Environmental and economic performance of food surplus upcycling via freeze-drying under current and future energy systems

Food surplus management requires strategies that reduce environmental impacts while maintaining economic viability and efficient resource use. The purpose of this study is to assess whether freeze-drying can serve as a food-grade upcycling pathway that retains surplus food within the food system (waste prevention), compared with anaerobic digestion (AD) as a downcycling pathway to the waste sector for energy and nutrient recovery. A prospective attributional Life Cycle Assessment (LCA), combined with an discounted cash-flow (DCF) investment appraisal, was applied to three high-volume surplus products, eggplants, mushrooms, and grapes, currently diverted to biogas production in Denmark, using the functional unit “treatment of 1 ton of food surplus”. Under the current Danish energy mix, freeze-drying exhibits higher environmental impacts than AD, with global warming impacts ranging from 289 to 333 kg CO 2 -eq. per ton of surplus treated, compared to 125 kg CO 2 -eq. per ton for AD. This difference is primarily driven by the high electricity demand of freeze-drying. When modelled under a low-carbon electricity scenario dominated by wind power, the climate footprint of freeze-drying decreases to 31–36 kg CO 2 -eq. per ton (approximately 90% reduction), whereas AD remains comparatively stable at approximately 112 kg CO 2 -eq per ton... Dry matter content is identified as a key determinant of environmental efficiency, as products with lower dry matter require more energy input for moisture removal. From an economic perspective, freeze-drying requires substantial upfront capital investment, ranging from approximately €5–8 million depending on scale, but can generate positive long-term returns through the production of shelf-stable, food-grade ingredients. At a 6% discount rate and a baseline selling price equal to 2× production cost, Net Present Values (NPVs) range from strongly positive (approximately €8–19 million) under integrated surplus ownership and large-scale operation to negative values (approximately –€3 to –€6 million) in mid-scale configurations requiring external feedstock procurement. Sensitivity analysis shows that higher selling prices substantially improve financial viability across scales. Overall, the results show that while AD currently represents a lower-impact option for surplus food treatment under fossil-intensive electricity systems, the relative performance of freeze-drying improves markedly in low-carbon energy contexts. These findings indicate that the environmental competitiveness of electricity-intensive food-grade upcycling pathways is strongly coupled to energy system decarbonisation. Retaining surplus food within the food system through upcycling may therefore represent a context-dependent complementary strategy, warranting consideration alongside biological treatment pathways in future sustainable food system strategies. • Freeze-drying represents a food-grade upcycling pathway for surplus food. • Anaerobic digestion is environmentally preferable under current electricity systems. • Freeze-drying becomes competitive as electricity systems decarbonise. • Dry matter content strongly influences environmental efficiency in surplus upcycling. • Illustrative meal examples link surplus upcycling, energy transition, and food provision.