Chapter 4 Inventory Analysis of Emissions and Extractions
4.5 Coproducts and Allocation
4.5.3 Allocation Methods for Coproducts
4.5.3.4 System Expansion
If the coproduct B of a system has any value, it can be considered to replace a prod-uct B′ that would otherwise get used. When B′ is replaced, its associated emissions are avoided. To include this effect in LCA, the system boundaries are extended to include the resource use and emissions for a product B′ that is considered equivalent to the coproduct B of the main system. Instead of adding these emissions to the sys-tem total, they are subtracted to represent that they are avoided due to the by-product (Figure 4.13).
For this method to be applicable, a substituted product must exist, with data avail-able on its emissions and resource use, from cradle to grave. The calculation is only valid when we can demonstrate that the substitution has actually happened or is the most likely use of the coproduct.
The method of avoiding allocation by system expansion can be demonstrated in the example of coproducing wheat and straw. The straw has no direct substitute, but
Product A
Resource extractions of A and B Resource extractions of B′
Emissions of A and B – –
Emissions of B′
System A boundaries
Product B Product B′
– Production of B′
Production of A and B
FIGURE 4.13 Avoiding allocation by system expansion. Since the coproduct B replaces a product B′, the raw materials and emissions associated with B′ are avoided and therefore subtracted from those of the main system.
90 Environmental Life Cycle Assessment it can be burned and used to replace gas heating, a common practice in Denmark due to its subsidies (Figure 4.14). It is assumed here that straw substitutes gas for heating.
The agricultural process that yields 8,000 kg/ha of wheat also yields 2,000 kg/ha of straw, which can be burned to yield 20,000 MJ of heat energy. This amount of heat energy could otherwise have been produced by petroleum that would take 25,690 MJ of primary energy to refine and extract. The primary energy use attributed to wheat is the difference between the primary energy for agricultural production and the petroleum primary energy avoided due to the straw coproduct. Thus, 2,000 kg of straw substitutes enough petroleum to avoid using 25,690 MJ of nonrenewable pri-mary energy, 1,844 g of CO2 emissions, and 2.9 g of NOx (Table 4.13). These values for energy and emissions are subtracted from those associated with the coproduc-tion of wheat and straw (27,250 MJ, 2,200 gCO2, and 13.6 gNOx). This attributes only 1830 MJ, 376 gCO2, and 10.7 gNOx to each hectare of wheat produced.
A second possible use of the straw is for electricity–heat cogeneration (Figure 4.15).
In this case, the straw substitutes both gas used for heating and electricity produc-tion, which ends up avoiding 34,670 MJ of primary energy, 2,129 gCO2, and 3.8 gNOx per hectare of wheat grown (Table 4.13). Since the energy avoided is actually greater than the amount necessary to produce the wheat and straw, the wheat production is
Straw combustion
η = 0.73
Energy of A and B – Energy of B′ =
=
Energy allocated to A
27,520 MJ – 25,690 MJ 1,830 MJ
Extraction and refinement of
light fuel oil –
B = straw 2,000 kg 13.7 MJ/kg
27,400 MJ
B′ = light fuel oil 23,530 MJ
A = wheat 8,000 kg
Agricultural production
combustionFuel η = 0.85
B′ = 20,000 MJHeat B′ = 20,000 MJHeat
FIGURE 4.14 Application of system expansion for the allocation of nonrenewable primary energy to the coproduction of straw and wheat, where straw is combusted and used as a heat source, which substitutes the alternate heat source of light fuel oil.
Inventory Analysis of Emissions and Extractions 91
TABLE 4.13 Allocation of Nonrenewable Primary Energy and CO2 and NOx Emissions between Straw and Wheat for Different Methods Allocation Method
System ExpansionSystem ExpansionMarginal Variation Financial AllocationStraw for HeatingStraw for Heating and ElectricityStraw Reincorporation to Replace Fertilizer Energy wheat (MJ/ha)1,830(7%)−7,150 (−26%)27,100(98.5%)27,250(99%) Energy straw (MJ/ha)25,690(93%)34,670(126%)420 (1.5%)270 (1%) Energy total (MJ/ha)27,520(100%)27,520(100%)27,520(100%)27,520(100%) CO2 wheat (g/ha)376(17%)91(4%)2,186(98.5%)2,198(99%) CO2 straw (g/ha)1,844(83%)2,129(96%)34 (1.5%)22(1%) CO2 total (g/ha)2,220(100%)2,220(100%)2,220(100%)2,220(100%) NOx wheat (g/ha)10.7(79%)9.8(72%)12.9 (95%)13.5(99%) NOx straw (g/ha)2.9(21%)3.8(28%)0.7 (5%)0.01(1%) NOx total (g/ha)13.6(100%)13.6(100%)13.6(100%)13.6(100%) Source:Audsley, A., et al., Harmonisation of Environmental Life Cycle Assessment for Agriculture, Final Report for Concerted Action, AIR3-CT94-2028, 1997.
92 Environmental Life Cycle Assessment
attributed an energy bonus of −7150 MJ/ha, as well as emissions of 91 gCO2/ha and 9.8 gNOx/ha.
These two possibilities for straw substitution indicate that the choice of how the coproduct is used plays a crucial role in the amount of attributed energy and emis-sions. If the decision-maker finds a heavily polluting product to replace with the coproduct, this would be an indirect way to reduce the environmental impacts of the main product.
4.5.3.5 (b) Physical Allocation
When not possible to avoid allocation, emissions and resource use should be attrib-uted to different coproducts based on physical causal relationships. There are three main ways for doing so, described as follows:
4.5.3.6 (b1) Marginal Variation
This method is applicable when we can vary at will the ratio of coproducts in a way that corresponds to actual practice. We determine the emissions and resource use in two cases: (i) associated with the baseline situation and (ii) in the case of a
Cogeneration η = 0.73
combustionFuel η = 0.85 Energy of A and B – Energy of B1′ –
27,520 MJ – 17,125 MJ – 17,540 MJ
= Energy allocated to A
= –7,145 MJ
Extraction and refinement of
light fuel oil –
B1 = 13,333 MJHeat B = Straw
2,000 kg 13.7 MJ/kg
27,400 MJ
A = Wheat 8,000 kg
Average electricity mix
η = 0.38 Agricultural
production –
Electricity
B2 = 6,667 MJ Heat
B′2 = 13,333 MJ Electricity B′2 = 6,667 MJ B′1 = Light fuel
15,686 MJoil
Energy B2′
FIGURE 4.15 Application of system expansion for the allocation of nonrenewable primary energy to the coproduction of straw and wheat, where straw is used for cogeneration of heat and electricity.
Inventory Analysis of Emissions and Extractions 93
variation of the quantity of coproducts. The change in impacts divided by the change of coproduct quantity estimates the amount of impact per unit coproduct.
In the case of wheat and straw production, straw can be reincorporated into the soil (Figure 4.16) rather than collecting it into a hay bale. This reduces the need of fertilizer for the next seeding. The two cases are as follows:
(i) In the baseline case, the system produces 8000 kg of wheat and 2000 kg of straw, and requires fertilizer containing 26 kg phosphorus and 50 kg potassium. The system uses a total of 27,520 MJ of energy.
(ii) If the system is marginally adjusted to reincorporate 1000 kg of straw to replace some fertilizer, it only requires 25.5 kg phosphorus and 43 kg potassium.
Due to decreased fertilizer use, the total energy required for the system is 27,310 MJ.
The difference in impacts between the two scenarios is a 210 MJ decrease in energy use. The difference in coproduct use is 1000 kg straw, so the marginal varia-tion is 0.21 MJ/kg straw. This yields 420 MJ allocated to 2,000 kg of straw, which leaves 27,100 MJ allocated to wheat. Other emissions, impacts, and uses of raw mate-rials can be allocated in the same manner. As is true for all alternatives, one must ensure that the incorporation of straw into the soil is a realistic scenario and that less fertilizer is actually used because of this. This scenario can also be examined from the system expansion approach, in which the reincorporated straw is considered a fertilizer substitute.
For marginal variation, we can vary the quantity of straw produced, the amount reincorporated, or the height at which it is cut, all independently from the quantity of wheat produced.
4.5.3.7 (b2) Representative Parameter in the Case of a Common Function In the case that the coproducts provide an identical function, it is possible to make an allocation based on a quantity or parameter representative of this function.
Agricultural production 26 kg P + 50 kg K Energy used by System (i)
27,520 MJ
B = straw 2,000 kg A = wheat
8,000 kg
Energy used by System (ii) 27,310 MJ
B = straw 1,000 kg A = wheat
8,000 kg
Agricultural production 25.5 kg P + 43 kg K
Reincorporated straw 1,000 kg
FIGURE 4.16 Application of marginal variation for the allocation of nonrenewable primary energy to the coproduction of straw and wheat. It marginally changes the amount of straw produced to estimate the marginal change in energy use.
94 Environmental Life Cycle Assessment To apply this allocation, the parameter must represent the common function of the coproducts, this function must correspond to that defined in the study objectives, and the two coproducts must effectively be used for this function. For example, a process that yields both heat and electricity could potentially use energy or rather exergy content as an allocation factor, to also reflect the potential of each energy vector to produce mechanical work. A process that involved chemical reactions could use chemical composition as an allocation factor, and a process that created some type of nutrient could use protein content as an allocation factor.
In the case of allocation between wheat and straw, the allocation could potentially be made based on the energy content of the two products if they were both intended as animal fodder. This function, however, does not correspond to the definition of the goal in this example, which is the production of wheat to make bread for human consumption. This approach thus cannot be applied here. An allocation on the basis of respective masses does not make sense either, because mass is not representative of a common function nor of the emissions in this example.
4.5.3.8 (b3) Property Reflecting a Causal Physical Relation
This method is applicable when we can determine a physical indicator that cap-tures a cause-and-effect relationship between the coproducts and associated emis-sions or resources used. All coproducts must have emisemis-sions and resource uses that are strongly linked to the same physical indicator. Thus, the physical indicator must capture the cause of the emission. In any case, the allocation factor requires a scientific and verifiable direct causality as a basis for selection (WRI and WBCSD 2011).
This method is not directly applicable to the straw example, but does apply to the case of treating multiple types of waste (Figure 4.10). For example, in simultane-ously treating waste plastics, batteries, and sludge, the heavy metal emissions may be significant. Since heavy metal emissions during waste treatment are directly propor-tional to their content in the product being treated, they can be allocated accordingly.
More concretely, let us consider an example in which some batteries are simultane-ously treated with other wastes, where the batteries contain 0.8 kg of cadmium and the other waste contains 0.2 kg of cadmium. If 10 g of cadmium are emitted to air as a result of this process, we allocate 8 g to the batteries and 2 g to the remaining waste.
Industry commonly allocates impacts by mass, even in nonwaste treatment scenarios, which is often questionable, because there is rarely such a direct cause-and-effect relationship, and mass allocation should be avoided unless this causality has been established. A recent interim report on greenhouse gas emis-sions provides further details on how to best implement this approach (WRI and WBCSD 2011).
If none of these conditions for physical causality (b1, b2, or b3) is fully met, we must not arbitrarily choose a physical parameter. We also must not choose a param-eter simply because it is somewhat correlated to the value of the products. Even if the parameter is more stable than the fluctuating price, such an allocation is simply a disguised and imprecise economic allocation. In such a case, it is better simply to apply an economic allocation using a long-term time-averaged price.
Inventory Analysis of Emissions and Extractions 95
4.5.3.9 (c) Economic or Functional Causality 4.5.3.9.1 Financial Allocation
When there is no clear physical relationship to allocate resource use or emissions by-product, we consider economic causality, thereby capturing financial incentives.
That is, a product is considered as primarily made for its mercantile value, so we can allocate emissions among coproducts according to their respective values. If relevant, any subprocesses not pertinent to the final product are separated out, as described in Subsection 4.5.3.3. It is at this separation point that the economic value of each coproduct is calculated and used for allocation.
It does not matter whether or not the prices are actually linked to the environ-mental effects of the product. This allocation method accounts for the incentive of financial income, which is a main driver of production and associated emissions and resource use.
Returning to the example of allocation between straw and wheat, the separa-tion point occurs after the harvesting and before the drying of the wheat and the making of straw bales. The final straw is sold for €0.026/kg, but that is after spending €0.002/kg on baling the straw, so the value of straw at the separation point is €0.024/kg; this effective value is called the shadow price. At this point, the price of the grain is around €0.6 €/kg. Thus, the 8000 kg of wheat and the 2000 kg of straw generate respective incomes of €4800 and €48 per hectare, which amounts to allocating 99% of resource use and emissions to the wheat and 1% to the straw.
We reiterate that financial allocation should only be applied if the other allocation techniques cannot be.