From variance to value: Stabilizing circular exchanges in industrial symbiosis networks

Abstract Industrial symbiosis, where companies exchange byproducts as feedstock, is a key strategy for advancing circular economy principles. While more sustainable than their virgin counterparts, byproducts frequently fluctuate in quantity and quality because they are often low‐value and low‐priority for the generating firms, and this variability can be further exacerbated in sustainable production systems that integrate variable renewable energy such as wind and solar. Addressing these challenges is becoming increasingly critical as local interdependencies intensify to create more circular supply chains. Prior research has investigated the long‐term resilience of such circular supply chains, especially to major supply chain disruptions. We expand on this prior research to address a pressing need to investigate the frequent short‐term disruptions characteristic of byproducts in circular industrial systems. We develop and introduce two novel methods—variance flow analysis (VFA) and the variable byproduct technoeconomic investment model (VBTIM). VFA diagnoses how variance originates and propagates across interconnected firms using flow‐based indicators, while the VBTIM supports firm‐level investment decisions under uncertainty through a stochastic cost‐minimization model. Applied to GreenLab Skive, a Danish eco‐industrial park, these tools reveal that firms exhibit distinct roles in amplifying, diffusing, or generating variability depending on their infrastructure and process design. Sensitive operations can amplify fluctuations, while flexible or buffered firms can help stabilize networks, highlighting when coordination mechanisms, storage strategies, or targeted investments are needed to align firm‐level efficiency with broader network resilience. Together, the VFA and VBTIM enable integrated planning for uncertainty in circular supply chains.