Meet customer calls for lower carbon products through a mass balance approach

Given regulations, upcoming carbon tariffs and a general shift in consumer demand, forward-looking companies are exploring the business case for lower carbon products. Replacing conventional inputs to manufacturing processes with sustainable alternatives, such as recycled materials or renewable electricity, will have a substantial effect on reducing the carbon impact of the resulting products. However, implementing these interventions into a separate facility or production line is costly and not always necessary as it may not result in a physically different product.

The mass balance approach, however, allows manufacturers investing in decarbonisation to attribute the carbon savings to a subset of products while ensuring that the total amount of sustainable material is accounted for. Doing so, they can offer products with a lower carbon footprint.

This approach is already gaining traction in the chemicals and metals sectors, which typically manufacture commodities in exceptionally large volumes. Companies outside of these sectors could also benefit from this footprinting approach, such as: 

  • An automotive company introducing recycled steel to replace virgin steel in its products over time.
  • A packaging company generating a portion of its electricity from on-site solar panels.
  • A confectionary company gradually replacing cocoa that has land use change emissions with a deforestation-free cocoa source.
  • A manufacturing company procuring biomethane to reduce the amount of natural gas needed for a heating process.
  • A logistics company procuring low carbon fuels to reduce the emissions intensity of transported freight.
     

Mass balance explained

The mass balance approach allows companies to allocate proportions of sustainable inputs that lower the CO2e emissions per unit to specific products. Instead of showing minor emissions reductions across all outputs, the company can instead assign the full benefits to one specific version of the product, which would then have a significantly lower carbon footprint.

Consider a steel manufacturer mixing 950 tonnes of virgin steel and 50 tonnes of recycled material to make sheet steel products. Ordinarily, their product carbon footprint would reflect these virgin/recycled proportions. In an ideal world, the manufacturer could separate the recycled material to manufacture a separate version made from 100% recycled materials and sell it as the sustainable product customers seek. But in most cases, physically separating the manufacturing process is not practically feasible. More so, stopping and starting production to switch from virgin steel to sustainable steel only adds inefficiencies – and therefore emissions – to the process.

With mass balance, the manufacturer can attribute the carbon savings from the 5% recycled input to 5% of its output without physical separation. These products are sold as ‘sustainable’ with a lower carbon footprint, while the remaining 95% are sold as ‘conventional’. This enables a green premium without physical segregation of materials.

This approach is only valid when all three of the following conditions are met:  

  • Sustainable and conventional materials must be interchangeable; for example, recycled and virgin plastic must perform the same role in the final product.  
  • These materials are regularly mixed during production.
  • Isolating the materials must be technically or economically unfeasible.  

By using the mass balance approach appropriately, companies can make sustainable products more available to their customers and:

  • Decarbonise operations and value chain in a practical way, one step at a time, introducing sustainable alternatives incrementally.
  • Fund further decarbonisation initiatives by charging a green premium for the product made with sustainable inputs. This will create new revenue streams and reinforce the business case for further investment.
  • Help customers reduce their own carbon footprint by incorporating the emission savings of the product into their own decarbonisation strategies.
  • Differentiate the product and the company in the market, gaining a competitive advantage.

 

The mass balance approach in footprinting standards

Interest in using mass balance within carbon accounting arose after the latest updates to globally recognised footprinting standards, such as the Greenhouse Gas Protocol’s Product and Corporate Value Chain (Scope 3) Standards, ISO 14064-1 and ISO 14067.

Although these footprinting standards are under revision with technical working groups (including members from the Carbon Trust) and are expected to incorporate mass balance in future versions, they currently offer no explicit guidance on how to apply it in carbon accounting.

Guidance on tracking ownership of materials does exist outside of these official footprinting standards. Chain of custody certifications, such as ISCC Plus certification and REDcert, can verify the flow of sustainable materials through supply chains. These certification systems can demonstrate that the company has both purchased and retained ownership of the sustainable input it claims.

Even in the absence of a clear ruling from the Greenhouse Gas Protocol and ISO standards, companies can choose to apply mass balance, provided they:

  • Hold evidence that the amount of sustainable input procured matches the quantity attributed to the final products. For example, the 50 tonnes of recycled steel referenced earlier.
  • Demonstrate that the sustainable input is traceable and allocated to specific products in a way that avoids double counting or inflating the environmental benefit.

How to credibly leverage mass balance

The lack of official footprinting guidance may deter some companies from adopting the mass balance approach in fear of making misleading claims. Independent third-party assurance helps address this by providing credibility and transparency. 

At the Carbon Trust, we consider the mass balance approach a credible way to demonstrate your decarbonisation progress and offer lower carbon products. With our advisory role in standards such as ISO 14067 and the GHG Protocol Product Standard, our experts are poised to help your company embrace mass balance, be it through:

  • Footprinting: Our experts help calculate product carbon footprints using mass balance, ensuring allocations are correct and evidence based.
  • Assurance: Our independent assurance team’s verification service gives organisations the confidence to make credible claims.
  • Communication: Verified products can carry the Carbon Trust label, displayed in 40 countries.
    Contact us for more information on how to position your products strongly in this changing market.

Contact us for more information on how to position your products strongly in this changing market.