PC Purchase cost of equipment

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PHB Polyhydroxybutyrate

PLA Poly(lactic acid)

MT Metric ton
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NPV Net present value
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NREL National Renewable Energy Laboratory

ROI Return on investment

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38 Abstract

39 A sustainable food waste valorisation process was proposed by designing a plant with a

40 capacity of 10 metric tons (MT) hour-1 of food waste powder with a 20-year lifetime. Three

41 scenarios were proposed with different products: Scenario I) lactic acid, Scenario II) lactide,

42 Scenario, and III) poly(lactic acid) (PLA). Mass balance showed conversion yields of 3.1 MT

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43 of 80% lactic acid, 1.7 MT of lactide, and 1.3 MT of poly(lactic acid) from 10 MT of food

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44 waste powder. All scenarios were economically feasible, but Scenario I had the highest

45 annual net profits (US$ 22,184,169), internal rate of return (31.1%), net present value

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46 (US$234,803,060) and the shortest payback period (5.1 years) at a discount rate of 5%. The

47 minimum selling prices of lactic acid, lactide and poly(lactic acid) were US$943 MT-1,

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US$2,073 MT-1 and US$3,330 MT-1, respectively. Sensitivity analysis showed that the prices
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49 of lactic acid, lactide and poly(lactic acid) were the largest determinants of the profitability in
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50 the plant while the sale of by-products (animal feed) was also critical to the plant’s

51 economics. This work has cast insights on the techno-economic performance of a sustainable
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52 food waste treatment under a decentralised approach in urban areas.

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54 Keywords: Food waste; Fungal hydrolysis; Lactic acid fermentation; Lactide synthesis;
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55 Poly(lactic acid) polymerisation; Sensitivity Analysis

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63 1. Introduction

64 Nowadays, around a third of the food produced for human consumption is lost or wasted

65 globally, resulting in 1.3 billion metric tons (MT) of food waste per year (FAO, 2011). The

66 problem is particularly serious in highly populated cities where large amounts of food waste

67 are generated every day. For example, the domestic sector in Taipei, Hong Kong and Seoul

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68 produces 0.07, 0.13 and 0.07 MT of food waste per capita every year, respectively

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69 (Environment Bureau, 2014). Apart from prevention and reduction through education and

70 policy, advanced technology also plays an important role to facilitate recycling in food waste

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71 management. In recent years, food waste biorefinery has been proposed to convert different

72 kinds of food waste into value-added products, which could facilitate the recovery of

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nutrients and development of a sustainable bio-economy (Lin et al., 2014). As a result,
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74 different bioconversion processes have been developed to utilise food waste for the
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75 production of various commodities and platform chemicals, such as ethanol (Kiran, 2015),

76 butanol (Huang et al., 2015), polyhydroxybutyrate (Pleissner et al., 2014a), microalgae

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77 biomass (Pleissner et al., 2013) and biocolourants (Haque et al., 2016).

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79 Lactic acid (LA) is one of the 12 most promising value-added building blocks that can be
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80 derived from sugars and used for the production of various commodity and specialty
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81 chemicals (DOE, 2004). One of the most common applications of LA is to synthesise

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82 poly(lactic acid) (PLA), which contributes to more than 35% of the bioplastic market due to

83 its eco-friendly properties and great material performance (AMR, 2015). Meanwhile, lactide

84 which is the intermediate during PLA polymerisation also has various applications as

85 polymer additives, adhesives, coatings, printing toners, and surfactants (Vink and

86 Davies, 2015). Nowadays, LA, lactide and PLA are mainly derived from renewable biomass

87 resources such as sugar beet and corn (Castro-Aguirre et al., 2016). In order to avoid food

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88 resource competition, waste materials and industrial by-products such as kitchen waste, whey,

89 coffee mucilage, corn cobs, corn stalks, wheat bran and brewer's spent grains have been

90 explored as alternative feedstock for fermentative LA production (Venus, 2006; Venus and

91 Richter, 2006). A few bioconversion strategies including enzymatic hydrolysis and

92 fermentation, simultaneous hydrolysis and fermentation, open fermentation and direct

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93 fermentation have been intensively studied with different LA producing microorganisms

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94 (Pleissner et al., 2017; Venus, 2006). Although a few recent studies have addressed the mass

95 balance of the bioprocess (Pleissner et al., 2016, 2017; Neu et al., 2016), most of the studies

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96 only focused on process demonstration and optimisation without in-depth technical and

97 economic evaluation, which prevented further process upscaling and commercialisation.

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Most importantly, the challenges in using waste material as feedstock such as impurity
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99 removal, heterogeneity of the biomass and utilisation of remaining residues are seldom
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100 addressed, which leaves uncertainties in regard to process upscaling and the feasibility of

101 using the waste-derived LA for PLA synthesis.

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103 Recently, we have developed a bioconversion process of food waste into LA via solid state

104 fermentation, fungal hydrolysis and LA fermentation (Kwan et al., 2016). Lactic acid was
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105 recovered with a high purity (>98 %) via a newly developed continuous ultrasonic-mediated
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106 solvent extraction method (Hu et al., 2017a). Mass balance analysis showed overall

conversion yields of 0.23 - 0.27 g g-1 for different kinds of food waste due to their varied
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108 composition (Kwan et al., 2016). The LA was successfully used to synthesise lactide and

109 PLA by ring-opening polymerisation using zinc oxide nanoparticle dispersion. It was

110 highlighted as a novel and efficient catalytic method due to moderate synthesis conditions

111 and high production yields (90-92%), compared to tin-based industrial methods

112 (Hu et al., 2017b). On the other hand, in order to cope with the challenges of food waste

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113 collection in urban areas with high population density, a decentralised approach was proposed

114 with the incorporation of food waste processing machines into the bioconversion process

115 (Kwan et al., 2016). Food waste currently processed by these machines (so-called food waste

116 powder) has experienced a significant reduction by volume and weight, which facilitates

117 source separation and prevents hygiene problems caused by food waste collection. As the

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118 Hong Kong Government has allocated more than HK$50 million in subsidies to encourage

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119 the installation since 2011, on-site food waste pre-treatment has commonly been adopted in

120 residential buildings (HKPC, 2016). However, the high operation and maintenance costs have

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121 led to a heavy financial burden on residents and the application of food waste powder for

122 composting cannot generate much revenue (HKOWRC, 2016). Therefore, a bioconversion

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process from food waste powder to high-value PLA was developed and demonstrated in the
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124 laboratory (see the block diagram in Figure 1) (Kwan et al., 2016; Hu et al., 2017a; 2017b).
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125 The process also features a few advantages including low-cost raw material, highly efficient

126 and non-polluting technology, and low impurity level in the end products. However, the
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127 economics of production of lactic acid and its derivatives are situation-specific and dependent
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128 on many factors, such as the costs of raw material, utilities, labour, and capital

129 (Datta et al., 1995). A sustainable bioconversion process should not only focus on resource
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130 efficiency, but also the economics of the process. A comprehensive techno-economic
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131 evaluation needs to be conducted to estimate the profitability and identify the key process
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132 factors which help formulate technology improvement strategies. It could increase the

133 process conversion yields along with associated reductions in modelled production costs

134 (Klein‐Marcuschamer, 2013) so that investment risk can be substantially decreased by the

135 technological improvement prior to commercialisation.

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137 In this study, techno-economic assessment was carried out to investigate the technical

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138 feasibility, profitability and extent of investment risk between LA, lactide and PLA

139 production using food waste powder as the raw material in a plant. Three scenarios were

140 proposed with different products: Scenario I) lactic acid; Scenario II) lactide; and

141 Scenario III) poly(lactic acid). Process flowsheets were developed for each scenario together

142 with mass and utility balance calculations. Sensitivity analysis was conducted to evaluate the

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143 effect of crucial parameters on the minimum selling price. To the best of our knowledge, this

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144 is the first study that focuses on the evaluation of LA, lactide and PLA production using food

145 waste powder and the novel LA downstream separation and polymerisation strategy.

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147 2. Methods

148 2.1. Simulation description

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149 A plant was simulated with a processing capacity of 10 metric tons (MT) hour-1 of food waste
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150 powder, which is the average amount produced in 10 typical housing estates with

151 five residential blocks in Hong Kong (Environment Bureau, 2014). Since on-site food waste
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152 treatment machines have already been installed and operated with financial support from
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153 governmental funding, the relevant cost was not covered in the simulation (Environment

154 Bureau, 2014). It was assumed that there was a 50% weight reduction of food waste after on-
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155 site processing (grinding and drying). The plant was located in Hong Kong with a 20-year
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156 lifetime, including 1 year of construction and start-up phase. The operation mode was set to

be continuous mode with 8,300 operation hours per year processing 10 MT h-1 of food waste
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158 powder (83,000 MT per year). Mass and energy balance calculations were performed with the

159 aid of Super-Pro Designer 8.0®. The profitability analysis, cumulative cash flow and

160 sensitivity analysis were performed using Microsoft Excel 2010.

161 2.2. Process description

162 The process simulated in this study was previously demonstrated at laboratory scale in order

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163 to provide a basis for the technical feasibility (Hu et al., 2017a, 2017b; Kwan et al., 2016).

164 The process flow is depicted in Figures 2, 3 and 4 using Super-Pro Designer 8.0®. Three

165 scenarios were proposed with different products: Scenario I) lactic acid; Scenario II) lactide;

166 and Scenario III) poly(lactic acid). The parameters for the process development are

167 summarised in Table 1.

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168

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169 As shown in Figure 2, food waste was firstly pre-treated on-site by a commercial food waste

170 processing machine to produce food waste powder, which was then collected and transferred

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171 to the plant for bioconversion. In the plant, the food waste powder containing 52.3%

172 carbohydrates, 12.8% proteins, 25.8% lipids, and 2.3% ash by weight was blended with water

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at a solid-to-liquid ratio of 30% (Kwan et al., 2016). It was then mixed with the fungal solid
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174 mashes of Aspergillus awamori and Aspergillus oryzae, which were prepared by solid state

fermentation at 30oC for 7 days, to facilitate the fungal hydrolysis in a bioreactor at 55oC for
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176 36 hours for glucose, free amino nitrogen and phosphate recovery (Pleissner et al., 2014b).
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177 After the hydrolysis, remaining solid and lipid were separated by centrifugation at 10,000g
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178 for 15 minutes. Figure 3 shows the hydrolysate being transferred to a fermenter for LA

179 fermentation by Lactobacillus casei Shirota. The inoculum of L. casei Shirota was prepared
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180 using hydrolysate as the culture medium in a shake flask at 37oC for 18 hours with constant
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181 shaking at 200 rpm, followed by seed fermentations for 18 hours. Fermentation was carried

out aerobically at a pH of 6.0 at 37oC for 36 hours. NaOH (10 M) was used for
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183 pH adjustment. The yield of LA production was set to be 0.92 g LA g-1 glucose as reported

184 previously (Kwan et al., 2016). Cell biomass (6.45 g L-1) was obtained after filtration of the

185 fermentation broth (Neu et al., 2016). The broth was then acidified and passed through an

186 activated carbon column to remove colourful impurities. The resultant broth was concentrated

187 by a rotary evaporator at 60°C under reduced pressure (2.5 kPa) and then mixed with ethyl

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188 acetate for continuous solvent extraction. The aqueous phase (raffinate) was the residual

189 fermentation broth separated from ethyl acetate and was collected as wastewater after

190 extraction. Based on our experimental result, 84% of LA was extracted in ethyl acetate and

191 isolated by evaporation at 40°C under 2.5 kPa (Hu et al., 2017a). It was assumed that 99% of

192 ethyl acetate is recovered and reused in subsequent extractions. Finally, LA was concentrated

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193 (60oC, 2.5 kPa) to produce 80% LA, which was sold in Scenario I or further polymerised to

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194 lactide and PLA in Scenario II and Scenario III, respectively.

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196 The polymerisation of LA to PLA is presented in Figure 4 based on previous findings in the

197 study of Hu et al. (2017b). Lactic acid (80%) was mixed with zinc oxide nanoparticle

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dispersion (0.3 wt%) in a reactor to facilitate lactide synthesis at 80-220oC for 8 hours. The
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199 conversion yield of lactic acid to crude lactide was 74% by weight. The crude lactide was
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200 then dissolved in ethyl acetate (1:1.5 w/v) at 90°C for 10 min, followed by recrystallisation at

201 4oC. The ethyl acetate was recycled for reuse by distillation at 40°C and 30 kPa. About 90%
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202 of lactide product was obtained. Small amount of residual oligomer was disposed as a solid
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203 waste stream. The purified lactide was sold in Scenario II or further polymerised to PLA in

204 Scenario III. In polymerisation, the PLA was synthesised from purified lactide through ring-
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205 opening polymerisation with initiator polyglyceryl-10 (0.013 mol%) and catalyst stannous

octoate (0.05 mol%) at 200oC for 25 minutes. The PLA was purified by dissolving in
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207 chloroform (1:1 w/v) and precipitated in methanol (1:3 v/v). The purified PLA obtained from

208 filtration was dried in an oven at 40°C. The spent chloroform and methanol (98%) were

209 recovered by distillation and reused (Hu et al., 2017b).

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211 2.3. Economic analysis

212 The economic performance of the three scenarios was studied by estimating the capital cost,

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213 operation cost and revenue generation. Profitability, cash flow and sensitivity analyses were

214 then conducted for evaluation and comparison between the three scenarios.

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216 2.3.1. Total capital cost estimation

217 The total capital cost was calculated by addition of fixed capital investment cost (FCI) and

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218 working capital cost. The FCI was the expenses for plant construction, including the costs of

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219 purchasing equipment, installation, piping and other related costs. It was evaluated by the

220 method of the percentage of delivered-equipment cost for solid-fluid processing plant (Peters,

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221 2003). The details of the evalution are summarised in Table 1. The equipment cost was

222 obtained from the recent cost data in the 2011 NREL report on bioethanol production

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(Humbird et al., 2011). When data were unavailable in this report, then either the textbook of
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224 Peters et al. (2003) or the built-in module in SuperPro Designer was used (Mupondwa et al.,
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225 2015). The purchase cost of a particular type of equipment (Cp,0) with a different

226 characteristic size (X) in a different year (t) was obtained using Equation (1):
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 =
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228 where CEPCIt is the Chemical Engineering Plant Cost Index at year t published monthly in
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229 the Chemical Engineering Magazine and the exponent (n) is characteristic to the particular

230 type of equipment. The exponent (n) was set to be 0.6 (sixth-tenths-factor-rule) for the order-
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231 of-magnitude estimation of new equipment cost (Green and Perry, 2008). The installation
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232 cost was equipment-specific and estimated from the purchase equipment cost using

233 appropriate multiplication factors that are available in the literature (Green and Perry, 2008;

234 Peters, 2003). Land cost was neglected because collaboration with the property management

235 company and the local food waste recycling company was expected (HKOWRC, 2016). The

236 working capital, which was assumed to be 15% of the FCI, was used to cover the expenses of

237 the initialisation of the plant in the start-up phase, such as the costs of purchasing raw

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238 material, utilities and testing of equipment (Peters, 2003). Besides, it was assumed that no

239 further capital cost or revenue of resales of plant’s facilities would be generated after the

240 plant’s lifetime.

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242 2.3.2. Operation cost estimation

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243 The estimated operating cost included the total variable production costs, fixed charges, plant

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244 overhead costs and general expenses (see Table 1) (Peters, 2003). The costs of raw materials

245 were obtained from the chemicals industry (ICIS, 2015). The labour requirement was

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246 estimated using Ulrich’s method that the working hours per week per shift were 50 hours and

247 the annual salary was US$20,000 (Lam et al., 2014; Ulrich, 1984). The utilities usage was

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determined based on the material and energy balance in SuperPro® designer and the costs
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249 were taken from local utilities companies, literature and online databases (CLP, 2017;
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250 Intratec, 2017; Mupondwa et al., 2015). The wastewater and solid waste treatment costs were

251 paid based on local regulation (Environmental Protection Department, 2015) while the
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252 logistics cost was acquired by personal communication with a local food waste recycling
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253 company (HKOWRC, 2016). The depreciation of the FCI was calculated using the straight-

254 line method for a 20-year lifetime with negligible salvage values. Table 1 summarises the
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255 estimation of other components in the operating cost based on the method described in
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256 Peters (2003).

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258 2.3.3. Revenue

259 Revenue was generated from the sales of products and food waste treatment service fee. The

260 current market prices of 80% l-lactic acid, lactide, PLA, lipids and animal feed were

261 US$1,874 MT-1, US$2,800 MT-1, US$5,215 MT-1, US$500 MT-1 and US$450 MT-1,

262 respectively (ASB, 2016; HKOWRC, 2016; Naturework, 2016). According to the information

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263 provided by the local food waste recycling company (Hong Kong Organic Waste Recycling

264 Centre, HKOWRC), a food waste treatment fee (US$ 77 MT-1) was received from food waste

265 suppliers (HKOWRC, 2016).

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267 2.3.4. Profitability analysis

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268 Various profitability indicators were employed to evaluate the economic performance of the

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269 three scenarios. The indicators included net production cost, minimum selling price, gross

270 profit, net profit, net present value (NPV), internal rate of return (IRR), payback time, and

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271 return on investment (ROI). The net production cost (US$ MT-1) is the operating cost per unit

272 of final product (80%-LA, lactide, or PLA), while the minimum selling price (US$ MT-1) is

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determined by the NPV becoming zero. The gross profit is a measure of profitability by
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274 subtracting the annual revenue from the annual operation cost, whereas the net profit takes
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275 income tax (16.5%) into account. The net present value (NPV) determines if the scenario is

276 profitable for the entire plant’s lifetime (20 years) by discounting the future cash flows to the
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277 present value. A positive NPV indicates that the process is profitable and vice versa. The
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278 NPV is defined in Equation (2).

&

#
 ( $) = " −
  (2)
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(1 + %)#
#'(

where t is the lifetime in years, C0 is the initial investment, Ct is the net cash flow during
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280 period t and d is the discount rate. The IRR is also an important indicator to reflect the

281 investment’s efficiency. It is the discount rate where the NPV value becomes zero which can

282 be derived from Equation (2). Besides, the payback time refers to the time required to recoup

283 the investment cost. Lastly, the ROI describes the rate of the cash return without the

284 consideration of cash discount in the plant’s lifetime. The ROI is defined in Equation (3).

/0 1 234

+,- (%) = 7 100 %  (3)

20 56

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285 Cash flow patterns over the plant’s lifetime were illustrated by calculating the cumulative

286 cash flow for each year. Different discount rates were applied to study the effect on the

287 profitability, and the IRR was found when the final cash value was zero. The patterns were

288 evaluated and compared between the three scenarios.

289

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290 2.3.4. Sensitivity analysis

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291 Sensitivity analysis was carried out to evaluate the impact of different variables upon the

292 economic performance in each scenario. Since the global economic environment can

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293 fluctuate during a plant’s lifetime, a number of variables were independently evaluated and

294 set at ±50% variation at the beginning of the whole plant’s lifetime. These include the capital

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cost, raw materials cost, labour cost, utility cost and selling prices of lactic acid, lactide, PLA,
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296 animal feed and lipids. The NPV was used as the indicator at a 5% discount rate
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297 (Broadie et al., 2007).

298
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299 3. Results and discussion

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300 3.1. Mass balance

301 The process flow diagram and mass balance of fungal hydrolysis, fermentative LA
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302 production and the chemical synthesis of lactide and PLA are presented in Figures 2, 3 and 4,
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303 respectively. Fungal hydrolysis was performed to recover 3.2 MT glucose, 32 kg free amino
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304 nitrogen (FAN) and 8 kg organic phosphorus from 10 MT of food waste powder based on the

305 results obtained in Kwan et al. (2016). The hydrolysate supplemented with yeast extract was

306 then used as the fermentation medium, which contained 97.2±1.0 g L-1 glucose, 1,253±65 mg

307 L-1 FAN and 529±27 mg L-1 organic phosphorus (Kwan et al., 2017). The hydrolysate was

308 diluted with water before fermentation in order to avoid significant substrate inhibition as our

309 previous study confirmed that the specific growth rate, yield and productivity were reduced,

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310 and the lag time was prolonged when the initial glucose concentrations increased to above

311 100 g L-1 (Kwan et al., 2017). A total of 3.0 MT LA were produced by fermentation and

312 1.3 MT (wet weight) of cell biomass was harvested by filtration. In the extraction process,

313 around 16% of LA was lost by adsorption of activated carbon and remained in the raffinate

314 stream. Therefore, only 2.5 MT LA was recovered which corresponded to 3.0 MT of 80% LA

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315 solution (see Figure 2). It should be noted that only the starch fraction in the food waste

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316 powder was used for LA production. While the percentage of starch in food waste powder

317 was 36.0 % (w/w), the remaining parts including protein, lipids and carbohydrate became by-

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318 product streams. As shown in Figure 2, 1.5 MT lipids and 5.4 MT remaining solids (wet

319 weight) were generated from 10 MT of food waste powder after fungal hydrolysis. The

320
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current LA manufacturing industry in which corn is used as the raw material also identified
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321 some by-product streams such as corn gluten feed, corn gluten meal, heavy steep water, and
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322 corn germ. It has led to 11 sub-processes to convert them into food, feed, energy and

323 materials for the benefits of waste treatment and economic return (Vink and Davies, 2015).
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324 Therefore, utilisation of the by-product streams in this study (i.e. remaining solid and lipids
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325 derived from food waste powder) needs to be explored and will be discussed in Section 3.4.

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327 For the LA recovery, the fact that only 84% of LA was obtained by solvent extraction might
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328 not be promising enough compared with around 90% recovery by other state-of-the-art
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329 methods. Pleissner et al. (2016) recovered 90% of LA from fermentation broth by

330 microfiltration, adsorption chromatography, ion exchange chromatography and distillation,

331 and additionally carried out mono- and bipolar electrodialysis to recover salt ions in the form

332 of NaOH and HCl (Pleissner et al., 2016). Meanwhile, Min et al. (2011) reported 92% of LA

333 recovery based on conventional precipitation of calcium lactate and acidification by adding

334 H2SO4, but possible loss during adsorption by activated carbon was not addressed. However,

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335 it should be noted that the ultrasonic solvent extraction method was found to recover high

336 purity of LA (> 98%) from complex medium derived from food waste, which may not be

337 easily achieved by other recovery methods. Also, it did not generate massive amounts of by-

338 products such as gypsum, in which conventional recovery processes produce and disposed of

339 around one ton of gypsum for every ton of LA (Vink and Davies, 2015).

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340

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341 In Figure 4, the purified 80% LA (3.0 MT) was fed into a reactor together with the zinc oxide

342 nanoparticle dispersion (7.6 kg) for lactide synthesis. Around 1.9 MT crude lactide was

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343 produced and then purified by dissolving in ethyl acetate, re-crystallisation and oven drying,

344 which resulted in 1.7 MT purified lactide and 0.2 MT oligomer (i.e. low molecular weight

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PLA). The ethyl acetate was recovered by distillation and reused in the plant. Meanwhile, the
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346 purified lactide was used to synthesise PLA catalysed by stannous octoate in a reactor
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347 resulting in 1.3 MT crude PLA product. Purification was done by dissolving the crude PLA in

348 1.7 MT chloroform and then precipitated in 2.7 MT methanol, followed by heat drying to
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349 remove the solvent vapour. Around 98% of solvents were recovered by distillation while the
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350 remaining parts (0.14 MT) became solvent waste streams (Hu et al., 2017). Overall, 1.7 MT

351 lactide or 1.3 MT PLA was produced from 10 MT of food waste powder (see Figure 4).
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352 Current industrial production of 1 kg PLA required the starch fraction of 2.67 kg corn
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353 (15% moisture), which corresponds to a conversion yield of 440 kg of PLA per 1,000 kg of
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354 dry corn (Vink and Davies, 2015). Although it is 3.4 times higher than that obtained in this

355 study using food waste powder as feedstock, it can attribute to the relatively high starch

356 content in corn (around 60% (w/w)) and the industrial scale of production capacity

357 (150,000 MT year-1 facility in Blair, Nebraska, United States) as reported by Vink and Davies

358 (2015). Due to these differences, it is impossible to make reliable comparison. However, it

359 clearly indicates that starchy food waste is a favourable feedstock in this bioconversion

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360 process and the starch content in the food waste powder should have a significant effect on

361 the mass balance, and subsequently the economic performance which deserves further

362 investigation.

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364 3.2. Capital cost

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365 Table 2 presents the capital cost including both fixed capital investment (FCI) and working

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366 capital for all the scenarios. The equipment cost for Scenario II (US$21,230,283) and

367 Scenario III (US$23,623,283) was relatively higher than that of Scenario I (US$19,590,283)

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368 since polymerisation and purification equipment were needed for lactide and PLA synthesis.

369 The fermenter is reported to be the most expensive item among all the equipment in a number

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of techno-economic studies related to bioconversion processes (Koutinas et al., 2016;
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371 Mupondwa et al., 2015; Kwan et al., 2015; Vlysidis et al., 2011). Vlysidis et al. (2011)
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372 reported that fermenters account for 34% of the bare equipment cost in the co-production of

373 biodiesel and succinic acid. Our previous study on the bioconversion of food waste to
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374 microalgae biomass also indicated that five sets of fermenters are needed in parallel
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375 operation, accounting for 27% of the bare equipment cost (Kwan et al., 2015). The cost of

376 fermenters in this study also contributed the most significant part (22-26%) to the total
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377 equipment cost for all the scenarios (Table 2) because there were 37 identical units operating
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378 in batch mode with three operations (pull-in, fermentation, and transfer-out). It resulted in a
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379 cycle time of 1 hour as there is always one tank loading and one unloading, while the actual

380 fermentation takes place in the remaining 35 tanks. Apart from the bare equipment cost,

381 additional costs for building the plant were anticipated and are summarised in Table 2. The

382 associated percentage of the cost contribution of each item to the FCI was based on the

383 existing literature (Peters, 2003). Working capital which was assumed to be 15% of the FCI

384 was expected to cover the expenses of the initialisation of the plant in the start-up phase, such

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385 as purchasing raw material, testing equipment and training labourers.

386

387 3.3. Operation cost

388 Estimated operating cost is presented in Table 3. A plant processing 83,000 MT of food waste

389 powder year-1 had the total annual operating cost of US$61,795,925, US$67,571,270, and

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390 US$72,951,945 in Scenario I, II, and III, respectively. Figure 5 illustrates the cost distribution

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391 of different steps in the bioconversion process. It is worth noting that LA fermentation was

392 the largest expenditure, contributing 42%, 39% and 36% of the total operation cost in

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393 Scenarios I, II and III, respectively. This is because the process of LA fermentation required

394 massive amounts of sodium hydroxide as pH buffer and yeast extract as nitrogen supplement,

395
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which account for 10-14% of annual operating costs (see Table 3). While the costs of sodium
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396 hydroxide and utilities were unavoidable, the cost of yeast extract, could be reduced by
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397 decreasing the added quantity. Yang et al. (2015) examined the effect of yeast extract on LA

398 fermentation with Thermoanaerobacterium aotearoense LA1002, and it was reported that the
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399 addition of yeast extract could be reduced from 10 g L-1 to 2.5 g L-1 without any significant
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400 effect on the fermentation performance.

401
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402 In most of the techno-economic studies related to fermentation, the carbon source is usually
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403 the major cost contributor. The study conducted by Choi and Lee (1997) reported that the cost
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404 of glucose contributed 30.7% to the total operating cost in fermentative production of PHB,

405 which resulted in a production cost of US$6,100 MT-1. Our previous study of plasticiser and

406 lactic acid production also indicated that 51% of the operation cost is contributed solely by

407 the cost of glucose (Kwan et al., 2015). In this study, cost distribution was similar across the

408 three scenarios such that raw materials cost in general accounted for the largest portion (21-

409 23%), followed by labour costs (12-13%) and utilities cost (11-12%). Although the feedstock

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410 in this study, i.e. food waste powder did not contribute any raw materials cost to the process,

411 the relatively high wages in Hong Kong and the demanding manpower required by

412 fermentation led to a high labour cost (US$8,095,080 - US$8,366,333) in all scenarios, in

413 which over 70% of labour was required in LA fermentation. This resulted in the net

414 production cost of 80%-LA (US$1,066 MT-1), lactide (US$2,271 MT-1) and PLA (US$3,558

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415 MT-1) (see Table 3).

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416

417 Efficiencies in the recirculation of resources are important to the development of a circular

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418 economy. The annual consumption of utilities and their costs in food waste hydrolysis, LA

419 fermentation, LA recovery, lactide synthesis and PLA polymerisation are summarised in

420
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Table 4. It is observed in all scenarios that the main usage of electricity was by the centrifuge
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421 (1,070,700 kWh), followed by the bioreactor (357,066 kWh) and the fermenter
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422 (306,485 kWh), where agitation and aeration are constantly supplied during fungal hydrolysis

423 and fermentation. It is also in line with Koutinas et al. (2016) who reported that around 80%
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424 of electricity usage is related to fermentation in the bioprocess of 2,3-butanediol production.

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425 The major utilities cost was found in the LA recovery where the evaporation and distillation

426 processes combined cost US$5,807,412 resulting from 483,951 MT of steam. The fact that
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427 massive amounts of steam are used for distillation of ethyl acetate indicates a drawback of
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428 intensive energy consumption of the novel solvent extraction method to recover LA.
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429 However, evaporation of LA solution is unavoidable in the manufacturing process. Since

430 most of the LA producing strains can only produce 100-200 g L-1 of LA, and product

431 inhibition becomes significant when the critical concentration is reached (Kwan et al., 2017;

432 Vink and Davies, 2015). Water is also an important utility, in which process water, cooling

433 water and irrigation water are needed in the current industrial PLA manufacturing process.

434 Although the amount of process water and cooling water can be minimised by advanced plant

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435 design, irrigation water applied to the corn field is necessary and it accounts for around half

436 of the total water used in the current industrial process (Vink and Davies, 2015). It

437 demonstrates the advantage of using food waste powder as a raw material where no irrigation

438 water is needed, and meanwhile most of the process water (around 84%) can be recovered by

439 evaporation (see Table 4). In general, the water costs contribute less than 5% of the total

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440 utility cost in all scenarios.

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441

442

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443 3.4. Revenue and profitability analysis

444 As shown in Table 5, annual revenue generated in Scenario I, Scenario II and Scenario III

445 was US$88,363,792, US$81,518,450, and US$96,949,810, respectively. Sales of LA, lactide

446 and PLA contributed around 50% of the revenue in the corresponding scenarios. Although

447 Scenario II (lactide production) had the lowest revenue, it is worth noting that the price for

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448 lactide varies to a great extent based on its application. For example, a chemical-grade lactide

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449 with a purity of 98% can be sold for over US$2 million per metric ton, which is hundreds of

450 times higher than the market price used in this study (Tokyo Chemical Industry, 2016).

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451 Although the lactide produced in our process was found to have around 98% purity that is

452 highly possible for food, drug, laboratory or medicinal use (Marketsandmarkets, 2016), the

453
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adopted price in this study was a grade for polymer production (Naturework, 2016). On the
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454 other hand, the sales of lipids to biodiesel manufacturers and animal feed to local agricultural
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455 industry were assumed. They contributed the second largest revenue (around 40%) to all the

456 scenarios. The suitability of using food waste-derived lipids from fungal hydrolysis for
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457 biodiesel production has been demonstrated already in our previous study, where 100%
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458 conversion was achieved through alkali-catalysed transesterification using KOH (Karmee,

459 2015). Protein-rich cell biomass and remaining solids have huge potentials for animal feed
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460 production via insect farming, in particular of the remaining solid consisting of around 30%
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461 carbohydrates, 20% proteins and 43% lipids (dry weight) (Kwan et al., 2016). Feasibility
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462 trials have been successfully conducted and a patent has been filed (Lin et al., 2017). The

463 larvae of Hermetia illucens was able to consume different feedstock including protein-rich

464 remaining solids, cell biomass, and pure sugars with over 75% survival rate in 12-day

465 duplicate trials (Li et al., 2017; Lin et al., 2017). The insect biomass samples consisted of

466 more than 50% crude protein which is extremely favourable for feeding poultry (Lin et al.,

467 2017). The market price of these residues can be up to US$450 MT-1 in Hong Kong

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468 (HKOWRC, 2016), but it can drop to as low as US$100 MT-1 in Mainland China (Eco-

469 Nutrient Biotechnology Ltd, 2016). Price of lipids can also reduce to US$250 MT-1

470 depending on the market supply and quality of lipids (ASB, 2016). So, sensitivity analysis

471 should address the effect of the revenue generated by these by-products on the plant’s

472 economics which will be discussed in Section 3.5.

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473

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474 Profitability analysis was carried out to evaluate and compare the economic performance of

475 each scenario in terms of the gross profit, net profit, NPV, IRR, ROI and payback time. The

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476 result is summarised in Table 5. All scenarios were found to be profitable, as indicated by the

477 net profit generation (US$22,184,169 year-1 in Scenario I; US$11,645,896 year-1 in

478
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Scenario II; US$20,038,218 year-1 in Scenario III) and the positive NPVs (US$234,803,060
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479 in Scenario I; US$104,758,004 in Scenario II; US$202,068,367 in Scenario III). Scenario I is
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480 the most economically favourable option with the highest IRR (31.1%) and ROI (22.9%), and

481 the shortest payback year (5.1 years) at 5% discount rate. On the other hand, the minimum
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482 selling prices of LA (US$943 MT-1), lactide (US$2,073 MT-1) and PLA (US$3,330 MT-1)
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483 were lower than the market prices presented in Table 5. This reflects that the products derived

484 from food waste powder by this bioconversion process should have sufficient
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485 competitiveness in the market. On the other hand, lactide synthesis and PLA polymerisation
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486 should in theory add value to the final products. The net profits were surprisingly low as
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487 compared to that of Scenario I. The additional costs of raw materials and utilities are the

488 major causes, the relatively high capital cost and the associated maintenance and repair

489 expenses in both scenarios should also be noted. It also shows the need to investigate the

490 potential impact of the capital costs on the plant’s economics, which will be evaluated in the

491 subsequent sensitivity analysis.

492

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493 Cumulative cash flow diagrams at different discount rate are shown in Figure 6. Discount rate

494 is an important tool that allows the adjustment of the future cash flow to the present value.

495 The quality of investment can be reflected by increasing the discount rate, which in turn

496 denotes the extent of risk or uncertainty that the investment is able to bear. Scenario I was

497 found to be the most economically favourable option, since the NPV at the end of a plant’s

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498 lifetime remained positive at a relatively high discount rate (< 31.1%). Whereas Scenario II

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499 and Scenario III had an IRR of 16.8% and 24.3%, respectively.

500

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501 3.5. Sensitivity analysis

502 Sensitivity analysis was carried out by varying the cost of capital investment, raw materials,

503
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utilities and labour, as well as the price of products within ±50% at the beginning of the
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504 plant’s lifetime in order to evaluate the effect of these variables on the plant’s economics.
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505 Since the plant was designed to operate for 20 years, fluctuation in the economic environment

506 and the labour market were anticipated and may probably pose a risk on the plant’s
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507 economics. Although the risk issue was addressed by the IRR and the cash flow analysis in
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508 Section 3.4, it is necessary to investigate which variable has the highest impact on plant’s

509 economics using sensitivity analysis. As shown in Figure 7, the price of LA, lactide and PLA
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510 were the largest determinants of the NPV in the corresponding scenarios. The NPVs even
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511 became negative after 50% reduction in price (see Figure 7). Nevertheless, it is not expected
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512 to pose a great risk to the plant since the market of these products is anticipated to undergo

513 significant growth owing to the rising usage in packaging, personal care and textiles in the

514 next 5-10 years. A number of reports have forecasted the annual growth rates of LA, lactide

515 and PLA in the industrial application will be above 10% due to the increasing demand for

516 environmentally friendly products and the high cost of petroleum-based products

517 (ICIS, 2015; Marketsandmarkets, 2015). They further added that although Europe is the

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518 current largest market for PLA, Asia-Pacific is projected to be the fastest-growing market

519 which will lead to a strong interest in setting up more lactide and PLA co-production plants in

520 Asian countries (Marketsandmarkets, 2015). In view of this, it is believed that the price of

521 LA, lactide and PLA should steadily increase in the future and therefore, improving the

522 economic performance for all scenarios.

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523

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524 Capital cost is also one of the most significant determinants in the NPVs for all scenarios (see

525 Figure 7). It is admitted that the estimation of capital cost has limited accuracy in techno-

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526 economic study. Peters (2003) indicated that the study estimate (or fractional estimate) has a

527 probable accuracy of −25% to +30%, while it can be improved to −5% to +10% as a detailed

528
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estimate (or firm estimate) based on complete specifications, drawings, and site surveys for
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529 the plant’s construction. Although it is impossible to acquire sufficient data to conduct a
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530 detailed estimate in this study, the sensitivity analysis showed that the plant can allow a ±50%

531 variation of the capital cost, which denotes that it has a certain flexibility with regard to
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532 capital cost investment, such as the change of any unlisted equipment cost, and the costs of
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533 the on-site food waste treatment machines when government funding is unavailable.

534
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535 As mentioned above, the selling price of by-products (animal feed and lipid) could exert a
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536 significant impact on the plant’s economics. The minimum selling price of these by-products
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537 was calculated in order to assess the potential risk in each scenario. For the animal feed, the

538 minimum selling prices were US$90 MT-1, US$290 MT-1, and US$141 MT-1 in Scenario I, II

539 and III, respectively (see Figure 8a), while the minimum selling prices of lipids were not

540 found since NPVs stay positive even though they have no value (see Figure 8b). It can be

541 concluded that the fluctuating market price of animal feed can pose a financial risk in

542 Scenarios II and III, since the current market price of the animal feed can reduce to

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543 US$100 MT-1 depending on its quality, crude protein level and application purpose (Eco-

544 Nutrient Biotechnology Ltd, 2016).

545

546 Figure 9 shows the breakeven charts for the plant with the effect on costs and profits based on

547 the processing capacity. Downtime is unavoidable as it must be allowed periodically to

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548 perform the scheduled routine maintenance, and sometimes it can be caused by operational

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549 errors, equipment failure, power supply blackouts and even insufficient amounts of feedstock.

550 When the equipment stands idle for a prolonged period, the costs of raw materials and

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551 utilities are decreased, but the fixed costs (e.g. maintenance, depreciation, insurance and other

552 general costs) would be unchanged. Therefore, downtime should be kept to a necessary

553
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minimum in order to prevent poor profitability (Peters, 2003). As shown in Figure 9, the
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554 breakeven points are 55%, 68% and 58% in Scenarios I, II and III, respectively, reflecting
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555 that the plant should operate at no less than its critical production rate and time in order to

556 generate gross profit. This means that the plant should process no less than 48,180 MT
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557 (Scenario I), 59,568 MT (Scenario II), 50,808 MT (Scenario III) of food waste powder per
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558 year. Given that more than 1.2 million MT of food waste is generated annually in Hong Kong

559 (Environment Bureau, 2014), collection of sufficient amounts of feedstock should not be a
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560 problem. In the meantime, it can facilitate a highly efficient transportation process due to the
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561 high-density generation (Pleissner et al., 2016).

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562

563 The proposed bioprocess is believed to have a large application potential in the globe. As

564 massive amounts of food are wasted, a sustainable technology to recycle the nutrients in food

565 waste is urgently needed. Although there are a few available food waste treatment

566 technologies such as composting, anaerobic digestion and incineration, we consider this

567 bioprocess as an advanced recycling method which specifically utilises and adds value to

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568 each nutrient in food waste, which is extremely favourable for commercialisation. The

569 majority of carbohydrates is recovered as sugars by fungal hydrolysis and used for the

570 production of LA and its derivatives. Lipids were separated after fungal hydrolysis for

571 biodiesel production. The remaining protein-rich residue is used for high-quality animal feed

572 production via insect farming (Lin et al., 2017). Most importantly, these products have

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573 received huge market interest because of the increasing demand for bio-based and

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574 environmentally friendly commodities, protein sources for feeding livestock, and sustainable

575 biofuel for vehicles. The protein-rich animal feed is able to replace the conventional fish

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576 meal, which provides an alternative protein source to fulfil the increasing demand of protein

577 for feeding livestock (Maurer et al., 2015). The biodiesel market was US$32.87 billion in

578
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2015, and it is projected to reach US$41.18 billion by 2021 at a compound annual growth rate
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579 of 3.8% during 2016 to 2021 (Marketsandmarkets, 2017).
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580

581 4. Conclusions
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582 This work showed the techno-economic evaluation of a food waste based biorefinery with the
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583 production of lactic acid, lactide and PLA. All scenarios examined in this study are

584 economically feasible, of which the production of LA (Scenario I) is the most profitable
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585 option in terms of the NPV (US$234,803,060), IRR (31.1%), ROI (22.9%) and payback years

(5.1 years). The minimum selling prices of LA, lactide and PLA are US$943 MT-1, US$2,073
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586

MT-1 and US$3,330 MT-1, respectively. Results from sensitivity analysis show that the prices
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587

588 of LA, lactide and PLA significantly affect the economic performance of the plant. It is a

589 sustainable technology to recycle the nutrients in food waste with competitive economic

590 performance, therefore it will promote the transition from the current linear to the circular

591 bio-economy. Further study will focus on process demonstration at the pilot scale to validate

592 the model and analyses.

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593

594

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595 Declaration

596 Consent for publication

597 All authors have approved the manuscript to be published.

598

599 Competing interests

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600 The authors declare no conflict of interest.

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601

602 Funding

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603 This work was supported by the Industrial Technology Funding from the Innovation and

604 Technology Commission (ITP/002/14TP) in Hong Kong.

605
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606 Acknowledgements
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607 The authors acknowledge the Innovation and Technology Funding (ITP/002/14TP) from the

608 Innovation and Technology Commission in Hong Kong and the Hong Kong Research
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609 Institute of Textiles and Apparel for funding application and project management. We would
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610 also like to thank for the industrial partners and industrial sponsors, which include Asia

611 Pacific Catering, Hong Kong Organic Recycling Waste Ltd., Central Textiles (Hong Kong)
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612 Limited and Rizhao Kaishun Tire Co., Ltd. for providing food waste and industrial
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613 sponsorships. Furthermore, we would like to thank Dr. ir. Hendrik Waegeman and Emile
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614 Redant in Bio Base Europe Pilot Plant for sharing their industrial experience. Special thank is

615 dedicated to Eco-Greenergy Limited for their in-kind donation of food waste processing

616 machine. The authors are grateful to Mr. Ernest Ming from Eco-Nutrient Biotechnology

617 Limited Company for conducting the investigation of using remaining solids as insect feed.

618

619

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724 Min, D.J., Choi, K.H., Chang, Y.K., Kim, J.H., 2011. Effect of operating parameters on

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725 precipitation for recovery of lactic acid from calcium lactate fermentation broth.
AN
726 Korean J. Chem. Eng. 28, 1969-1974.

727 Mupondwa, E., Li, X., Boyetchko, S., Hynes, R., Geissler, J., 2015. Technoeconomic analysis
M

728 of large scale production of pre-emergent Pseudomonas fluorescens microbial

D

729 bioherbicide in Canada. Bioresour. Technol. 175, 517-528.

TE

730 Naturework, 2016. “Price of raw lactide and PLA.” Message from Au-yeung, C. (Technical

731 Service and Business Development, Greater China in NatureWorks) to Tsz Him
EP

732 Kwan. 14th May, 2016. Personal communication via email.

C

733 Neu, A., Pleissner, D., Mehlmann, K., Schneider, R., Puerta-Quintero, G.I., Venus, J., 2016.
AC

734 Fermentative utilization of coffee mucilage using Bacillus coagulans and

735 investigation of down-stream processing of fermentation broth for optically pure l(+)-

736 lactic acid production. Bioresour. Technol. 211, 398-405.

737 Peters, M., Timmerhaus, K., West, R., 2003. Plant design and Economics for Chemical

738 Engineers, McGraw-Hill, Boston, United States.

739 Pleissner, D., 2016c. Decentralized utilization of wasted organic material in urban areas: a

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740 case study in Hong Kong. Ecol. Eng. 86, 120-125.

741 Pleissner, D., Demichelis, F., Mariano, S., Fiore, S., Gutiérrez, I.M.N., Schneider, R., Venus,

742 J., 2017. Direct production of lactic acid based on simultaneous saccharification and

743 fermentation of mixed restaurant food waste. J. Clean Prod. 143, 615-623.

744 Pleissner, D., Kwan, T.H., Lin, C.S.K., 2014b. Fungal hydrolysis in submerged fermentation

PT
745 for food waste treatment and fermentation feedstock preparation, Bioresour. Technol.

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746 158, 48-54.

747 Pleissner, D., Lam, W.C., Han, W., Lau, K.Y., Cheung, L.C., Lee, M.W., Lei, H.M., Lo,

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748 K.Y., Ng, W.Y., Sun, Z., Melikoglu, M., Lin, C.S.K., 2014a. Fermentative

U
749 polyhydroxybutyrate production from a novel feedstock derived from bakery waste,
AN
750 Biomed. Res. Int. 1-8.

751 Pleissner, D., Lam, W.C., Sun, Z., Lin, C.S.K., 2013. Food waste as nutrient source in
M

752 heterotrophic microalgae cultivation, Bioresour. Technol. 137, 139-146.

D

753 Pleissner, D., Neu, A.K., Mehlmann, K., Schneider, R., Puerta-Quintero, G.I., Venus, J.,
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754 2016a. Fermentative lactic acid production from coffee pulp hydrolysate using

755 Bacillus coagulans at laboratory and pilot scales. Bioresour. Technol. 218, 167-173.
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756 Pleissner, D., Schneider, R., Venus, J., Koch, T., 2016b. Separation of lactic acid and recovery

757 of salted ions from fermentation broth. J. Clean Prod. 92(3), 504-511
C

758 Tokyo Chemical Industry, 2016. Price of L-(-)-Lactide.

AC

759 www.tcichemicals.com/eshop/zh/cn/commodity/L0115/, 2016 (accessed 7th January,

760 2018).

761 Ulrich, G.D., 1984. A guide to chemical engineering process design and economics, Wiley,

762 New York, United States.

763 Vazquez R. (Chief Executive Officer in ASB Biodiesel (Hong Kong) Ltd.). “Re: Enquiry of

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764 market prices of waste cooking oil and biodiesel in Hong Kong” Message to Kwan Tsz

765 Him and Dr Carol Sze Ki Lin. 15th Sep, 2016. Personal communication via email.

766 Venus, J., 2006. Utilization of renewables for lactic acid fermentation. Biotechno. J. 1(12),

767 1428-1432.

768 Venus, J., Richter, K., 2006. Production of lactic acid from barley: strain selection,

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769 phenotypic and medium optimization. Eng. Life Sci. 6(5), 492-500.

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770 Vink, E.T., Davies, S., 2015. Life cycle inventory and impact assessment data for 2014

771 Ingeo™ polylactide production. Ind. Biotechnol. 11(3), 167-180.

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772 Vlysidis, A., Binns, M., Webb, C., Theodoropoulos, C., 2011. A techno-economic analysis of

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773 biodiesel biorefineries: Assessment of integrated designs for the co-production of
AN
774 fuels and chemicals, Energy 36(8), 4671-4683.

775 Yang, X., Zhu, M., Huang, X., Lin, C.S.K., Wang, J., Li, S., 2015. Valorisation of mixed
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776 bakery waste in non-sterilized fermentation for l-lactic acid production by an evolved

777 Thermoanaerobacterium sp. strain, Bioresour. Technol. 198, 47-54.

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778
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779 Figure captions

780

781 Figure 1. Production process scheme from food waste to lactic acid, lactide or

782 poly(lactic acid).

783

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784 Figure 2. Process flow and mass balance diagram of the fungal hydrolysis for all scenarios.

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785

786 Figure 3. Process flow and mass balance diagram of lactic acid fermentation for all

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787 scenarios.

788

789
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Figure 4. Process flow and mass balance diagram of lactide synthesis and PLA
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790 polymerisation in Scenario II and III.
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791

792 Figure 5. Cost distribution of the operating cost in different scenarios.

D

793
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794 Figure 6. Cumulative cash flow diagrams at different discount rate in (a) Scenario I, (b)

795 Scenario II and (c) Scenario III.

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796
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797 Figure 7. Sensitivity analysis of (a) Scenario I, (b) Scenario II and (c) Scenario III.
AC

798

799 Figure 8. Sensitivity analysis of selling prices of (a) Animal feed and (b) Lipids.

800

801 Figure 9. Breakeven chart for (a) Scenario I, (b) Scenario II and (c) Scenario III.

802

803

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804 Table 1. Parameters for the techno-economics study.

Items Estimation assumption

Plant location Hong Kong
Plant capacity 83,000 MT of food waste powder year-1
Design on-stream factor 0.95 (346 days year-1)
Feedstock Food waste powder
Main products Scenario I: Lactic acid (80 %)
Scenario II: Lactide

PT
Scenario III: Poly(lactic acid) (PLA)
Mass balance
Glucose recovery yield 0.32 g glucose g-1 food waste powder

RI
Fermentation yield 0.92 g lactic acid g-1 glucose
Lactic acid recovery 84 % by weight
Lactic acid purity 98 % by weight

SC
Conversion yield from lactic acid to 73 % by weight
lactide
Recovery yield of lactide during 93 % by weight

U
purification
Conversion yield from lactide to PLA 74 % by weight
AN
Recovery yield of PLA during 100 % by weight
purification
Capital cost Capital cost = FCI + working capital
Direct Cost (DC)
M

Equipment purchase cost (PC) Listed equipment purchase cost

Installation Equipment specific
Process piping 0.31 × PC
D

Instrumentation 0.43 × PC
Electrical 0.10 × PC
TE

Buildings 0.15 × PC
Yard improvement 0.12 × PC
Service facilities 0.55 × PC
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Indirect Cost (IC)

Engineering and supervision 0.32 × PC
Construction expenses 0.34 × PC
Legal expenses 0.04 × PC
C

Contractor’s fee 0.19 × PC

AC

Contingency 0.37 × PC
Fixed-capital investment (FCI) FCI = DC + IC
Working capital 0.1 × FCI
Annual operating cost Annual operating cost = total variable production costs +
fixed charges + plant overhead costs + general expenses
Total variable production costs
Raw materials From mass balance
Labour-dependent No. of operator was calculated by Ulrich et al., 1984
Annual salary: US$ 20,000
Supervision factor: 0.15
Utility cost Electricity: US$ 0.122 kWh-1
Steam: US$ 12 MT-1

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Waste water treatment
Solid waste disposal
Logistic cost
Equipment maintenance and repair
Laboratory cost for QC and QA
Steam (High pressure): US$ 14 MT-1
Process water: US$ 0.12 m-3
Cooling water: US$ 0.03 m-3
Chilled water: US$ 0.4 m-3
US$ 102.6 MT-1
US$ 12.8 MT-1
US$ 25 MT-1 food waste powder
7 % of the FCI
15 % of the total labour cost

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Operating supplies 15 % of the equipment maintenance and repair cost
Royalties 4 % of the capital cost
Fixed charges

RI
Depreciation (20 year straight line) Depreciated 5 % of the FCI
Insurance 1 % of the FCI
Plant overhead costs 50 % of labour, equipment maintenance and repair costs

SC
General expenses
Administrative costs 15 % of operating labour cost
Distribution and marketing costs No less than 2 % of total operating cost

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Research and development costs 5 % of annual operating cost
Revenues
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Selling price of 80 % Lactic acid US$ 1,874 MT-1
Selling price of lactide US$ 2,800 MT-1
Selling price of PLA US$ 5,215 MT-1
US$ 500 MT-1
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Selling price of lipids

Selling price of animal feed US$ 450 MT-1
Food waste treatment service fee US$ 77 MT-1
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808 Table 2. Fixed-capital investment (FCI) of the plant.

Cost (US$)
Unit price Scenario I Scenario II Scenario III
Items
(US$)
Cost Cost Cost
Quantity Quantity Quantity
(US$) (US$) (US$)
Equipment purchase costs*
Blending Tank/Storage tank 99,554 1 99,554 1 99,554 1 99,554
(V-101)

PT
Solid state fermentation 600 1 600 1 600 1 600
(SFR-101)
Solid state fermentation 600 1 600 1 600 1 600
(SFR-102)
Bioreactor (BR-101) 75,538 37 2,794,913 37 2,794,913 37 2,794,913

RI
Centrifuge (DC-101) 533,080 1 533,080 1 533,080 1 533,080
Rotary Vacuum Filtration 219,000 2 438,000 2 438,000 2 438,000
(RVF-101)

SC
Mixing 0 1 0 1 0 1 0
Shake flask (SFR-103) 2,000 37 74,000 37 74,000 37 74,000
Seed Fermenter (SFR-104) 10,281 37 380,393 37 380,393 37 380,393

U
Seed Fermenter (SFR-105) 27,550 37 1,019,351 37 1,019,351 37 1,019,351
Seed Fermenter (SFR-106) 38,168 37 1,412,218 37 1,412,218 37 1,412,218
AN
Mixing 0 37 0 37 0 37 0
Fermenter (SFR-107) 139,546 37 5,163,206 37 5,163,206 37 5,163,206
Filtration (MF-102) 170,000 23 3,910,000 23 3,910,000 23 3,910,000
M

Acidulation (V-102) 132,150 1 132,150 1 132,150 1 132,150

GAC column (GAC-101) 370,000 3 1,110,000 3 1,110,000 3 1,110,000
Evaporator (EV-101) 855,219 1 855,219 1 855,219 1 855,219
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Solvent extraction 403,000 1 403,000 1 403,000 1 403,000

(BGBX-101)
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Distillation (V-103) 1,264,000 1 1,264,000 1 1,264,000 1 1,264,000

Stirred reactor (R-102) 103,000 0 0 1 103,000 1 103,000
Mixing 0 0 0 1 0 1 0
EP

Filtration (MF-103) 154,000 0 0 1 154,000 1 154,000

Crystalliser (CR-101) 841,000 0 0 1 841,000 1 841,000
Condenser (HX-101) 34,000 0 0 1 34,000 1 34,000
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Tray Dryer (TDR-101) 254,000 0 0 2 508,000 2 508,000

Stirred reactor (R-103) 723,000 0 0 0 0 1 723,000
AC

Mixing 0 0 0 0 0 1 0
Filtration (MF-104) 144,000 0 0 0 0 3 432,000
Tray Dryer (TDR-102) 301,000 0 0 0 0 1 301,000
Distillation (V-104) 937,000 0 0 0 0 1 937,000
Total 19,590,283 21,230,283 23,623,283
Installation N/A 7,352,885 N/A 7,713,085 N/A 8,727,235
Process piping N/A 6,072,988 N/A 6,581,388 N/A 7,323,218
Instrumentation N/A 8,423,822 N/A 9,129,022 N/A 10,158,012
Electrical N/A 1,959,028 N/A 2,123,028 N/A 2,362,328
Buildings N/A 2,938,542 N/A 3,184,542 N/A 3,543,492

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Yard improvement N/A 2,350,834 N/A 2,547,634 N/A 2,834,794
Service facilities N/A 10,774,656 N/A 11,676,656 N/A 12,992,806
Engineering and supervision N/A 6,268,891 N/A 6,793,691 N/A 7,559,451
Construction expenses N/A 6,660,696 N/A 7,218,296 N/A 8,031,916
Legal expenses N/A 783,611 N/A 849,211 N/A 944,931
Contractor’s fee N/A 3,722,154 N/A 4,033,754 N/A 4,488,424
Contingency N/A 7,248,405 N/A 7,855,205 N/A 8,740,615
Total 96,768,814 104,576,164 116,530,081

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809 * Equipment code can be referred to Figure 2, 3 and 4.

810

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813 Table 3. Annual operating cost and net production cost for Scenario I, Scenario II and Scenario III.

Scenario I Scenario II Scenario III

Unit Cost Cost Cost Cost
Items Cost Cost
(US$/unit) Quantity Unit contribution Quantity Unit Cost (US$) contribution Quantity Unit contribution
(US$) (US$)
(US$/MT-1) (US$/MT-1) (US$/MT-1)

PT
Raw materials
Sodium hydroxide 300 11,039 MT 3,311,700 11,039 MT 3,311,700 11,039 MT 3,311,700
Sulphuric acid 188 592 MT 111,279 592 MT 111,279 592 MT 111,279

RI
Ethyl acetate 1,058 2,772 MT 2,932,744 3,604 MT 3,812,926 3,604 MT 3,812,926
Activated carbon 430 4,293 MT 1,845,887 4,293 MT 1,845,887 4,293 MT 1,845,887
Yeast extract 7,300 659 MT 4,807,817 659 MT 4,807,817 659 MT 4,807,817

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Polyglyceryl-10 264 8.3 MT 2,191
Zinc oxide nanoparticle 20,000 63 MT 1,262,098 63 MT 1,262,098
Stannous octoate 12,000 17 MT 209,160

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Chloroform 581 832 MT 483,218
Methanol 300 1,331 MT 399,213

AN
Total 13,009,426 521 15,151,706 1,061 16,245,488 1,529
Labour-Dependent
Operating labour 20,000 352 7,039,200 359 7,170,912 364 7,275,072

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Operating supervision 1,055,880 1,075,637 1,091,261
Total 8,095,080 8,246,549 578 8,366,333 787
Utilities

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Electricity 0.122 2,585,899 kWh-1 314,286 324 2,889,321 kWh-1 351,164 2,899,742 kWh-1 352,430
Steam (High pressure) 14 16,639 MT 226,457 40,851 MT 555,982

TE
Steam 12 500,526 MT 6,006,312 519,559 MT 6,234,708 570,068 MT 6,840,816
Process water 0.12 45,730 MT 5,693 45,730 MT 5,693 45,730 MT 5,693
Cooling water 0.03 17,979,592 MT 472,863 18,361,356 MT 482,904 21,555,903 MT 566,920
Chilled water 0.40 217,108 MT 86,843 217,108 MT 86,843
EP
Total 6,799,155 272 7,387,769 517 8,408,685 791
Waste water treatment 102.6 22,485 MT 2,306,031 92 22,485 MT 2,306,031 162 22,487 MT 2,306,312 217
Solid waste disposal 12.8 4,293 MT 55,035 2 5,931 MT 76,043 5 5,931 MT 76,043 7
C

Logistic cost 25.0 83,000 MT 2,075,000 83 83,000 MT 2,075,000 145 83,000 MT 2,075,000 195
Operating supplies 883,541 35 954,826 67 1,063,970 100
AC

Royalties 3,870,753 155 4,183,047 293 4,661,203 439

Laboratory/QC/QA 1,214,262 49 1,236,982 87 1,254,950 118
Maintenance & repair 5,890,276 236 6,365,506 446 7,093,135 668
Depreciation 4,207,340 168 4,546,790 318 5,066,525 477
Insurance 841,468 34 909,358 64 1,013,305 95
Plant overhead costs 6,992,678 280 7,306,027 512 7,739,734 728

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Administrative costs 1,055,880 42 1,075,637 1,091,261 103

Distribution and marketing costs 1,500,000 60 1,750,000 2,000,000 188
Research and development costs 3,000,000 120 4,000,000 4,500,000 424
Total 61,795,925 2,474 67,571,270 4,733 72,951,945 6,867
Credit for sale of by-products
Lipids 6,059,000 -243 6,059,000 -424 6,059,000 -570

PT
Animal feed 29,095,650 -1,165 29,095,650 -2,038 29,095,650 -2,739
*Net production cost (US$ MT-1) 1,066 2,271 3,558
814 *Net production cost was calculated with reference to Peters (2003).

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815 Table 4. Utilities usage and cost in the processes.

Steam
Process Cooling Chilled
Electricity Steam (High
Item code* Equipment water water water
(kWh) (MT) pressure)
(MT) (MT) (MT)
(MT)
Fungal hydrolysis
V-101 Blending Tank/Storage tank 151,915 188,410
SFR-101 Solid state fermentation 165,901 24 1,826
SFR-102 Solid state fermentation 165,835 24 1,826

PT
BR-101 Bioreactor 357,066 10,451
DC-101 Centrifuge 1,070,700
RVF-101 Rotary vacuum filtration 10,357 830
MX-101 Mixing 59,043

RI
Total 1,921,774 10,499 0 251,935 0 0
Cost (US$) 233,569 125,988 0 31,366 0 0
Lactic acid fermentation
SFR-103 Shake flask 2,467

SC
SFR-104 Seed Fermenter 9,046 1
SFR-105 Seed Fermenter 12,336 19
SFR-106 Seed Fermenter 32,895 259
MX-102 Mixing 30,594

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SFR-107 Fermenter 306,485 5,797
Total 363,229 6,076 0 30,594 0 0
AN
Cost (US$) 44,146 72,912 0 3,809 0 0
Lactic acid recovery
MF-102 Filtration
V-102 Acidulation 170,171
GAC-101 GAC column
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EV-101 Evaporator 209,087 -236,799

BGBX-101 Solvent extraction 130,725
V-103 Distillation 274,864 17,979,592
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Total 300,896 483,951 0 -236,799 17,979,592 0

Cost (US$) 36,570 5,807,412 0 0 472,863 0
Lactide synthesis
TE

R-102 Stirred reactor 257,772 16,639

MX-103 Mixing
MF-103 Filtration
CR-101 Crystalliser 45,650 18,569 217,108
EP

HX-101 Condenser 381,764

TDR-101 Tray Dryer 464
Total 303,422 19,033 16,639 0 381,764 217,108
Cost (US$) 36,877 228,396 226,457 0 10,040 86,843
C

Poly(lactic acid) polymerisation

R-103 Stirred reactor 10,421 24,212
AC

MX-104 Mixing
MF-104 Filtration
TDR-102 Tray Dryer 732
V-104 Distillation 49,777 3,194,547
Total 10,421 50,509 24,212 0 3,194,547 0
Cost (US$) 1,267 606,108 329,525 0 84,017 0
Consumption in Scenario I 2,585,899 500,526 0 45,730 17,979,592 0
Cost in Scenario I (US$) 314,286 6,006,312 0 5,693 472,863 0
Consumption in Scenario II 2,889,321 519,559 16,639 45,730 18,361,356 217,108
Cost in Scenario II (US$) 351,164 6,234,708 226,457 5,693 482,904 86,843
Consumption in Scenario III 2,899,742 570,068 40,851 45,730 21,555,903 217,108
Cost in Scenario III (US$) 352,430 6,840,816 555,982 5,693 566,920 86,843
816
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817 Table 5. Annual revenue and profitability indicators of Scenario I, Scenario II and Scenario III.

Scenario I Scenario II Scenario III

Unit price Quantity Percentage Quantity Percentage Quantity Percentage

Items Value Value Value
(US$/unit) (MT) (%) (MT) (%) (MT) (%)

Revenue (US$/year) 88,363,792 100 81,518,450 100 96,949,810 100

80 % Lactic acid 1,874 24,983 46,818,142 53 Nil Nil Nil Nil Nil Nil

Lactide 2,800 Nil Nil Nil 14,276 39,972,800 49 Nil Nil Nil

PT
PLA 5,215 Nil Nil Nil Nil Nil Nil 10,624 55,404,160 57

Lipids 500 12,118 6,059,000 7 12,118 6,059,000 7 12,118 6,059,000 6

Animal feed 450 64,657 29,095,650 33 64,657 29,095,650 36 64,657 29,095,650 30

RI
Food waste
treatment service 77 83,000 6,391,000 7 83,000 6,391,000 8 83,000 6,391,000 7
fee
Gross profit (US$ year-1) 26,567,867 13,947,180 23,997,865

SC
Net profit (US$ year-1) 22,184,169 11,645,896 20,038,218
Net present value (× 1,000
234,803 104,758 202,068
US$)

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Internal rate of return (%)* 31.1 16.8 24.3

Return on investment (%) 22.9 11.1 17.2

AN
Payback time (year)* 5.1 9.0 6.6
Minimum selling price (US$
943 2,073 3,330
MT-1)
818 *Discount rate was set as 5 %.
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832 Figure 1.

833

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836 Figure 2.

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845 Figure 3.

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847 *Weight of remaining solids and cell biomass are based on wet weight.
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848 Figure 4.

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852 Figure 5.

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868 Figure 6.

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871 Figure 7.

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874 Figure 8.

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882 Figure 9.

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