Who is the most effective stakeholder to incent in the waste cooking oil supply chain? A case study of Beijing, China

Abstract

Waste cooking oil (WCO) is one of the most promising feedstocks for biodiesel production as it is environment friendly, has energy supply potential, impacts edible oil safety, and enables competitive recycling costs. However, one central roadblock to the development of WCO-based biodiesel in China is its fairly low collection rate in the formal WCO supply chain. Most waste cooking oil is still collected by informal collectors with some flowing back to “table.” The aim of our paper is to identify the most effective incentive conditions and targets in the WCO supply chain to offer recommendations that address this WCO roadblock. Accordingly, we designed a Stackelberg game model among restaurants, recyclers, and biodiesel production enterprises. The results show that restaurants are the best targets for incentives in this WCO supply chain. With a certain amount of monetary incentives, the WCO supply for biofuel production can be improved significantly. If the restaurant subsidy is 4000 yuan/ton, the amount of WCO recycled would increase by 47%, which is far more efficient than incenting recyclers or biofuel producers. We also set up four scenarios and found that compared with a single policy approach (mandatory only or economic incentive only), a combined policy (mandatory with economic incentive) would be the most effective means to incent restaurants to submit WCO for biofuel. There was also a correlation between policy incentive effectiveness and restaurant sensitivity to WCO submission profits. When the price sensitivity was larger than 17.98, the best policy for the government would be to offer economic incentives to restaurants. To guarantee the effectiveness of such policy incentives, supporting laws, policy guidelines, and routine supervision should be provided as well.

Keywords

Waste cooking oil (WCO) / Biodiesel / Economic incentive / Stackelberg game simulation

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Funding

National key research and development program(2018YFC1902703)

National Social Science Foundation(18CGL027)

Beijing Social Science Foundation(16YJC042)

2018 International Clean Energy Talent Program(201802180071)