The sole responsibility for the content of this document lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the EASME nor the European Commission are responsible for any use that may be made of the information contained therein. Legal Notice: The information in this document is subject to change without notice. The Members of the project consortium make no warranty of any kind with regard to this document, including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose. The Members of the project consortium shall not be held liable for errors contained herein or direct, indirect, special, incidental or consequential damages in connection with the furnishing, performance, or use of this material. Possible inaccuracies of information are under the responsibility of the project. This report reflects solely the views of its authors. The European Commission is not liable for any use that may be made of the information contained therein. Deliverable 2.1 Efficiency Framework concept description Date: 01/03/2016 WP2 Efficiency framework T2.1 Efficiency framework concept Dissemination Level: Public Website project: www.maestri-spire.eu Total Resource and Energy Efficiency Management System for Process Industries
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The sole responsibility for the content of this document lies with the authors. It does not necessarily reflect the opinion of the European Union. Neither the
EASME nor the European Commission are responsible for any use that may be made of the information contained therein .
Legal Notice: The information in this document is subject to change without notice. The Members of the project consortium make no warranty of any kind with
regard to this document, including, but not limited to, the implied warranties of merchantability and fitness for a particula r purpose. The Members of the project
consortium shall not be held liable for errors contained herein or direct, indirect, special, incidental or consequential damages in connection with t he furnishing,
performance, or use of this material. Possible inaccuracies of information are under the responsibility of the proje ct. This report reflects solely the views of its
authors. The European Commission is not liable for any use that may be made of the information contained therein.
Possible inaccuracies of information are under the responsibility of the project. This report reflects solely the views of its authors. The European Commission is
not liable for any use that may be made of the information contained therein.
Environmental Influence domains; and will be integrated within the Efficiency and Economy
domains.
3.4 Consequences and critical factors for the efficiency framework
The efficiency and eco-efficiency are a critical and central topic for the efficiency
framework. Moreover, these are important enablers for addressing resource and energy
efficiency, which consequently leads to economic and environmental competitiveness and
subsequently overall sustainability.
Support in the identification/definition of PIs and KPIs [assess overall efficiency of the system]• High frequency monitoring/Daily use [fluctuation of efficiency values]• Operational and Control approach using: real time, in-line, on the shop-floor Data; lean principles; visual management.• Parameterization of Efficiency assessment taking into Lean and efficiency principles• Support "on the spot“ informed decision making process• Identification and quantification of value added and non-value added - efficiency
MSM
Eco-efficiency performance evaluation and identification of significant environmental aspects and significant results i.e. PIs, KRIs and KEPIs• Systemic off-line analysis to assess environmental and economic performance• Low frequency monitoring• Consider the eco-efficiency principles for eco-efficiency performance assessment• SIMULATION OF SCENARIOS to support decisions regarding improvements• Communication is fitted with a set of information and metrics that enable communication of accurate information, at anytime• Life-cycle Approaches
ecoPROSYS
Efficiency Framework
• Evaluate overall efficiency• Increase efficiency based on eco-efficiency principles• Support decision considering efficiency, environmental and economic performance
• Identify the best scenarios by considering and evaluation the trade-offs between efficiency and eco-efficiency performance• Assess effectiveness (via eco-effectiveness) of improvement actions• Support tactical management
Simulation of scenarios for eco-efficiency improvement Information of Eco-efficiency performanceInformation of Efficiency performance
Efficiency analysis based on eco-efficiency principles
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To characterize the efficiency performance of a production unit or system, applying
efficiency assessment of optimizing the use of resources.
In conclusion, the efficiency framework will enable the practical use of eco-efficiency
assessment and will follow the eco-efficiency international standard and good practices.
Subsequently, these outcomes, from the MAESTRI project, will support European
standardization for efficiency assessment.
Figure 32 -Phases of an eco-efficiency assessment (ISO, 2012).
Goal and Scope Definition
Quantification of eco-efficiency Definition
Product System Value
Assessment Environmental Assessment
Interpretation
This will allow the user to define the level desired to the Eco-efficiency, describing:
-Purpose of eco-efficiency assessment; -Intended use of the results; -Product system to be assessed and boundaries of
the system and external systems; -Function and functional units; -Environmental assessment method and impact
categories; -Choice of eco-efficiency indicators;
-Interpretations and Limitations.
Based on Life Cycle Assessment according to ISO 14040 and ISO 14044. Our methodology gives the environmental profile of the study object more than individual indicators.
This assessment shall
considerer the full life cycle
of the product system. This
includes the functional
value, monetary value and
others.
The eco-efficiency profile shall be determined by
relating the Life Cycle Impact Asessment profile to
the product system value. The sensitivity analysis
should be conducted carefully. The definition of
weights of some aspects, the possibility of different
scenarios among others variables, suggests an
analysis of results for sensitivity and uncertainty for
eco-efficiency assessments.
Identify significant issues based on the results of environmental and product system value assessment phases. Formulation of conclusions,
limitations and recommendations.
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4.4 Consequences and critical factors for the efficiency framework
The management system, has an important role within the efficiency framework. It is focused
on the incorporation of sustainability aspects in company strategy and objectives. The
standards through the implementation of structured management systems, targeting
resource consumption and energy efficiency, will also enable the concentration of process
efficiency relevant data and information across different departments of the company.
The management system, besides embracing management tools that encompass LEAN
strategies related to sustainable continuous improvements, will also include synergies with ISO
standards (9001, 14001; 14040, 14045, 50001, etc.) in order to support decision making
processes and stimulate competitiveness. Moreover, this will assure that the efficiency
framework is in line with environmental, eco-efficiency and quality ISO standards.
Nevertheless, all shortcomings that arise from the standards would be carefully assessed and
avoided/mitigated.
Consequently, the management system, taking into account standard approaches, will be
able to embed energy and resource efficiency in strategy and daily improvements routines
and support continuous improvement both in term of economic and environmental issues.
As consequence of the integration of the management system (standard bases) and
efficiency framework, the efficiency framework will enable great advantages, namely
facilitate the implementation of the MAESTRI platform by: supporting companies that already
have implemented the standard; assuring international standardized compliance regarding
resource and energy aspects, i.e. resource efficiency and eco-efficiency; and adapting low
cost eco improvement to improve the total efficiency and support continuous improvement.
Ultimately, considering the scope and context of MAESTRI project, it is strongly advisable that
the efficiency framework follows and is in line with the international standards.
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The economic component of Eco-Efficiency is referred to as value. It can be expressed in
monetary indicators as well as characteristic related with its functionality, market purpose,
durability, etc. The monetary-based value indicators depend greatly of the product/process
cost structure and of the cost incurred in the several life cycle phases involved in the analysis.
So, there is the need to establish a way to account for the cost drivers of each life cycle
phase. In this report the cost and value modelling proposed for the general framework are
presented. In addition, a methodology is proposed to estimate the time and resources
needed to allow for sensitivity analysis and simulation for several scenarios.
Therefore, the aim of this section is to provide an overview of the Life Cycle Cost (LCC)
methodologies commonly applied, to explain and clarify the Process Based Cost Models
approach (PBCM) and its applicability in the computing of Eco-Efficiency indicators. An
approach for a complete life cycle analysis of value is presented. This work starts with a state
of the art about the LCC and its derivations, followed by the PBCM description. Finally the
proposed approach to assess the value dimension of the Eco-Efficiency is presented in terms
of inputs, outputs and identified limitations.
5.1 Overview of the approaches
5.1.1 Life cycle costing
The Life Cycle Cost (LCC) is a widely used cost methodology in sustainable production scope
since it accounts the incurred costs of a product or service during its complete life cycle
(from material extraction to End-of-Life treatment (EoL) (Bornschlegl, Kreitlein, et al., 2015)
(Carlsson 2009). In general, the products’ life cycle can be divided in four main phases:
material extraction, production, use and EoL. Despite the life cycle perspective proposed by
LCC, in some analysis/studies only specific life cycle phases are considered (Chakravarty &
Debnath 2014) (Du, Guo, et al. 2015), depending on the studies’ aim. The LCC methodology
is divided in four main steps: 1) Define a goal, scope and functional unit; 2) Inventory costs; 3)
Aggregate costs by cost categories; 4) Results’ interpretation (UNEP/SETAC 2011).
In the first step, the study’s boundaries and duration are defined. Other aspects related to
the analysis as allocation procedures, functional unit, and the perspective of the actor (if it is
a supplier, manufacturer, user or consumer perspective) are defined as well (Korpi, Ala-Risku
2008). The functional unit is the reference for calculation, so all the costs and benefits are
accounted and presented related to this unit. In the second phase the costs related to each
life cycle phase in study are accounted, which in the third phase are aggregated according
to their cost categories. Finally, the fourth and last part of this methodology consists in the
results’ analysis where the costs results are interpreted (UNEP/SETAC 2011).
The LCC methodology aims to be a tool for support the selection of the most effective
available alternative in an economic point of view, in other words, the alternative that
presents the least cost of in its entire life cycle. The importance of producing goods with the
least cost to acquire, use and dispose makes the LCC a powerful tool in the earliest phases
of a project (Folgado, Peças, et al. 2010). The cost considered in LCC can be also classified
5 Definition of the Life Cycle Costing analysis approach
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according to their occurrence in single (e.g. initial investment to purchase a machine),
Besides the LCC applicability for products assessment, this methodology is also applied to
assess processes’ costs. This kind of analysis is very useful to support the process design
selection, since it allows comparing different alternatives to manufacture the same product
in terms of costs (Chakravarty & Debnath 2014) (Bornschlegl, Kreitlein, et al. 2015).
The complexity to develop an LCC analysis, comprising the complete life cycle of a product,
had promoted the development of simplified approaches. These “simplified LCC”
approaches tend to consider only the more relevant life cycle phases and costs. However,
each simplification must be applied carefully in order to achieve reliable results (Ribeiro,
Pousa, et al. 2009).
The Life Cycle Cost Assessment (LCCA) is another cost assessment methodology, which
derives from LCC. This methodology integrates economic costs, which are accounted in LCC
analysis, and environmental costs, which are costs related to the impacts of the human
activities on the environment (e.g. air pollution, water contamination, acid deposition)
(Warren & Weitz 1994). The way of accounting the environmental costs is a controversial
point, since expressing the environmental damage in terms of costs is a hard assignment
which depends on the technician who performs the study. Besides this problem, the
environmental impact also varies depending on the study’s area, which makes the
environmental cost hard to predict (Gluch & Baumann 2004) (Keoleian, Kendall et al. 2001).
The Dynamic Life Cycle Cost (DLCC) is another variant of the LCC where the costs are
divided in two main types: static costs and dynamic costs. The static costs can be prevised in
the earliest phases of the project and they are fixed while the dynamic costs will depend on
the use and the maintenance strategies. Then, the static and dynamic costs are summed
resulting in the total costs which can be useful to support decision making processes not only
during the design phase but also in the use phase for maintenance strategies selection
(Herrmann, Kara, et al. 2011).
Independently of the applied methodology, the variability of the money in time is another
point of disagreement between researchers. Some researchers believe that the costs of a
product life cycle considering or not the variability of the money in time will not influence
substantially the final results (Korpi, Ala-Risku 2008). On the other hand, some researchers
consider this point as a main factor in the final results. In these cases, usually researchers
apply the discount rate which depends on the inflation, cost of capital, investment
opportunities and personal consumption preferences. The most common form of accounting
the income and outcome payments from different times is by Net Present Value (NPV)
(Gluch & Baumann 2004) (Bornschlegl, Kreitlein, et al. 2015).
5.1.2 Process-Based Cost Modelling
As it is expectable, the LCC methodologies require a high number of inputs. This required
data leads to two main types of performing LCC. In the first type, the LCC is only a kind of a
black box where each product cost is introduced, being the sum of these costs the total cost
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(there are few softwares available commercially). However, this kind of approach does not
allow performing sensitive analyses, since the processes are not modeled. In the second type,
the LCC are developed closely connected with a Technical Cost Modelling (TCM).
The TCM is a range of methods aiming to analyse the economic implications of different
technological alternatives available within product development. So, TCM methods provide
information about economic consequences of a product or a process before they have
been produced, which is very useful in the earliest phases of the product design. There are
two different approaches of TCM: 1) the costs are modelled having as basis similar present
and past processes or products costs, which can limit its application in new technological
processes; 2) based on details of the production and operational conditions (Field, F, Kirchain,
R, et al. 2007). One example of a cost estimation method is the Process-Based Cost
Modelling (PBCM) which first application was to analyse innovations in manufacturing
processes, in order to avoid large investments that could have a bad performance in an
economic point of view (Field, F, Kirchain, R, et al. 2007). The PBCM quantifies the needed
resources as equipment, material and energy for a specified production target, based on
estimates from engineering concepts and industry data available. With the PBCM outputs,
decision-makers could have an idea of the influence of their technical choices in a unit cost
value before those choices are implemented, which will minimize strategic errors (Field, F,
Kirchain, R, et al. 2007) (Ribeiro, Peças, et al. 2013). However, there are some costs extremely
hard to predict/model, since they depend on the product’s way of use, such as the
maintenance costs (Thiede, Spiering, et al. 2012). Despite this limitation, there are some
statistical approaches based in Monte Carlo simulation which minimize the uncertain costs.
The sensitive analysis is another technique commonly applied to minimize the uncertainties of
this kind of costs (Gluch & Baumann 2004). The PBCM also allows considering different levels
of cost estimation, since who applies this tool can select more or less inputs and outputs.
Therefore, in one hand this tool can be applied in simple analysis, where the data collection
would be easier, since less inputs and outputs are considered. In the other hand, PBCM can
also be applied in more comprehensive analyses, where the results accuracy will be higher,
however the data collection could be a lengthy process. In Figure 33 is presented a
schematic approach of a PBCM model, where the first step is to model the process
according to the product description. After this, the process requirements such as cycle time
and equipment specifications are assessed. Having the process requirements and the
production volume defined the required resources are computed through the operations
model. Finally, the financial model with price factors and accounting principles is applied
considering the required results, being the product cost the final result of this process.
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Figure 33 - Schematic PBCM approach – Adapted from (Ribeiro, Peças, et al. 2013).
5.1.3 Value Modelling
One of the main steps of an Eco-Efficiency analysis is the definition of the value profile for the
product / service. There are different approaches to assess the value profile. Therefore, the
value may be determined considering the LCC results together with the monetary indicators
such as value of sales less costs of all inputs and functional performance values such as
production capacity, life time, etc. (Baptista, et al. 2014). Besides these indicators
classification, WBCSD proposes other classes of indicators: general and specific indicators.
The general indicators have a common methodology to calculate independently of the
company, sector or country where the study is being performed. The specific indicators do
not have a well-defined methodology to calculate and can have only relevance for a
specific product or company. Thus, these last indicators have relevance inside the
company’s boundaries but they can be despised in other companies (Verfailie & Bidwell
2000). To clarify these two types of indicators, some examples are introduced in
Table 4 - Possible set of value general and specific indicators. (Adapted from Baptista, et al. 2014)
Value Indicators
General Indicators
Amount of Goods Produced (ton, kg)
Durability (years)
Sales (€)
Net Sales (€)
Specific Indicators
Gross Value Added – GVA (€)
Gross Value of Production – GVP (€)
EBITDA (€)
Overall Production Costs
Production Cost per Process (€)
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5.2 Economic approaches aiming for Sustainable Production Perspective
From the WBCSD documents, Eco-Efficiency must comprehend the value profile definition.
The value profile is built applying the relevant indicators for the specific case in study, which
can vary depending on several factors such as the company’s needs, study scope, country,
etc. (Verfailie & Bidwell 2000).
Depending on the selected indicators to represent the value profile, the data treatment
must be different to perform the Eco-Efficiency Ratios. There are two possible scenarios. In
the first one, the indicators of the value profile are better as higher they are. In the second
scenario the indicators are better as lower they are. As can be easily noticed, the first
indicators can be used directly to perform the Eco-Efficiency Ratios, since as higher is the
indicators higher will be the ratios. On the other hand, when the value is assessed based in
the LCC or other costs, some data treatment is required, since in general the product’s value
is higher as lower these costs are.
To assess the products’ Eco-Efficiency, the LCC and LCA results are commonly applied.
However, in these cases the Eco-Efficiency ratios are not representative of the products’ Eco-
Efficiency, since LCC results are not a value indicator. To perform this kind of analyses with
this data, the graphic solutions were proposed, where each axe represents LCC and LCA
results. Then, the graphic solution shows the position of each alternative depending on the
LCC and LCA results. Considering this graphic solution, the products’ Eco-Efficiency is higher
near the graphic origin (better results as lower are the LCC and LCA results) (Ng, Nai, et al.
2014) (Ferrández-Garcia, Ibáñez-Forés, et al. 2015).
5.2.1 Life cycle perspective
As it can be noticed in the previous sections of this report, Eco-Efficiency can be assessed
considering different types of indicators. Despite the Eco-Efficiency has the life cycle
perspective in its background, in several cases the companies perform the analysis only
considering inputs and outputs inside their boundaries, since these are the processes where
they have the highest control. In these cases, value indicators as sales and processes’ costs
are useful and provide relevant information (GVA, EBITDA, etc.). However, if a life cycle
perspective is adopted, the value profile should comprehend value indicators based on the
LCC results. When combined with the environmental profile data, these two types of
indicators will allow performing Eco-Efficiency ratios from complete life cycle point of view
and Eco-Efficiency Ratios of specific aspects of the product/process. So, this kind of
approach provides information about the overall product/service Eco-Efficiency while in the
same time it provides relevant information to identify the phases and processes where the
improvements can be more significant.
In the present approach, a life cycle perspective of the products/services was considered to
assess Eco-Efficiency. The Figure 34 schematizes the adopted approach to assess the life
cycle costs.
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Figure 34 - Life Cycle Cost Approach.
5.2.2 Input Parameters
The proposed approach (Figure 34) comprehends the complete life cycle. However, a
particular concern is given to the production phase since from the producer point of view
this is the life cycle phase where the improvements are more significant and easier to
implement. Therefore, in the proposed approach the production phase of the product (the
processes of the company) must be modelled under the logics of the PBCM methodology.
The resulting incurred costs outside the production phase should be introduced by the user of
the approach directly or obtained with direct calculation of resources consumptions/use,
translated in cost by general cost ratios.
The proposed PBCM approach to estimate the inputs required and outputs generated in the
product production phase is present in Figure 35. For each production system a specific
PBCM must be developed thus modelling the influence of product features and
characteristics in the processes parameters and the influence of the processes parameters in
the processes performance. In a simple description of the PBCM use, the user introduces
information such as product specification, production volume and process conditions in
order to obtain the time and physical resources required for the production phase, that are
translated in cost afterwards.
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Figure 35 - PBCM to model production phase.
5.2.3 Outputs of the approach
Having the production phase modelled and the required resources of this phase, the cost
breakdown provides two types of costs: variable costs and fixed costs. Having these data,
different Key Performance Indicators (KPI’s) are generated, as well as product and process
cost breakdown depending on the study’s scope. Also, the proposed approach assumes a
permanent link of the PBCM with the System Application and Products (SAP) company’s
data and system.
So, the value profile can be composed by two levels of outputs (for the same period of
analysis):
- The cost breakdown: the cost related information (coming from PBCM), namely the
variable costs (material, energy, maintenance, etc.) and the fixed costs (equipment,
building, overheads, etc.).
- Value related indicators: some of them functional (market and technical related
value) and others (financial related value) coming directly from the International
Accounting Standard (IAS), i.e. EBITDA, GVA, etc.
Having all this data available in the value profile, the proposed approach also allows
performing sensitive analyses and simulation scenarios, which are very useful to assess how
different production conditions influence the value indicators as well as cost and Eco-
Efficiency in general.
In addition, this approach is able to perform sensitive analysis in the value indicators. The user
can change inputs (i.e. type of material, type of machine, level of energy consumption, etc),
which will influence the modelled costs. This costs variation will change the cost breakdown
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results, which also influence KPI’s. Afterwards the KPI’s also varies, being these differences
between the initial and final conditions presented as ΔKPI’s. On the other hand, the financial
indicators which derive from the company’s SAP also changes. Despite the software does
not calculate these indicators, it is able to present their differences between the initial and
final conditions due the costs changes. Therefore, these indicators’ differences are presented
as ΔNPV and ΔEBITDA.
Beyond the economic indicators, the value profile of a product can be complemented with
other indicators such as technical and market indicators (Figure 36). These indicators should
be introduced by the user of this approach, since it depends on the product type, functional
requirements, market needs, etc. The user must introduce these indicators when the products’
characteristics change, since the approach is not able to perform this task by itself.
Therefore, to have the complete Value Profile, the user should introduce the market and
functional indicators that are valued in each case.
Figure 36 - Value Profile Modulation.
5.3 Consequences and critical factors for the efficiency framework
The reliability of the results of the present approach depends on the production process
variables behaviour modelling and inputs accuracy. Therefore, special concern must be
given to processes modulation in order to obtain reliable value indicators.
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In terms of economic indicators, the KPI’s derive from the cost breakdown, which are
obtained by the developed PBCM of the production phase. Therefore, the production
model is the key factor to achieve reliable KPI’s. Still concerning economic indicators, the
NPV and EBITDA are also assessed based on SAP companies’ data. Thus, the SAP data is also
a key aspect to define the value profile, in this case to calculate indicators such as NPV and
EBITDA.
The functional requirements and the market needs have also an important relevance on the
value profile definition. While the functional requirements are easy to define, the market
needs can be difficult to predict, since they depends on several aspects such as the study
scope, product type, country etc. Therefore, to assess the market dimension a subjective
analysis is needed, in other words, these indicators depend on the person who is performing
the analysis. In terms of functional requirements, the products must be according to the
required specifications to accomplish their functions. These functional indicators can be very
different depending on the product in study (e.g. durability, yield strength, work temperature,
etc.) which could be a limitation of the present approach.
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In the following sections the structure to be used to assess and evaluate the environmental
influence is presented. In practice, this represents LCA methodologies, impact assessment
methods, as well as the available databases that can be considered within the efficiency
framework.
6.1 The environmental assessment within the efficiency framework
An accurate management of environmental issues is essential to achieve continuous
improvement, which is a fundamental principle for successful organisations. Implementing an
effective environmental assessment on elements that have an impact on the environment,
can lead not only to a better understanding of performing activities, drivers, and barriers, but
also to cost reduction and long-term prosperity of an organisation (Baptista, et al., 2014).
According to (Madden, et al., 2006) eco-efficiency is a management strategy that
combines economic and environmental performance to create better products and
services (i.e. with more value) while reducing resource consumption, waste generation, and
pollution (i.e. with less ecological impact). Consequently, the environmental assessment is a
central topic of an eco-efficiency methodology. In practice, the ratio between these
economic and environmental topics intends to improve competitiveness and environmental
performance by stimulating productivity and innovation.
6.2 Life cycle thinking: methods and application
In practical terms, Life Cycle Thinking (LCT) supports that products, processes or services result
from successive and interactive stages that make up their life cycle. Therefore, it aims to
provide a systematic and holistic perspective to products, processes or services, covering its
entire life cycle. The main goal of LCT is then to identify improvements by decreasing impacts
across all life cycle stages of goods, production processes and/or services by avoiding
burden shifting from one stage to another. This means minimising impacts at one stage of the
life cycle, or in a geographic region, or even in a particular impact category, while helping
to avoid increases elsewhere (Giudice, et al., 2006).
For each particular stage there are several tools that provide reliable results and enhance its
quality and efficiency. Meanwhile, they can support decision making by allowing more
accurate choices considering the definitions and requirements of products, processes or
services.
From an environmental perspective, Life cycle assessment (LCA) presents a structured, and
principally comprehensive, approach to identify, quantify and assess the environmental
aspects of product systems. Cornerstone to the life cycle thinking is the understanding that
environmental impacts are not restricted to localities or single processes, but rather are
consequences of the life-cycle design of products and services. The product life-cycle
covers all processes from extraction of raw material, via production, use, and final treatment
or reuse [(ISO, 2006a), (Wenzel, et al., 1997), (Guinée, 2001), (Baumann & Tillman, 2004)].
6 Definition of the environmental assessment approach
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In addition, the combination of a quantitative approach and a holistic perspective leads to
trade-offs being clearly stated, which makes LCA a systematic tool well-suited for
environment decision making. In fact, most product systems involve long and complex
supply chains, where environmental improvement in a particular part of the chain may lead
to hidden problem shifts in other parts. For this purpose, a wide impact scope and full life
cycle ensures that trade-offs are properly identified and evaluated, being the main added
value of providing a life cycle perspective, to avoid problem shifting from one stage to
another.
Since its origin as cumulative resource requirements, LCA now is evolved into a scientific field
that includes emission inventory methods and environmental cause-consequence modelling
(Goedkoop, et al., 2002), with standardization of methodology step by step. The revised ISO
standard was completed in 2006 (ISO, 2006a). The field has since then seen tremendous
growth in specific product-oriented methods and applications such as Product Category
Rules (PCRs) and Environmental Product Declarations (EPDs), impact-oriented standards (i.e.
water footprint, carbon footprint, product environmental footprints), and policy applications.
In addition, LCA, eco-design and policy based on life cycle perspective are collectively
referred to as Life Cycle Thinking (LCT). In this matter, the European Platform for LCA presents
a mutual basis for LCT, through the ELCD database for life-cycle inventories and the
Handbook for LCA, intended to provide guidance on the application of LCA within the
European context.
Overall, LCT can promote a more sustainable rate of production and consumption and help
to use financial and natural resources more effectively.
6.3 Life cycle environmental assessment methodology
ISO 14040:2006 defines LCA as the "compilation and evaluation of the inputs, outputs and
potential environmental impacts of a product system throughout its life cycle" (ISO, 2006a).
Thus, it consists of a structured and comprehensive method which studies, assesses, and
quantifies the significant environmental impacts of all relevant emissions and resources
consumed during the entire life cycle of a product, process or service.
ISO 14040:2006 also defines the four major components of an LCA as: (1) goal and scope; (2)
inventory analysis; (3) impact assessment; and (4) interpretation of results, as illustrated in next
figure (Figure 37).
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Figure 37 - Working procedure for an LCA (ISO, 2006a). The doted lines indicate the order of procedural steps and
the dotted line indicates interaction.
Following the standard rationale, a LCA starts with an explicit statement of the goal and
scope of the study, which shall include a clear description of the product system, the
functional unit, the system boundaries, the assumptions and limitations, the data
requirements and the allocation procedures to be used, and the types of impact and the
specific methodology for impact assessment. The goal and scope includes a definition of the
context of the study which explains to whom and how the results are to be communicated.
The functional unit is a quantitative measure and corresponds to a reference function to
which all flows in the LCA are related. Allocation is the method used to partition the
environmental load of a process when several products or functions share the same process.
In the inventory analysis, a flow model of the technical system is constructed using data on
inputs and outputs. The flow model is often illustrated with a flow chart including the activities
that are going to be assessed and also gives a clear picture of the technical system
boundary. For that purpose, the input and output data required for the system model
characterisation are collected (i.e. resources, energy requirements, emissions to air and
water and waste generation for all activities within the system boundaries). Following, the
environmental loads of the system are calculated and related to the functional unit, and the
flow model is finished.
The inventory analysis is followed by impact assessment, which involves the translation of the
environmental burdens identified in the inventory analysis into environmental impacts.
Impact Assessment is typically a quantitative process involving characterization of burdens
and assessment of their effects. In the classification stage, the inventory parameters are
sorted and assigned to specific impact categories, accordingly to the selected impact
assessment methodology. The next step is characterisation, where inventory parameters are
multiplied by equivalency factors for each impact category. Thereafter all parameters
n
n n Impact Assessment
Classification
Characterisation
Normalisation
Weighting
n
n n
n
n
n
n
n
n
n
n
Goal & Scope
Definition
Interpretation Inventory Analysis
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included in the impact category are added and the result of the impact category is
obtained.
For many LCA, the assessment ends with this characterization step, which is also the last
compulsory stage according to the standard (ISO, 2006a). However, some studies involve
further steps including normalization and weighting. In normalisation the results of the impact
categories are compared to better understand the magnitude of each category result.
During weighting, the different environmental impacts are weighted against each other to
get a single number for total environmental impact.
Finally, the results from the phase of inventory analysis and impact assessment are
summarised during the phase of interpretation. The outcome of the interpretation is the
conclusions and recommendations for the product system under study. The interpretation
should include:
• identification of significant issues for the environmental impact,
• evaluation of the study considering completeness, sensitivity and consistency,
• conclusions and recommendations.
The working procedure of LCA is iterative as illustrated with the dotted lines in Figure 37. The
iteration means that information gathered in a later stage can cause effects of a former
stage. When this occurs the former stage and the following stages have to be reworked
considering the new information.
Accordingly, from a general perspective, LCA evaluates the environmental performance of
products, processes or services throughout its entire life cycle, from its “cradle” all the way to
the “grave”. The life cycle model of a product, process or service usually starts with the
acquisition of raw materials and energy that is needed for the production of the studied
object, the “cradle”. The model follows the stages of processing, transportation,
manufacturing, use phase and finally, waste management, which is considered as the
“grave”. The assessment is accomplished by identifying quantitatively and qualitatively the
stages requirements for energy and materials, and the emissions and waste materials
released to the environment related to the product under study.
6.4 Environmental assessment approach
6.4.1 Environmental assessment structure and data flow
For the purpose of the described approach, the production system is composed by the
interaction of different unit processes connected by flows of intermediate products which
perform one or more defined functions. In this sense, in accordance to a life cycle thinking
approach, to calculate the environmental influence of a production system all input and
output flows should be properly identified and quantified.
The rationale is then that the more detailed mapping of environmental aspects (i.e. input
and output flows) related to the production system, the more accurate will be the results and
greater will be the advantage taken from the environmental assessment. Consequently,
each input and output flow should be considered as separate as possible, meaning also that
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both direct and indirect environmental impacts should be considered. Taking into account
the source and its consequential impact, direct environmental aspects are all the aspects
that can be controlled directly by the company and/or over which the company has a
direct influence. On the other hand, indirect aspects are those that are related to the
activities included in the process or product life cycle, but occurring in premises owned or
controlled by third parties, e.g. upstream stages related to raw materials and consumable
goods production.
Accordingly, from a generic perspective, the input and output flows of a production system
can be define as follows:
Materials – includes all substances and materials essential to the manufacturing
process, or its proper functioning, which can form an integral part of the product or
not.
Energy – includes all form of energy essential to the manufacturing process, or its
proper functioning, which can form an integral part of the product or not.
Resources – includes all substances, materials and energy forms that are not essential
the manufacturing process, but which are intended to assist its proper functioning.
Primary Products – main material, substances or form of energy resulting from the
manufacturing process.
Co-products – products resulting from the manufacturing process which can be used
directly and without modification, in another manufacturing process within or outside
the same company.
Residues – any substance or material which the holder discards, intends or is required
to discard, including those identified in the European List of Waste8.
Emissions – direct or indirect discharged substance, material or form of energy, to the
atmosphere, water or soil, in gaseous, liquid or solid form, respectively.
Thus, considering this requisite of identify and quantify all input and output flows (i.e.
environmental aspects) of the product system, as well as to correlate them with associated
environmental impacts providing a life cycle perspective, it becomes clear that LCA
methodology should represent the best support method for the proposed environmental
assessment structure.
At its genesis LCA is one of several environmental management methods, alongside with risk
assessment, environmental performance evaluation, environmental auditing or
environmental impact assessment. However its main benefit is to present a structured and
comprehensive approach to identify, and principally quantify and assess the environmental
aspects and impacts of product systems. On other hand, and in addition to the support of
proposed environmental assessment structure, it can also assist on:
identifying opportunities to improve the environmental performance,
decision making process regarding environmental performance,
8 COMMISSION DECISION (COM 2000/532/EC) of 3 May 2000, replacing Decision 94/3/EC establishing a list of wastes
pursuant to Article 1(a) of Council Directive 75/442/EEC on waste and Council Decision 94/904/EC establishing a list of hazardous waste pursuant to Article 1(4) of Council Directive 91/689/EEC on hazardous waste.
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selection of relevant indicators of environmental performance (i.e. KEPI),
environmental communication and marketing (e.g. implementing an eco-labelling
Summing up, by the environmental point of view, the approach followed by the simulation
module would enable to:
Simulate alternative scenarios through the definition of eco-efficiency principles goals
or performing changes on inventory data;
Evaluate how the inventory data influences the achievement of eco-efficiency
principles goals, and prioritise changes according to the organisational objectives;
Define eco-efficiency principles goals and organisational objectives through the
creation of scenarios and evaluation of their consequences.
6.4.3 Life cycle inventory databases
From a process industry perspective, the Life Cycle Inventory (LCI) consists on the
identification and quantification of all input and output flows from every unit processes within
the production system. However, as presented above, including a “cradle-to-gate”
perspective to the production system makes this a very difficult task, once materials,
products and services are diverse and geographically disperse in their resources,
manufacturing and assembly operations. This highlights the need to obtain data that
accurately and consistently measure the environmental aspects of production systems
activities. In fact, the quality of an LCA outcome is a reflection of the underlying data and
how it’s assembled.
With this in mind, for the past decades, several free and commercial databases have been
developed, maintained, and updated by different general database providers, by
academics and researchers, by industry sector database providers, and by industry internal
groups. These databases are mainly intended to facilitate the entire characterization process
of all environmental aspects associated with a product or production system.
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For the purpose of current report, a comprehensive assessment of available databases was
performed in order to create a scientific basis for the Efficiency Framework concept, and
better understand the consequences of their availability to Efficiency Framework
implementation. As a result of this assessment, Table 6 presents a brief description of
identified databases.
Table 6 – Identification and description of available LCA databases
Database
Name
Developer/
Provider Description Scope Availability
ELCD -
European
reference
Life Cycle
Database
European
Platform on
Life Cycle
Assessment
Comprises LCI data from front-running EU-
level business associations and other
sources for key materials, energy carriers,
transport, and waste management. In
addition, the respective data sets are
officially provided and approved by the
named industry association.
European Free
available
APME – Eco-
profiles
Association of
Plastics
Manufacturers
in Europe
(APME)
Includes data on the consumption and
recovery of plastics used in the main
application sector of packaging, building
and construction, automotive and
electric and electronic.
European Free
available
LCA Food DK 2.-0 LCA
Consultants
Provides environmental data on
processes in food products chain and on
food products at different stages of their
value chain.
European Free
available
SPINE@CPM Chalmers
University of
Technology
Contains detailed information on all types
of freight transports, energyware
production, production of selected
materials and waste management
alternatives.
European Free
available
GEMIS
(Global
Emission
Model for
Integrated
Systems)
International
Institute for
Sustainability
Analysis and
Strategy
(IINAS)
Includes data to determine energy and
material flows for mainly energy,
materials, and transport systems.
European Free
available
Ecoinvent Swiss Centre
for Life Cycle
Inventories
central
database
Worldwide leading LCA database. The
entire database consists of over 10.000
interlinked datasets, each of which
describes a life cycle inventory on a
process level, for different geographical
regions, activities and allocation
procedures.
European/
World
Purchase
database
GABI Thinkstep Comprehensive and mainly special-
purpose LCA database based on primary
data collection, mainly from industry. It
addresses several industries from
agriculture to electronics and retail,
through to textiles or services.
Europe/W
orld
Purchase
database
World Food
LCA
Database
Quantis Food-specific database considering
environmental inventory data in food and
food related products and processes.
Europe/W
orld
Purchase
database
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Database
Name
Developer/
Provider Description Scope Availability
KCL EcoData KCL Contains nearly 300 data modules,
covering various sectors related to pulp
and paper industry.
Europe Purchase
database
IVAM LCA
Data 4
IVAM UvA BV It consists of about 1350 processes,
leading to more than 350 materials from
different industrial sectors
Europe Purchase
database
Athena Athena
Institute
Comprises more than 90 structural and
envelope materials datasets for building
and construction sector.
North
America
Purchase
database
US LCI
Database
National
Renewable
Energy
Laboratory
(NREL)
Provides a cradle-to-grave accounting of
the energy and material flows into and
out of the environment that are
associated with producing a material,
component, or assembly. It's an online
storeroom of data collected on
commonly used materials, products, and
processes.
North
America
Free
available
GREET U.S.
Department of
Energy's Office
of
Transportation
Technologies
Database allowing the evaluation of
various engine and fuel combinations on
a consistent fuel-cycle basis.
North
America
Free
available
IISI Database International
Iron and Steel
Institute
Database including resource use, energy
and environmental emissions associated
with the processing of eight stainless steel
industry products, from the extraction of
raw materials to the steel factory gate.
World Free
available
GTGLCI US Department
of Energy
Database for several materials used in
wind turbine manufacturing.
North
America
Free
available
UPLCI – Unit
Process Life
Cycle
Inventory
US Department
of Energy
Contains data to assess a product life-
cycle at the manufacturing stage. Data is
in the form of a heuristic to establish
representative estimates of the energy
and mass loss from a unit process in the
context of manufacturing operations for
products.
World Free
available
ProBas German
Federal
Environment
Agency
(Umweltbunde
samt)
It includes unit as well as aggregated
processes, for the following topics: Energy,
Materials & Products, Transportation
services and Waste. ProBas+ is an
extension and refinement of ProBas which
contains 1,800 additional data sets, data
updates, corrections for transport
processes, and an improved process
linking and data structure.
Europe Purchase
database
Agribalyse French
Environment
and Energy
Management
Agency
(ADEME)
It includes different aggregated and unit
processes, which must be connected to
background ecoinvent v.2.2. database.
Europe Free
available
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Database
Name
Developer/
Provider Description Scope Availability
USDA United States
Department of
Agriculture
(USDA)
Contains agricultural data sets with a US
background, plus crosswalks to upstream
Ecoinvent v.2.2 data sets
North
America
Free
available
Ökobaudat German
Federal Ministry
of Transport,
Building and
Urban
Development
Database mainly focused on construction
materials and processes for building
sector.
Europe Purchase
database
NEEDS New Energy
Externalities
Developments
for
Sustainability
It contains industrial LCI data on future
transport services, electricity and material
supply.
Europe Free
available
Bioenergieda
t
German
Federal Ministry
for the
Environment,
Nature
Conservation
and Nuclear
Safety
Contains processes for bioenergy supply
chains, mostly with German background.
Europe Free
available
AusLCI -
Australian
National Life
Cycle
Inventory
Database
Australian Life
Cycle
Assessment
Society
(ALCAS)
It is in its development stage but contains
nearly 300 processes mainly related to
agricultural activities in Australia.
Oceania Free
available
KNCPC
Database
Korea National
Cleaner
Production
Center
Consists on several datasets focusing
electronics, chemicals, transport systems
and waste treatments, based on a series
of industry-requested surveys.
Asia Free
available
CRMD -
Canadian
Raw
Materials
Database
University of
Waterloo
Database profiling the environmental
inputs and outputs associated with the
production of Canadian commodity
materials.
North
America
Free
available
Wood for
Good
Wood for
Good
campaign
Online information hub containing
environmental and design data
necessary to specify wood and timber
materials.
Europe Free
available
MiLCA Japan
Environmental
Management
Association for
Industry
Presents more than 3000 data sets in both
gate to gate and cradle to gate type,
mainly on Japanese industrial activities.
Asia Free
available
Space
Materials
and
Processes
database
Ecodesign
Alliance for
Advanced
Technologies
Presents a comprehensive database with
more than 400 datasets mainly related to
space and aeronautic materials and
manufacturing processes.
Europe Free
available
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From the table above it is evident the existence of numerous initiatives aimed to assist and
disseminate the implementation of LCA methodologies in different regions, sectors and
industrial circumstances. This also highlights the evolving nature of the methodology for
which is expected an increase of its application in the near future, taking into account the
overcome of its main barrier - the existence of consistence databases to model the
environmental impacts of processes and products.
Moreover, there are several other background initiatives aiming to provide consistence to
available databases and guidance principles for their development. In this matter, UNEP,
through its Life Cycle Initiative, has produced a report provide guiding principles on how
data should be collected, how datasets should be developed and how databases should
be managed (Sonnemann & Vigon, 2011). In this way the publication provides the bridge
between the data users and the data providers, making basic information easily accessible
for computing the environmental footprints of materials and products that are key to make
and judge green claims and to allow institutional and individual consumers to make
informed consumption choices.
In a complementary way, the CO2PE! initiative (Cooperative Effort on Process Emissions in
Manufacturing) has been initiated as a response to the current status of existing databases
and their highly generic nature and incomplete coverage (Kellens, et al., 2012). It is an
international initiative aiming to improve documentation and analysis of the environmental
footprint for a wide range of available and emerging manufacturing processes with respect
to their direct and indirect emissions, i.e. consistent with the objective of an LCA. CO2PE! was
developed for current and emerging manufacturing processes for discrete part
manufacturing. For this reason, its inventory database is considered to represent state-of-the-
art for manufacturing processes due to its coverage of conventional and non-conventional
processing, and its temporal relevance. Also, being the database developed for discrete
part manufacturing, it facilitates its use as a fundament for specific adaptations of the
inventories.
Concluding, in the scope of the proposed environmental approach, it is expected that the
risk of exposure to the lack of data for production systems environmental characterization is
relatively small. However, due to the existence and importance of this exposure risk, this
should be taken into account during the decision-making process for the Efficiency
Framework development.
6.4.4 Life cycle environmental impact assessment
According to ISO 14040:2006, the impact assessment is primarily intended to enhance
understanding of the LCI results (ISO, 2006a). Due to the complexity of the Life Cycle Impact
Assessment (LCIA) process many methodologies have been developed during the last
decades. However, in practice, these LCIA methodologies can be divided into two main
categories (Jolliet, et al., 2003):
• Theme oriented methods, which convert the inventory results into a number of themes,
usually greenhouse effect (or climate change), natural resource depletion, stratospheric
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ozone depletion, acidification, photochemical ozone creation, eutrophication, human
toxicity and toxicity.
• Damage oriented methods, also starts by classifying a system's flows into presented
environmental themes, but modelling each environmental theme's damage into
damage categories, as human health, ecosystem and depletion of resources.
In practice, the main differences of available methods are related to the interpretation and
weighing provided to each category, both from damage or impact perspectives. This usually
makes the whole process of selecting the best method applied to each case in a very
difficult task, which can be even more complicated if one considers the possibility of
selecting different categories from different methods in order to find the most suitable
assessment.
More recently, the Institute for Environment and Sustainability in the European Commission
Joint Research Centre (JRC), in co-operation with the Environment DG, has developed the
ILCD handbook (JRC, 2011), as part of the Commission’s promotion of sustainable
consumption and production patterns. This guidance document provides recommendations
for LCIA applications in the European context, in particular on models and characterisation
factors that should be used for LCIA. At its core, it supports the analyse of emissions into air,
water and soil, as well as the natural resources consumed in a single integrated framework in
terms of their contributions to different impacts on human health, natural environment, and
availability of resources. In this sense, it supports the calculation of indicators for different
impacts such as climate change, ozone depletion, photochemical ozone formation,
respiratory inorganics, ionising radiation, acidification, eutrophication, human toxicity, eco-
toxicity, land use and resource depletion (JRC, 2011).
The ILCD Handbook is also in line with international standards and has been established
through a series of extensive public and stakeholder consultations. For this reason, and
considering the scope and context of MAESTRI project, the LCIA application in the
environmental assessment approach that under development would follow these
recommendations.
However, the scope of the ILCD Handbook is just focused on impact categories, at midpoint
level, and damage categories, at endpoint level. This means that recommended approach
just implement the connection between inventory results and environmental impacts results
with similar impact pathways, at midpoint level, and damage results, at endpoint level. In
practice, this means that it does not allow the calculation of a single score result representing
the entire environmental influence of a production system, as required by the explained
environmental assessment approach. This includes both normalisation and weighting, which
are used to better understand the relative magnitude of each category result of the
production system. For this reason, all available LCIA methods were evaluated in order to
assess the most adequate approach to fulfil the defined requirements for environmental
assessment and best suit the process industries reality.
After this comprehensive analysis of current available methods, the LCIA selected for the
present assessment will be ReCiPe impact assessment methodology (Goedkoop, et al., 2013).
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The ReCiPe method is a damage oriented method which comprises harmonised category
indicators at the midpoint and the endpoint levels. Midpoint categories are considered to be
links in the cause-effect chain of an impact category, prior to the endpoints, at which
characterization factors or indicators can be derived to reflect the relative importance of
the impact (Bare, et al., 2000). It has been developed by RIVM and Radboud University, CML,
and PRé Consultants, being also the most currently used LCIA method.
In summary, ReCiPe method comprises eighteen impact categories, at midpoint level, and
three damage categories, endpoint categories, and enables to perform both normalisation
and weighting (Goedkoop, et al., 2013). In addition, due to weighting can represent an
additional source of uncertainty, ReCiPe method includes three different perspectives of the
methodology, using the archetypes specified in Cultural Theory [(Thompson, et al., 1990),
(Hofstetter, 1998)]. Considering the archetype view provided by this theory, different
weighting factors are assigned to the results reducing substantially the uncertainty of
weighting process.
Also considering the impact scope of proposed framework, the extension of conventional
life-cycle impact methods as recommended by ILCD Handbook, more specifically for critical
raw materials and REACH chemicals is also advised. For this reason, the conventional
characterization methods should be supplemented by aspects that shall be identified in the
life cycle of production systems, including:
• Hazardous substances as defined in the REACH authorization list;
• Critical raw materials as defined by the European Commission9.
6.5 Consequences and critical factors for the efficiency framework
The environmental assessment is a central topic of an eco-efficiency methodology. The ratio
between economic and environmental topics intends to improve competitiveness and
environmental performance by stimulating productivity and innovation.
To characterize the environmental performance of products, processes or services, applying
a Life Cycle Thinking, the Life cycle assessment arises as a structured, and principally
comprehensive, approach to identify, quantify and assess the environmental aspects of
product systems.
LCA is also a dynamic method that can be easily adapted to different product systems,
industrial circumstances, geographies or perspectives, considering both full life cycle value
chains (i.e. cradle-to-grave), or partial life cycle value chains (i.e. cradle-to-gate or gate-to-
gate). For this reason, LCA will also provide flexibility and scalability to the environmental
assessment, which are essential requirements of MAESTRI project platform, once the
Efficiency Framework should be adjustable in order to assure its application to any process
industry regardless the type of industry/sector and size. However, the outcome of the
environmental assessment and characterization will be permanently dependent on the
9 European Commission, “COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL,
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS On the review of the list of critical raw materials for the EU and the implementation of the Raw Materia,” 2014.
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quality of generated data. For this reason, the connection between the environmental
assessment, and consequently the Efficiency Framework, with the metering and monitoring
system and the overall platform is evident and of high relevance for proper implementation.
One other important remark is that the production system analysis would include the
functions that influence the performance or results of the production system, even indirectly,
and would also be expanded to include the identification of unused materials, energy and
resources. This will allow identification of opportunities that can result in exploitable synergies
with other production systems, both internally or externally the company. This integration aims
also to incorporate this identification exercise into the daily routine of decision making in
every company.
Moreover, the results from the environmental assessment can be used for four distinct
purposes within the proposed framework:
• Present LCA results – providing an accurate information on the environmental
influence exerted by different environmental aspects, individually;
• Generate eco-efficiency ratios – providing a quantified result for environmental
influence of production system, its unit processes and environmental aspects;
• Generate KEPIs – providing quantifiable metrics that reflect the environmental
performance of a system;
• Provide a technical and practical basis for simulation of alternative scenarios and
evaluation of goals.
Apart from the system overall environmental performance, the presentation of LCA results
aim to provide accurate information on the environmental influence exerted by different
environmental aspects, individually. This is particularly important for the identification of the
most significant aspects that should be targeted during the development of improvement
measures.
Regarding eco-efficiency ratios, they intend to help companies on managing links between
environmental and value performance. Their ultimate goal is to provide a clear vision of the
system baseline performance, and to assist the implementation of strategies by connecting
the various levels of the system with clearly defined targets and benchmarks. In the same
way, KEPIs are quantifiable metrics that reflect the environmental performance of a system.
They provide businesses with a tool for measurement by focusing on ‘key’ measures – i.e.
those most important to an understanding of a business. For this reason, while eco-efficiency
ratios present the generated value in accordance to the environmental influence produced,
KEPIs are presented in quantities or environmental impacts as a function of these quantities
(e.g. kWh of electricity, kg of residues, tonnes of CO2 emitted).
In order to provide an effective support for decision making, the simulation module would be
based on connections of direct influence between inventory data of production system and
goals defined by the company to each eco-efficiency principle. Additionally, a multi-
directional approach should be also included, considering the characterisation provided by
the user during the environmental performance evaluation. Furthermore, to allow prediction
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the simulation module should also include a direct complementarity with Material and
Energy Flow Analysis (MEFA) method.
In this matter, a strong connection with efficiency assessment should be also considered. To
enable the effectiveness of the relationship between process mapping modifications,