Impacts on fuel producers and customers of conflicting rules for life cycle assessment

Report, 2022

The use of life cycle assessment (LCA) as a tool for estimating the environmental performance of a product or service in a holistic and systematic manner is increasing. Fuel producers may need to apply different methodological frameworks to be used in different contexts; internally for product development activities as well as externally for communication with customers or authorities. Different LCA frameworks may vary in scope, system boundaries (i.e. life cycle stages to be considered) or modelling requirements (such as data demands but also more detailed methodological features). They may also vary in terms of information they can provide in relation to the environmental performance of the product. Those variations could lead to conflicting outcomes and conclusions and may also increase complexity for the LCA practitioner leading to high competence and resource requirements.

Within the research project: Impacts on fuel producers and customers of conflicting rules for LCA, the requirements of different LCA frameworks and their implications to fuel producers are investigated. Focus has been given on three specific frameworks that are identified as relevant or potentially relevant for fuel producers, namely: the recast of the EU Renewable Energy Directive (referred to here as RED II), the EU framework for Product Environmental Footprint (PEF), and the framework of Environmental Product Declaration (EPD). The aim of the project is to increase understanding on the different LCA frameworks available and identify whether the multitude of such frameworks gives conflicting recommendations for environmental improvements and fuel choices.
 
The three LCA frameworks listed above were applied in case studies. To illustrate the potential differences that the different frameworks may lead to, a variation of production pathways and feedstocks were selected including first generation as well as advanced biofuels. Based on the results obtained it can be concluded that applying all three frameworks is not a straightforward task. The methods contain fundamental differences and are at different levels of development, maturity, and adoption. In certain situations, they can lead to diverging conclusions as a result of different quantitative outcomes for a specific production pathway, thus influencing decision making processes in different directions. Understanding those differences and underlying assumptions is important for understanding the variations in outcome.

The result for a specific fuel could differ substantially depending on the framework applied and the assumptions and interpretations made when applying this framework. Certain methodological parameters were identified to have a greater impact on the results than others:
• The three frameworks diverge in the methods applied for modelling waste management, which can be very important for the results when the biofuel is produced from waste.
• The frameworks diverge in what approaches are allowed for modelling processes with multiple products. This can be very important for the results when the fuel is co-produced with other products.
• The frameworks also diverge in how the electricity supply is modelled. This is not very important for the results in most of our case studies, because the production of these biofuels does not require a lot of electricity.

The study confirms that applying a framework like EPD or PEF in addition to RED II would require significant supplementary efforts. Not only because of different rules which were often contradicting or difficult to interpret but also because of additional data and reporting requirements. The need for expertise and resources is increasing for fuel producers to be able to provide EPD and PEF compliant assessments.

To enhance the development and harmonization of LCA approaches this project stresses the need for product specific rules (in the form of Product Environmental Category Rules (PEFCR) and Product Category Rules (PCR)) for renewable fuels. Future versions of all three studied frameworks should be clearer on how specific methodological choices are to be applied (e.g., when it comes to allocation and multifunctional processes) as well as when it comes to model electricity supply. RED for example shall be clearer on how to define the electricity region while EPD guidelines on how to define the electricity market.

Although it is not realistic to aim for a single unified LCA framework, the biofuel PCR and PEFCR can be developed with RED in mind. Some aspects of the PEF methodology can perhaps also be integrated into RED III that is currently under development. This would enhance the broader adoption of the frameworks among fuel producers. Finally, the involvement and engagement of the industry, and fuel producers themselves is very important. Industry initiatives are essential for the development of biofuel PCR and PEFCR while the general development of the three frameworks can also be influenced.

In this study, we also investigated the relationship between the LCA frameworks and schemes for chain of custody certification (CoCC), in particular schemes for mass balance certifications (MBC) to investigate to what extent these schemes complement or overlap with LCA. The purpose of MBC schemes and LCA are different, in the sense that the first aim at verifying the sources and sustainability of total amounts of raw materials used by tracking them throughout the value chain, while the second at quantifying specific environmental impact. The system boundaries are similar, since both cover the entire value chain, but may be applied differently depending on the detailed frameworks applied and choices made in applying the MBC schemes.

By identifying and clearly illustrating the variations among the studied frameworks the study enhances application, development, and harmonization of LCA, in a broader perspective, informs LCA practitioners but also decision makers and provides insights on how the identified challenges can be addressed.