Mechanical recycling of polyethylene offers the best balance of cost and carbon
A worked 전과정원가 analysis of seven plastic recycling technologies, with cost-benefit, sensitivity and Monte Carlo uncertainty analysis.
Thermal, mechanical and chemical recycling routes for PP, PE and PVC are compared on life cycle cost, net benefit and global warming potential, then combined in one weighted decision score. Every figure is traceable and can be reworked in the free Excel calculator.
The answer in four numbersFree downloads by DEISO LLC · Excel workbook with live formulas and a 1,000-run Monte Carlo · 14-page PDF
What this case study teaches
Purpose: to show, step by step and with every number traceable, how a 전과정원가 analysis turns cost, revenue and carbon data into one defensible technology decision, and how to test whether that decision survives uncertainty.
Learning objectives
- Calculate — life cycle cost, net benefit, benefit-cost ratio and present value from stage-level data.
- Reconcile — source data that does not add up, and document every correction.
- Combine — economic and environmental results with min-max normalisation and a weighted score.
- Test — the decision with one-at-a-time sensitivity, break-even points and a 10,000-run Monte Carlo simulation.
- Judge — whether a recommendation is defensible or an artefact of the chosen weights.
Engineers, cost analysts, procurement teams, sustainability professionals and students of life cycle costing.
Intermediate. About 45 minutes to read; 90 minutes to rework with the Excel calculator.
Seven recycling options for three plastics
A company is choosing a recycling route for three plastic waste streams: polypropylene (PP), polyethylene (PE) and polyvinyl chloride (PVC). It has costed thermal recycling and mechanical (material) recycling for each plastic, and chemical recycling by pyrolysis as a general route for mixed plastics — seven options in total.
For each option it holds a cost breakdown across six life cycle stages, a total revenue, and a 전과정평가(LCA) (LCA) result for global warming potential (GWP). The question is which option offers the best balance of economic and environmental performance, and how confident that answer can be.
| 기술 | 추출 | Transport | Pre-processing | Production | 유통 | 수명 종료 | Revenue | GWP |
|---|---|---|---|---|---|---|---|---|
| Thermal recycling (PP) | 1.9 | 2.5 | 3.5 | 40 | 8 | 0.8 | 85 | 1.02 |
| Thermal recycling (PE) | 10 | 2 | 3.5 | 25 | 14 | 0.8 | 110 | 1.24 |
| Thermal recycling (PVC) | 5 | 2.5 | 1.5 | 15 | 8 | 15.8 | 40 | 1.14 |
| Mechanical recycling (PP) | 7 | 70 | 16 | 90 | 4 | 104.5 | 250 | 1.75 |
| Mechanical recycling (PE) | 5 | 62.5 | 16 | 28 | 4 | 4.5 | 150 | 0.124 |
| Mechanical recycling (PVC) | 9 | 120 | 16.5 | 50 | 4 | 20 | 185 | 0.114 |
| Chemical recycling (pyrolysis) | 1.9 | 9.8 | 16 | 55 | 10 | 22 | 90 | 0.175 |
The source gave a stated total cost for each option and, separately, a stage breakdown. The stated totals are treated as authoritative. Three stage values are reconciled: Thermal PVC end of life from 10 to 15.8 and Mechanical PVC pre-processing from 0.05 to 16.5, both clear transcription errors; and Mechanical PP end of life from 104 to 104.5, an allocation choice because the source does not show which stage carried the USD 0.5 million difference. Thermal PP needed no change: its stages sum to the stated 56.7; the source mis-added them as 57.7.
The source gave no functional unit, so GWP is read as per kg of plastic waste treated. The Mechanical PP GWP of 1.75 is kept as given, although it is probably a transcription error for 0.102. Changing it does not change the recommendation.
Method and formulas
Every result in this case study comes from the formulas below. The free Excel calculator implements the same formulas, so each figure can be traced and reworked.
Life cycle cost: the sum of stage costs from extraction to end of life.
Net benefit and benefit-cost ratio. A ratio above 1 means revenue exceeds life cycle cost.
Present value with totals spread evenly over n = 10 years at r = 8%. The annuity factor is 6.710, so PV(NB) = 0.671 × NB for every option.
Economic index: min-max normalisation of net benefit to a 0 to 1 scale.
Environmental index: GWP normalised and inverted, so lower emissions score higher.
Weighted score on a 1 to 5 scale, where w is the economic weight. Tested at w = 0.7, 0.5 and 0.3.
One-at-a-time sensitivity for a cost or the revenue with step s = 20%, and the elasticity of net benefit to each driver.
Monte Carlo: each stage cost and the revenue drawn uniformly within range u, 10,000 times. Extraction, pre-processing and production ±10%; transportation and distribution ±15%; end of life ±20%; revenue ±15%.
Life cycle cost and cost-benefit results
Mechanical routes carry far higher life cycle costs than thermal routes, driven by transportation and end of life. Mechanical PP is the most expensive option at USD 291.5 million; Thermal PVC the cheapest at USD 47.8 million.
| 기술 | Life cycle cost | Revenue | Net benefit | Benefit-cost ratio | PV of net benefit | Largest cost driver |
|---|---|---|---|---|---|---|
| Thermal recycling (PP) | 56.7 | 85 | +28.3 | 1.50 | +19.0 | Production (71%) |
| Thermal recycling (PE) | 55.3 | 110 | +54.7 | 1.99 | +36.7 | Production (45%) |
| Thermal recycling (PVC) | 47.8 | 40 | −7.8 | 0.84 | −5.2 | End of life (33%) |
| Mechanical recycling (PP) | 291.5 | 250 | −41.5 | 0.86 | −27.8 | End of life (36%) |
| Mechanical recycling (PE) | 120.0 | 150 | +30.0 | 1.25 | +20.1 | Transportation (52%) |
| Mechanical recycling (PVC) | 219.5 | 185 | −34.5 | 0.84 | −23.1 | Transportation (55%) |
| Chemical recycling (pyrolysis) | 114.7 | 90 | −24.7 | 0.78 | −16.6 | Production (48%) |
Three options return a net gain: Thermal PE (USD 54.7 million), Mechanical PE (USD 30.0 million) and Thermal PP (USD 28.3 million). The other four lose money, from Thermal PVC (−7.8) to Mechanical PP (−41.5). On economics alone, Thermal PE leads with a benefit-cost ratio of 1.99.
Discounting does not change this ranking. With costs and revenues spread evenly, every option is multiplied by the same annuity factor. Discounting would matter only if spending were front-loaded.
Global warming potential
Mechanical PVC (0.114), Mechanical PE (0.124) and pyrolysis (0.175) have a GWP roughly one tenth of the thermal routes (1.02 to 1.24). Mechanical PP is the outlier at 1.75, the highest of all, although that value is probably a transcription error.
Plotting both results together shows the decision directly. Mechanical PE is the only option in the shaded quadrant: profitable and low-carbon. The thermal routes for PE and PP are profitable but carbon-intensive; Mechanical PVC and pyrolysis are low-carbon but lose money.
Learn to run this analysis on your own projects
Every step in this case study, from stage costing to Monte Carlo simulation, is taught in depth in the DEISO LCCA training.
Life cycle costing analysis (LCCA) professional training
Advanced training programmes aligned with ISO 15686-5, IEC 60300-3-3 and ASTM E917, built for engineers, cost analysts, and procurement teams developing practical 전과정원가 capability.
Monte Carlo uncertainty analysis
Single-point results hide risk. A 10,000-run Monte Carlo simulation varied every stage cost and the revenue together within their ranges, to show how likely each outcome is.
| 기술 | P5 | P50 | P95 | Probability of net gain |
|---|---|---|---|---|
| Thermal recycling (PP) | +16.0 | +28.3 | +40.5 | 100.0% |
| Thermal recycling (PE) | +39.6 | +54.7 | +69.9 | 100.0% |
| Thermal recycling (PVC) | −14.5 | −7.9 | −1.2 | 2.0% |
| Mechanical recycling (PP) | −84.0 | −41.8 | +0.8 | 5.4% |
| Mechanical recycling (PE) | +6.9 | +29.8 | +52.9 | 99.7% |
| Mechanical recycling (PVC) | −66.7 | −34.7 | −3.1 | 3.2% |
| Chemical recycling (pyrolysis) | −38.9 | −24.7 | −10.3 | 0.0% |
The three profitable options stay profitable in almost every run: Thermal PE and Thermal PP in 100%, Mechanical PE in 99.7%. No loss-making option exceeds a 5.4% chance of turning a gain. The ranking is stable under the stated uncertainty.
Sensitivity analysis and break-even points
One-at-a-time sensitivity changes each driver by 20% while holding the others fixed, to find which input moves the result most.
| 기술 | Most critical driver | Net benefit swing at ±20% | Revenue fall to break even | Cost rise to break even |
|---|---|---|---|---|
| Thermal recycling (PP) | Revenue | ±17.0 | 33.3% | 49.9% |
| Thermal recycling (PE) | Revenue | ±22.0 | 49.7% | 98.9% |
| Thermal recycling (PVC) | Revenue | ±8.0 | Already a net loss | Already a net loss |
| Mechanical recycling (PP) | Revenue | ±50.0 | Already a net loss | Already a net loss |
| Mechanical recycling (PE) | Revenue | ±30.0 | 20.0% | 25.0% |
| Mechanical recycling (PVC) | Revenue | ±37.0 | Already a net loss | Already a net loss |
| Chemical recycling (pyrolysis) | Revenue | ±18.0 | Already a net loss | Already a net loss |
Revenue is the most critical driver for every option. For Mechanical PE, a 20% fall in revenue removes the whole USD 30.0 million net benefit (elasticity 5.0), and a 25% rise in life cycle cost does the same. Transportation, at 52% of its life cycle cost, is the cost to watch.
Mechanical PE is the right choice, but a thinner one than Thermal PE financially. Thermal PE can absorb a 49.7% revenue fall before breaking even; Mechanical PE can absorb 20%. Secure offtake prices for recycled PE and optimise collection logistics before committing.
Weighted economic-environmental score
The economic and environmental indices are combined on a 1 to 5 scale under three weightings, from economics-led (70/30) to environment-led (30/70).
| 기술 | Economic index E | Environmental index V | Score 70/30 (rank) | Score 50/50 (rank) | Score 30/70 (rank) |
|---|---|---|---|---|---|
| Thermal recycling (PP) | 0.726 | 0.446 | 3.57 (3) | 3.34 (3) | 3.12 (4) |
| Thermal recycling (PE) | 1.000 | 0.312 | 4.17 (2) | 3.62 (2) | 3.07 (5) |
| Thermal recycling (PVC) | 0.350 | 0.373 | 2.43 (5) | 2.45 (6) | 2.46 (6) |
| Mechanical recycling (PP) | 0.000 | 0.000 | 1.00 (7) | 1.00 (7) | 1.00 (7) |
| Mechanical recycling (PE) | 0.743 | 0.994 | 4.27 (1) | 4.47 (1) | 4.67 (1) |
| Mechanical recycling (PVC) | 0.073 | 1.000 | 2.40 (6) | 3.15 (5) | 3.89 (3) |
| Chemical recycling (pyrolysis) | 0.175 | 0.963 | 2.64 (4) | 3.27 (4) | 3.91 (2) |
Mechanical PE ranks first under every weighting, from 4.27 when economics carries 70% to 4.67 when the environment carries 70%. Thermal PE ranks second only when economics dominates, and falls to fifth when the environment does. Testing several weightings, rather than fixing one, is what shows the recommendation is defensible and not an artefact of the weights.
Conclusion and limitations
Recommendation: adopt mechanical recycling for polyethylene. It returns USD 30.0 million of net benefit at a GWP of 0.124 kg CO₂-eq per kg, ranks first under every weighting, and stays profitable in 99.7% of simulated outcomes.
- If carbon carries no weight — Thermal PE earns more (USD 54.7 million) but emits ten times more CO₂-eq per kg.
- Protect the margin — revenue and transportation drive the Mechanical PE result; lock in offtake prices and optimise logistics.
- Avoid — Mechanical PP and PVC, Thermal PVC and pyrolysis lose money under almost every simulated outcome.
Limitations
- Illustrative teaching dataset with a stated functional unit assumption; three stage values reconciled.
- No time profile, so present value assumes even spreading; capital timing could change the picture.
- Only GWP is assessed; other impact categories and GWP uncertainty are not modelled.
- Uniform distributions with assumed ranges; correlated inputs would widen the Monte Carlo spread.
자주 묻는 질문
What is 전과정원가 (LCC)?
전과정 원가 산정 adds up every cost an option incurs across its whole life, from extraction and transport through processing, distribution and end of life, so options are compared on total cost rather than purchase or operating cost alone.
How is LCC different from 전과정평가(LCA) (LCA)?
LCC measures money; LCA measures environmental impact, such as global warming potential in kg CO₂-eq. This case study uses both and combines them in a weighted score.
Which recycling technology performs best in this case study?
Mechanical recycling of polyethylene (PE). It returns a net benefit of USD 30.0 million with a GWP of 0.124 kg CO₂-eq per kg, ranks first under all three weightings tested, and stays profitable in 99.7% of 10,000 Monte Carlo runs.
Why not thermal recycling of PE, which earns more?
Thermal PE has the highest net benefit (USD 54.7 million) but a GWP ten times higher (1.24 kg CO₂-eq per kg). It ranks second when economics carries 70% of the weight and falls to fifth when the environment does.
What is the difference between sensitivity and uncertainty analysis?
Sensitivity analysis changes one input at a time to find which driver moves the result most. Uncertainty analysis varies all inputs together, here by Monte Carlo simulation, to show how likely each outcome is.
Why does discounting not change the ranking?
The case gives life cycle totals without a time profile, so costs and revenues are spread evenly over ten years. Under that assumption discounting multiplies every option by the same factor. Discounting changes rankings when spending is front-loaded, such as heavy capital cost in year one.
Can I run this analysis on my own data?
Yes. The free DEISO LLC Excel calculator reproduces every calculation in this case study, including a live 1,000-run Monte Carlo simulation, and accepts your own costs, revenues and GWP values.
Take the method further
Rework every number in this case study with the free Excel calculator, keep the PDF for reference, or build the full capability through structured training.
Life cycle costing analysis (LCCA) professional training
Advanced training programmes aligned with ISO 15686-5, IEC 60300-3-3 and ASTM E917, built for engineers, cost analysts, and procurement teams developing practical 전과정원가 capability.
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