A financial and environmental sustainability of circular bioeconomy: A case study of short rotation coppice, biochar and greenhouse production in southern Finland

Business opportunities of circular bioeconomy have been proposed to lessen the socio-economic challenges of rural areas and to conserve diminishing natural resources. Recently, the financial and environmental sustainability of circular bioeconomy has gained considerable research interest. This study examines three promising operational models for circular bioeconomy development in southern Finland: willow cultivation on marginal lands, wood-based biochar production and wood chip heated greenhouse production. The feasibility of these models is assessed by analysing their financial and environmental sustainability using a multi-methodological approach. Financial sustainability is analysed using net present value and internal rate of return indicators via cash flow analysis. Environmental sustainability is examined using carbon footprint indicator in a life cycle assessment and a closed loop analysis. The results reveal correlations between both types of indicators, suggesting that a circular bioeconomy may lead to win–win situations. Potential closed loops are identified, and a circular bioeconomy model is suggested for improving security of supply and the flexibility of raw materials. Imbalanced revenue allocations between primary and secondary production are recognised as a potential threat to financial feasibility. Understanding financial and environmental sustainability of divergent operational models supports decision making and the legitimacy of change.