A comparative analysis of different carbon cap policies on the economic lot-sizing problem with remanufacturing

Andrés Vallecilla, Sebastián Dávila-Gálvez and Franco Quezada

International Journal of Production Research, 2025, vol. 63, issue 22, 8347-8370

Abstract: This paper investigates the implementation of carbon cap policies within a remanufacturing production system, focussing on a single-item lot-sizing problem aimed at meeting the demand for end-of-life products under four distinct carbon cap policies. Our study, motivated by the operational dynamics of ECOCITEX, a Chilean textile remanufacturing company, explores the balance between operational costs, carbon emissions, and production levels in response to environmental policies. We introduce a mixed-integer linear programming (MILP) formulation to address economic lot-sizing with considerations for both remanufacturing and carbon emissions constraints. Through extensive computational experiments, we assess the impact of various carbon emissions policies on production and emissions levels and their associated costs, finding that global and rolling-horizon policies offer the best trade-off between emission reductions and production cost increases. This leads to more environmentally friendly production policies for remanufactured products without compromising financial sustainability. The findings underscore the importance of flexibility in environmental policies for remanufacturing operations, suggesting that stringent carbon caps, while beneficial for emission reductions, may pose challenges to demand fulfillment and cost management. For managers, this highlights the critical need for adaptive policy frameworks that support sustainable production objectives without impeding operational efficiency.Graphical abstract illustrating the relationship between the productive sector, mitigation strategies, green management, and comparative analysis in the context of carbon emission reduction and remanufacturing.Figure Alt Text: A structured flow diagram divided into four sections: Productive Sector, Mitigation Strategies, Green Management, and Comparative Analysis. Each section contains icons and text explaining its role in carbon emission reduction and remanufacturing.Figure Long Description: The graphical abstract is structured into four color-coded sections. The Productive Sector (grey) includes elements such as textile industries, production, and textile waste, showing their connection to carbon emissions. The Mitigation Strategies (blue) section introduces carbon cap policies and the Extended Producer Responsibility law as tools to address emissions. The Green Management (green) section presents strategies such as remanufacturing and four ways of applying sustainable policies. Finally, the Comparative Analysis (purple) section focuses on the evaluation of quantity, costs, and emissions through a three-axis analysis. Dashed arrows connect elements across sections, illustrating their interdependence.

Date: 2025
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DOI: 10.1080/00207543.2025.2467878

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