Life Cycle Thinking
             PROJECT :

   TITLE :
             The Role of Inventory Analysis
Life Cycle Thinking
Figure 1. The Role of Inventory

There are a range of issues confronting Life Cycle Thinking in the New
Zealand context. Inventory plays a central...
to incorporate data from processing and             compelled to provide current data on an
distribution to the end consum...
A leading practitioner (Alcorn, 2008) has          ability to undertake and maintain complex
suggested that Statistics New...
Figure 2. Suggested Actions

    National LCI register and common format
    Assuming that a data collection policy was in...
Figure 3. Life Cycle Assessment Framework

                    Goal & Scope

Figure 4. LCA Type

 LCA Type

Figure 6. Impact Assessment Categories

Figure 7 Tools

Calculation Methods

Most of the work in generating data in New        homogenous datasets, as well as using
Zealand has been biased toward the...
Currently there is strong interest in the government sector around the concept
of ‘Eco-Verification’, which is, in broad te...
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Life Cycle Thinking Shortform Locus Research

  1. 1. Life Cycle Thinking PROJECT : TITLE : The Role of Inventory Analysis in New Zealand CLIENT : MoRST / MED PROJECT CODE : 5301-02 DATE : 29/08/08 AUTHOR : Timothy Allan KEYWORDS : Life Cycle Inventory, Life Cycle Assessment, Life Cycle Thinking DOCUMENT RELEASE : Confidential Public DISCLAIMER : The views expressed in this publication are those of the author and are not necessarily supported by the Ministry of Economic Development or the Ministry of Research, Science and Technology.
  2. 2. Life Cycle Thinking Figure 1. The Role of Inventory g in kin Th LCM le C yc Business e Li f RS&T GHG Development Accounting Inventory Data Policy LCA Government Assessment Introduction ‘Life Cycle Thinking’ refers to the development and analysis of product systems (which includes both products and services) by looking at the inputs and outputs of materials over its life. Life Cycle Thinking is the over arching principal which encompasses a wide range of approaches, methods and tools. Currently there is a strong interest in the This report investigates the application of Life government sector surrounding the concept Cycle Inventory (LCI) or Inventory Analysis of ‘Eco-Verification’. Eco-Verification can be in the New Zealand context. It sought to defined loosely as the research, creation and understand current activity and isolate key communication of objective and quantitative issues and opportunities which could be used metrics relating to the environmental impact by government, research and commercial of products we produce. stakeholders. These discussions have resulted in some key LCI has a number of key steps which impact areas or gaps being defined. A particular gap on the creation of an effective data set around Life Cycle Inventory (LCI) methods and that can be widely used. Some of these parameters has been defined by the Ministry steps offer opportunities for a homogenous of Research Science and Technology (MoRST) approach while others are too context specific and the Ministry of Economic Development. and dependent on the goal and scope of a particular study. 2
  3. 3. Insights There are a range of issues confronting Life Cycle Thinking in the New Zealand context. Inventory plays a central role in the application of Life Cycle Management (LCM) in business, as firms undertake LCA and GHG assessments, in RS&T and in policy development by government. Inventories require ongoing maintenance and research to retain their currency and usefulness, indicating a more interactive approach needs to be taken to creating, maintaining and using key datasets and research. As an emergent discipline, capability is (PAS) 2050, developed through British still developing in this country and needs Standards International (BSI), requires a ‘national interest’ approach. This would constant monitoring at a national level to ensure a consistent spread of practitioner- ensure New Zealand is able to contribute focused education, and ensure efficient cohesively to, and proactively deal with, the practices build up and retain the confidence of outcomes. industry and business communities, as well Taking a sector level approach to data as consumers. There is also a wider case for collection and creation can reduce the burden education around what Life Cycle Thinking can on individual companies, while providing deliver for New Zealand firms and industries, credible data to instigate emission mitigation to help them ‘manage the expectations’ of measures. their stakeholders, customers, supply chain partners, regulators and social stakeholders. New approaches Position of LCI It is likely that new methods such as Economic Input Output Analysis (EIOA) are LCI or ‘Inventory Analysis’ was developed going to increase in importance as a viable in the context of the Life Cycle Assessment way to achieve life cycle thinking outcomes. (LCA) framework. But it is now used by other distinct fields such as greenhouse gas EIOA differs from LCA in that it is ‘top down’, accounting, eco-labels, product development using general economic data instead of and even governmental policy. Figure 1 detailed process data. EIOA offers some presents one view of some of these key exciting potential to deliver similar results to relationships. LCA but comes with some limitations through its use of data averages and research-based assumptions to define and allocate impacts. Impact on SMEs Understanding and developing skills in such The creation and maintenance of data at emerging methods is a valid priority to pursue an individual company level can be very alongside existing methods (such as LCA), and difficult without specialised staff or guidance would ensure New Zealand develops strategic for existing staff in an enterprise. This is a capacity and understanding in new areas. particular hurdle for SMEs, who can be faced with a disproportionate cost relative to their business scale. The challenge becomes very Data real and present for SMEs as the rollout of Primary sector data in New Zealand has been carbon labelling gains momentum in European effectively researched and collected over an markets. extended period of time. The development of carbon labelling schemes This was originally collected up to the such as the Publicly Available Specification farm gate, but has progressively moved 3
  4. 4. to incorporate data from processing and compelled to provide current data on an distribution to the end consumer as concern ongoing basis for the common benefit. about climate change has tracked through There is an opening for industry to contribute supply chains. aggregated (sector-body level) data and find Practitioners have noted that some research ways to fund such an initiative alongside has become outdated and may need to be research partners. If these datasets are made replaced in key sectors where New Zealand more freely available this would directly industry needs to maintain its momentum in reduce the cost to undertake LCI and LCA impact mitigation to secure its world market. work, thereby reducing the barriers to entry Research can underpin decisions made in for smaller firms. the LCI process and is as important as data The format of common or publicly available collection. Defining what key research areas databases should be kept open through the need to retain their currency is considered an use of the most prevalent interchange format, important aspect of the ongoing maintenance XML. of inventories. This data would need common data collection There are a wide range of research projects information (ISO14048) to indicate which and initiatives currently underway in the parameters are essential to reference in the private and public sector. These are often creation and use of pooled datasets. not communicated effectively to a wider group of expert stakeholders and therefore An example of this approach exists in the do not promote and encourage easy access Australian Life Cycle Inventory (AUSLCI) to the findings or lessons learned. Making initiative whose aims are to “provide a this information transparently and centrally national, publicly-accessible database with available through an online community would easy access to authoritative, comprehensive provide an effective body of knowledge and and transparent environmental information discussion on key topics. on a wide range of Australian products and services over their entire life cycle. It will be It is probable that at least some, if not all, of an invaluable tool for those involved in LCA, these projects use common data (for instance as it will also define and develop consistent energy and vehicle emissions factors) that guidelines, principles and methodologies for could be useful to others. At present, there the collection of LCI data, along with protocols is no unified approach to the cross-sector for LCA processes for different sectors. ” creation and maintenance of important datasets, which leaves the way open for One of the key drivers for the establishment inefficient behaviours such as duplication, of the AUSLCI project was the need to create variation and inconsistency of interpretation of a common approach that would give industry the same data. and consumer confidence to the application and use of LCA data. Establishing a unified register of all New Zealand specific LCI databases and There is evidence that the New Zealand maintaining up-to-date knowledge of building sector is moving in this direction with their status is likely to foster sharing and the support of the Department of Building and collaboration. Housing. A unified NZ LCI dataset register could AUSLCI has provided New Zealand an document both private and public datasets invitation to join the programme, a proposal without compromising confidentiality. This which would warrant consideration by key would promote the commercial exchange of stakeholders. Such a decision would require information between related industries and consultation around the small community of sectors. practitioners in this country to avoid a risk of creating divisions among them. Critical sectors on which many other industries depend (e.g. energy) could be 4
  5. 5. A leading practitioner (Alcorn, 2008) has ability to undertake and maintain complex suggested that Statistics New Zealand could datasets to ensure integrity of downstream collect data on key environmental metrics. assessments. In addition it shifts the cost This could be a mechanism in some sectors of education onto research providers, to reduce the individual cost of data collection practitioners and ultimately their industrial and might open the way for increased uptake clients, which further exacerbates the existing of LCA and other analytical methods, such as resource constraint and the squeeze on carbon foot printing. sectors and firms. Other data collected and maintained by The absence of any formal tertiary education Statistics New Zealand, such as economic on LCA or analytical environmental input/output tables, could also be reviewed assessment or management (with the and improved (Andrew, 2008) to deliver more exception of the University of Auckland’s advanced information to those using EIOA and ICSER unit) provides little incentive for hybrid processes. students in science or engineering fields to pursue post graduate study in Life Cycle To align effectively with government policy Thinking. and RS&T spending, it is crucial that the environmental data needed for new high The ‘Life Cycle Management (LCM) initiative’, growth industries is identified. Without this led by Sarah McLaren at Landcare Research, step, there could be a risk that their entry aims to address this lack of capability and into new markets is frustrated, particularly in capacity by taking six masters students, emerging and high technology sectors. training them and then embedding them in six exporting companies. In effect up this up-skills Leadership the companies in Life Cycle Management. If successful this concept could be extended The formation and maintenance of a ‘Life to incorporate a wider range of companies to Cycle Thinking’ leadership group drawn from accelerate uptake further. key stakeholders including top practitioners, The community of practitioners in New government and business would provide Zealand appears to be grouped into an effective platform to ensure continual commercial (private) and research (public) improvement. arenas. The linkages and collaborations in It would provide a platform for the discussion the public research domain are relatively of issues and opportunities that exist in the effective, but the linkages between public national and international context. This group research and private consulting appear to could also provide more consensus and be relatively weak. Creating the impetus leadership than presently exists. for life cycle ‘thinkers’ from all sectors and practitioner groups to get together would Capacity & Capability increase knowledge exchange and assist in the formation of functional links between the There is limited LCA capability in New sectors, likely leading to increased uptake. Zealand. This report has investigated a wide range of A few practitioners have a comprehensive applications and found leading practitioners understanding of the whole LCA method and operating in interesting, innovative, and the wider related issues that were raised in productive ways. However, their impact on this study. New Zealand industry and on development of This group tends to advise the wider peer the discipline is hampered by a lack of unity. group of practitioners about best practice The suggested actions outlined in Figure 2 and structure for various studies. This are some of the steps that could contribute creates a bottleneck for rolling out any to building up a stronger and more vital New substantial studies that need to be undertaken Zealand approach to Life Cycle Thinking that is concurrently. It is also a risk to New Zealand’s tailored to our context. 5
  6. 6. Figure 2. Suggested Actions National LCI register and common format Assuming that a data collection policy was instituted, create a national register with consistent data descriptions and requiring data in an open XML format. This would be an effective tool to build a clearer picture of where gaps are and therefore would help to target new research accurately. Data collection policy Defining the information that needs to be specified for data collection instituted with government endorsement. This might follow the ISO/TS 14048 outline which already exists. Code of practice A government-endorsed code of practice to develop consistency in application. This would provide businesses with confidence that they are employing a practitioner who is using the most current, appropriate and efficient approaches for the New Zealand context. LCI Co-Funding Co-funding LCI development would provide practitioners with the ability to reduce the cost burden to companies. This could also be made conditional on the practitioners submitting their aggregated data to a national register and contributing to a wider pool. Tertiary & Continuing Professional Education A clear imperative which requires urgent action is the implementation of teaching at a tertiary undergraduate and post-graduate level to educate and train new practitioners and build capability in this strategic area. (Such as the Landcare Research LCM programme). Establishment of Advisory groups On Life Cycle Thinking (Incorporating LCA and LCM and other areas), Inventory Analysis, and Impact Assessment, to ensure specific advice on these three critical areas. These groups should be facilitated in such a manner as to involve key practitioners without creating unnecessary work for them. Establishment of a structured community To support wider discussion, presentation and learning about life cycle thinking and its application within New Zealand. Investigation This research looked at a number of areas that influence or impact upon LCI within New Zealand. The results are detailed in the following pages. LCA Process study to ensure that the correct aspects of the life cycle are considered along with the Life Cycle Assessment (LCA) is included appropriate impacts to provide balanced and here as the LCI Process was created and objective assessment. defined in the context of the LCA Framework. The Life Cycle Assessment process is defined It is therefore useful to discuss the LCA as the investigation and valuation of the framework and the position of LCI in this. environmental impacts of a product or service Life Cycle Assessment (LCA) is a framework caused or necessitated by its existence. or methodology for the quantitative The process has evolved through a lengthy environmental assessment of product gestation period with the current methodology systems. It is a structured approach that is being finalised in the 2006 ISO 14040 and defined in ISO 14040 standards. It establishes 14044 standards. the context, goal, scope and intent of a 6
  7. 7. Figure 3. Life Cycle Assessment Framework Goal & Scope Direct Applications • Product development & improvement • Strategic planning Inventory Interpretation • Public policy making Analysis (LCI) • Marketing • Benchmarking • EcoLabels & product declarations 8) 99 Impact 1:1 Assessment 04 (LCIA) 14 O (IS rd n da A Sta LC The ISO standards prescribe the LCA process (such as Global Warming Potential). and methodology through the following two Interpretation: Analysing the information standards: and determining whether the aims of the ISO/DIS 14040: Principles and study can or have been met. Framework Life Cycle Inventory (LCI) refers to the ISO/DIS 14044: Requirements and inventory analysis phase of Life Cycle Guidelines Assessment. LCI is a base step and is an essential part of any quantitative These standards provide practitioners with environmental assessment. The LCI is a mass a wide range of choices which influence the and energy balance of environmental flows shape or efficacy of any targeted LCA study. (Baumann & Tillman) and as such forms the A standard LCA is defined as being formed cornerstone of eco-verification. through a four-step process: The LCI phase is primarily concerned with the Goal & Scope Definition: Determining capturing, research, creation and modelling what the aims are and whether these of Inventory data related to the inputs and can be delivered in the given scope. outputs of processes and product systems. There is a separate ISO standard for LCI data Inventory Analysis (LCI): Modelling the documentation ISO/TS 14048. This format is a flow of the life cycle and collecting any standard for LCA data; underlying data that is required. “This Technical Specification provides the Life Cycle Impact Assessment (LCIA): requirements and a structure for a data characterising the impacts and evaluating documentation format, to be used for against the defined impact categories 7
  8. 8. Figure 4. LCA Type Participants LCA Type Change oriented Accounting Stand Alone transparent and unambiguous documentation identifying areas that can be mitigated but and exchange of Life Cycle Assessment (LCA) are not product development oriented or and Life Cycle Inventory (LCI) data, thus integrated into the product development permitting consistent documentation of data, process. reporting of data collection, data calculation Figure 4 illustrating LCA type is also useful and data quality, by specifying and structuring in highlighting the number of experienced relevant information”. practitioners from the total pool surveyed. Six This study had a focus on the ‘Inventory practitioners actively practised across all three analysis’ or LCI part of the process. A wide types indicating a good level of experience range of parameters that influence or are and depth in the application of LCA. part of the LCI process were considered and discussed with participants of the study. Please refer to the main report for a complete System Boundary list of parameters considered. The ‘system boundary’ is largely defined in to the goal and scope of an LCA study. What processes are selected for consideration and LCA Type analysis depend largely on the intentions and To more effectively understand the nature aims of the environmental assessment. and purpose of the LCI work currently being For example a farmer would primarily be undertaken these were grouped into LCA interested in considering the impacts up to types. The three classifications used were: the farm gate (i.e. one tonne of greasy wool) Stand alone: Single and exploratory, used and the impact to produce this, while the to describe a single product. apparel manufacturer would have to take this through processing, fabric and distribution to Accounting: Comparative and the end consumer. retrospective. Due to its relationship with the goal and Change oriented: Comparative and scope of a study the system boundary is prospective. context specific and cannot be harmonised. The prevalent types of LCA study being It may however be possible to create a undertaken are stand alone or accounting consistent ‘approach’ amongst New Zealand based, therefore retrospective and practitioners. comparative. These are being used for Figure 5. Allocation Type Participants Not used 4 Allocation Type System Expansion 7 Economic Ouput 7 Physical 10 Other 7 8
  9. 9. Figure 6. Impact Assessment Categories Participants Toxilogical Impacts Human Health Non-Toxilogical Impacts Impacts to Work Environment Resources Water Land Energy & Materials Global Warming Potential Consequences Ozone Depletion Ecological Eutrophication Photo-Oxidant Formation Ecotoxilogical Impacts Habitat Alterations Allocation most practitioners utilise the ISO preferred method of Physical allocation with the ‘Allocation’ is defined as “partitioning the input more advanced practitioners using system or output flows of a process to the product expansion to discover additional relevant system under study” (ISO14040 1997). Put in details. simpler terms many products are linked and share processes and resources. This means that the impact or the burden of the impact Impact Categories needs to be allocated between different The definition of impact categories falls products and processes. under the ‘impact assessment’ (LCIA) phase of the LCA process. Technically it does not ‘Allocation’ provides a framework to do this. have a bearing on the data collected, but the An example might be a log which is split into a decisions made during the goal and scope percentage allocated to milled graded timber phase about what impact categories are used and another percentage allocated physically are of interest to this study. It is during this (by mass) to pulp and paper production. phase that inputs and outputs are related to Allocation is one of the most difficult areas the environmental impact they have (i.e. CO2 in LCA methodology. It complicates the data would be attributed to Global Warming). collection process and can greatly increase The ISO classification (illustrated in Figure the threshold of data required in the given 6) of impact categories provides three broad system. Most practitioners surveyed adhere categories or groupings; human health, to the ISO standard prescription for the resources and ecological consequences. procedure of allocation procedure which In the New Zealand context there is an specifies system expansion as the preferred overriding focus on Global Warming Potential method, with physical the next preferred, and and Energy and Materials, with only economic the least preferred. experienced practitioners working in other Allocation is an important consideration for impact categories. There are exceptions, inventory analysis due to its potential impact such as eutrophication which is an important on New Zealand industry. Figure 5 illustrates consideration in pastoral farming. 9
  10. 10. Figure 7 Tools . Participants Calculation Methods Simapro Gabi Everdee Excel Method Participants noted that the restriction of Excel is used across the board for the collation impact categories through the focus on and documentation of data in the inventory energy and green house gas (GHG) emissions process. It is also used in relatively advanced has impacted on the data collected. This was applications, as various research organisations jointly attributed to budget and the current have their own formulas and custom focus and pressure around climate change. spreadsheets for working carbon emissions. This may potentially lead to a reduction in Some research organisations also used quality and coverage of the data sets being Excel as a tool to prepare the inventory created, and could limit their potential information prior to insertion in an LCA tool. application in other areas. Experienced practitioners using Excel cited Experienced practitioners have stated the transparency as a key benefit. that the restriction of impact assessment Other practitioners said they did not have a categories should not affect the integrity of requirement to conduct a full LCA so were data collected, as all critical inputs and outputs content with using spreadsheet tools and should be collected. It would therefore be formulas for completion of data collection and important to further define what data is being inventory analysis. omitted and what steps could be taken to address this issue. The other two tools recorded in use were; Everdee, a free tool created through the Uptake of Tools EcoSMEs initiative in the EU, and the Landcare CarboNZero programme which has Development of the LCA methodology has developed its own tool with a built-in GHG resulted in the creation of software tools protocol. which enable dynamic modelling of systems. The intermittent nature of LCA work in recent These tools allow the performance of years appears to have been an impediment calculations and visualisations, making the to the uptake of more advanced life cycle process easier and more streamlined. engineering tools. This is likely to change with The adoption of these tools in New Zealand is increasing demand and the requirement for patchy, with a range of practitioners still using standardisation. self-generated Excel spreadsheets, mainly due to the intermittent nature of LCA projects Data collection and the capital cost of software purchase (not The inventory analysis stage relies on the necessarily that they resist uptake). ‘bottom up’ collection of process data from Both GABI and SimaPro are advanced LCA the production, consumption and disposal software tools with a range of available of products and services. It is reliant on the databases for different industries. A greater quality of research data and hinges on the number of participants used SimaPro, availability of usable data to form an accurate although GABI has only recently started to be picture of the system being assessed. taken up in Australasia, and may develop a The credibility of any LCA results rests greater following over time. substantially on the data’s quality. 10
  11. 11. Most of the work in generating data in New homogenous datasets, as well as using Zealand has been biased toward the primary modified international databases of materials sector. As a result, there is a growing body of and processes where required. information up to and past the farm gate to Datasets that were created ranged from processing. highly detailed studies (direct measurement), As markets have become more interested to studies which are based solely on research in climate change, studies are increasingly papers. One particular study went as far as considering the whole supply chain including collating all material and energy used in the distribution, use and end of life. construction of the plant and using that in the final assessment of the product (the capital The evidence gathered in this study cost of producing the goods). Most studies shows that manufacturing and value- would not consider the cost of capital. added industries have little New Zealand- specific data to reference. At the same Modified datasets and existing datasets are time these manufacturing sectors have primarily international (originating from the increased offshore production which has EU or the USA), that are generally linked to, led to difficulties in procuring environmental or embedded in, LCA software tools. These information from extended supply chains databases, such as Ecoinvent, contain a wide (McLaren, 2008). variety of materials and processes which enable modelling at a schematic level and Data quality and availability appear to be in some cases offer detailed levels at which variable, with some studies from basic there is parity in application and context. literature research (which may be of uncertain age and provenance). Most practitioners cite data quality as a Data availability serious issue, both in terms of availability Many datasets are classed as private, which and accuracy for New Zealand’s context. In prevents them from being openly exchanged addition, they expressed real concerns about or used for the benefit of other companies. the cost of data collection and maintenance, There are a number of data exchange formats which were seen as a recurrent hurdle cost to available. The most widely used exchange file both SMEs and even to larger enterprises. format is XML (extended mark-up language). This hurdle is due in part to the requirement This supports a fast and easy exchange of LCI for continuous data collection that requires data into different software packages, such as technically-sophisticated methods or devices GABI or SimaPro. and specialised staff. Research organisations often retain the right to use aggregated data for other applications Dataset creation (in their projects). This type of practice would appear to work against wider transparency, There are a range of approaches taken by discourage openness, and generally most participants which could be broadly encourage a competitive approach. categorised as: Some data is published, and is therefore Created Datasets: researched partly available in aggregated form (although and created for the environmental not accessible at a detailed application level) assessment and some data is made available on specific Modified Datasets: existing datasets request. modified for a particular application Currently there is no central repository for Existing Datasets: using existing data collection and therefore no easy way to datasets for a particular application determine if a study has been conducted in the area or if there is other useful data in New Most of the advanced practitioners have Zealand that could be used in other studies. been, or are, involved in the creation of 11
  12. 12. Currently there is strong interest in the government sector around the concept of ‘Eco-Verification’, which is, in broad terms, the enabling, quantifying and substantiating of improved environmental performance by industries. The Ministry of Economic Development and the Ministry of Research, Science and Technology commissioned this publication from authors Locus Research in 2008 to learn more about the activities of New Zealand Life Cycle Inventory (LCI) practitioners, the LCI approaches and methods in common use, and their key parameters. This report investigates the application of LCI in the New Zealand context to provide evidence about current activities, and to isolate potentially significant issues and opportunities, so that all parties can advance Eco Verification activity more effectively. Research undertaken by Locus Research (2008) LR0003