Evaluation of LIME3 utilization
method in Sekisui Chemical Group
ESG management
Report on Assessment of Plastic
Molded Products

June 2019
Sekisui Chemical Co., Ltd.

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -1.

General1.1

Assessment implementors

Affiliated institution: Sekisui Chemical Co., Ltd. ESG Management Promotion Department
Name: Hitomi Miura
Contact: miura015@sekisui.com

1.2

Report creation date

May 31, 20192.

Goal of the study

2.1

Reasons for carrying out the study

Sekisui Chemical has promoted two initiatives using LIME2. One is to carry out an LCA
evaluation for each product at the product planning and development stage for each theme, and has
recommended its use as a tool for conducting environmental impact assessments at design review
meetings for product planning and development. The other is to calculate the “return rate to natural
capital” as an integrated index that can show the impact of corporate activities on the natural andsocial environments and use it as a KPI for the company. In 2014, the calculation result as the index
was released. It was converted into a KPI in 2017 and has been used to monitor the progress of themedium-term plan launched in 2017 to set priorities of the initiatives and determine the direction of
measure development.
On the other hand, in LIME2, I felt it was an issue that the environmental impact of "water
resource consumption" could not be achieved and that the evaluation was limited to within Japan as
the business was expanding globally. In particular, in our business field, we can make a great
contribution through our products in terms of water, such as the provision of water treatment plant
equipment, including infrastructure materials. Therefore, by using LIME3 to evaluate the value andrisk of “water” according to situation and area of each country including “overseas”, we considered
if the evaluation results could be used as a tool or an indicator to find a direction of the new
medium-term plan from 2020 or if the results could be used for product promotion.

2.2

Intended applications

We want to apply the survey results towards the next two major applications.
- Identifying the merits of use for each productIn this study, the main focus was on understanding the environmental impact of businessdevelopment in each country and finding out the direction of measure development in each area.
- Evaluate potential for use as a tool to measure the progress and effects of ESG management

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -withinthe Sekisui Chemical Group.
(We also clarified the differences in the evaluation results from the previously used LIME2,
andproceeded with the study including consideration that the differences from the conventional
disclosure information should be shown to stakeholders.)

3.

Scope of the study

3.1

Study subjects and specifications

1kg plastic molded product as the intermediate material manufactured by Sekisui Chemical.

3.2

Functions and functional units

Supplying 1kg of plastic molded product

3.3

System boundaries

From resource mining to the production of 1 kg of plastic molded products (Cradle to Gate), andthe disposal and recycling stages. (Fig. 3.3-1) To expand the range of possibilities for using LIME3,
we examined several scenarios, such as the country of procurement and the location of
manufacturing factories, that allow companies to formulate strategies. Specifically, regarding theprocess from raw material procurement to the manufacture of molded plastic products, weevaluated scenarios in the United States, Japan, the Netherlands, China, Thailand, Mexico, Nigeria,
UAE, and Australia. For disposal and recycling, scenarios were evaluated in the United States,
Japan and China.

Fig. 3.3-1 System boundary image

3.4 Special notes (excluded processes, matters, etc.)
Since the use stage involves use as an intermediate material, it is difficult to grasp the actual
situation of both use in a user company and use as a final product. As such, this was excluded from

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -the study. Furthermore, raw material production and assembly and the construction, maintenance,and disposal of factories and machines related to fuel production, as well as tools and parts required
for maintenance are not included in the assessment. Other important points in the supply chain wereassessed using a simplified process flow.

4.

Inventory analysis

4.1

Foreground data

Collection parameters for foreground data are as shown in 4.1-1.
Table 4.1-1
Temporal effective range
Geographical effective range

Foreground data collection parameters
FY2015
Japan. However, in order to consider the business development
scenarios in each country being evaluated, the analysis was
performed assuming that input and output for respective
processes in those counties were the same as those forcorresponding processes in Japan.

Technical effective range

Data on the production of plastic molded products is based on
in-house operating results
Input flow
Main raw materials
Main energy (power, fossil fuel, steam)
Water (tap water, industrial water, groundwater)
Output flow

Other data collection parameters

Product production volume
Waste product (landfill, incinerator, renewable
resources)
Wastewater (rivers, sewer systems, etc.)
No data gathered for land use or forest resources(Impact estimated to be minor)

The following three scenarios were assessed as disposal and recycling scenarios (Table 4.1-2).
Table 4.1-2 Scenarios for disposal and recycling
Scenario

Conditions

Landfill scenario

After dismantling, crushing and sorting, evaluate as 100% landfill.

Thermal recycling

After dismantling, crushing and sorting, the cement industry recovers heat

scenario

after incineration, which contributes to reducing fossil resource consumption.

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -Material recycling

Considering that material (cascade) recycling is 100%, the environmental

scenario

impact after dismantling, crushing, and sorting is not calculated (cut-off). The
effect of replacing virgin material with recycled materials has not been
calculated.

4.2

Background data

IDEAv2.2i was used as a background database. Note that IDEAv2.2 is based on Japanese
production technology, so when interpreting the results, it was noted that the environmental impact
was underestimated in overseas evaluations, especially in the assessment of developing nations. As
for power data, Japanese system power data was used since we are assuming the use of Japanese
production processes. By doing so, we thought it possible to eliminate the country-specific impactof background data and clarify the differences in results based on country-specific LIME3
coefficients.i
For the basic flow, the result of integrating LIME2 was calculated using MiLCA v2ii, and the top
20 items with the highest contribution and the basic flow related to water resource consumption
were adopted. The ratio of the total value of the top 20 items to the total integration result of
LIME2 was 99.7%, which was considered to be a reasonable range for the purpose of this study.

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -4.3

Items in the inventory analysis and the results

A list of analyzed items and results in inventory analysis is shown in Table 4.3-1.
Table 4.3-1 LCI analysis results of plastic molded products
Resources/

Collection/

Emissionsdischarge destination

Resource

Land

Category

Basic flow name

Unit

Production

Crushing

Heat

LandfillrecoveryNon-renewable energy

Generic coal,kg

3.59E-01

7.08E-03-1.28E+00

0kg

2.11E+00

5.53E-03-3.42E-020m3

2.01E-03

1.44E-06-1.40E-07

0m3

4.80E-06

2.67E-07-2.08E-13

0kg

1.89E+00

9.04E-03-1.50E-03

0m3

3.64E-02

1.47E-05-3.60E-05

0m3

8.63E-05

4.78E-06-3.75E-12

0kg

9.67E-03

2.75E-05-1.19E-03

0kg

9.14E+00

5.70E-02-6.30E-01

025.7MJ/kg
ResourceLand

Non-renewable energy

Crude oil,
44.7MJ/kg

Resource

Hydrosphere

Renewable materials

Groundwater,
consumption

Resource

Hydrosphere

Renewable materials

Groundwater,transpiration,
consumption

ResourceLand

Non-renewable energy

Natural gas,
54.6MJ/kg

Resource

Hydrosphere

Renewable materials

Surface water
consumption

Resource

Hydrosphere

Renewable materials

Surface water,transpiration,
consumption

Emission

Air

Unidentified

CH4 (fossil resource
derivative)

Emissions

Air

Unidentified

CO2 (fossil
resource derivative)

Emissions

Air

Unidentified

HCFC-22kg

4.39E-04

8.59E-09-2.11E-11

0

Emissions

Air

Unidentified

N2O

kg

4.37E-04

3.28E-07-2.19E-05

0

EmissionsAir

Non-urban area or highNOx, urban areakg

7.32E-03

2.04E-05-2.47E-030effective chimney height(chimney height)

Non-urban area or highPM2.5, urban areakg

4.50E-04

6.16E-07-2.13E-040effective chimney height(chimney height)

Non-urban area or highPM2.5,kg

4.51E-03

3.45E-07-3.61E-05

0effective chimney height

non-urban area

Non-urban area or highSO2, urban areakg

2.63E-04

2.47E-06-2.30E-030effective chimney height(chimney height)

Emissions

Emissions

Emissions

Air

Air

Air

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -EmissionsLand

Within managed

Industrial waste

category(landfill)kg

1.93E-03-8.63E-11

1.00E+00

Emissions

Air

Unidentified

Hydrocarbon

kg

1.10E-04

5.08E-07-4.96E-06

0

EmissionsAir

Non-urban area or highSulfur oxide (SOx),kg

4.70E-04

5.14E-06-6.75E-06

0effective chimney heighturban area
(chimney)5.

Impact assessment

5.1

Assessment steps and impact categories

For the impact assessment, we used the Japanese version of the LIME2 and LIME3, Life-cycle
Impact Assessment (LCIA) Method based on Endpoint modeling to evaluate integrated assessment.
In addition, since multiple coefficient lists are presented in LIME3 and the user can select themaccording to the purpose, the options adopted this time are shown in Table 5.1-1. However, for
crude oil and natural gas, the global average was applied. There are two reasons for this. The firstwas the determination that "the selection of oil and natural gas procurement countries cannot be
assigned as corporate strategy." the second was that the problem of crude oil and natural gas
resource depletion should be viewed as a global issue regardless of regionality.
Table 5.1-1 LIME3 options adopted
Options adopted
DF or IF1 or IF2

IF2 (economic valuation) only

Resource consumption

Consuming country base.
The crude oil and natural gas
integration coefficient is the world
average (however, Japan's integration
coefficient is used when comparing
LIME2 and LIME3)

User cost discount rate

3% (7% for sensitivity analysis)

Weighting coefficient

G20 (population-weighted)

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -5.2

Impact assessment results

5.2.1 LIME2 vs LIME3 integration result comparison
Figure 5.2-1 shows a comparison of the integration results of LIME2 and LIME3 when thefactory location is Japan. As mentioned above, the results of the examination at LIME2 have been
audited by the auditing organization as an integrated index since 2017, and then calculated anddisclosed as a company. In this case, the sum of the integration results of LIME2 and LIME3 wasalmost the same. However, looking at the breakdown, there was a large difference in the aspects
that had an impact. Since the integration results of LIME2 and LIME3 are calculated based on
different unit, the rate conversions are: LIME2 weighting result: 100 yen = LIME3 weighting
result: $1 US.
For example, looking at the results by impact category, the impact on urban air pollution is only
a fraction. This is mainly due to the lower LIME3 integration coefficient of SOx. For the
integration coefficient of air pollution, a separate evaluation model is used for LIME2 and LIME3.
However, LIME3 uses a model that can more appropriately evaluate the effects of the widespreaddiffusion of PM2.5. This is because the impact of urban air pollutants emitted in Japan is relatively
becoming decreasing. On the other hand, fossil resource depletion has almost doubled. The main
factor is that the LIME3 integration coefficient for crude oil and natural gas is larger than that of
LIME2. Regarding the integration coefficient of crude oil and natural gas, the survey time wasdifferent for LIME2 development and LIME3 development, and this is because LIME3 reflected
the latest user costs. The impact of water resource consumption, which is a new evaluation itemfrom LIME3, became apparent, although at a small ratio of several percent.
Furthermore, looking at the results by protection area, the contribution of social assets andbiodiversity increased and the contribution of human health decreased in LIME3. The contributionof primary production was almost zero. The presumed reasons are that only social assets are subject
to LIME3 (experimental) as a result of waste treatment, and land use and forest resource data were
not included in this data.

Figure 5.2-1 LIME2 vs LIME3 weighting result comparison

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -By impact category (left), by protection area (right)

5.2.2. Evaluation results according to business development (production activities) in eachcountry
As described in section 2.2, in this study, we evaluated the merits of utilizing each product.
In particular, our main focus was on understanding the environmental impact of businessdevelopment in each country and finding out the direction of measure development in each area. As
such, 5.2-2 shows a comparison of LIME3 integration results by country of factory location.
By impact category, we acknowledged that the contribution of fossil resource depletion isdominant and of high importance. We also recognized that global issues include fossil resource
depletion and climate change, and local issues include urban air pollution in East and Southeast
Asia and water resource consumption in Japan and Europe.
It can be interpreted that the major impact of urban air pollution in East and Southeast Asia isdue to the relatively high population density and the proximity of contaminated areas to people. It
can also be interpreted that the impact of water resource consumption in Japan is relatively large
because the result is based on the model assuming that food production efficiency per water
consumption in Japan is high, and if food production declines due to water shortage, damage
including malnutrition will be induced in economically more vulnerable countries through foodtrade. .

Figure 5.2-2 Results of LIME3 integration by country of plant location
Figure 5.2-2 shows that the contribution of fossil resource depletion is dominant. As describedabove, for items having a large difference from LIME2, the coefficient updated and set taking into

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -account uncertainty has a large effect. Therefore, sensitivity analysis was performed to confirm therange of uncertainty. With LIME3, 3%, 5%, and 7% can be selected for the resource discount rate
(how much the future value is discounted from the present value in consideration of future
uncertainty). In this case, we conducted a sensitivity analysis to compare the results with an
integration coefficient with a discount rate of 7% to confirm the impact of future forecasts on thecontribution of fossil resources (Figure 5.2-3). Taking into account future uncertainties, theimportance of the contribution of fossil resource depletion and the importance of climate change
did not change. From this, it was reconfirmed that the most important issue in the products
examined in this study was the depletion of fossil resources even if the situation changed.

* Thailand, Mexico, Nigeria, UAE and Australia omitted due to space limitations
Figure 5.2-3 Sensitivity analysis of LIME3 integration results by country of factory location
5.2.3 Evaluation results of disposal and recycling
Figure 5.2-4 shows the evaluation results based on disposal / recycling scenarios of landfill,thermal recycling, and material recycling. Regarding landfill scenarios, the results of integration
were small in China and large in Japan and the United States. In the landfill scenario, the cost of
disposal and the number of remaining years affect user costs, which translates into a lower
integration coefficient in China. Regarding the thermal recycling scenario, negative integration
results were large in China and small in Japan and the United States. In other words, it shows thatthe effect of subtracting the environmental load by replacing the grid power with thermal recycling
was significant in China. Regarding material recycling, the integration result was almost zero in all2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -countries because, as described in Table II 4.1-2, material (cascade) recycling is considered to be
100%, and the environmental burden after disassembly, crushing, and sorting is not calculated(cut-off treatment).

* Evaluated only in the United States, Japan, and China due to space limitations.
Figure 5.2-4

Results of LIME3 integration at the disposal / recycling stage

6.

Conclusion

6.1

Summary of the results

An integrated evaluation of plastic molded products from raw material procurement toproduction and disposal / recycling was conducted. The recommendations gained through thoseresults are described below.
The important protection areas were social assets: consumption of fossil resources of crude oiland natural gas, and human health: climate change and air pollution and water resource
consumption. From this, the magnitude of the issues was re-recognized by the global evaluationand new evaluation items.
Environmental measures considered to be important suggest that the procurement of raw
materials (maximization of recycling, conversion to bio-based raw materials), promotion of energy
saving and introduction of renewable energy, not limited to our own factories, have the potential toreduce environmental impact.
It was important to consider local issues depending on the location of the company's factories,
especially air pollution issues in Southeast Asia and water issues in Japan and Europe. Whenmanufacturing in East Asia, Southeast Asia, etc., it is necessary to pay more attention to air
pollution than in Japan. Water is indispensable in the reaction process for resin production, andwater is required for cooling during molding. At this stage, it is important to consider water2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -consumption with an emphasis on direct risks, such as the potential of water sources in the area andthe load on discharge destinations.
Regarding the disposal and recycling of used products, it is important to note that the waste
coefficient (social assets) in LIME3 at this stage is a preliminary calculation, but as long as thecurrent status of the disposal system in each country continues, we would like to try not to landfill
in Japan and the United States.
From the above, it was concluded that it is necessary to consider further measures to reduce theenvironmental burden of each country in each process, taking into account the economic situationaccording to each environmental aspect and impact category.
At present, with regard to local water issues in Japan, measures to improve both quantity andquality will be implemented from FY2018, and the results of this study will support the promotionof these measures.
It was also recognized that the difference between the integration results of LIME2 and LIME3
was largely due to differences in the way of thinking about the integration coefficient and how tohandle them. The study also recognized that there is uncertainty in the weighting coefficients, andthat the use of the weighting results should be implemented with consideration to the impact of theuncertainties of the coefficients and recognizing that scope. This is one of the things we consideredduring this evaluation.

6.2

Limits and future issues

In this evaluation, the comprehensiveness of the targeted processes (resin material production,
resin production, disposal / recycling) covered important processes, and the validity of the results is
considered to be secured. On the other hand, IDEAv2 used as a background database has limitations
due to the modeling of Japanese production processes. In other words, in the production process inJapan, environmental facilities for preventing air and water pollution are in place. If applied
overseas (particularly in developing countries), there is a possibility that the environmental impact
will be underestimated. Summarizing this issue, note that environmental impacts may beunderestimated in overseas (particularly in developing countries).
In addition, although the subject of this study is one of our plastic molded products, it ispresumed that similar trends can be obtained in products used for other purposes. However, sincehorizontal recycling is not evaluated, this is excluded. In the future, we will consider the use of
LIME3, taking into consideration the assumptions at the stage of use.
At this stage, it was found that the use of LIME3 could give more detailed suggestions because it
could be considered by region to reduce the environmental impact of the product life cycle.
We judge that this shows that it can be effectively used in both the development of measure andthe market.

2.2
Evaluation of LIME3 utilization method in Sekisui Chemical Group ESG management- Report on Assessment of plastic molded products -On the other hand, these interpretations were obtained by confirming the coefficientcharacteristics of LIME3 with teachers of LIME3 method developers. It is difficult to infer theseinterpretations from the results of integration, and we believe that certain considerations are needed
to explain the event to stakeholders. In other words, explaining the differences in the results ofintegration with the conventional method to stakeholders and explaining the differences in eachcountry require some expertise and comprehension. We want to consider LIME3 utilization whileconsidering whether it is easy to understand.

Reference literaturei

LCI Database IDEA version 2.1, National Institute of Advanced Industrial Science and Technology,
The Research Institute of Science for Safety and Sustainability, Society and LCA Research Group,
Industrial Environmental Management Associationii
LCA system MiLCAver. 2, Japan Environmental Management Asociation for Industry