DRAFT Carbon Footprint of Products Analyzing ISO 14067

DRAFT Carbon Footprint of Products Analyzing ISO 14067, PAS 2050 and Product Standards Tod Delaney, Ph. D, P. E. President First Environment Inc. 1

Role of Carbon Footprint Ø Refers to the calculation of the amount of GHG emissions associated with a company, event, activity, or the lifecycle of a good/service ; Ø Enables to ascertain and manage GHG emissions along the supply chain; Ø Safeguards the survival of companies in the changing regulatory and economic business landscape; Ø Furthers the understanding of the risk and opportunities in the supply chain; Ø Allows to focus effort in response to new regulatory, shareholder, and consumer pressures. Klaus Radunsky 2

Klaus Radunsky 3

Various Product Standards � PAS 2050 � The WRI/WBCSD GHG Protocol Product Standard � ISO 14067: International (global) Standard � Standards are broadly consistent in their quantification � methods, but their differing purpose and standard development � processes has lead to different documents. � Key methodological rules underpinning quantification in are consistent. In particular, key topics that have been brought into alignment include consistent approaches to: � � � Sector or product rules Inclusion of biogenic carbon Recycling Land use change Delayed emissions 4

PAS 2050: Publicly Available Specification (PAS) �Issued by British Standards Institute (BSI) Published first in 2008, revised in 2011. was introduced in 2008 (revised in 2011) with the aim of providing a consistent internationally applicable method for quantifying product carbon footprints. �PAS 2050 drew upon lessons learned during the Product Standard’s development process in its 2011 revision. 5

GHG Protocol Product Standard The WRI/WBCSD GHG Protocol Product Standard �The GHG Protocol built on the initial PAS 2050 method in development of its Product Standard. �Was released in 2011 and provides requirements to quantify the GHG inventories of products as well as for public reporting. 6

ISO 14067: International (global) Standard �FDIS Failed (Technical Specification) �Still an on-going process �To be accepted by majority of participating countries �If PAS contradicts to ISO, PAS takes precedence 7

Areas of Consistent Approaches Across Standards Areas Consistent approaches - no need for harmonization Boundary and Allocation Both Cradle-to-grave and cradle-to-gate approaches are allowed Data and Data Quality Primary data requirement - Primary data shall be collected for all individual processes under the financial and operations control Offsets Not allowed for inclusion 8

Differing Principles Principle PAS 2050 vs. Product Standard vs. ISO 14067 - minor differences in definitions Completeness Per PAS 2050, an inventory is considered complete if all material emissions are included (processes or sources contributing >1% to total emissions are considered material). The Product Standard allows insignificant emissions to be excluded, with the reporting organization determining the exclusion threshold based on the business goals for the inventory. ISO 14067 emphasizes comprehensiveness and significance. Consistency Under PAS 2050, consistency is required to “enable meaningful comparisons in GHG related information. ” The Product Standard defines consistency more narrowly as the ability to compare inventory results for a single product over time. ISO 14067 emphasizes consistency, but comparative assertions are not supported Accuracy PAS 2050 states bias and uncertainties should be reduced as far as practicable. The Product Standard is more prescriptive, requiring inventories with no systematic bias. However, it also states practitioners should “achieve sufficient accuracy to enable users to make decisions with reasonable assurance as to the reliability of the reported information. ” In practice, it seems the Product Standard requires a level of accuracy sufficient to meet the intended business goals for the inventory. ISO 14067 emphasizes avoidance of double counting, comprehensiveness, and significance. 9

Goal, Scope, and Principles Product Sector Rules Potential Differences PAS 2050 review has introduced ‘supplementary requirements’ (SRs) that include sector guidance/rules /Product Category Rules (CPR) A potential for differences exists in the supplementary requirements’ (SRs) and/or product rules used. But the expectation is that the same rules should apply to any standard. ISO uses CPR when available and applicable. The Product Standard refers to ‘product rules’ to enable comparisons. All documents require sector approaches to be consistent with the overarching standard. 10

Goal, Scope, and Principles Product Category Rules (PCRs) Potential Differences PAS 2050: the ISO 14025 compliant PCRs: (1) Shall be used in boundary setting when the system boundary in the PCR does not conflict with the system boundary established in PAS 2050 clause 6, (2)As the first preference GHGP does not require PCRs to be followed (for quantification or public reporting) but also is more flexible beyond 14025. The Product Standard: encourages users to look to sector specific guidance and product rules when available and in conformance with the product standard. Provides guidance on additional specifications needed for comparisons that can be addressed in product rules. ISO 14067: Part 1: PCRs shall be used when they: (a)Exist, Are in accordance with ISO 14025, (b)Comply with the requirements of this standard, (c) Are considered proper. Part 2: The CF communication to consumers shall fulfill specific product group requirements as defined by the PGR developed in accordance with the standard. PCR usage under ISO part 1 and PAS is required but it’s not clear how users might interpret “considered proper” or “does not conflict” and whether that interpretation will be consistent. ISO part 2 requires PGRs but not program operators for public reporting 11

Goal, Scope, and Principles Product Comparison Potential Differences PAS 2050: intended to support comparison of GHG emissions between products, and to provide a common basis for communication of this information. However this PAS does not specify requirements for communication (except use profile). There are different specifications for communication of comparisons. The Product Standard: supports performance tracking of a product over time. For product labeling, performance claims by third parties, consumer and business decision making based on comparison of two products, and other types of product comparison, additional specifications are needed. Comparative assertions are not supported. ISO 14067: Comparative assertions are not supported. 12

Treatment of Specific Emissions & Removals Aircraft emissions Potential Differences None of the standards require the use of a multiplier or other correction to emissions from aircraft transport. Minor chance - the inclusion of a multiplier is optional in the Product Standard but if included would cause different results for air travel emissions. The Product Standard allows the use of a multiplier in the inventory results, but if so the multiplier must also be disclosed in the inventory report. If a multiplier is used for PAS 2050, it needs to be recorded separately from the main inventory result. 13

Treatment of Specific Emissions & Removals Time period for assessment Potential Differences PAS 2050 specifies 100 year assessment period, unless otherwise provided for in supplementary requirements. Minor chance – If a longer time period is used following the Product Standard. However, both standards allow flexibility for certain products/sectors. The Product Standard allows companies to specify the appropriate time-frame. ISO 14040/14044, 14067 there is no time limitation. But if known science, sector guidance, or product rules do not exist, the Product Standard suggests companies should assume a minimum time period of 100 years including the end-of-life stage. 14

Treatment of Specific Emissions & Removals Stored Carbon Potential Differences In PSA 2050 and Protocol Standard, carbon stored Minor chance - if time / beyond the assessment period is treated as stored assessment period is different. carbon. In the Product Standard, stored carbon is also reported separately. PAS explicitly recognizes the impact of carbon storage. PAS 2050 time period for biogenic carbon storage is within 100 -years period) ISO: Unclear what “reported separately” means. ISO doesn’t require a time period. Data on the timing of carbon storage & sequestration shall be Protocol Standard : Embedded collected and reported separately carbon reported but impact not included in product footprint 15

System Boundary Potential Differences PAS 2050 sets certain specific inclusions and exclusions for the system boundary as a default unless provided for in supplementary requirements (e. g. , excludes capital goods). 95% minimum coverage The default for both is to exclude processes that are not typically relevant to a product’s life cycle. The Product Standard –requires all “attributable” processes to be included in the boundary. “Non-attributable” processes (i. e. not directly connected to the studied product like capital goods) are not required to be included (and if included must be disclosed). Differences may result where different assumptions or product rules/supplementary guidance are used. Use of the same SRs/product rules should bring consistency here. ISO 14067 – one criterion: significant contribution to CFP; there are cut-off rules (mass, energy, environmental impact). Inclusion or exclusion of either attributable or nonattributable processes can be disclosed and justified. 16

System Boundary Materiality / Cut-off Potential Differences Where a data gap exists, exclusions are allowed by the Product Standard on the basis of significance (a 1% insignificance threshold is given as a rule of thumb but not required). Some chance – if assessment under the Product Standard results in greater than a 5 % of total emissions excluded, this will cause different results than PAS 2050. Justification and disclosure of exclusions from the assessment is required in the inventory report. PAS 2050 allows exclusions on the basis of materiality (<1%) but at least 95% of complete product life must be included. Use of SRs / product rules may bring consistency here. Revision has moved towards alignment with the Product Standard by removing requirements to apply the 95% rule to remaining sources where a single source is >50%, and not requiring scale up to account for 100%. 17

Allocation Potential Differences After avoiding allocation, the hierarchy within the Some chance - without SRs Product Standard is physical allocation and then available it’s possible that physical economic allocation is used for Product Standard & economic used for PAS 2050 step 2 “physical relationships” does 2050. Use of same SRs / product not apply rules may bring consistency here. ISO requires a 3 step procedure For PAS 2050, the hierarchy is supplementary requirements (SRs) and then economic allocation as the default approach except in some cases where specific requirements are given (i. e. , transport/energy recovery/energy production using CHP). 18

Land Use Impacts Potential Differences PAS 2050 defines a direct land use change as “the conversion of non-agricultural land to agricultural land as a consequence of producing an agricultural product or input to a product on that land. ” Differences in definition scope can alter results. The Product Standard defines a direct land use change less narrowly. It allows other methods to be used, as long as the reference is reported. ISO 14067 : When significant, the GHG emissions and removals occurring as a result of direct land use change shall be assessed in accordance with the goal and scope of the study and in accordance with internationally recognized methods such as the IPCC Guidelines for National Greenhouse Gas Inventories. The Product Standard PAS 2050 do not include indirect land use changes. 19

Calculating Emissions Potential Differences PAS 2050 requires total emissions be scaled up to account for any immaterial excluded emissions, while the Product Standard allows processes or inputs with missing data to be excluded, if a worst case emissions estimate indicates they are insignificant. Different quantification may lead to differing results. The addition of the weighting of emissions in PAS 2050 may lead to PAS 2050 requires use of the latest IPCC Global Warming differing results. Potentials (GWPs) to convert all GHGs inventoried to CO 2 e units, while the Product Standard doesn’t explicitly require use of IPCC GWPs. While PAS 2050 allows weighting of delayed emissions over time, the Product Standard does not allow weighting of emissions when estimating the main inventory results. However, if organizations want to also report the impact of delayed emissions separately, they may do so. 20

Inventoried GHGs Potential Differences The Product Standard and ISO 14067 requires the six Kyoto GHGs (CO 2, CH 4, N 2 O, SF 6, perfluorocarbons (PFCs), and hydrofluorocarbons (HFCs)) be included in the inventory, but recommends other GHGs significant or relevant to the product being inventoried be included as well. The inclusion of Different GHGs may lead to differing results. This also changes the scope of the quantification. In addition to the six Kyoto gases, PAS 2050 requires inclusion of substances controlled by the Montreal Protocol and listed in the latest IPCC guidance. PAS 2050 has a more inclusive list, so in cases where additional substances beyond those listed in the Product Standard are included, this should be noted in reporting. 21

Assurance/Verification Potential Differences • PAS 2050 provides for three types of conformity assessment for product inventories: (1) independent third party certification; (2) other party verification (non-accredited third parties); and (3) selfverification. Mandatory verification can lead to different results than without it. • PAS 2050 “highly encourages” independent third party certification when communicating inventory results publicly. • ISO: requires third party certification. Some types of communication (labels) are a detailed publicly available report • Product Standard: must be assured by a first or third party. 22

Reporting Potential Differences PAS 2050 does not specify any requirements for communicating a product-level carbon footprint. However, it does require that data supporting the GHG emission calculations, including but not limited to, product and process boundaries, materials, emission factors, etc. Differing requirements can lead to different results The Product Standard lists specific elements which must be included in public reporting of product-level inventories in Chapter 14. According to the Standard, a public GHG inventory report must follow the key accounting principles (Relevance, Accuracy, Completeness, Consistency, and Transparency) and include: general information, scope, boundaries, allocation, recycling, data information, inventory results, methodological choices, inventory changes over time, assurance, and use of results. 23

Reporting Potential Differences ISO 14067 – Addresses quantification and communication of carbon footprints. It supports linkage to more specific rules (e. g. , PCRs under ISO 14025, sector specific standards, internationally agreed sector-specific guidance documents, CFP-PCR) Supports Comparisons of CFP if linked to more specific rules (e. g. , CFP-PCR) but limited by Annex. Differing requirements can lead to different results 24

Conclusions �More harmonization is needed to facilitate comparability of carbon footprints for similar products. �Transparency in reporting, including clear identification of guidelines followed, unit of analysis, boundaries, assumptions, and limitations, will be essential for increasing utility of product-level emission inventories for both reporting organizations and the public. �As further sector specific rules are developed, we hope that the same rules may be applied to either standard to bring further consistency in product carbon assessments internationally. 25

Thank you 26

Supplemental Information about ISO 14067 27

ISO 14067 – Key Features (1) Carbon footprint of products – Requirements and guidelines for quantification and communication Introduction 1. Scope 2. Normative references 3. Terms and definitions 4. Application 5. Principles 6. Methodology for CFP quantification 6. 1 General 6. 2 Use of CFP-PCR 6. 3 Goal and scope of the CFP quantification 6. 4 Life cycle inventory analysis for the CFP 6. 5 Life cycle impact assessment 6. 6 Life cycle interpretation 7. CFP study report Klaus Radunsky 28

ISO 14067 – Key Features (2) 8. 8. 1 8. 2 9. 9. 1 9. 2 9. 3 9. 4 9. 5 9. 6 Publicly available CFP communication General CFP disclosure report CFP communication Options for CFP communication intended to be available to the public CFP communication not intended to be available to the public CFP communication programme Creation of CFP-PCR Additional aspects for CFP communication q q q Annex A (normative) The 100 -year GWP Annex B (normative) Limitations of the carbon footprint of a product Annex C (informative) Possible procedure for the treatment of recycling CFP studies Annex D (normative) Comparisons of CFPs q Klaus Radunsky 29

Klaus Radunsky 30

ISO 14067 – Key Features (3) 4 Application Ø As with all ISO International Standards, this International Standard is not intended to create barriers to trade or to contradict any WTO requirements. Ø The CFP study shall not be used for a communication on overall environmental superiority because a CFP study covers only a single impact category. Ø Comparisons based on the CFP of different products shall not be made public unless the requirements of Annex D are fulfilled, because of the inherent limitations of the CFP approach (see also Annex B). Klaus Radunsky 31

ISO 14067 – Key Features (4) Ø Consistency (terminology, principles, requirements) Ø With existing ISO standards (e. g. , ISO 14040, 14044, 14020, 14025) Ø With PAS 2050 Ø With GHG Protocol Product Standard Ø Supports four options for communication of CFP Ø Declaration Ø Label Ø Report Ø Performance tracking report Ø (CFP claim: see ISO 14021) Klaus Radunsky 32