Hybrid LCAs for a Circular Economy: The Added Value of Combined Methodologies

Paola Federica Albizzati, Joint Research Centre, Seville; Eleonore Loiseau, French National Institute for Agriculture, Food, and Environment (INRAE); and Anna M. Walker, Joint Research Centre, Seville

At the SETAC Europe 26th Life Cycle Assessment (LCA) Meeting, which was held from 21–23 October in Gothenburg, Sweden, Tuesday afternoon started with a session on hybrid life cycle assessments (LCAs) applied to a circular economy (CE) context. The session was hosted by Paola Federica Albizzati and Anna M. Walker from the Joint Research Centre in Seville, and Eleonore Loiseau from the French National Institute for Agriculture, Food & Environment (INRAE). A brief introduction on the persisting relevance of the CE concept in EU policy-making set the scene. Its increasing importance is exemplified by the two CE Action Plans in 2015 and 2020, the recent appointment of the EU Commissioner for Environment, Water Resilience and a Competitive CE, Jessika Roswall, and the announcement of a CE Act in 2026. Against this background of politicians counting on CE to deliver on strategic priorities, such as global competitiveness, strategic autonomy and decarbonization, its potential contribution must be quantified and monitored.

Whereas academics have yet to come up with an integrated assessment method, there is consensus that capturing the effects of CE interventions requires transparency on two levels. On one hand, material and product flows need to be tracked to measure their environmental and socio-economic impacts, while on the other hand, identifying changes in monetary flows can help understand the implications on a sector and economy-wide level. Therefore, relying on the results of a single assessment method is unlikely to provide industry practitioners and policy makers with sufficient information to make meaningful decisions. A combination of different methods, each with their benefits and shortcomings, is thus recommended to account for the most important effects of CE interventions. Life cycle-based assessment approaches have been considered among the most suitable to assess the sustainability impact of moving toward a CE. Whereas LCA can capture the physical flows bottom up, the wider implications of CE on a sector or country level are better captured by additionally tracking monetary flows in environmentally extended input output (EEIO) analyses. Other top-down analyses include computable general equilibrium models, with higher sector aggregation, but inclusion of economy-wide spillover effects.

The goal of the session was to investigate in more detail how the aforementioned modeling approaches can be meaningfully combined, and which methodological choices need to be paid attention to for obtaining actionable results. Six presenters gave three oral and three spotlight poster presentations on different ways of linking these methods to an audience of about 50 researchers. The discussion highlighted the benefits of using EEIO tables or hybrid LCAs to assess the environmental impact of systems on a meso- or even macro-scale, such as companies and their supply chains, sectoral policies or global consumption. The advantage of EEIO tables is that they can provide both economic and physical data over time for Life Cycle Inventories (LCIs) for all sectors of the economy, including service sectors such as banking, real estate and insurance.

The presentations also underlined the methodological issues involved in achieving wider dissemination of the assessment approaches. When comparing assessments analyzing the same material system with physical versus monetary flows, trends tend to point into a similar direction, but significant differences in results of the impact categories persist. During the discussion, several researchers raised the need to harmonize the computational structure of hybrid LCAs to facilitate the connection of the production process system with the sectoral system. Therefore, considerable methodological developments and skills are required to operationalize more streamlined hybrid LCAs. Integrating other approaches, such as material flow or system dynamics analyses, are also promising ways of improving the representativeness and detail of the data. Especially the material flow analysis (MFA) can create a unifying link between the LCA and the EEIO data, with both of these methods able to use MFAs for their respective LCIs. Moreover, the LCI data on elementary flows with environmental or socio-economic impact of the LCA can be used as input data for the EEIO table, in cases where the sector data for the environmental extensions are deemed too aggregated.

Presenters also put forward the proposal of combining the impact of hybrid LCA results with information on planetary boundaries, to assess the absolute environmental sustainability of global consumption or economic sectors. However, care must be taken when interpreting the results incorporating planetary boundaries, as these results are highly dependent on the choice of the attribution factor used for the safe operating space within the planetary boundaries. The safe operating space varies in time and geographical scope, and is depending on several factors such as population, historical emissions, consumption, as well as production in a certain area. Moreover, the planetary boundaries are currently not directly related to the extent of damage at endpoint level. Therefore, it is advisable to carry out a combined assessment of planetary boundary exceedance and damage, which can be linked both to environmental and health aspects.

The final discussion point revolved around the type of results that could be taken up both by industry professionals and policy makers. As regulation is usually developed with incomplete information, the participants lined out the main take away’s irrespective of the exact quantification of results. First, it was emphasized that environmental impacts needed to be drastically reduced both from a planetary boundary, as well as an environmental damage perspective. The focus should be on maximum reduction, given the trespassing in both dimensions has been considerable over the last 20 years. Second, the results on the safe operating spaces could inform the setting of policy-mandated reduction targets, for regions and countries, given they are adapted to the respective territory and the economy activities operating therein. Finally, the results on the potential impact of CE interventions can substantiate a shift away from  end-of-life policies toward an incentive system that reduces the demand for virgin raw materials, both through process optimization and demand reduction.

Author’s contact: [email protected]