How to allocate the climate benefits of circular economy solutions to different actors in the supply chain
Year: 2023
Type: dissertation
Abstract: Circular economy (CE) solutions play a key role in controlling a climate crisis as they create climate benefits, i.e., greenhouse gas emission reductions by reducing the production of virgin raw materials and the amount of waste. Life cycle assessment (LCA) is a method that can be used to assess the climate burdens and benefits of CE solutions. However, multifunctional processes (e.g., recycling and secondary materials) can create an allocation problem in LCA: how to allocate the climate benefits of CE solutions equitably and without double counting among different actors in the supply chain? This thesis literature review investigated various standards, guidelines, and academic publications considering the allocation in LCA. It was found that there is no clear answer to the allocation problem, as LCA studies have different goals and applications. \n \nIn the case study, pioneering CE companies from different sectors were interviewed to examine how the allocation of climate benefits of CE solutions is considered in practice. Based on the literature review and the case study, the recycled content and closed-loop allocation methods were found to be the most common methods for allocating the impacts of recycling. The recycled content method allocates the climate benefits of recycling to the user of recycled material. In contrast, the closed-loop allocation method allocates the benefits to the producer of recyclable material. In addition to these methods, a 50/50 allocation method can allocate the climate impacts more evenly among different actors. Furthermore, more complex methods have been developed.
Source: LUTPub (LUT University)
Author: Savikko, Peppi
Institution: Lappeenranta-Lahti University of Technology
Language: English
Subfield: Environmental Engineering
Field: Environmental Science
Domain: Physical Sciences
Open Access status: green
OpenAlex ID: W7001052993