Cost-Benefit Analysis of Organic Refuse Derived Fuel: A Review Study of Karachi City

Abstract

This study examines the following primary research enquiries: How economically feasible is the production of Organic Refuse-Derived Fuel (ORDF) in Karachi, Pakistan? What are the prospects for sustainability that ORDF generation presents within the framework of local waste and energy systems? This study performs a cost-benefit analysis of ORDF production to investigate these enquiries. About half of the municipal solid waste (MSW) in Karachi is organic, which turns an environmental problem into a possible source of energy. Using data on local market and energy prices, this analysis looks at the capital investment, operating costs, revenue, and payback period for a facility that makes 1,000 kg of briquettes every day, Entrepreneurs must invest up to PKR 4 million to launch the business, which is approximately the yearly energy cost for 100 average Karachi households. With annual running costs of PKR 9.2 million, revenue reaches PKR 12.78 million, yielding a net profit of PKR 3.57 million and a payback of about 1.1 years.This revenue will support full time employment of as many as 10 local employees. The financial resilience is assessed by scenario based models and Monte Carlo simulations that include changes in tariffs, binder costs and product price. The 10,000 simulations analysis has shown that the project will be economically viable with a payback period of less than 1.5 years in over 85 percent of the cases. The study identifies the advantages of ORDF, which entails social and environmental advantages and gives a sustainable remedy to city wastes. ORDF's potential in Pakistan’s circular economy.