Ref.

Ares(2017)460623 - 27/01/2017

Grant Agreement No.

634699

Project Acronym
FRESH-DEMO

Project title
Waste reduction and quality improvement of fruits and
vegetables via an innovative and energy-efficient
humidification/antimicrobial technology

Type of the action: Innovation Action

Call identifier: H2020-SFS-2014-2

Topic: SFS-17-2014:
Innovative solutions for sustainable novel food processing

Deliverable Number: D 5.2

Title: Report on cost benefit analysis

Due date of deliverable: Month 23

Start date of project: 1st March 2015

Duration: 24 Months

Responsible Organisation: 9- DTU

Date of submission: 28/01/2017

Version: 1

This project has received funding from the European Union’s Horizon 2020 research and innovation programme
under grant agreement No 634699
Dissemination Level
PU Public, fully open, e.g. web X
CO Confidential, restricted under conditions set out in Model Grant Agreement
CI Classified, information as referred to in Commission Decision 2001/844/EC
 D 5.2: Report on cost benefit analysis

Table of content

1. SUMMARY ........................................................................................................................................................ 3

2. OBJECTIVES ..................................................................................................................................................... 3

3. MAJOR FINDINGS AND RECOMMENDATIONS ...................................................................................... 4

4. METHODS ......................................................................................................................................................... 5

4.1. Scope of the assessment ........................................................................................................................................... 5

4.2. Model parameters and data sources ......................................................................................................................... 5

4.3. Net present value ...................................................................................................................................................... 5

4.4. Total present value of costs ....................................................................................................................................... 6

4.5. Total present value of benefits .................................................................................................................................. 6

4.6. Monetization of environmental impacts ................................................................................................................... 8

5. RESULTS AND DISCUSSION ......................................................................................................................11

5.1. Monetized environmental impacts .......................................................................................................................... 11

5.2. Does humidification bring economic benefits? ........................................................................................................ 12

5.1. Limitations .............................................................................................................................................................. 14

6. CONCLUSIONS ...............................................................................................................................................14

7. REFERENCES .................................................................................................................................................15

ANNEX .....................................................................................................................................................................16

Environmental impacts as basis for monetization ................................................................................................................ 16

Calculated costs and benefits ............................................................................................................................................... 17

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 D 5.2: Report on cost benefit analysis

1. Summary
Cost benefit analysis (CBA) showed that application of humidifiers in the post-harvest steps of fruit and
vegetables is generally a sound investment. The net present value (NPV) is equal to 202,000-228,900
and 427,400-481,100 € per fruit and vegetables sold in two supermarket displays different in size (12.5-
m2 and 25-m2 displays, respectively) over duration of a 15 years. Although the largest contributor to the
NPV were benefits associated with monetized environmental impacts, the contribution from benefits
from increased supermarket turnover, benefits from increased weight during transport, and benefits
from reduced amount of the biowaste to be disposed of, were also large (ca. 50% of total benefits).
Even disregarding the monetized environmental impacts the economic benefits were nearly 6 times
higher than costs over the 15-year time horizon. Capital and operational expenditures were found to be
small compared to the potential benefits (with operational expenditures being ca. 2 times higher than
capital expenditures). The results from the CBA point to the conclusion that when developing the
technology further the focus should be put on ensuring that there is an increasing supermarket turnover
when humidification is used, and ensuring that humidifiers allow reducing food losses in the post-harvest
as these largely influence benefits associated with reduced disposal of biowaste. They also suggest that
further technological development of the humidifier installations that increase capital and operational
expenditures can be justified (from a cost-benefit perspective), provided that humidifiers reduce losses
in the post-harvest.

2. Objectives
To determine whether humidification systems are sound investment in the fruit and vegetable sector,
cost-benefit analysis (CBA) is carried out. First, we assessed economic performance of the humidification
technology relative to the baseline system with conventional cooling without humidification system,
quantifying trade-offs between costs (associated with capital expenditures and maintenance of the
humidification units) and benefits (stemming from e.g. higher supermarket turnover, reduced amount of
biowaste, energy and labour needs, and optimized transportation when humidification is used instead of
conventional cooling). Second, we assessed trade-offs between environmental and economic impacts.
For this purpose, environmental impacts quantified using life cycle assessment (LCA) in T5.1 of this work
package (please see D5.1) were monetized using the Stepwise method, taking into account the
monetary value of environmental burdens and benefits associated with each endpoint impact category
contributing to the LCA areas of protection: resource use, ecosystem quality, and human health.
The benefits calculated using the CBA methodology are naturally distributed between actors in the post-
harvest value chain: mainly supermarkets, but also including transport actors who benefit from
optimized transportation, and the whole society which benefits from the improved quality of the
environment. All actors must (ideally) be considered when assessing the economic performance of the
technology. We note that this perspective, although common in CBA, deviates slightly from just single-
stakeholder perspective interested to maximize benefit of single actor only irrespective of potential costs
and other actors in the value chain and irrespective potential costs and benefits associated with
environmental burdens and benefits.

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 D 5.2: Report on cost benefit analysis

This deliverable is structured as follows. First, we present major findings from the CBA, including a brief
overview of results (i.e. environmental and economic performance of the technology and tradeoffs
between economic and environmental impacts). Details of the methods used and data sources, followed
by detailed presentation and interpretation of the results, are presented thereafter.

3. Major findings and recommendations

1. CBA results suggest that application of humidifiers in the post-harvest steps of fruit and vegetables is
generally a sound investment. The net present value (NPV) is equal to 202,000-228,900 and
427,400-481,100 € per fruit and vegetables sold in two supermarket displays different in size (12.5-
m2 and 25-m2 displays, respectively) over duration of a 15 years. The range reflects sensitivity to
method used to quantity environmental impact data (process-based vs. hybrid approach, as
explained in D5.1.) that are monetized.
2. The largest contributor to the NPV are benefits associated with monetized externalities
(environmental impacts), followed by benefits from increased supermarket turnover, benefits from
increased weight during transport, and benefits from reduced amount of the biowaste to be disposed
of.
3. Capital and operational expenditures are found to be small compared to the potential benefits (with
operational expenditures being ca. 2 times higher than capital expenditures). Indeed, even
disregarding the monetized externalities (e.g. assuming that there is no change in environmental
performance relative to conventional system), leads to benefits which are nearly 6 times higher than
costs over the 15-year time horizon.
4. The largest benefits when externalities are monetized come from 5 impact categories: agricultural
land occupation where benefits stem from avoided agriculture due to reduced food losses, but also
freshwater ecotoxicity in the area of protection ecosystem quality. The largest benefits associated
with human health come from avoided impacts from climate change, and to some extend from
formation of particulate matter. These findings are generally similar when hybrid-LCA results are
used instead of process-based LCA results, although more weight (and thus monetary value) is given
to human health benefits when hybrid-LCA results are used.
5. When optimizing the economic performance of the technology further and expanding application to
other markets and countries, the focus should be put on: (i) ensuring that there is an increasing
supermarket turnover when humidification is used, as measured for two Dutch supermarkets, and
(ii) ensuring that humidifiers allow reducing food losses in the post-harvest as these are decisive for
the overall reduction in environmental impacts (see D.5.1), and furthermore they influence largely
benefits associated with reduced disposal of biowaste.
6. Finally, further technological development of the humidifier installations that increase capital and
operational expenditures can be justified from a cost-benefit perspective, provided that the two
conditions mentioned in the point above are met.

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 D 5.2: Report on cost benefit analysis

4. Methods
4.1. Scope of the assessment
The CBA was performed for average generic fruit and vegetable. This choice of the scope of the analysis
was determined by the availability of data, as the most important data on costs and benefits come from
trials performed in a supermarkets (over 4-year time horizon, during the project and before), using two
displays of different size where various fruit and vegetables were sold, and thus allocation of costs and
benefits to each specific fruit and vegetable was not possible. Note, that this chose of the scope deviates
slightly from the scope of the process-based LCA, where four different fruit and vegetables were
assessed. To allow comparison between environmental and economic tradeoffs, where environmental
tradeoffs depend on the type of fruit and vegetable, we thus assumed that the data measured apply to
either of the four fruit and vegetables from the demonstration case studies. As input to monetization, we
used either average environmental impacts (across the four produce types) derived used process based
LCA. As a sensitivity check to test the robustness of our conclusions, we monetized environmental
impacts derived for generic fruit/vegetable using hybrid LCA (see D.5.1. for details).

Two scenarios were considered: (i) in the first scenario small supermarket display (area 12.5 m2) is
considered, requiring installation of 1 humidifier system; (ii) in the second scenario the display is large
(25 m2), and requires installation of 2 humidifiers. As different amounts of fruit and vegetables are
displayed per unit of time, the amounts of produce, number of trucks, and humidifier systems were
scaled to the amount of produce needed to fulfill the displays to allow for meaningful comparisons
between the two displays. Details of the methods and underlying data are presented in the below.

4.2. Model parameters and data sources

The data for the CBA come from three main sources: (i) measurements performed during the project
(e.g. waste, turnover, energy use, water use) in the retail using two Dutch supermarkets; (ii)
calculations performed for the LCA in D5.1, where systems boundaries were defined and life cycle
inventoried modelled and documented; and (iii) other data, being either data retrieved from literature,
calculated, or assumed based on reasonable expectations. Details of the data use to calculate present
value of cost and benefits, are presented below and are synthesized in Table 1.

4.3. Net present value

The net present value (NPVn, in €) is calculated as the difference between the total present value of
benefits (PVB, in €) and the total present value of costs (PVC, in €) of installing humidification systems
in post-harvest stages of fruit and vegetables. NPV was calculated for each year t, for the duration of
the project being is equal to life time of the humidifier, n=15 yr. Discount rate r=5% was used, which is
within range of expected values (from 3 to 7%).
n
PVBt - PVCt 
NPVn  
t 0 1  r t

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 D 5.2: Report on cost benefit analysis

Because humidifiers do not replace existing conventional cooling systems (but modify energy
consumption, amount of waste generated, retail sales) positive NPV when all the differences between
conventional and humidification-based systems are considered, indicate better economic performance as
compared with the conventional cooling systems. Positive NPV thus suggests that humidification is
expected to be a sound investment in the post-harvest fruit and vegetable supply sector.

4.4. Total present value of costs

The total present value of costs at time t (PVCt, in €/yr) was calculated taking into account capital
expenditure for the humidification installations, assumed equal to rental (CCAPEX,t, in €/yr), total annual
operational expenditures of humidification installation (COPEX,t, in €/yr). As CCAPEX,t and COPEX,t differ
between humidifier systems and post-harvest stages, they represent the sum of costs at each relevant
stage. Note that in calculations we did not include costs (and benefits) associated with storage in
distribution centers and wholesaler, as these are expected to be small due to large amounts of produce
treated (per unit of humidification system installed) when compared to 1 or 2 units installed in
supermarket displays or comparable number of units needed for transportation.

PVCt  CCAPEX,t  COPEX,t

Capital expenditures
Capital expenditures (CCAPEX,t) for the humidifying system are based on the business plan developed in
Fresh-demo and include the annualized unit cost of the whole installation (comprised of humidifiers and
the associated equipment like the reverse osmosis, controller, humidity and temperature sensors, and a
pump which are needed for the whole post-harvest supply chain). These costs are assumed equal to
rental cost and occur in each project year starting from year 1.
Operational expenditures
Operational expenditures (COPEX,t) at time t are also based on the business plan for humidifier systems.
The OPEX cost includes the cost of maintenance of the humidifiers (mainly spare parts and human
labour), cost of electricity and water consumption. The cost of electricity consumption during use of the
humidifying systems was measured. The cost of water consumption during use was either measured (in
supermarkets) or was calculated from data on water use during average use as provided by the
manufacturer and cost of water in the respective country.

4.5. Total present value of benefits

The benefits of humidification use stem from various factors. First, sales increase (Csales,t, in €/yr) due to
increasing turnover of fruit and vegetables as customers more often go to the supermarket when
humidifiers are installed, and due to due to increasing overall turnover in the supermarket (which is an
indirect effect of having humidifiers installed). Second, there amount of biowaste to be disposed of is
reduced when humidifiers are installed, bringing benefits (Cdisposal,t, in €/yr). Although humidifiers use
some energy (as captured by OPEX), fruit and vegetables in the supermarket do not need to be brought

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 D 5.2: Report on cost benefit analysis

back to cold storage in the supermarket overnight, brining energy benefits (Cenergy,t, in €/yr), and labour
benefits (Clabour,t, in €/yr). When humidification is applied during transport, fruit and vegetable typically
increase in weight (1-1.5%). This increase allows eliminating the current practice in the supply chain of
transporting 2-3% more of fruit and vegetables to compensate for decrease in weight due drying out in
conventional systems. Thus, the benefits from increased weight when humidification is installed (Cweight
transport,t, in €/yr) correspond to 1-1-5% increase in produce weight during transport. Finally, there is cost
associated with change in environmental impacts when humidification systems are employed (Cexternalities,t,
in €/yr). Note, that as environmental impacts might increase or decrease (depending on the category of
impact), this cost can be positive (brining benefits when impacts are reduced) or positive (reducing
benefits due to higher emissions or resource extraction).

PVBt  Csales,t  Cdisposal,t  Cenergy,t  Clabour,t  Cweight transport,t  Cexternalities,t

Benefits from increasing sales

Benefits from increasing sales (Csales,t) at year t were calculated basing on measurements of changes in
turnover of fruit and vegetables, and the overall turnover. These turnovers have been measured for 4
years, during the project and before. Although the average amount a client was buying did not change
when humidification system was installed, more clients were shopping in the supermarket.
Benefits from avoided disposal of biowaste
Benefits from avoided disposal of biowaste (Cdisposal,t) at year t were also based on measurements in the
same supermarkets for 4 years. The measurements included quantification of waste of fruit and
vegetables daily for 5 categories of produce (vegetables, fruit, citrus, exotic, and rest, excluding
bananas, potatoes, and packed vegetables). The values presented in Table 1 are average values
measured across all included produce categories.
Benefits from avoided energy consumption
Benefits from avoided energy consumption (Cenergy,t) at year t were calculated using data on energy
savings retrieved from the measurements in the supermarket. In both supermarkets the benefits from
reduced energy were higher compared to operational costs associated with energy consumption by
humidifier systems themselves.
Benefits from avoided labour
Benefits from avoided labour (Clabour,t) at year t were based on measurements in the two supermarkets,
calculated using an hourly rate of € 10,61.

Benefits from increase in weight during transport

Benefits from increase in weight during transport (Cweight transport,t) at year t are calculated assuming 1.5%
increase in weight, and a price of farm production retrieved for the four fruit and vegetables.
Benefits from monetized externalities

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 D 5.2: Report on cost benefit analysis

Benefits (or burdens) from externalities (Cexternalities,t) at time t were calculated by monetizing
environmental impacts (that is, difference in environmental impacts between conventional and
humidification-based systems) using the Stepwise2006 method (Weidema 2009).

4.6. Monetization of environmental impacts

In Stepwise2006, endpoint indicator results for each of the three areas of protection (human health,
ecosystem quality, and resources) are monetized in EURO (€), allowing to express results of the life
cycle assessment in a single score and compare them with other costs and benefits in CBA. Details of
the monetization procedure are explained in Weidema et al. (2006) and Weidema (2009). The following
procedure was used to monetize environmental impacts:
1) Environmental impact scores presented in D5.1 were recalculated using the endpoint method
ReCiPe 2008, with hierarchist (H) perspective. There recalculation of environmental impacts using
different method was necessary as the ILCD method used in D5.1, although being the best EU-
recommended practice, does not yet include modeling at endpoint (where the existing approaches
were found immature), where impact scores are expressed in lives of year lost (human health) or
species × years (ecosystem quality). Modeling impacts at midpoint levels, as done in D5.1, is
sufficient for comparison between systems, but is not sufficient for monetization which requires that
the impacts can be expressed in terms to which monetary preferences can be attributed (Weidema
et al. 2006). ReCiPe 2008 (H) was chosen among other alternatives as it was ranked best in 5 out of
15 ILCD impact categories at endpoint.
2) Monetary valuation from Stepwise2006 was done using conversion factors between the endpoint
indicators from Stepwise2006 and those of ReCiPe 2008. This was necessary as although the
different impact assessment methods use the same endpoint categories, they deviate slightly in the
definitions and units of the endpoint category indicators. As in Weidema (2015), the conversion
factor were: (i) for human health 1 Disability Adjusted Life Year (DALY) = 74,000 EUR2003 (in 2003
Euros); (ii) for ecosystem quality, 1 lost species×year = 9.5×106 EUR2003; (iii) for resources, 1
USD2000 (in 2000 U.S. dollars) =0.862 EUR2003. The conversion factors are applied to endpoint
indicator scores in ReCiPe 2008 expressed in DALY, species×year, or USD2000.

Table 1 Data and parameters underlying the cost benefit analysis needed to compute individual costs or benefits.
The data is primarily based on experiments carried out in two supermarkets, combined with data from literature,
D5.1 on LCA, and data assumed based on realistic expectations. The costs and benefits are presented in Tables 2
and 3.

Small Large
Parameter display display Source
Supermarket
Area of display (m2/display) 12.5 25 measured (determined by case study)
Number of humidifiers per display
(unit/display) 1 2 measured (determined by case study)
assumed based on reasonable
Display depth (m) 0.25 0.25 expectations

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Volume of produce per display

(m3/display) 3.125 6.25 assuming 0.25 m depth of the display
Average produce density (kg/m3) 1000 1000 Rahman 2009, p 473
Display utilization rate (m3/m3) 0.6 0.6 assumed, see D5.1
Mass of produce per display
(kg/display) 1875 3750 calculated
Average shelf life of produce in retail assumed based on reasonable
(days) 2 2 expectations
Weight of produce displayed per year calculated based on measured and
(kg/yr/display) 337500 675000 assumed data
Increase in fruit and vegetable
turnover (%) 10 5 measured
measured (small) or assumed (large)
as no measurements were done for the
Increase in overall turnover (%) 0.50 0 large display
Reduction in amounts of biowaste (%) 35 25 measured
Reduction in labour needed not Measured; only total benefit in € was
(min/day/display) determined 28 measured for display 1 (see Table 3)
Energy use by humidification system
(kWh/yr/display) 3942 7884 measured
Water use (m3/yr/display) 65 130 measured
assumed, within range of expected
Discount rate (%) 5% 5% values (3-7%)
Transportation
assumed based on reasonable
expectations /2 times per week, 30
Number of truck drives (drive/yr) 60 60 weeks per year)
Weight of produce transported in a assumed based on reasonable
truck (kg/drive) 10000 10000 expectations
Weight of produce transported per
year (kg/yr) 600000 600000 calculated
Increase in produce weight during assumed based on reasonable
transport (%) 1.5 1.5 expectations
determined by demonstration case
Price of farm production (€/kg) 0.45 0.45 study
Water use at truck (kg/h) 6 6 data from manufacturer
assumed based on reasonable
Duration of truck drive (h/drive) 8 8 expectations
Water use due to product transport
per year (m3/yr) 2.88 2.88 calculated
Generic data
Price of energy (EUR/kWh) 0.12 0.12 data from supermarket
Price of water (EUR/m3) 1.8 1.8 data from supermarket
Impact assessment data (process-based LCA)
Monetized IS - human health (EUR/kg
sold) 0.0106 0.0106 calculated, average across 4 vegetables
Monetized IS - ecosystem quality
(EUR/kg sold) 0.0226 0.0226 calculated, average across 4 vegetables
Monetized IS - resources (EUR/kg
sold) 0.0026 0.0026 calculated, average across 4 vegetables

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Impact assessment data (hybrid LCA)

Monetized IS - human health (EUR/kg
sold) 0.0207 0.0207 calculated, generic fruit/vegetable
Monetized IS - ecosystem quality
(EUR/kg sold) 0.0066 0.0066 calculated, generic fruit/vegetable
Monetized IS - resources (EUR/kg
sold) 0.0012 0.0012 calculated, generic fruit/vegetable

Table 2 Costs underlying calculation of PVC (eq. 2). The data is primarily retrieved from product manufacturer
(CEN) or are calculated.

Small Large
Cost display display Source
Supermarket
Cost of rental or annuity
(EUR/yr/display) 500 1000 determined by case study
Cost of maintenance (EUR/yr/display) 500 1000 determined by case study
Cost of energy use by humidification
system (EUR/yr/display) 473 946 calculated based on measurements
Cost of water use (EUR/yr/display) 117 234 calculated based on measurements
Transport
Cost of rental or annuity of 1
humidification system in a truck
(EUR/yr) 350 350 determined by case study
Cost of maintenance of 1
humidification system in a truck
(EUR/yr) 650 650 determined by case study
Cost of rental or annuity (EUR/yr) 197 394 calculated
Cost of maintenance (EUR/yr) 366 731 calculated
Cost of water use by 1 humidification
system in a truck (EUR/yr) 5.2 5.2 calculated based on measurements
Cost of water use (EUR/yr/display) 2.9 5.8 calculated

Table 3 Benefits underlying calculation of PVB (eq. 3). The data is primarily retrieved from product manufacturer
(CEN) or are calculated.

Small Large
Cost display display Source
Supermarket
Benefit due to higher fruit and
vegetable turnover (EUR/yr/display) 1800 9600 measured
Benefit due to higher overall turnover measured (small) or not determined
(EUR/yr/display) 1500 0 (large) and assumed equal to 0
Benefit due to reduced waste
disposal (EUR/yr/display) 2350 5200 measured
Benefit due to reduced energy
consumption due to no need for cold
storage (EUR/yr/display) 720 1440 measured

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Benefits due to labour savings measured (small) or calculated based on

(EUR/yr/display) 1750 2139 measurements (large)
Transport
Benefits due to weight savings of one
humidification system in a truck
(EUR/yr/truck) 4050 4050 measured
Benefits due to weight savings
(EUR/yr/display) 2278 4556 calculated

5. Results and discussion

Below, we present monetized environmental impacts and the net present value for the two supermarket
displays. Then, we interpret out findings.

5.1. Monetized environmental impacts

The change in life cycle impact assessment method from ILCD to ReCiPe 2008 did not change our
conclusions about environmental performance of the humidification technology relative to conventional
systems. Generally, benefits are from 5 to 10% across impact categories (average across the four fruit
and vegetables) relative to conventional systems (see Table A1). This allows using the ReCiPe 2008
endpoint scores as input to monetization and further evaluation of tradeoffs between economic and
environmental impacts.
Monetized environmental impacts (isolated from any other economic costs and benefits) for all 15
ReCiPe 2008 impact categories are presented in Figure 1. The values correspond to (monetized)
difference between conventional system and system with humidification, expressed in € per 1 kg of
fresh fruit/vegetable sold. As this difference is in all cases except ozone depletion positive, confirming
improved environmental performance of humidification-based systems, the monetized impacts are also
positive suggesting that there will be monetary benefits associated with using humidification systems in
food supply. The extent of these benefits will depend on the monetary value of impacts, as presented in
the figure below, and on the amount of produce sold throughout 15-year project duration in each
supermarket display.
Figure 1 also shows that the largest benefits when externalities are monetized come from 5 impact
categories: agricultural land occupation where benefits stem from avoided agriculture due to reduced
food losses, but also freshwater ecotoxicity in the area of protection ecosystem quality. The largest
benefits associated with human health come from avoided impacts on human health from climate
change, and to some extend from formation of particulate matter. The benefits for the area of
protection resources are the smallest, and mainly stem from avoided depletion of fossils when
humidification is installed relative to conventional systems.

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0.025

Fossil depletion

Metal depletion

0.020
Natural land transformation

Urban land occupation

Agricultural land occupation

0.015
Marine ecotoxicity

Freshwater ecotoxicity
EUR/kg sold

Terrestrial ecotoxicity

0.010 Freshwater eutrophication

Terrestrial acidification

Climate change Ecosystems

0.005 Ionising radiation

Particulate matter
formation
Photochemical oxidant
formation
0.000 Human toxicity
Human Ecosystem Resources
health quality
Ozone depletion

Climate change Human

Health
-0.005
Figure 1 Monetized environmental impacts calculated using the Stepwise 2006 method applied to endpoint scores
derived from ReCiPe 2008, expressed in € per 1 kg of fruit/vegetable sold (see Appendix, Table A1 for details of
endpoint impact scores). The monetized environmental impacts are used as input to calculation of cost associated
with environmental impacts (Cexternalities,t) in eq 3). Calculated costs and benefits are also presented in tabular form
in Appendix, Table A3 and A4.

5.2. Does humidification bring economic benefits?

Figure 3 shows the tradeoff between costs and benefits for the two displays over 15-year project
duration. As the benefits outweigh the cost in both cases, the net present values are positive. When
discounting of 5% is used, the NPV is equal to 228,900 and 481,100 EUR per display, respectively.
For the small display (display 1; left panel in Fig. 3), the largest benefits are associated with monetized
externalities (driven by reduced impacts on ecosystem quality), followed by benefits from increased
sales, reduced biowaste disposal, and weight increase during transport. The benefits from increased
sales are distributed nearly equally (in monetary terms), between higher turnover of fruit and
vegetables, and overall supermarket turnover. Costs are 14 times smaller compared to all the benefits

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over the 15-year time period, and are driven mainly by operational costs (OPEX) associated with
maintenance and running (energy consumption) of humidifiers. Note that these costs are outweighed by
benefits from decrease need for conventional cooling in the night, which is treated separately and
included as benefit; black bard in Fig. 3). Overall, the operational costs are nearly twice higher
compared to capital costs (CAPEX) associated with manufacturing of humidifier installation.
For the large display (display 2; right panel in Fig. 3), the largest contributors to the overall net present
value are, again, benefit associated with externalities, followed by the benefit form increasing sales,
disposal of biowaste, and weight change. There is some benefit associated with reduced labor, although
its contribution is generally small (4.5% of total benefits over a 15-year time period). Comparison
between the two displays is not straightforward as the area of the large display is larger (2 times) that
of the area of the first display. Yet, this increase in display area (and thus the weight of produce sold) by
a factor of 2, increases benefits associated with higher fruit and vegetable turnover by a factor of 2.9,
and the benefits associated with waste disposal by a factor of 2.2, resulting in overall increase in total
present value of benefits by a factor 2.1. This small increase in benefits with increasing scale increase is
brought about by higher fruit and vegetable turnover in the second supermarket (despite the overall
turnover being equal to zero due to no measurements available), and less waste in the second
supermarket.

600,000 600,000

550,000 550,000

500,000 500,000

450,000 450,000

400,000 400,000
Costs and benefits (EUR/display)
Costs and benefits (EUR/display)

externalities externalities
350,000 350,000
weight transport weight transport
labour 300,000 labour
300,000
energy energy
250,000 disposal 250,000 disposal
sales sales
200,000 200,000
OPEX OPEX
CAPEX 150,000 CAPEX
150,000

100,000 100,000

50,000 50,000

0 0

-50,000 -50,000
Display 1 (small) Display 2 (large)

Figure 3 Cost and benefits used in eq. 1 and 2 to calculate the net present value. All costs and benefits are
discounted (discount rate 5%) over the 15 year time horizon, resulting in the NPV of 228,900 and 481,100
€/display for display 1 and 2, respectively. Process-based environmental impacts were monetized. Benefits derived
from hybrid-LCA are presented in Appendix, Tables A5-A6.

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5.1. Limitations
Our findings show that humidification will bring economic benefits. However, our analysis is not without
limitations, as several assumptions that had to be made. We will show that they do not have large
influence on our conclusions, although they may change the magnitude of the net present value.
First, our conclusions are expected to be rather robust to other supermarkets, at least in the
Netherlands. Although the variability in turnover and resulting benefits is up to a factor of 3 between the
two Dutch supermarkets, the NPV value changes by 5% when the NPV is normalized to the display area,
suggesting that the overall economic performance is not very sensitive to the turnover as there are
other important benefits (like benefits from reduced disposal, or weights). Due to variability in price
ranges between fruit and vegetables across European countries, humidification is expected to bring
more benefits in countries where the prices are the largest – which are often countries which import
fruit and vegetables.
Second, we included benefits from transportations and increase in weight assuming that economic
benefits linearly relate to increase in weight. This is only the case for those fruit and vegetables which
are sold by weight (most fruit and vegetables), but not the case for fruit and vegetables sold by piece
(e.g. cauliflower). Exclusion of these benefits for vegetables sold by piece would reduce the NPV
correspondingly, but would not change the conclusion about the overall economic performance of the
technology. On the other hand, we did not consider potential benefits from increased life time of the
fruit and vegetables (ca. 3 days, as measured in D4.2) which would result in trucks being filled
completely during transportation. This benefit is fruit-specific and thus uncertain to quantify at this point,
but could be an important contributor to the net present value in case transportation distance is long
and cost of transportation is large.
Finally, our monetization of environmental impacts was done using impact scores calculated using
process based LCA for generic fruit/vegetable. When environmental impacts derived using hybrid-LCA,
as explained in D5.2, are used for a generic produce, the NPV is comparable to that calculated using
process-based LCA; it is equal to 202,000 and 427,400 €/display for display 1 and 2, respectively (see
Tables A3-A6). The small decrease in NPV is brought about solely by slightly different environmental
profile and associated benefits from monetizing externalities. Although the major contributors to
monetized environmental benefits state are the same, the important of human health related impacts
(mainly due to climate change and particulate matter formation) are larger as compared to impacts on
ecosystems and resources. Although this difference does not change the overall conclusion, it illustrates
some sensitivity of the outcome to the LCA method chosen (process-based vs. hybrid).

6. Conclusions
The conclusions are summarized in section “2. Major findings and recommendations”. Please find them
there.

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 D 5.2: Report on cost benefit analysis

7. References
Rahman, S.F., Food Properties Handbook, Second Edition. CRC Press, 2009.
Weidema, B.P., Hermansen, J., Kristensen, T., Halberg, N., 2006. Environmental Improvement Potentials
of Meat and Dairy Products. unpublished
Weidema, B.P., 2009. Using the budget constraint to monetarise impact assessment results. Ecol. Econ.
68, 1591–1598.
Weidema, B.P., 2015. Comparing Three Life Cycle Impact Assessment Methods from an Endpoint
Perspective. J. Ind. Ecol. 19, 20–26.

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 D 5.2: Report on cost benefit analysis

Annex
Environmental impacts as basis for monetization

Table A1 Environmental impacts calculated using ReCiPe 2008 (H) at endpoint (process-based LCA). The impact
scores were averaged across the four fruit and vegetables and monetized using Stepwise 2006 methods, as
explained in the main part.
RECIPE ENDPOINT H conventional system humidification system
Scenario no. 1 2 3 4 21 22 23 24
Food losses Average Average Average Average Average Average Average Average
Location Baseline Baseline Baseline Baseline Baseline Baseline Baseline Baseline
Fruit strawberries peaches grapes asparagus strawberries
peaches grapes asparagus
Humidifier efficiency high high high high
Impact category Unit
Climate change Human Health DALY 2.1E-06 1.1E-06 1.3E-06 2.1E-06 1.9E-06 1.0E-06 1.3E-06 1.9E-06
Ozone depletion DALY 1.5E-09 8.2E-10 1.0E-09 7.2E-10 5.2E-09 3.4E-09 3.6E-09 3.5E-09
Human toxicity DALY 2.3E-07 9.6E-08 1.3E-07 2.8E-07 2.2E-07 9.0E-08 1.3E-07 2.6E-07
Photochemical oxidant formation DALY 1.8E-10 1.2E-10 1.2E-10 2.0E-10 1.7E-10 1.1E-10 1.2E-10 1.8E-10
Particulate matter formation DALY 5.1E-07 2.9E-07 3.4E-07 7.3E-07 4.8E-07 2.6E-07 3.3E-07 6.7E-07
Ionising radiation DALY 2.0E-09 8.5E-10 1.1E-09 9.8E-10 1.9E-09 7.7E-10 1.1E-09 9.1E-10
Climate change Ecosystems species.yr 1.2E-08 6.3E-09 7.5E-09 1.2E-08 1.1E-08 5.8E-09 7.3E-09 1.1E-08
Terrestrial acidification species.yr 2.9E-11 1.7E-11 2.0E-11 6.0E-11 2.6E-11 1.5E-11 1.8E-11 5.5E-11
Freshwater eutrophication species.yr 1.4E-11 1.0E-11 9.7E-12 2.3E-11 1.2E-11 8.5E-12 8.7E-12 2.1E-11
Terrestrial ecotoxicity species.yr 2.8E-10 3.5E-10 3.7E-11 4.9E-09 2.6E-10 3.1E-10 3.5E-11 4.5E-09
Freshwater ecotoxicity species.yr 2.7E-11 1.3E-11 1.7E-11 2.2E-11 2.6E-11 1.2E-11 1.6E-11 2.0E-11
Marine ecotoxicity species.yr 5.0E-12 2.3E-12 3.1E-12 2.7E-12 4.8E-12 2.2E-12 3.0E-12 2.5E-12
Agricultural land occupation species.yr -4.7E-09 -3.9E-09 -3.1E-09 9.4E-08 -4.3E-09 -3.6E-09 -2.9E-09 8.7E-08
Urban land occupation species.yr 7.8E-10 3.5E-10 5.3E-10 2.0E-10 7.4E-10 3.3E-10 5.2E-10 1.9E-10
Natural land transformation species.yr 6.9E-10 3.9E-10 4.7E-10 3.7E-10 6.2E-10 3.5E-10 4.3E-10 3.4E-10
Metal depletion $ 4.9E-03 2.4E-03 3.5E-03 5.6E-03 4.6E-03 2.3E-03 3.4E-03 5.2E-03
Fossil depletion $ 7.2E-02 3.7E-02 4.5E-02 4.0E-02 6.5E-02 3.3E-02 4.2E-02 3.7E-02

Table A2 Environmental impacts calculated using ReCiPe 2008 (H) at endpoint (hybrid-LCA). The impact scores
are calculated for a generic fruit and vegetable (see D5.1). They were monetized using Stepwise 2006 methods, as
explained in the main part.

HYBRID-RECIPE ENDPOINT H conventional system humidification system

Scenario no.
Food losses Average Average
Location Baseline Baseline
Fruit fruit vegetables fruit vegetables
Humidifier efficiency high
Impact category Unit Total
Climate change Human Health DALY 2.0E-06 1.9E-06
Ozone depletion DALY 7.0E-10 3.2E-09
Human toxicity DALY 6.3E-08 6.2E-08
Photochemical oxidant formation DALY 1.9E-10 1.7E-10
Particulate matter formation DALY 7.7E-07 6.5E-07
Ionising radiation DALY 6.3E-10 5.9E-10
Climate change Ecosystems species.yr 1.2E-08 1.1E-08
Terrestrial acidification species.yr 9.5E-11 7.7E-11
Freshwater eutrophication species.yr 7.6E-12 6.4E-12
Terrestrial ecotoxicity species.yr 3.2E-11 2.8E-11
Freshwater ecotoxicity species.yr 1.1E-11 1.0E-11
Marine ecotoxicity species.yr 2.0E-12 1.9E-12
Agricultural land occupation species.yr -3.9E-09 -3.6E-09
Urban land occupation species.yr 3.0E-10 2.9E-10
Natural land transformation species.yr 3.3E-10 2.9E-10
Metal depletion $ 2.3E-03 2.2E-03
Fossil depletion $ 4.3E-02 4.1E-02

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 D 5.2: Report on cost benefit analysis

Calculated costs and benefits

Table A3 Costs and benefits underlying the net present value for display 1, with externalities monetized basing on
environmental impacts computed using process-based LCA.
Cweight
CAPEX Cdisposal Cenergy Clabour transport, t Cexternaliti PVB,t NPV,t
Year (EUR) OPEX (EUR) PVC (EUR) Csales (EUR) (EUR) (EUR) (EUR) (EUR) es (EUR) (EUR/yr) (EUR/yr)
0 -500 0 -500 0 0 0 0 0 0 0 -500
1 -476 -973 -1,449 3,300 2,350 720 1,750 2,278 12,101 22,499 21,050
2 -454 -927 -1,380 3,143 2,238 686 1,667 2,170 11,525 21,428 20,048
3 -432 -883 -1,314 2,993 2,132 653 1,587 2,066 10,976 20,407 19,093
4 -411 -841 -1,252 2,851 2,030 622 1,512 1,968 10,453 19,436 18,184
5 -392 -801 -1,192 2,715 1,933 592 1,440 1,874 9,956 18,510 17,318
6 -373 -762 -1,136 2,586 1,841 564 1,371 1,785 9,482 17,629 16,493
7 -355 -726 -1,081 2,463 1,754 537 1,306 1,700 9,030 16,789 15,708
8 -338 -692 -1,030 2,345 1,670 512 1,244 1,619 8,600 15,990 14,960
9 -322 -659 -981 2,234 1,591 487 1,184 1,542 8,191 15,228 14,247
10 -307 -627 -934 2,127 1,515 464 1,128 1,468 7,800 14,503 13,569
11 -292 -597 -890 2,026 1,443 442 1,074 1,399 7,429 13,813 12,923
12 -278 -569 -847 1,929 1,374 421 1,023 1,332 7,075 13,155 12,308
13 -265 -542 -807 1,838 1,309 401 974 1,269 6,738 12,528 11,721
14 -253 -516 -769 1,750 1,246 382 928 1,208 6,417 11,932 11,163
15 -241 -491 -732 1,667 1,187 364 884 1,151 6,112 11,364 10,632
Total -5,690 -10,605 -16,295 35,966 25,612 7,847 19,073 24,828 131,886 245,211 228,917

Table A4 Costs and benefits underlying the net present value for display 2, with externalities monetized basing on
environmental impacts computed using process-based LCA.
Cweight
CAPEX Cdisposal Cenergy Clabour transport, t Cexternaliti PVB,t NPV,t
Year (EUR) OPEX (EUR) PVC (EUR) Csales (EUR) (EUR) (EUR) (EUR) (EUR) es (EUR) (EUR/yr) (EUR/yr)
0 -1,000 0 -1,000 0 0 0 0 0 0 0 -1,000
1 -952 -1,946 -2,898 9,600 5,200 1,440 2,139 4,556 24,202 47,137 44,239
2 -907 -1,853 -2,760 9,143 4,952 1,371 2,037 4,339 23,050 44,893 42,132
3 -864 -1,765 -2,629 8,707 4,717 1,306 1,940 4,133 21,952 42,755 40,126
4 -823 -1,681 -2,504 8,293 4,492 1,244 1,848 3,936 20,907 40,719 38,215
5 -784 -1,601 -2,385 7,898 4,278 1,185 1,760 3,748 19,911 38,780 36,396
6 -746 -1,525 -2,271 7,522 4,074 1,128 1,676 3,570 18,963 36,933 34,662
7 -711 -1,452 -2,163 7,164 3,880 1,075 1,596 3,400 18,060 35,175 33,012
8 -677 -1,383 -2,060 6,823 3,696 1,023 1,520 3,238 17,200 33,500 31,440
9 -645 -1,317 -1,962 6,498 3,520 975 1,448 3,084 16,381 31,905 29,943
10 -614 -1,254 -1,868 6,188 3,352 928 1,379 2,937 15,601 30,385 28,517
11 -585 -1,195 -1,779 5,894 3,192 884 1,313 2,797 14,858 28,938 27,159
12 -557 -1,138 -1,695 5,613 3,040 842 1,251 2,664 14,151 27,560 25,866
13 -530 -1,084 -1,614 5,346 2,896 802 1,191 2,537 13,477 26,248 24,634
14 -505 -1,032 -1,537 5,091 2,758 764 1,134 2,416 12,835 24,998 23,461
15 -481 -983 -1,464 4,849 2,626 727 1,080 2,301 12,224 23,808 22,344
Total -11,380 -21,210 -32,589 104,627 56,673 15,694 23,312 49,657 263,772 513,735 481,145

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 D 5.2: Report on cost benefit analysis

Table A5 Costs and benefits underlying the net present value for display 1, with externalities monetized basing on
environmental impacts computed using hybrid LCA.
Cweight Cexternaliti PVB,t NPV,t
Year CCAPEX COPEX PVC Csales Cdisposal Cenergy Clabour transport es (EUR/yr) (EUR/yr)
0 -500 0 -500 0 0 0 0 0 0 0 -500
1 -476 -973 -1,449 3,300 2,350 720 1,750 2,278 9,635 20,033 18,584
2 -454 -927 -1,380 3,143 2,238 686 1,667 2,170 9,176 19,079 17,699
3 -432 -883 -1,314 2,993 2,132 653 1,587 2,066 8,739 18,171 16,856
4 -411 -841 -1,252 2,851 2,030 622 1,512 1,968 8,323 17,305 16,053
5 -392 -801 -1,192 2,715 1,933 592 1,440 1,874 7,927 16,481 15,289
6 -373 -762 -1,136 2,586 1,841 564 1,371 1,785 7,549 15,696 14,561
7 -355 -726 -1,081 2,463 1,754 537 1,306 1,700 7,190 14,949 13,868
8 -338 -692 -1,030 2,345 1,670 512 1,244 1,619 6,847 14,237 13,207
9 -322 -659 -981 2,234 1,591 487 1,184 1,542 6,521 13,559 12,578
10 -307 -627 -934 2,127 1,515 464 1,128 1,468 6,211 12,913 11,979
11 -292 -597 -890 2,026 1,443 442 1,074 1,399 5,915 12,299 11,409
12 -278 -569 -847 1,929 1,374 421 1,023 1,332 5,633 11,713 10,866
13 -265 -542 -807 1,838 1,309 401 974 1,269 5,365 11,155 10,348
14 -253 -516 -769 1,750 1,246 382 928 1,208 5,110 10,624 9,855
15 -241 -491 -732 1,667 1,187 364 884 1,151 4,866 10,118 9,386
Total -5,690 -10,605 -16,295 35,966 25,612 7,847 19,073 24,828 105,008 218,333 202,038

Table A6 Costs and benefits underlying the net present value for display 2, with externalities monetized basing on
environmental impacts computed using hybrid LCA.
Cweight
CAPEX Cdisposal Cenergy Clabour transport, t Cexternaliti PVB,t NPV,t
Year (EUR) OPEX (EUR) PVC (EUR) Csales (EUR) (EUR) (EUR) (EUR) (EUR) es (EUR) (EUR/yr) (EUR/yr)
0 -1,000 0 -1,000 0 0 0 0 0 0 0 -1,000
1 -952 -1,946 -2,898 9,600 5,200 1,440 2,139 4,556 19,270 42,205 39,307
2 -907 -1,853 -2,760 9,143 4,952 1,371 2,037 4,339 18,352 40,195 37,435
3 -864 -1,765 -2,629 8,707 4,717 1,306 1,940 4,133 17,478 38,281 35,652
4 -823 -1,681 -2,504 8,293 4,492 1,244 1,848 3,936 16,646 36,458 33,955
5 -784 -1,601 -2,385 7,898 4,278 1,185 1,760 3,748 15,853 34,722 32,338
6 -746 -1,525 -2,271 7,522 4,074 1,128 1,676 3,570 15,098 33,069 30,798
7 -711 -1,452 -2,163 7,164 3,880 1,075 1,596 3,400 14,379 31,494 29,331
8 -677 -1,383 -2,060 6,823 3,696 1,023 1,520 3,238 13,695 29,994 27,934
9 -645 -1,317 -1,962 6,498 3,520 975 1,448 3,084 13,043 28,566 26,604
10 -614 -1,254 -1,868 6,188 3,352 928 1,379 2,937 12,422 27,206 25,337
11 -585 -1,195 -1,779 5,894 3,192 884 1,313 2,797 11,830 25,910 24,131
12 -557 -1,138 -1,695 5,613 3,040 842 1,251 2,664 11,267 24,676 22,982
13 -530 -1,084 -1,614 5,346 2,896 802 1,191 2,537 10,730 23,501 21,887
14 -505 -1,032 -1,537 5,091 2,758 764 1,134 2,416 10,219 22,382 20,845
15 -481 -983 -1,464 4,849 2,626 727 1,080 2,301 9,733 21,316 19,853
Total -11,380 -21,210 -32,589 104,627 56,673 15,694 23,312 49,657 210,015 459,978 427,389

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