Assessing Efficiency in the Circular Economy Using the Levelized Cost of Waste: A Case Study of Textile Waste Pyrolysis

The growing importance of environmental technologies in a circular economy requires the use of tools that allow a realistic assessment of their economic efficiency. Classical investment indicators, such as NPV or IRR, are proving inadequate in the case of installations whose main objective is not to maximise profit but to reduce waste and emissions. There is a lack of tools in the literature that would allow for an unambiguous assessment of the unit cost of waste treatment, taking into account the life cycle of the installation and market conditions. This study aims to assess the feasibility of using the Levelised Cost of Waste (LCOW) indicator, modelled on the Levelised Cost of Energy (LCOE) from the energy sector, as a planning and decision-making tool in the waste management sector. In this study, an LCOW calculation model was developed and applied to analyse textile waste pyrolysis technology. Simulations were conducted for three plant scales (1000, 5000, and 10,000 Mg/year), and a sensitivity analysis was performed to examine the relationship between the LCOW and by-product prices, energy costs, capital expenditures, and CO2 emissions. The results confirm that the LCOW is a helpful tool for determining tariffs, identifying subsidy thresholds and comparing technology options. Its application is particularly well suited to small-scale environmental investments where classical approaches fail.