The North Macedonian Government is committed to promoting a sustainable future through innovative environmental policies and collaborative initiatives. In partnership with the Swiss Import Promotion Programme (SIPPO), the Value Chain Generator® was tasked to assess the country’s current waste management practices within the natural ingredients and food sectors and identify opportunities for circular business models to drive sustainability.
Challenge
North Macedonia relies heavily on agriculture and food processing, generating large amounts of organic biomass as a result. Despite the abundance of available organic waste, most of this feedstock remains underutilized. In the best cases, the residuals are used as animal food or sent to biogas plants, which should ideally be a last resort according to circular economy principles. Current approaches are neither circular nor economically sustainable, and the full value of organic waste streams is not being realized. Thus, the Economic Chamber of Commerce North Macedonia (ECM) asked SIPPO to support its efforts to promote circular practices in the agriculture and food processing sector.
Solution
The VCG.AI’s tool is intended to create effective circular value chains. In doing so, VCG.AI’s analysis of the members of the agriculture sector of the ECM has identified several key residual streams that can be converted into valuable secondary materials or new ingredients.
Two of them are further considered here:
- Grape Pomace: North Macedonia generates over 100 million litres of wine annually, leading to 16.7 million kg of grape pomace.
- Tomato Production Residuals: North Macedonia produced 157,050 metric tons of tomatoes in 2021, resulting in 62,800 kg of pulp and skin waste.
For the two residual streams, there are various commercial opportunities to transform them into new raw materials or inputs for new circular products. However, not all options are economically viable, even if the conversion technology is commercially available.
Through VCG.AI’s analysis, the most promising options for implementation, considering North Macedonia’s specific circumstances and industrial structure, have been identified as follow:
- Grape Pomace from winery and grape growing residuals can be converted into very valuable products for the pharma industry and cosmetics like Pectin or Polyphenols.
- Tomato production residuals such as pulp, skins, or wastewater from the Vegetable Industry is the main source of Lycopene also used for cosmetics, pharma, and food applications.
Figure 1: Circular Value Chains identified by VCG analysis on targeted residual streams.
Key determinants that decide which option are most viable:
- Volume of Residuals: The amount of residuals generated locally compared to what is needed for conversion, as a minimum sustainable supply is crucial for industrial operations.
- Proximity of Residual Producers: Mapping and locating residual stream producers is essential, as transporting these materials over long distances is often economically unfeasible.
- Market Demand: The availability of buyers for the secondary material or converted new products/ingredients, ensuring there is sufficient demand for the new circular products.
- Supportive Infrastructure: The presence of infrastructure to facilitate smooth transport, storage, bulk handling, and processing of the residuals.
Based on the current situation in North Macedonia and the extent to which key determinants are met, VCG.AI was able to identify the most viable conversion options, key suppliers of residuals, and potential buyers for the converted materials.
Figure 2 displays one of the identified options, including the most promising conversion process, the resulting ingredients or products, their expected value, and the minimum amount of residuals required to ensure a sustainable and efficient industrial conversion process. Business cases were developed that indicated the economic viability.
Figure 2: Market value of end products for 2 possible solutions on Grape Pomace residuals
The analysis confirmed that several options are economically viable since at least three out four key determinants are successfully met. It became evident that North Macedonia is well-positioned to transform selected biomass residuals into valuable circular products and ingredients that are in high market demand.
Lead by the ECM, discussions with private sector representatives are now underway to explore how to develop these options into circular business models and how to identify investment opportunities.
Contribution of VCG.AI
Since the concept of Circular Business is still emerging, creating effective circular value chains can be challenging. VCG.AI is a solution platform designed to identify biowaste valorization cases specific to various residuals, sectors, countries, and specific conditions.
The platform assists in identifying and valuing different residual streams by assessing their commercial viability, thereby offering insights into the most feasible implementation options. This process involves analyzing waste streams, evaluating conversion technologies, and identifying suppliers and potential buyers.
In a nutshell, VCG.AI analyzes publicly available company data to help BSO harvest the full value of various types of waste of their members. This platform aims to demonstrate that Circular Economy is not just an “alternative business model” but a practical and actionable approach to business implementation and investment.
