Avoiding Greenhouse Gas
Emissions

The Essential
Role ofChemicals

Guidelines
Accounting for and Reporting Greenhouse Gas (GHG) Emissions
Avoided along the Value Chain based on Comparative Studies
Version 2
October 2013 (updated December 2017)

“The earth
we live on
is a precious
resource
for all”

B

Dr. Hariolf Kottmann
CEO
Clariant
President, International Council of
Chemical Associations (ICCA)

Mr. Osamu Ishitobi
Chairman
Sumitomo Chemical Company
CEO, Sponsor, Energy & Climate Change,
International Council of Chemical
Associations (ICCA)

Mr. Tön Buchner
CEO and Chairman of the Boardof Management and the Executive
Committee AkzoNobel
Co-Chair, WBCSD Reaching Full Potential
Chemical Sector Project

Mr. Feike Sijbesma
Chief Executive Officer
DSM
Co-Chair, WBCSD Reaching Full Potential
Chemical Sector Project

Dr. Klaus Engel
Chief Executive Officer
Evonik Industries
Co-Chair, WBCSD Reaching Full Potential
Chemical Sector Project

Mr. Jean-Pierre Clamadieu
Chief Executive Officer
SolvayCo-Chair, WBCSD Reaching Full Potential
Chemical Sector ProjectForeword
Developments in science and technology have enabled people to live longer, healthier, moreagreeable and more prosperous lives. Minimizing environmental impacts whilst furthering thesedevelopments is critical to a sustainable future. The chemical industry contributes to almost every
modern technology and has long been developing innovative products that improve sustainability.
With that in mind, the industry supports the use of life cycle assessment (LCA) methodologies
because these enable the assessment of the environmental impact of products and technologies
over their complete life cycle, including production, use and end-of-life handling. As such, they are
critical to assessing – and ultimately improving – sustainability.
Greenhouse gas (GHG) emissions are one of the many environmental impacts that LCAs canquantify. By comparing GHG emissions along the life cycle of two alternative products ofequal benefit to users, we can understand which technology avoids GHG emissions, improving
sustainability. LCA standards help to improve the quality and reliability of these assessments.
The consistent measurement and reporting of LCAs increases credibility and comparability of theresults, leading to better decision making by stakeholders along the value chain. Measuring avoided
emissions of GHG over the value chain of products in particular, is an area where consistency ofapproach is essential. But, it has often given rise to debate among stakeholders.
To address these concerns, in early 2012 the International Council of Chemical Associations (ICCA)
and the World Business Council of Sustainable Development (WBCSD) Chemical Sector project,“Reaching Full Potential”, formed a taskforce to develop practical guidelines to improve consistency
in the assessment and reporting of avoided emissions. These guidelines have been updated in2017. We expect these guidelines to improve reporting consistency across the industry. In the
future, we intend to expand them to cover other environmental impacts. We therefore aim to engage
all stakeholders in the value chain so as to further improve the guidelines and the quality of our
methodology. We believe this is an important step in improving the sustainability of our society.

Related ICCA documents
Available on www.icca-chem.org/energy-climate•	Avoiding Greenhouse Gas Emissions - the Essential Role of Chemicals:
17 Case Studies - Technical Reports•	Avoiding Greenhouse Gas Emissions - the Essential Role of Chemicals:
17 Case Studies - Summaries•	Greenhouse gas emission reductions enabled by products from the chemicalindustry: Quantifying the global potential

1Acknowledgements

ICCA and WBCSD Chemical sector would like to thankthe numerous people that have been involved in thedevelopment of these guidelines:
Working Group Co-chairs
For version 1 (2013): Juhan Robberts (ExxonMobil Chemical, ICCA Chair of the LCA taskforce); Andrea Brown(WBCSD, Director, Chemical); Cordula Mock-Knoblauch (BASF, Head of Coordination Climate Protection).
For version 2 (2017): Pierre Coërs (Solvay, ICCA Chair of the cLCA taskforce), Andrea Brown(WBCSD, Director, Chemical).
Working Group Participants
For version 1 (2013): Mike Levy (ACC); Carmen Alvarado (AkzoNobel); Junichi Nakahashi (Asahi Kasei
Corporation); Nicola Paczkowski (BASF); Beatriz Luz (Braskem); Yuki Hamilton Onda Kabe (Braskem);
Peter Botschek (Cefic); David Russell (The Dow Chemical Company); Mike Mazor (The Dow Chemical
Company); Gaelle Nicolle (DSM); Robert Donker (DSM); Mikkel Thrane (DuPont); Susanne Veith (DuPont);
Jason Pierce (Eastman); Jennifer Creek (Eastman); Guido Vornholt (Evonik); Ulf Auerbach (Evonik);
Abdelhadi Sahnoune (ExxonMobil Chemical); Joerg Feesche (Henkel); Kiyoshi Kasai (JCIA); Motozo Yoshikiyo(JCIA); Naoki Takahara (JCIA); Kiyoshi Matsuda (Mitsubishi Chemical Holdings Corporation); Anju Baroth(SABIC); Gretchen Govoni (SABIC); Sreepadaraj Karanam (SABIC); Ignacio Hernandez-Bonnett (Shell);Robert Cooper (Shell); Xavier Riera-Palou (Shell); Chatree Chuenchomsakun (SCG Chemicals);Michel Bande (Solvay); Pierre Coërs (Solvay); Masahiro Minami (Toray); Osamu Mito (Toray).
For version 2 (2017): Klas Hallberg (Akzonobel); Junichi Nakahashi (Asahi Kasei Corporation);
Nicola Paczkowski (BASF); Yuki Hamilton Onda Kabe (Braskem); David Morris (DSM); Jacobine
DasGupta (DSM); Jason Pierce (Eastman); Guido Vornholt (Evonik); Marvin Hill (ExxonMobil Chemical);Joerg Feesche (Henkel); Rajesh Mehta (SABIC); Gretchen Govoni (SABIC); Avantika Shastri (SABIC);
Dominique Debecker (Solvay); Jean-François Viot (Solvay); Pierre Coërs (Solvay); Andrea Brown (WBCSD);
Kiyoshi Kasai (JCIA)
These guidelines have been developed with the support of three outside consultancies.
For version 1 (2013): We thank Marijn Vervoorn of Arthur D. Little and Annemarie Kerkhof of Ecofys for theirleadership roles in different phases of the project. The work has been reviewed by several stakeholders
external to the chemical industry. In particular we would like to express our thanks to Professor Hongtao
Wang of Sichuan University, China; Plastics Europe; Professor Masahiko Hirao of the University of Tokyo,
Japan; and the Interuniversity Research Centre for the Life Cycle of Products (CIRAIG) for their valuable input.
For version 2 (2017): We thank Sebastien Humbert of Quantis for his leadership role in coordinating
the revision in the different phases of the project.

2

Table of contents
Foreword........................................................................................................................................................................................................................................................................................... 01
Acknowledgements................................................................................................................................................................................................................................................... 02
Executive summary...................................................................................................................................................................................................................................................04
Main methodological issues addressed in these guidelines....................................................................................................................................06
Guidelines on reporting avoided emissions.......................................................................................................................................................................................07
Key differences between version 1 (2013) and version 2 (2017) of these guidelines...........................................................07

1

Introduction................................................................................................................................................................................................................................................................................08
1.1 Purpose of the guidelines.................................................................................................................................................................................................................................08
1.2 How the guidelines were developed................................................................................................................................................................................................. 10
1.3 Who should use the guidelines................................................................................................................................................................................................................ 10
1.4 Relationship to existing standards and guidelines.................................................................................................................................................... 10
1.5 Limitations of the guidelines....................................................................................................................................................................................................................... 11

2
3

Principles..........................................................................................................................................................................................................................................................................................12
Guidelines on accounting avoided emissions.....................................................................................................................................................14

3.1 Purpose of study............................................................................................................................................................................................................................................................ 15
3.2 Solution to compare to......................................................................................................................................................................................................................................... 16
3.3 Functional unit.................................................................................................................................................................................................................................................................. 19
		3.3.1 Function of the product/application............................................................................................................................................................................... 19
		3.3.2 Quality requirements............................................................................................................................................................................................................................ 19		
3.3.3 Service life of the solution(s)..................................................................................................................................................................................................... 19		
3.3.4 Time and geographic reference of the study.....................................................................................................................................................20
3.4 Calculation methodology..................................................................................................................................................................................................................................20
		3.4.1 Boundary setting.......................................................................................................................................................................................................................................20
		3.4.2 Data quality........................................................................................................................................................................................................................................................20
		3.4.3 Methods/formulas used.................................................................................................................................................................................................................. 21
		3.4.4 Simplified assessment...................................................................................................................................................................................................................... 21		
3.4.5 Key parameters driving emissions....................................................................................................................................................................................22		
3.4.6 Scenarios of future developments and uncertainties............................................................................................................................22

4	Guidelines on contribution of value chain partners to avoided emissions............................................. 24
4.1	Qualitative assessment of the contribution of a chemical productto value chain avoided emissions........................................................................................................................................................................................................25
4.2	Pros and cons of attributing value chain avoided emissions
to individual value chain partners........................................................................................................................................................................................................27
4.3	Possible approaches to attribute value chain avoided emissions
to individual value chain partners........................................................................................................................................................................................................28

5
6

Guidelines on reporting avoided emissions............................................................................................................................................................ 30
Annexes ...........................................................................................................................................................................................................................................................................................34
Annex A. Report template..............................................................................................................................................................................................................................................35
Annex B. F unctional allocation of avoided emissions to selected components of the solution........................38
Annex C. Glossary......................................................................................................................................................................................................................................................................40
Annex D. References.............................................................................................................................................................................................................................................................. 41

3

Executive
summary
As part of low-carbon technology value chains,
many chemical industry products aid the
reduction of greenhouse gas (GHG) emissions
compared to conventional products orcompared to the market average (see Figure 1).
Under the terminology of the Greenhouse
Gas Protocol international accounting tool,
emission reductions of this kind are termed“avoided emissions”.
Figure 1. A reduction in GHG emissions is represented by the difference between the life
cycle emissions from the solution of the reporting company and the solution to compare to
Solution to compare to:
Raw material
supplier

Material
manufacturer

GHG emissions:
Material
processor

Assemblerof parts

Technology
user

Disposalcompany

140

Solution of reporting company:
Chemicalcompany
Emissions reduction:

4

100
40

This document provides guidelines for calculating avoided GHG emissions enabled by chemical products,
by comparing two solutions with the same user benefit. It also gives guidance on how to communicate
the results. A number of case examples are published on the ICCA website (www.icca-chem.org/energyclimate). These case examples are aimed to provide additional insight for users to understand the guidance
and reporting requirements. The intention of these guidelines is to support chemical companies in assessing
the GHG emissions avoidance potential of their products. This will support research and development andhelp the chemical sector communicate credibly to stakeholders the role of chemical products in reducing
GHG emissions. The chemical industry hopes that other industries facing similar challenges as the chemicalindustry may also benefit from these guidelines.
Although these guidelines focus on GHG emissions, the chemical industry supports the multi-criterial
approach of Life Cycle Assessment (LCA), to ensure that LCA studies cover all aspects of the environmental
impact. The guidelines build on the internationally accepted requirements of the ISO standards on Life Cycle
Assessment (LCA). They also aim to be consistent with leading standards and specifications on carbon
footprinting of products, including the GHG Protocol Product Life Cycle Accounting and Reporting Standard,
PAS 2050 and ISO/TS 14067.
The illustrative case studies assembled by ICCA in line with the present guidance focus on the reduction of
GHG emissions only. It is the intention of the ICCA to broaden the approach and include other environmental
impacts, like water and land use, in future studies when the respective accounting methodologies become
more mature. It is important to note that several of the case studies investigated involve possible trade-offs
to other environmental impacts while demonstrating GHG emission reductions. We expect future studies tosystematically reflect those trade-offs with authoritative references, reflecting the scientific discussion andmethodology.

5

Main methodological issues addressed in these guidelines
Purpose of the study
The objectives of studies on avoided emissions can be varied, hence different types of comparison can be made.
Comparisons can be classified into three different categories:• Category 1: Product/technology vs non-use of product/technology.
• Category 2: Product/technology comparison across sectors.
• Category 3: Product/technology comparison within the same sector.

Selection of the solution to compare to
In order to calculate avoided emissions, the solution involving the chemical product needs to be compared to a specificreference case or baseline (called the “solution to compare to”), which has to deliver the same function
to the user. This solution to compare to can be one specific solution, a few specific solutions or the average
market mix.

Assessment
Whenever possible, the full life cycle should be considered when calculating avoided emissions.
However, if necessary, identical parts or processes in both life cycles may be omitted.

Uncertainty of future developments
Assumptions about future conditions, such as how electricity used will be generated, can considerably impact theamount of avoided emissions calculated. Thus, for products with a long use stage, the reporting company should
undertake a qualitative scenario analysis taking into account alternative future developments.

Attribution of avoided emissions among value chain partners
Life cycle avoided emissions almost always result from efforts of multiple partners along the value chain. Therefore,
avoided emissions calculated shall always be first attributed to the complete value chain. Criteria to categorize thesignificance of the contribution of chemical products to such value chain avoided emissions as “fundamental”,“extensive”, “substantial”, “minor” or “too small to claim” are defined based on the function of the chemical
product. Arguments for and against a quantitative attribution of avoided emissions among value chain partners are
summarized. To support companies that see a compelling need to attribute part of the avoided emissions to theuse of their products, we have developed a decision tree. If quantitative attribution is done, companies should seek
consensus with their partners along the value chain.

6

Guidelines on reporting avoided emissions
To ensure that communication to third parties on avoided emissions is credible the following fundamental reporting
guidelines are specified:- Companies shall report the main results of the study of their own solution (or the solution their productcontributes to) and of the comparative solution (the “solution to compare to”).
- Avoided emissions shall be presented as the difference between the two emission profiles, and differentiated bylife cycle stages.
- Companies shall clearly state that the credit for the avoided emissions belongs to the complete value chain andshall describe and qualify the significance of the contribution of their product in the value chain based on thefunctionality of their product.
- If trade-offs with other environmental impacts occur, the reporting company shall report on these environmental
impact categories in the same way as it reports on GHG emissions or should consider not reporting avoided
emissions at all.
The transparency of communication about results of avoided emissions studies is ensured by a number of further
reporting requirements. These specify details of the report and include a reporting template.

Key differences between version 1 (2013) and version 2 (2017) of
these guidelines
The key differences between version 1 (2013) and this version 2 (2017) of these guidelines are:
- The concept of value chain level (chemical product or end-use level) has been removed.
- The concept of categories of comparison has been introduced.
- The criteria to select the solution to compare to has been made less rigid than in version 1.
- The exclusion of considering solutions being banned or in the process of being banned as solution to compare
to has been removed.
- The concept of discount factor has been removed.
- The IPCC version to be used is the most recent one and not anymore the version of 2007.
- The concept of functionality has been added in the attribution approach.
- Several clarifications have been made (e.g. past vs future avoided emissions, decision tree for selectionof solution to compare to, data quality, etc.).

7

1.

Introduction
1.1 Purpose of the guidelines
Today’s world faces the challenge of climate change. The chemical industry is contributing to the reductionof greenhouse gas (GHG) emissions by pursuing two complementary actions:
1. Reducing emissions in its own manufacturing facilities and supply chains, and
2. Developing innovative products or applications that reduce emissions when used by other industries
and consumers.

Figure 2. Customers of the EU chemical industry(percentage of output consumed by customer sector)
Other business activities 7.4%
Furniture 2.1%
Electrical machinery and apparatus 2.2%
Publishing and printing 2.3%
Wood 2.6%
Food and beverages 2.6%
Machinery and equipment 2.8%
Fabricated metal products 3.1%
Other non-metallic mineral products 3.1%
Textiles 3.2%
Basic metals 4.3%
Automotive 4.3%
Pulp and paper 4.6%
Service 4.9%
Wholesales & retail trade 5.1%
Other manufacturing 5.4%
Agriculture 7.0%
Construction 7.9%
Health and social work 11.2%
Rubber and plastics 13.9%
Sources: European Commission, Eurostat data (Input-Output 2000) and Cefic Analysis

8

100
90
80
70
60
50
40
30
20
10
0

Chemicals are part of the life cycle of most everyday goods, as shown in Figure 2. This unique position offers thechemical industry opportunities to reduce GHG emissions throughout society.
Many innovative chemical industry products enable GHG emission reductions downstream in the value chain,for example during the processing and manufacturing of downstream products, during use by the consumer
or during end-of-life treatment (see Figure 3). The chemical industry contributes to GHG emission reductions
throughout society, in collaboration with its value chain partners. Chemical companies seek to identify
opportunities for further emission reductions and to communicate these opportunities to their customers andpolicy-makers.

Figure 3. A reduction in GHG emissions is the difference between the life cycle emissions
from the solution of the reporting company and the solution it is compared to
Solution to compare:Raw material
supplier

Material
manufacturer

GHG emissions:
Material
processor

Assemblerof parts

Technology
user

Disposalcompany

140

Solution of reporting company:
Chemicalcompany
Emissions reduction:

100
40

To support these efforts, reliable and credible figures on GHG emission reductions enabled by chemical
products are essential. As part of a value chain, chemical products assist emission reductions but are notsolely responsible for them. That is why many leading chemical companies called for sector guidelines on
calculating emission reductions enabled by chemical products.
This document provides guidelines on how to calculate emission reductions in value chains, by comparing
two solutions with the same user benefit. In line with terminology chosen by the Greenhouse Gas Protocol,
the difference in emissions between two alternative solutions is termed “avoided emissions” in this document.
The guidelines will help the chemical sector to communicate credibly to stakeholders the role of chemical
products in reducing GHG emissions. The chemical industry hopes that other industries facing similar
challenges may also benefit from these guidelines.

91.2 How the guidelines were developed
The guidelines were developed by the chemical sector task force of the World Business Council for Sustainable
Development (WBCSD) and the International Council of Chemical Associations (ICCA) between July 2012 andJune 2013. The task force drew upon existing Life Cycle Assessment (LCA) studies, company presentations,and expertise from participating chemical companies. The guidelines were revised and updated in 2017. This
document builds on internationally accepted standards and guidelines on LCA and carbon footprinting (seeSection 1.4) and is therefore not a stand-alone document.
Use of the terms “shall”, “should” and “may” conforms to ISO/IEC directives (2011).
For definitions of the terms see Annex C.

1.3 Who should use the guidelines
The guidelines have been developed for all chemical companies worldwide and for interested stakeholders.
Companies that seek to measure, manage and communicate the avoided GHG emissions of their chemical
products are encouraged to use this guidance document. Widespread use of these guidelines will increase theconsistent calculation and communication of avoided emissions and make companies’ findings more credible.
Results of avoided GHG emissions studies interest a wider audience, including chemical industry value chain
partners and other stakeholders. This document could serve as a starting-point for conversations with value chain
partners on how overall sustainability of product systems can be improved and communicated.

1.4 Relationship to existing standards and guidelines
This document builds on internationally accepted requirements and guidelines found in the ISO 14040 (2006)
and ISO 14044 (2006) on LCA and is inspired by the Guideline for Calculating the Avoided CO2 emission (2012) of
the Japan Chemical Industry Association (JCIA). In addition, these guidelines aim to be consistent with leading
standards and specifications on product carbon footprinting, including the GHG Protocol Product Life Cycle
Accounting and Reporting Standard (2011), PAS 2050 (2011), and ISO/TS 14067 (2013). The guidelines provide a
step-by-step procedure to estimate the differences in GHG emissions between solutions. They focus on common
challenges of LCA practitioners (people and organisations carrying out studies) in the chemical industry. In
particular, they take into account the upstream position of chemical products in the value chain and provide a way
to reliably quantify the effect a chemical product can have on environmental impacts of downstream activities.
Accordingly, the guidelines go beyond existing standards. Table 1 gives an overview of the extra guidelines provided
in this document compared to ISO 14040 (2006) and ISO 14044 (2006).

10

Table 1. Extra guidelines on accounting and reporting avoided emissions compared to
ISO 14040 (2006) and ISO 14044 (2006)
ISO 14040 / ISO 14044

Guidelines in this document

Goal and Scope definition

Purpose of study (Section 3.1)
Solution to compare to (Section 3.2)
Functional unit (Section 3.3)
Boundary setting (Section 3.4.1)

Life cycle inventory (LCI)

Data quality (3.4.2)
Methods/formulas used (Section 3.4.3)

Life cycle impact assessment (LCIA) Assessment (Section 3.4.4)
Interpretation

Key parameters (Section 3.4.5)
Integrating uncertainties and scenarios of future developments(Section 3.4.6)-

Attribution of avoided emissions to value chain partners (Section 4)

Reporting

Reporting guidelines (Section 5)

If a full LCA1 is not possible initially, companies may start with an analysis restricted to GHG as a first step. In thiscase, the reporting company shall check if tradeoffs exist by doing a screening LCA1. If trade-offs are identified in
the screening LCA, the reporting company shall report on these environmental impact categories in the same way
as it reports on GHG emissions or should consider not reporting avoided emissions at all. If the analysis does notcomply with ISO requirements, this shall be stated and the reasons shall be explained. In all aspects not specified inthese guidelines, for example data quality requirements, companies shall follow the relevant ISO and GHG protocol
standards.Though this guidance is made for GHG emissions, the key principles apply to any impact category.
The chemical industry supports the multicriterial approach on which LCAs are based, as this ensures that studies
show all aspects of the environmental impact (ICCA, 2013). To compare their products with alternative solutions,companies should perform a multicriterial LCA and check for possible trade-offs with other environmental impacts
resulting from increased use of their low-carbon solutions (comparative assertion according to ISO 14040 (2006)
and ISO 14044 (2006)).

1.5 Limitations of the guidelines
These guidelines should be regarded as a first global effort to develop consistent guidelines to account for and report
avoided emissions. The guidelines note that chemical industry products are delivered to end-users through value
chains and try to address value chain reporting issues, thereby avoiding multiple counting of avoided emissions. Fair
reporting can only be achieved through coordination with value chain partners. We strongly welcome feedback on
this document from value chain partners. It will help us update these guidelines to take into account the experience ofcompanies and other organizations.

1

In general, a screening LCA takes all relevant impact categories into account, but uses more data from databases (secondary data) than life cycle specificdata collected by the reporting company (primary data), compared to an ISO compatible LCA study.

11

2.

Principles
This document adopts the five accounting
principles of the GHG Protocol standards:
relevance, completeness, consistency,transparency and accuracy. We have added
a sixth principle, feasibility. The principles
will guide users implementing the guidelines,
especially when making choices that are notspecified in this document.

12Relevance- Ensure the GHG inventories appropriately reflect the GHG emissions of the productand serve the decision-making needs of users – both internal and external to thecompany.

Completeness- Account for and report on all GHG emission sources and activities within the choseninventory boundary.
- Disclose and justify any specific exclusions.

Consistency- Use consistent methodologies to allow for meaningful comparisons of emissions overtime.
- Transparently document any changes to the data, inventory boundary, methods, or any
other relevant factors in the time series.

Transparency- Address all relevant issues in a factual and coherent manner, based on a clear audit
trail.
- Disclose any relevant assumptions and make appropriate references to theaccounting and calculation methodologies and data sources used.

Accuracy- Ensure that the quantification of GHG emissions is systematically neither over nor
under actual emissions, as far as can be judged, and that uncertainties are reduced as
far as practicable.
- Achieve sufficient accuracy to enable users to make decisions with reasonableassurance as to the integrity of the reported information.

Feasibility- Ensure that the chosen approach can be executed within a reasonable timeframe andat reasonable effort / cost.

13

3.

Guidelines
on accounting
avoidedemissions143.1 Purpose of study
In defining the purpose of the study, the following items shall be clearly stated:- The name and description of the organization(s) commissioning the study and the organization(s) performingit (“the practitioner(s)”).
- The objectives of the study.
- What chemical product the study focuses on (e.g. resin hardener for a wind turbine blade, engineering plastic
for a fuel tank, or Expanded Polystyrene (EPS) for wall insulation).
Products or technologies can be compared using different reference products or reference technologies,
respectively.
It is not limited to the chemical sector only but valid for other sectors as well.
Comparisons can be classified in three categories (Table 2):• Category 1, where the reference product is the non-use of a product or technology.
• Category 2, where the reference product or technology is from another sector (for a chemical productthe reference product is a non-chemical product or technology).
• Category 3, that compares products or technologies within the same sector (for chemical industry
the reference product is another chemical product).
Chemical products are often intermediate products that are integrated in technologies/products that are
manufactured downstream in the value chain. Chemical products may influence the performance of thesetechnologies/products in such a way that GHG emissions are avoided. In order to assess the contributionof chemical products to the emissions avoided by the use of these low-carbon technologies/products, thecomparison needs to be carried out between technologies/products. In this case the low-carbon technology/
product is compared to a reference technology/product (called “the solution to compare to”) and can be
categorized in category 1, 2 or 3 based on selected reference technology/product. For example, a comparative
study on wind electricity versus natural gas power generation will fall into category 2, whereas a comparison
between carbon fiber blades for windmills versus glass fiber based wind blades will be classified as“category 3”.
The type of comparison should be reported.

15

Table 2. Different categories of comparison

Chemical product* vs. nonuse of product/technologye.g.
• Insulation vs. no insulation.
• Packaging of food vs. no packaging.
• Wind electricity vs. no-electricity for rural homes indeveloping countries.
• Fuel additives for vehicle efficiency vs. non-use
of fuel additives.

Chemical product*
vs. non-chemical
product/technology

e.g.
• EPS vs. mineral wool.
• Plastic packaging vs. tinplate.
• Wind electricity vs. grid electricity.
• Wind electricity vs. natural gas-based electricity.
• Electric mobility vs. conventional mobility.

Chemical product*vs. chemical
product/technology

e.g.
• Best-in-class insulation vs. chemical average insulation.
• HPDE foam bottle vs. standard HDPE bottle.
• Bio-based vs. fossil-based chemical product.
• Best-in-class wind turbines vs. industry average windturbines.
• Best-in-class fuel additives for vehicle efficiency vs.
standard fuel additives.

Category 1
Product/technology
vs. non-use of
product/technology

Category 2
Product/technology
comparison acrosssectors

Category 3
Product/technology
comparison within
the same sector* Definition of product also includes services and low-carbon technlogies that make use of a chemical product such as wind electricity or electric mobility

3.2 Solution to compare to
In order to calculate avoided emissions, the solution involving2 the chemical product being studied needs to becompared to a certain reference case or baseline. This baseline is the solution that is replaced and is called the“solution to compare to”.
The solution to compare to shall meet a number of criteria to ensure a credible avoided emissions claim:- Ideally one wants to compare the studied solution to what the studied solution really replaces.
-	The solution being replaced could be the market average, an average of several solutions of the market, a very
specific solution, the dominant solution, or a marginal solution (see figure 4).
- The comparison may also be done with a solution that would exist if the studied solution did not exist.
-	If relevant, products soon to be phased out can also be used as the solution to compare to (but not products thathave been phased out for a long time).

Past or future avoided emissions
Both past3 or future4 avoided emissions may be calculated and reported but shall not be mixed (and it shall beclearly stated which one of these two cases is reported).

Solution to compare to shall:- Deliver the same function to the user as the solution of the reporting company. For example, if a customer requires
energy with full-time availability (base load energy), the reporting company cannot compare as such wind energy
with fossil-based energy as the alternatives are not exchangeable. However, the comparison can be made if thedifference in performance between the alternatives is resolved, for example by including a back-up gas turbine orstorage batteries for the wind energy option to ensure continuous power availability.
- Be distributed/used on the market, in the reference time period and geographic region5 of the solution of thereporting company. When the solution(s) being replaced or the solution that would have been existed if the
2
3
4
5

16

A solution can be based on a new chemical product or a new use of an existing chemical.
Past avoided emissions may have occurred between two specific points in time in the past but could also be from a specific point in time in the past until « now ».
Future avoided emissions may occur between « now » and a certain point in time in the future, but also between two specific points in time in the future.
When identifying the solution to be replaced not only established markets are included but also growing markets where the solution to be replaced is the solutionthat would have been existed in the absence of the chemical product/solution.

studied solution has not been introduced (e.g. in a growing market) cannot be exactly identified, a fair proxy forwhat is replaced shall be chosen. It is important to make sure that the solution to compare to(or its proxy) chosen is not greenwashing (see decision tree “How to select the solution to compare to”).
- Be exchangeable with the solution of the reporting company for the typical customer in the selected market interms of quality criteria (see Section 3.3.2).
- Be as consistent as possible with the solution of the reporting company in terms of data quality, methodology,
assumptions etc.
Figure 4: Decision tree on how to select the solution to compare to:First identify the list of products/technologies being replaced:
What does your solution substitute in
the market? (note that it could be also
in a growing market)?
One specific solution(the “absence” of a product solution
is one specific solution too)Y

Use this specific solution

A few specific solutions

Y

Do you know all these specific solutions?

Average market mix(i.e. the entire market mix)

Y

Y

N

Use the market mixof these specificproducts

Use the dominantsolutionsof those specificsolutions

Do you know the average market mix?
YN

Use the average
market mix

Use thedominant(s)productsof the average
market mix

When replacing a mix of solutions, identify the fraction of each solution being replaced:
When replacing a mix of solutions, whatfraction of each solution of this mix do you
replace?

If information is not available, use themarket fraction of the mix as a proxy

Once the solution(s) to compare to is (are) identified, it (they) need(s) to be modeled. However, thedata to model it may not be always available. The following question can be asked:
Y

Use these dataN

Use a proxy (representative solution)that is as similar as possible to solution
to be compared to

Do you have data about
these solutions?

Solution to compare to made of several alternatives
Note that in the case of a solution to compare to made of several alternatives, some of these alternatives may
actually have lower emissions than the solution being studied).

17

Solution to compare to is made of X% alternative
A, Y% alternative B and Z% alternative C

Figure 5.
Construction of a solution to compare to based on a mix of alternatives
X% of alternative A
Material
manufacturer

Raw material supplier

Material
processor

Assemblerof parts

Technology
user

Disposal company

X% of alternative B
Raw material supplier

Material
manufacturer

Material
processor

Assemblerof parts

Technology
user

Disposal company

X% of alternative C
Raw material
supplier

Material
Material
Assembler
Chemical company
manufacturer
processorMaterial processorof parts

Technology
Assemblerof userparts

Disposal company

Solution of reporting company:
Raw material supplierChemical company

Material
processor

Assemblerof parts

Technology
user

Disposal company

Net emissions (i.e. avoided «benefits»)
as compared toalternative C

Avoided emissions
as compared toalternatives A and B

Whether avoided emissions will occur will depend on the fraction of X, Y and Z that are expected to be substitutedby the new solution 6 (i.e. in order to have avoided emissions, the amount of avoided emissions due to replacementof alternatives A and B should be higher than the amount of net “additional” emissions due to replacement ofalternative C) (Figure 5).
An example of solution to compare to made of a mix of three solutions in presented in Figure 5. In this example,
the solution to compare to is made of X% alternative A, Y% alternative B and Z% alternative C. In this example, themain advantage of the solution of the reporting company compared to solution A is a lower impact in terms of raw
material supplier, the main advantage of the solution of the reporting company compared to solution B is a lower
impact in terms of technology user, but there is also a solution C of the market that may be replaced (by the solutionof the reporting company) that actually already had a lower carbon footprint than the new solution (for example due
to lower impact in terms of raw material supplier). This solution C may be more environmentally friendly than thesolution of the reporting company, but may be replaced by the solution of the reporting company for, for example,
cost reason.
Note that in the example presented in Figure 5, the life cycles “Chemical company”, “Material processor”, “Assemblerof parts” and “Disposal company” can be excluded from the system boundary since they are the same and will notchange the “net” avoided emissions. Describing the two solutions being compared:- The reporting company shall clearly describe how the boundaries of the market and the application have been
defined.
- Both the solution of the reporting company and the solution to compared to shall be described in similar levels ofdetail.
- The description shall include market information including market shares and the reference flow, e.g. the amountof the chemical product on which the result of the study is based.
- The description shall discuss all aspects of all compared solutions which have a material impact on the emissions
generated during the life cycle.
- If the end-use application is included in the study, the description shall detail how the chemical product is usedas part of the end-use application.

6

18

X, Y and Z are the fraction of the solution to compare to that are made of the solution expected to be substituted and not the fraction of the market share of each of
the solution expected to be substituted.

3.3 Functional unit
3.3.1 Function of the product/application
According to ISO 14040 (2006) and ISO 14044 (2006), a functional unit shall be defined to which all inputs andoutputs of the product system can be related and which establishes equivalency between the products/applications
under study. Companies shall specify and quantify the functional unit, taking the following aspects into account:- The functional unit is defined as the unit performance characteristics and services delivered by the solutions
being studied.
- The functional unit shall be equivalent for all compared solutions.
- To ensure the product is exchangeable for the typical customer in the selected market, relevant quality criteria
shall be taken into consideration (see Section 3.3.2 for an overview of types of quality criteria).
- The functional unit shall be consistent with the goal and scope of the study.
Examples of functional units:- Insulating 1 m2 of an exterior wall (using expanded polystyrene (EPS) versus stone wool), both achieving a
U-value (wall) of 0.2 W/(m2*K).
- Living in an existing single-family detached house in Germany with an average temperature for 40 years (from2011 to 2051) (with polystyrene insulation and without).
- Pack and preserve, with a rigid material, 400 g of chocolate drink powder during one year using
polypropylene (PP) (based on fossil versus biobased feedstock).
- Running a medium-sized gasoline automobile for 200,000 kilometres (with fuel efficient tires using special
chemicals versus regular tires).

3.3.2 Quality requirements
The following three aspects should be used to assess whether compared solutions are truly exchangeable:
1. Functionality, related to the main function of the solution.
2. Technical qualities, such as stability, durability, and ease of maintenance.
3. Additional benefits rendered during use and disposal.

3.3.3 Service life of the solution(s)- The reporting company shall specify the service life of the solution in the functional unit, i.e. for how long theperformance of the final product or service needs to be maintained. The service life is defined by the end-use
application and may not be the same as the lifetime of the chemical product.
- The defined service life shall be in line with standards used in the market, e.g. product category rules, studies
from reputable organizations, and studies by leading companies in the value chain.
- The reporting company shall clearly report the basis and justification for the service life selected for the productor service.
- The service life influences the reference flow.

193.3.4 Time and geographic reference of the study
Companies shall specify the reference period chosen for the study. The data used shall be representative forthe reference period. In case data are not available for the reference period, the reporting company shall use
data covering periods as close as possible to the reference period.
The typical duration of a reference period is one year.
The reporting company shall report the reference period(s) for the used data.
Companies shall specify the geographic region chosen for the study. This includes the geographic region
where the product is produced as well as where it is used. The reporting company should consider trade-offs
that are relevant for the geographic regions chosen for the study, e.g. water depletion (see also Section 1.4).

3.4 Calculation methodology
3.4.1 Boundary setting
Whenever possible, the full life cycle should be considered when calculating avoided emissions, in order tocomply with the requirements of ISO 140447 . However, when calculating avoided emissions, the solution of
the reporting company and the solution to compare to might have a number of identical life cycle stages orprocesses in their life cycles. The system boundary shall consider all processes that may be influenced by
the solutions being compared (and may exclude the processes that are the same for the different solutions8).
All system boundaries shall be explicitly mentioned in order to clarify what life cycle stages and processes
are excluded or included. Life cycle stages and processes included and excluded shall be explicitly mentioned.
The exclusion of some life cycle stages or processes should be justified.
The reporting company shall describe the value chain steps of all solutions being compared:- A flow diagram shall be provided to show the value chains for each of the solutions being compared.
The reporting company should consider all activities from cradle to grave (see Section 3.4.3).
- A qualitative description of the value chain shall be provided for clarification.
-	The diagram shall indicate which life cycle stages or processes of the value chain were assumed tobe identical in the calculation of life cycle GHG emissions of the alternative solutions.

3.4.2 Data quality
Different methodologies may be valid to assess data quality. The importance is that the company doing
the assessment applies correctly the data quality method to the solutions assessed. An estimation ofdata quality shall be done to show that it satisfies the comparison done.
The reporting company shall provide transparency on data quality.

7

8

20

ISO 14044 states the following: “The deletion of life cycle stages, processes, inputs or outputs is only permitted if it does not significantly change the overall
conclusions of the study. Any decisions to omit life cycle stages, processes, inputs or outputs shall be clearly stated, and the reasons shall be explained.”
Indeed, identical life cycle stages or processes in the life cycle contribute equal amounts of GHG emissions to each solution and so do not affect the absoluteamount of avoided emissions.

3.4.3 Methods/formulas used
The reporting company shall describe the method used to account for emissions at each step:- For both solutions the life cycle GHG emissions shall be calculated in the same way according toexisting standards.
- The reporting company shall explain:• Its choices of methodology and standards used.
• Methods/formulas used to calculate the cradle-to-grave inventories.
This includes the choices for allocation. For allocation, recognized approaches shall be used (model used shall beclearly exposed). Sensitivity analysis should be done to test the influence of the allocation choiceson the final results.
All GHG emissions shall be converted to a mass of CO2 equivalents (“CO2-eq”, CO2eq” or “CO2e”)

according to the most recent IPCC version9 , over a 100 year time horizon.

3.4.4 Simplified assessment
If some life cycle stages or processes can be excluded from the system boundary because they are the same in
the two solutions being compared, the calculation of avoided emissions is some sort of simplified assessment canbe performed (where identical parts or processes in the life cycle of the products/solutions to be compared areomitted) (see Figure 6). The simplified assessment takes into account the sixth accounting principle of this document,
feasibility (see Section 2).
When a simplified assessment is used, the following additional reporting requirements shall be applied.
- The report shall specify what life cycle stages and processes are omitted and why.
- The report shall indicate the significance of the emissions being omitted relative to total emissions of thesolution to compare to preferably in a quantitative manner but at least in a qualitative manner.
- Data sources or assumptions used to estimate omitted emissions shall be reported.
- The report shall clearly and noticeably describe the limitations of the study arising from omitting identicalprocesses. These might include change in the significance of life cycle stages or processes, increased
uncertainties, etc.
A reduction percentage, i.e. x% GHG emissions avoided in comparison to the reference solution, shall not bereported.
The significance of emissions omitted relative to total emissions of the solution to compare to can be determinedby basing estimates of omitted emissions on published LCAs or own estimates. If a quantitative estimate is made,results should be shown in a scenario analysis.

9

At the time of publication of this guidance, the most recent version of IPCC was of the year 2013. In case not the most recent version of IPCC was used, state thereason not to use the most recent version (e.g. non availability in the LCA software, etc.). Make sure it is used consistently (i.e. the same list of characterization
factors) among the scenarios compared.

21

Figure 6. Illustration of simplified assessment. GHG emissions expressed in kg CO2eq per functional unit

GHG emissions (kg CO2eq)

Full avoided emission
calculation
100

Simplified avoided
emission assessment
10

10

80
60
40

75

20
0

15
Solution ofreportingcompany

75?

?

Avoided life cycle emissions
Life cycle emissions of identicallife cycle stages or processes

25
Solution tocompare to

15
Solution ofreportingcompany

25
Solution tocompare toLife cycle emissions of different
life cycle stages or processes

3.4.5 Key parameters driving emissions
The reporting company shall specify which activities and parameters mainly drive the generation of GHG emissions
and the calculated avoided emissions, and how sensitive these are to the identified parameters. Examples
are use of gasoline, service life of product, etc.

3.4.6 Scenarios of future developments and uncertainties
Upstream steps in the value chain of a manufactured chemical product can be calculated from existing data, since
they have already taken place. But the use stage and end-of-life stage might extend several years into the future. User
behavior and end-of-life treatment might change in the future, impacting future avoided emissions. Uncertainties
over future conditions include, but are not limited to, changes in energy mix and energy efficiency, regulatory policies,
market conditions, recycling practices, etc.
Though assumptions on future conditions can have a big impact on avoided emissions calculated, the reporting
company shall first consider a solution to compare to that assumes no future changes (i.e. use most recent actualdata). For products with a long use stage, for example more than ten years, the reporting company should provide
a qualitative scenario analysis, explaining how each key parameter in the avoided emissions calculation mightchange in the future and how this may influence the calculated avoided emissions.
Companies shall report the results of the base case and should report the scenario taking into account the mostprobable future changes.

22

23

4.

Guidelines oncontributionof value chain
partners
to avoided
emissionsLife cycle avoided emissions almost always arise
from efforts and contribution by multiple partners
along the value chain. Avoided emissions are result
from the sum of contributions by the different value
chain actors. These include raw material suppliers,
material manufacturers such as chemicalcompanies, material processors, part-assemblers
and users of the technology. Avoided emissions
cannot, in general, be attributed to one partner
alone – they should primarily be attributed to thecomplete value chain.

24

4.1 Qualitative assessment of the contributionof a chemical product to value chain avoided emissions
Individual partners in the value chain often wish to claim part of the emissions avoided. To increase thecredibility of such statements, the reporting company must clarify the role of its product in the value chain
and refrain from reporting value chain avoided emissions if its own contribution is too small to claim.
Reporting companies shall use the schema presented in Table 3 to qualify the contribution of their productto value chain avoided emissions. The schema classifies products according to their contribution to avoiding
GHG emissions (functionality approach).

Table 3. The significance of the contribution of chemical products10 to value chain avoided emissions
based on the functionality approach

10

Significance of contribution

Relationship between chemical product and avoided GHG

Fundamental

The chemical product is the key component that enables the GHG
emission avoiding effect of the solution.

Extensive

The chemical product is part of the key component and its
properties and functions are essential for enabling the GHG
emission avoiding effect of the solution.

Substantial

The chemical product does not contribute directly to the avoided
GHG emissions, but it cannot be substituted easily withoutchanging the GHG emission avoiding effect of the solution.

Minor

The chemical product does not contribute directly to the avoided
GHG emissions, but it is used in the manufacturing process of afundamentally or extensively contributing product.

Too small significance ofcontribution to claim

The chemical product can be substituted (by a different chemical
product for example) without changing the GHG avoiding effect of
the solution.

The principles of this table are also valid for any part of the system (e.g. « chemical product », « non-chemical product », or « service »).

25

Figure 7. Example: illustrates an example of the significance of the contribution of individual partners to
avoided emissions in a typical low-carbon technology value chain. The contribution of the technology user
is slightly different from that of other value chain partners: although the user does not make a technologicalcontribution he enables implementation of the technology by investing in and using it.

Figure 7. Example of communication on value chain avoided emissions by individual partners in a typical lowcarbon technology value chain based on the functionality approach (see Table 3)

Raw material
supplierRaw material
supplier
substantial
Raw material
supplier
too small
Raw material too small
supplier
too small

Chemicalcompany
Chemicalcompany
too small
Chemicalcompanyminor
Chemicalcompany substantial
extensive

Material
processor
fundamental

Company shall not
claim value chain
avoided emissions
Company mayreport attributed
avoided emissions, inaddition to complete
value chain avoided
emissions, together
with explanation of
the significance of thecontribution
The technology user
may report the complete
value chain avoided
emissions

End productmanufacture

Disposalcompany
too smallTechnology
userServiceprovider11
minor

substantial

The reporting company shall report total emissions avoided along the complete value chain and shall report thesignificance of the contribution of its product to the end-use solution according to the functionality approach aspresented in Table 3. In addition, the reporting company shall describe the specific role of its product in such a waythat the reader understands how it is related to the GHG emission avoiding function of the end-use solution.
Example:X million tonnes of emissions are avoided by using wind turbines backed by battery storage for power generation
instead of the average European power production
technology mix (grid mix). Company A makes two minor contributions to these avoided emissions by
manufacturing resin components and coatings for the wind turbine blades.
Note that avoided emission figures referring to a complete value chain, to which the reporting company contributes,
cannot be compared with emissions caused by the reporting company since the reporting boundaries are different.
If the reporting company chooses to report the emissions associated with its activities (such as Scope 1 andScope 2)12, then the reporting company shall clearly state that the reporting boundaries for activity emissions
are different from those of avoided emissions.

11
12

26

Note for « Service provider » : Installation, assembler, etc. may significantly contribute to the solution by special skills, etc.
For Scope 1 and 2 definitions see GHG Protocol “A Corporate Accounting and Reporting Standard” (WRI and WBCSD, 2004).

4.2 Pros and cons of attributing value chain avoided
emissions to individual value chain partners
Companies may wish to quantify their contribution to emissions avoided by a complete value chain forreasons including:- Transparency: Every player along the value chain may communicate on emissions avoided by the complete
value chain. There is a risk of double counting, but this can be avoided if value chain partners agree how toattribute avoided emissions.
- Internal management: Companies increasingly compile detailed quantitative data on the emissions causedby their activities - within their corporate boundaries (scope 1) as well as along the value chain (scope 2
and scope 3) – to help them plan and control efforts to reduce emissions. Likewise they are looking
for methodologies that help them quantify their role in emission avoiding value chains, to underpin thedevelopment of R&D and marketing strategies, as well as to develop performance targets and monitor theirimplementation.
- Comprehensive corporate external reporting: Companies often wish to present a true and fair picture of
their overall impact on climate change. If the emissions caused by a company’s activities are reported
quantitatively, avoided emissions may be quantified and reported as well.
- Support understanding of value chains: External stakeholders including investors, policy makers andcitizens are looking for reliable and comparable figures to understand and compare the role of different
organizations in emission avoiding value chains.
- Communication of benefits of a whole industry sector: The chemical industry or other industry sectors may
want to use avoided emission calculations to illustrate their contribution/benefits to society.
- Partners along the value chain, that make a contribution that is considered too small to report value chain
avoided emissions, might want to report on their (small) individual share.
However, important drawbacks of attributing avoided emissions to individual partners along the value chain
have to be underlined:- This may undermine understanding that implementation of low-carbon technologies is only possible
through cooperation by different value chain partners.
- No single attribution method truly reflects the contribution of each value chain partner to the avoided
emissions. Neither the physical characteristics of products, such as mass and volume, nor the price areproportionately correlated to the emission avoiding ability of a product. As a result, contributions of apartner may be over- or under-represented.
- Different attribution methodologies often lead to different avoided emissions results, with discrepancies
being quite large in some cases. So figures for attributed avoided emissions quoted by different companies
might not be comparable, but might be interpreted as if they are.
- If there is no agreement among value chain partners on how to attribute avoided emissions to individual
partners, total attributed avoided emissions may be counted several times or do not add up to 100%.
- There is a reverse effect in economic as well as in physical attribution:
For example, product improvements by individual companies that reduce material use whilst achieving
the same functionality may result in less avoided emissions being attributed to this company.

27

Given the ongoing debate on the advantages and disadvantages of quantitatively attributing avoided emissions
among value chain partners, this document does not promote quantitative attribution of avoided emissions.
However, to explore the possibilities of attributing avoided emissions to value chain partners and to offer companies
a possible solution, the following section shows how avoided emissions could be attributed to value chain partners
in a quantitative way.

4.3 Possible approaches to attribute value chain
avoided emissions to individual value chain partners

If companies see a compelling need to attribute a fraction of the avoided emissions to the use of their products,
they should do so very transparently. They are recommended to follow well-defined steps andfully document the basis of their calculation. A proposed process is described below.
The reporting company is recommended to use the decision tree in Figure 8 when assessing andreporting avoided emissions to which several partners along the value chain contribute.
Figure 8. Decision tree on attribution to be used by companies when assessing and reporting avoided emissions

Can you avoid attributing?

Y

Calculate avoided emissions
without attribution

N

No communication of avoided emissionsof complete value chainN

No attribution of avoided emissions

Y

Use these attribution factors

N
Does assessment of significanceof contribution based on the functionality
approach (see Table 3)
lead to at least
a minor contribution?
Y
Report the emissions avoided by thecomplete value chain clearly describing
the qualitative contribution of theindividual product (see Table 3)

Attributing desired after carefully
checking the pros and cons?
Y
Is there consensus along the value chain
on how to attribute?
N
Check which attribution method(functional13 , economic, physical) best
represents the contribution of individual
players along the value chain and apply it

Check attribution factors and results of
attribution with value chain partners
13 Functionality can be used to first group components (of the value chain) into classes of high and low functionality, then decision of which fraction of the avoided
emissions can be attributed to each group (e.g. by giving typically a higher fraction of the avoided emissions to higher functional elements than it would get witheconomic allocation), and finally attribution (e.g. economic) can be done within each group. See Annex B.can be given to each group (e.g. by giving typically ahigher fraction of the avoided emissions to higher functional elements than it would get with economic allocation), and finally attribution (e.g. economic) can bedone within each group. See Annex B.

28

When a reporting company applies attribution methodologies, it is recommended to address the following:- Include all value chain partners that are addressed in the avoided emissions study (start from the defined user
benefit and look upstream in the value chain to see which partners are needed to achieve the user benefit).
- If service providers are part of the value chain, attribution of emissions based on physical relationship is notpossible.
- In principle, avoided emissions attributed to a single company in the value chain can be compared withemissions caused by that company as the system boundaries are the same. However, since no prescriptive
guidelines have been developed for attribution of avoided emissions among value chain partners, results mayvary considerably. Companies are recommended to refrain from such comparisons.
The reporting company shall always report total emissions avoided along the complete value chain.
It shall report on the significance of the contribution of its product to the end-use solution according to
the functionality approach as presented in Table 3 in Section 4.1. The reporting company may report figures for
attributed avoided emissions as additional information.
In that case, companies are recommended to clearly describe the applied attribution methodology and thereasoning underlying the attribution factors. When other value chain partners use a different attribution method,companies are recommended to include this method as a separate scenario. If attribution is done, companies
should seek consensus with their partners along the value chain.
The recommendations put forward in this section are a first attempt to provide guidance in quantifying avoided
emissions attributable to individual value chain partners. The chemical industry intends to work with its value chain
partners to further improve this approach and produce guidelines supported broadly
by different stakeholders.
More on functional allocation: see annex B.

29

5.

Guidelines
on reporting
avoidedemissions30

This section provides guidance on how to report on a study on avoided emissions.
Table 4 provides an overview of all reporting requirements that have been mentioned in previous sections.
The reporting company shall comply with the requirements in Table 4 and additional reporting requirements
as specified in this section.
Table 4. Overview of reporting requirements from the previous sections
SectionRequirements

3.1
Purpose of study• In defining the purpose of the study, the following items shall be clearly stated:- The name and description of the organization(s) commissioning the study andthe organizations performing it.
- The objectives of the study.
- What chemical product the study focuses on.

3.2
Solutions tocompare to

Describing the solutions to compare to:• The reporting company shall clearly describe how the boundaries of the market and theapplication have been defined.
• Both the solution of the reporting company and the solution to compare to shall be describedin similar levels of detail.
• The description shall include market information including market shares and the reference
flow, e.g. the amount of the chemical product on which the result of the study is based.
• The description shall discuss all aspects of all compared solutions which have a material
impact on the emissions generated during the life cycle.
• If the end-use application is included in the study, the description shall detail how the chemical
product is used as part of the end-use application.

3.3.1
Function of the
product/
application• A functional unit shall be defined to which all inputs and outputs of the product system can be
related and which establishes equivalency between the products/applications under study.
• Companies shall specify the service life of the product or service in the functional unit, i.e.
for how long the performance of the final product or service must be maintained.
• The reporting company shall explain how the service life is determined.

3.3.3
Service life of thesolution• The reporting company shall specify the service life of the product or service inthe functional unit.
• The reporting company shall clearly report the basis and justification for the service life
selected for the product or service.

3.3.4
Time and geographic
reference of the study

•
•
•
•

3.4.1
Boundary setting• The reporting company shall describe the value chain steps of all solutions being compared:- A flow diagram shall be provided to describe the value chains for each of the solutions
being compared.
- A qualitative description of the value chain shall be provided for clarification.
- The diagram shall indicate which life cycle stages or processes of the value chain wereassumed to be identical in the calculation of life cycle GHG emissions of the alternative
solutions.
• All system boundaries shall be explicitly mentioned in order to clarify what processes are
excluded and included.
• Life cycle stages and processes included and excluded shall be explicitly mentioned.

3.4.2
Data quality• The reporting company shall provide transparency on data quality.

Companies shall specify the reference period chosen for the study.
Companies shall report the reference period for the data used.
The reporting company shall explain the scenarios used to project the future.
Companies shall specify the geographic region chosen for the study.

31Section

Requirements

3.4.3
Methods/formulas
used• The reporting company shall describe the method used to account for emissions at each step.
• The reporting company shall provide transparency on:- Methodological choices made and standards used.
- Methods/formulas used to calculate the cradle-to-grave inventories.
- Allocation choices.

Reporting-	Companies shall report the main results of the study of their own solution and of the comparative
solution (the “solution to compare to”).
-	Avoided emissions shall be presented as the difference between the two emission profiles, anddifferentiated by life cycle stage.
-	Both past or future avoided emissions may be reported but shall not be mixed (and it shall be clearlystated which one of these two cases is reported).
-	Companies shall clearly state that the credit for the avoided emissions belongs to the complete value
chain and shall describe and qualify their specific role in the value chain based on the functionality of
their product.
-	If trade-offs with other environmental impacts occur, the reporting company shall report on theseenvironmental impact categories in the same way as it reports on GHG emissions or should consider
not reporting avoided emissions at all.
-	If the analysis does not comply with ISO requirements, this shall be stated and the reasons shall be
explained.
-	If the study underwent a critical review, the critical review process and status shall be clearly reported.

3.4.4
Simplified
assessment

If the simplified assessment is used the following additional reporting requirements apply:• The report shall specify the omitted life cycle stages and processes and the justification behind it.
• The report shall give an indication of the significance of the emissions being omitted in relation tototal emissions of the solution to compare to preferably in a quantitative manner but at least in aqualitative manner.
• Data sources or assumptions used to estimate omitted emissions shall be reported.
• The report shall clearly and noticeably describe any limitations of the study arising from omitting
identical processes such as change in the significance of life cycle stages or processes, greater
uncertainties, etc.
• Companies shall not report a reduction percentage, i.e. x % GHG emissions avoided in comparison
to the reference solution.

3.4.5
Key parameters• The reporting company shall specify which activities and parameters drive the generationof GHG emissions.

3.4.6
Scenarios of future
developments anduncertanties• Companies shall report the results of the base case and should report the scenario taking into accountfuture changes that are deemed most probable.

4.1
Qualitative
assessmentof the contribution• The reporting company shall report on the significance of the contribution of its product tothe end-use solution according to the functionality approach as presented in Table 3.
• The reporting company shall describe the specific role of the product so that the reader understands
how it is related to the GHG emission avoiding function of the end-use solution.
• If the reporting company chooses to report the emissions associated with its activities (such as Scope
1 and Scope 2), then the reporting company shall clearly state that the reporting boundaries
for activity emissions are different from those of avoided emissions.

4.3
Possible approaches
to attribute value
chain avoided
emissions to
individual value
chain partners• The reporting company shall always report the total emissions avoided along the complete value
chain and shall describe its specific role in the value chain according to Table 3 in Section 4.1.

Additional reporting suggestions-	Companies should report the full cradle-to-grave emissions of their own solution and full cradle-to-grave
emissions of the solution to compare to. Companies should present the results of the study in a table toenhance clarity for external stakeholders (see Table 5).
- Additionally, companies should provide a graph of results for every value chain step (see Figure 10).
- Companies should describe the type of comparison (see Table 2).
- The final result may additionally be communicated in terms of:		 • Total absolute avoided emissions.
		 •	% emissions avoided compared to total emissions of the solution to compare to. However, this way ofpresenting results is not allowed when the reporting company used the simplified assessment.

32

- The reporting company should finalize the report with an overview of:		 • Conclusions and implications from the study.
		 • Additional steps/updates that might be planned to improve the results of its study.
- Appendices may be included to provide:		 • Additional information on sources used.
		 • Results from the critical review.
		 • A glossary.

GHG emissions

Figure 9. Avoided emissions are the difference between the cradle-to-grave emissions from the solutionof the reporting company and those of the solution to compare to

Solution to compare to
Extraction

Manufacturing

Distribution

Use stage

End-of-life

Total

Solution of reporting
company

Table 5. Example of a table presenting all results of a study on avoided emissions
Emissions per stage (mass of
CO2e)

Reporting company’s solution

Solution to compare to

Raw material extraction...............

...............

Manufacturing / processing...............

...............

Distribution...............

...............

Use stage...............

...............

End of life...............

...............

Total emissions

P1

Avoided emissions= P2 - P1

P2

Public disclosure of LCA comparative assertions requires critical review by a panel in order to comply with
ISO 14044. For avoided emissions studies, companies should be consistent with ISO 14044. If the study
underwent a critical review, the critical review process and status shall be clearly reported.
Annex A contains a proposed reporting template for avoided emissions studies.

33

6.

Annexes34Annex A. Report template
TITLE of study
Commissioner and performer of the study
Short executive summary (typically 100 words).
Sections to be included:
1.	Purpose of study[explain the objective and goal of the study; the methodology used (ICCA-WBCSD Avoided Emissions Guidelines)
and other relevant high-level information].
2. Solutions to compare to
2.1 Description of the solution to compare to[describe what solutions are being compared and provide relevant information about each solution].
2.2 Definition of the boundaries of the market and the application.
3. Functional unit and reference flow
3.1 Description of the function and the functional unit
[describe the function and functional unit of the product].
3.2 Reference flow
[indicate the amount of the chemical product on which the result of the study is based].
3.3 Quality requirements[indicate any quality criteria that are taken into consideration to ensure compared products areexchangeable for the typical customer in the selected market].
3.4 Service life of the solution[Indicate service life of product taken into consideration].
3.5 Time and geographic reference of the study[indicate the time and geographic reference].
4.Boundary setting[describe the boundaries of the case study:- Describe the value chain steps of all solutions to compare, making explicit which processes
are included and excluded from the case study.
- Include a flow diagram for each of the solutions to compare, indicating which parts are identicalin the calculation of life cycle GHG emissions of the alternative solutions.
- Describe the cut off threshold and how the threshold was determined].

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5. Calculation methodology and data[indicate any relevant general information related to calculation methodology; specific information about data
and databases used; data quality; methods/formulas used; key parameters]
5.1 Methods and formulas used[in case the simplified assessment has been used this should be mentioned explicitly in the report(at the beginning and in Section 6), and the report requirements of Section 3.4 of the guidelines should
be taken into account].
5.2 Allocation		[indicate the allocation chosen].
5.3 Data, data sources and data quality[specify which databases are used and report the data quality, including most important data in a table].
6.	Results[indicate study results from compared solutions with figures, tables, descriptions, etc.]
6.1 Avoided emissions[present the avoided emissions as the difference between the two emission profiles, and differentiatedby life cycle stage:- Clearly state that the credit for the avoided emissions belongs to the complete value chain.
- Report the full cradle-to-grave emissions of the reporting company’s solution and the full
cradle-to-grave emissions of the solution(s) to compare.
- Present the results in a table (see Figure A1 and Table A1)
		 describe key parameters].

GHG emissions

Figure A1. Results of the case study

Solution to compare to
Extraction

Manufacturing

Distribution

Use stage

End-of-life

Table A1. Results of the case study
Emissions per life cycle stage(mass of CO2e)36

Reporting company’s solution

Solution to compare to

Raw material extraction...............

...............

Manufacturing / processing...............

...............

Distribution...............

...............

Use stage...............

...............

End of life...............

...............

Total emissions

P1

Avoided emissions= P2 - P1

P2

Total

Solution of reporting
company6.2 Scenario analysis[describe used scenarios, e.g. to take into account future changes or to test the sensitivity of
the results to the allocation choices; describe the results from scenario analysis].
7. Significance of contribution[describe the significance of the contribution of the studied chemical product to overall value chain avoided
emissions (see Section 4 of the guidelines); describe the specific role of the product so that the reader understands
how it is related to the GHG emission avoiding function of the end-use solution; describe attribution methods,
if they are used in the study].
8. Review of results[indicate any review of the results that were undertaken and which standard
was followed – such as a critical review based on ISO 14040 (2006), ISO 14044 (2006) and ISO/TS 14071 (2014);
in case a critical review was done, the critical review report is put in appendix].
9. Study limitations and future recommendations[describe any limitations of the study (including the assessment on how robust the solution to compare to chosen is)
or improvements/recommendations for future revisions of the study].
10. Conclusions[describe the main conclusions obtained from the study; indicate if the conclusions of other studies are notconsistent with the present case].
11. References[list any relevant references].
12. Appendices[optional:- Additional information on sources used.
- Use of data from reporting company and databases.
- Critical review report.
- Glossary].

37

Annex B. Functional allocation of avoided emissions
to selected components of the solution
In some product systems it becomes essential to distinguish between components, so as not to take into
account components that are “trivial” and do not really influence the efficiency of the solution that allows to
avoid greenhouse gas emissions.
A functional allocation that allocates avoided emissions to the system components that are influential to the
avoidance of greenhouse gas emissions may be preferred. This should be preferred every time it is possible
and if it better ensures that components that contribute directly to the avoidance of greenhouse gas emissions
get a fair share.
Distinguishing between these influential and non influential components may be relatively straightforward,
or not, depending on cases. This may be done based on criteria similar to those to select the significance ofthe contribution of the considered chemical product (see Table 3). Only the elements that have a fundamental,
extensive, or substantial contribution to the greenhouse gas avoiding effect of the solution shall be considered(see Table A2). The economic allocation will then focus on these elements only.
Table A2. Significance of contribution
Significance of contribution

Relationship between component of the solution
and avoided emissions

Fundamental

The component is the key to the greenhouse gas emission
avoiding effect of the solution.

Extensive

The component is one of the key components: its properties andfunctions are essential for enabling the greenhouse gas emission
avoiding effect of the solution.

Substantial

The component does not contribute directly to the avoided
greenhouse gas emissions, but it cannot be substituted easily
without changing the greenhouse gas emission avoiding effectof the solution.

Too small significance ofcontribution to allocate

The component does not influence the efficiency of the solution:
it does not contribute directly to the avoided greenhouse gas
emissions, it can be substituted without changing the greenhousegas avoiding effect of the solution.

ExampleAn example for such a case is a photovoltaic (PV) system used to generate electricity. A PV system consistsof PV cells, that are grouped together to form a PV module, and the auxiliary components called “balanceof system” (BOS) that includes the inverter, controls, etc. (Solar Photovoltaics undated, Fraunhofer 2016,
Renewable energy institute 2016, NREL 2011). The capital cost of a PV system is composed of the PV module
cost and the balance of system cost.
Table A3 shows a typical example of functional allocation of avoided emissions to selected components of thesolution for a residential and small-scale PV system.
The PV system components that can be categorized as influential in converting solar energy in electricity
are: glass, cells, EVA, Tedlar, and inverter. For offgrid systems, batteries for electricity storage will also be

38

categorized as contributing components. On the contrary, the majority of the balance of system components do not
influence the efficiency of electricity generation and play a supporting role rather than a fundamental, extensive, or
substantial role in electricity generation. Economic allocation over the full system, as shown (4th column), would
allocate a large part of avoided emissions to these supporting components. Taking into account the functions ofevery component would be a better choice for the PV system example. The functionality based selection of thecomponents to be taken into account allows to focus on five components of the overall solution namely glass, cells,
EVA, Tedlar, and inverter that form 58% of the system cost. Economic allocation is then applied only amongst thesecomponents.
Table A3. Example of allocation of avoided emissions to selected components of the solution
Elements

PV module

Balance ofsystemTotal

Components% Contribution
to system cost
(representative
cost)

Economic
allocation
over the fullsystemSignificance ofcontribution in
generating renewableelectricity

Can be easily
replaced by othermaterials to serve
same functionality?

Economic
allocation
focused on
the selectedcomponents

Frame

4%

4%

Too small contribution

Yes

(0%)

Glass

4%

4%

Substantial

Yes

6.9%

Cells

30%

30%

Fundamental

No

51.7%

EVA

2%

2%

Extensive

Maybe

3.4%

Tedlar2%

2%

Extensive

Maybe

3.4%

Others components

3%3%

Too small contribution

Yes

(0%)

Inverter

20%

20%

Fundamental

No

34.5%

System installation(material)

20%

20%

Too small contribution

Yes

(0%)

System installation(service)

15%

15%

Too small contribution

Yes

(0%)

100%

100%

100%

Remarks on costs of the PV system: The PV module cost is determined by raw material costs, notably silicon
prices, cell processing/manufacturing and module assembly costs. The PV module cost is typically between 33%
to 50% of the total capital cost of a PV system, depending on the size of the project and the type of PV module(Solar Photovoltaics undated). In this example, PV module cost is estimated to be 45% of system capital cost. Thebalance of system costs and installation comprise the remaining capital costs for a PV system. The balance ofsystem costs largely depend on the nature of the installation. For residential and small-scale systems, the balanceof system and installation costs comprise 55% to 60% of total PV system costs (Solar Photovoltaics undated). Thebalance of system cost includes items, such as the cost of the structural system (e.g. structural installation, racks,
site preparation and other attachments), the electrical system costs (e.g. the inverter, transformer, wiring and otherelectrical installation costs) and the battery or other storage system cost in the case of offgrid applications.

39Annex C. Glossary
Attribution
Dividing up avoided greenhouse gas emissions among the different partners in a low-carbon
technology value chain.

Chemical productThe chemical product is the product sold by the reporting company.

Functional unit
Functional unit is the quantified performance of a product system for use as a reference unit (ISO 14044, 2006).

May
The term “may” is used in this document to indicate a course of action permissible within the limitsof the document (ISO/IEC, 2011).

Shall
The term “shall” is used in this document to indicate requirements strictly to be followed in order toconform to the guidelines in this document and from which no deviation is permitted (ISO/IEC, 2011).

ShouldThe term “should” is used in this document to indicate that among several possibilities one is recommended
as particularly suitable, without mentioning or excluding others, or that a certain course of action is preferred but
not necessarily required, or that (in the negative form) a certain possibility or course of action is deprecated but
not prohibited. (ISO/IEC, 2011).

Solution
Any product that is sold along the value chain, a chemical product, a material from another industry,
a component or a final technology.

Solution to compare to
The alternative solution providing the same benefit to the customer as the reporting company`s solution.

PAS
Publicly Available Specification.

40

Annex D. References
British Standards (2011). PAS 2050: Specification for the assessment of the life cycle greenhouse gas emissions ofgoods and services.
EPE - Entreprises Pour l’Environnement (2017). Les émissions évitées – les entreprises évaluent leur contribution
pour le climat.
Fraunhofer (2016). Photovoltaic report, Fraunhofer Institute for Solar Energy Systems, ISE with support of PSE AG,
Freiburg, Germany, November 17, 2016, www.ise.fraunhofer.de
ICCA (2013). How to Know If and When it’s Time to Commission a Life Cycle Assessment – An Executive Guide.
ISO 14040 (2006). Environmental management – Life cycle assessment – Principles and framework.
ISO 14044 (2006). Environmental management – Life cycle assessment – Requirements and guidelines.
ISO/IEC (2011). ISO/IEC Directives Part 2. Edition 6.0 2011-04. Rules for the structure and drafting of International
Standards. ISO: International Organization for Standardization. IEC: International Electrotechnical Commission.
ISO/TS 14067 (2013). Greenhouse gases - Carbon footprint of products – Requirements and guidelines forquantification and communication.
ISO/TS 14071 (2014). Environmental management – Life cycle assessment – Critical review processes andreviewer competencies: Additional requirements and guidelines to ISO 14044:2006.
Japan Chemical Industry Association (2012). Guideline for Calculating the Avoided CO2 Emission.
NREL (2011). Corning, Physical Properties of Glass and the Requirements for Photovoltaic Modules,
Dr. James E. Webb and Dr. James P. Hamilton; NREL Photovoltaic Module Reliability Workshop, February 16, 2011.
Renewable energy institute (2016). Comparing Prices and Comparing Prices and Costs of Solar PV in Costs ofSolar PV in Japan and Germany Japan and Germany, The Reasons Why Solar PV is more Expensive in Japan,
March 2016.
Solar Photovoltaics (undated). Renewable Energy Technologies: Cost Analysis Series, Volume 1: Power Sector
Issue 4/5, Solar Photovoltaics.
WRI/WBCSD (2004). GHG Protocol: A Corporate Accounting and Reporting Standard.
WRI/WBCSD (2011). GHG Protocol: Product Life Cycle Accounting and Reporting Standard.

41About the International Council of Chemical Associations (ICCA)
The International Council of Chemical Associations (ICCA) is the worldwide voice of the chemical industry, representing
chemical manufacturers and producers all over the world. Responding to the need for a global presence, ICCA was createdin 1989 to coordinate the work of chemical companies and associations on issues and programs of international interest.
It comprises trade associations representing companies involved in all aspects of the chemical industry.
ICCA is a chemical industry sector with a turnover of more than 3,600 billion euros. ICCA members (incl. observers &Responsible Care members) account for more than 90 percent of global chemical sales.
ICCA promotes and co-ordinates Responsible Care® and other voluntary chemical industry initiatives. ICCA has a central rolein the exchange of information within the international industry, and in the development of position statements on mattersof policy. It is also the main channel of communication between the industry and various international organizations thatare concerned with health, environment and trade-related issues, including the United Nations Environment Programme(UNEP), the World Trade Organization (WTO) and the Organisation for Economic Co-operation & Development (OECD).
ICCA operates by coordinating the work of member associations and their member companies, through the exchange of
information and the development of common positions on policy issues of international significance. Three main issues
focused on by ICCA are: Chemicals Policy & Health, Climate Change & Energy, Responsible Care®.
ICCA also serves as the main channel of communication between the industry and various international entities, such as
inter-governmental organizations (IGOs) and NGOs that are concerned with these global issues.

www.icca-chem.org

About the World Business Council for Sustainable Development (WBCSD)
The World Business Council for Sustainable Development is a CEO-led organization of forward-thinking companies thatgalvanizes the global business community to create a sustainable future for business, society and the environment. Together
with its members, the Council applies its respected thought leadership and effective advocacy to generate constructive
solutions and take shared action.
Leveraging its strong relationships with stakeholders as the leading advocate for business, the Council helps drive debate
and policy change in favor of sustainable development solutions.

www.wbcsd.org

For more information, please contact the ICCA Extended Secretariat:
Rachelina Baio: rba@cefic.be
Servet Gören: sgo@cefic.be
Sachiko Kohno: skohno@jcia-net.or.jp

This brochure is released by the World Business Council for Sustainable Development (WBCSD) and The
International Council of Chemical Associations (ICCA). The designations employed and the presentation of thematerial in this publication do not imply the expression of any opinion whatsoever on the part of WBCSD or ICCA
concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitationof its frontiers or boundaries. Moreover, the views expressed in this publication do not necessarily reflect those of
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The WBCSD provides a forum for its 200 member companies - who represent all business sectors, all continents and a
combined revenue of more than $7 trillion - to share best practices on sustainable development issues and to develop
innovative tools that change the status quo. The Council also benefits from a network of 60 national and regional businesscouncils and partner organizations, a majority of which are based in developing countries.