ACCRUAL-BASED COST–BENEFIT EVALUATION OF FABA WASTE TREATMENT PRACTICES IN THE NATIONAL FERTILIZER INDUSTRY

Abstract

This study examines policy frameworks for circular economy (CE) implementation through the utilization of Fly Ash and Bottom Ash (FABA) as a biochar-related resource to support soil revitalization and climate change mitigation in Indonesia’s fertilizer industry. Positioned within the context of State-Owned Enterprises (SOEs), the study addresses the gap between technical waste treatment practices and strategic, policy-oriented evaluations of efficiency, scalability, and socio-economic impact. Employing a quantitative research design, primary internal data from three fertilizer subsidiaries located in Java, Sumatra, and Kalimantan are analyzed using an accrual-based cost–benefit analysis framework. The analysis compares internal waste disposal scenarios with external waste utilization through inter-industry collaboration. The results indicate that waste utilization strategies consistently outperform direct disposal in terms of cost efficiency and value creation. Companies in Sumatra and Kalimantan experience substantial cost reductions, while the Java-based company achieves net positive returns due to lower logistics costs and closer proximity to utilization partners. These findings demonstrate that circular economy implementation not only reduces environmental burdens but also enhances economic performance through integrated revenue streams, including environmental and social value. This study contributes to the literature by positioning FABA utilization as a strategic policy instrument that aligns SOE performance indicators, national development priorities, and Sustainable Development Goals (SDGs), offering actionable insights for policymakers and industry stakeholders.