Research on World Agricultural Economy

Financial Feasibility Analysis of Spent Coffee Grounds Briquettes as Alternative Renewable Fuel in South West Region of Aceh

Muhammad Reza Aulia

Universitas Teuku Umar

Utari Azrani

Universitas Teuku Umar

Hartini

Universitas Teuku Umar

Fantashir Awwal Fuqara

Universitas Teuku Umar

Anisah Nasution

Universitas Teuku Umar

DOI: https://doi.org/10.36956/rwae.v7i2.2813

Received: 6 October 2025; Published: 11 June 2026

Abstract

This study evaluates the commercial feasibility of producing briquettes from spent coffee grounds (SCG) in the South West Region of Aceh, Indonesia, where cafe clusters generate a steady and concentrated residue stream suitable for decentralised valorisation. A ten-year discounted cash-flow model at a 12% discount rate is integrated with operational, process-engineering, and market insights to assess whether a compact, MSME-scale densification line can achieve financial viability. The nominal plant processes 816 kg/day and produces 254,592 kg/year of briquettes at an assumed ex-factory price of IDR 4500/kg. Baseline modelling yields an annual operating cash flow of IDR 285.36 million, a Net Present Value (NPV) of IDR 73.52 million, an Internal Rate of Return (IRR) of 13.13%, a Net Benefit–Cost Ratio (Net B/C) of 1.05, and a payback period of 5.46 years. Sensitivity analysis identifies realised price as the dominant determinant of feasibility, followed by utilisation rates and key variable-cost components such as binder and labour. Qualitative extensions incorporate the feasibility of multi-plant network configurations, the economic implications of seasonal moisture variability, and refinements to binder–labour optimisation informed by local practice. A hypothetical carbon-finance scenario indicates potential for raising IRR if monitoring costs and verification burdens decrease. Overall, the findings show that SCG briquettes can be commercially viable under disciplined pricing, utilisation above 96%, and consistent quality assurance, offering a practical circular-economy pathway for reducing waste burdens and substituting conventional solid fuels in West Aceh.

Keywords: Spent Coffee Grounds; Biomass Briquettes; Feasibility Analysis; Circular Bioeconomy; Small and Medium Enterprises

References