Impact of Allocation Methods on the Environmental Footprint in the Dutch Agro Sector
Partial report ‘PPS Klimaatperspectief Nederlandse agroproductie'
Life Cycle Assessment (LCA) measures the environmental impact of products from start to finish. It is widely used by companies in the agro sector to calculate greenhouse gas emissions (CO2 footprint) and set targets. Consumers are now seeing LCA results appear on food packaging, such as Eco-scores and CO2 emission labels in supermarkets. Various international LCA standards exist to ensure that calculations are performed consistently. For the Dutch agro sector, the European Product Environmental Footprint (PEF) framework of LCA standards by product category is particularly important. In the LCA calculation of a CO2 footprint, allocation is a significant step. Using a so-called allocation key, the total environmental impact of a company and its supply chains is distributed over the products it produces. For example, consider a dairy farm that produces both milk and meat. Various allocation keys are possible, such as economic value, energy content, or weight. The choice of an allocation key is crucial, as it affects the assigned environmental impact of a product. This can also influence the strategies for reducing emissions.
Within the PPS Klimaatperspectief Nederlandse agroproductie (Climate Perspective Dutch Agro Production), the impact of allocation has been studied for various production systems in the Dutch agro sector, including animal feed, dairy, veal, and pork. This report shows that the choice of a specific allocation key has a significant impact on the final environmental footprint of these products, which can also affect defining the best reduction strategy.
LCA Methods and the use of allocation
Whether to use allocation and which method to choose depends on what you want to know: the impact now or the impact of changes. Choosing a specific allocation method can result in a product having a higher or lower environmental impact; however, this does not affect the impact of the total system. Therefore, it is better to avoid allocation whenever possible. If it is necessary, it is important to use the same method within the same sector, especially when comparing products.
When calculating the environmental impact of products, it is common to use Attributional LCA. This approach looks at the environmental impact of a product at a fixed moment, like a snapshot of the situation, or an annual report from a company. If multiple products are generated in the production of a single product (for example, both milk and meat on a dairy farm), the impact must be distributed among these products, making allocation unavoidable. Unfortunately, there is currently no fixed, consistent method for allocation within the widely used European PEFCR framework.
An alternative approach is the Consequential LCA. This method examines what happens when changes are made in the production process. In this method, you aim to exclude allocation as much as possible, focusing on the bigger picture of changes, where you want to understand the effects of all products and markets produced by a company. This method is more complex but helps better understand the consequences of changes in the system.
Example of Allocation
Milk and Meat Production from Dairy Cattle
A dairy farm produces both milk and meat from the same cows. When conducting an LCA, it is necessary to assign all inputs and emissions to the end products, in this case, both milk and meat. However, milk and meat share common resources, such as feed, water, and energy, which contribute to the environmental impact. Allocation does not change the size of the environmental impact of the dairy farm, but it does change the distribution of that impact between milk and meat. Particularly for meat, the difference can be substantial. Depending on the allocation method, milk may be assigned 92% or 96% of the impact, which makes little difference. For meat, however, the difference between 4% and 8% represents a doubling.
Recommendations for the Sector and Government
The research provides the sector and the government with several recommendations that can help interpret LCA results:
For the sector
Monitor and Report
Track how emissions change with and without allocation to understand the effect of allocation on emission reductions.
Regular Testing
Regularly check whether the applied allocation factors and methods are still accurate, especially for by-products whose value changes, such as mixed feeds. It is also useful to apply different allocation methods to see how robust the results are in comparisons between alternatives and over time.
Use Consequential LCA Method
When investigating the environmental effects of new applications of by-products, look not only at the own application but also at possible applications in other sectors.
Caution with Comparisons Between Product Groups
Be cautious when comparing different product groups. Allocation can influence the comparison, even when the same method is used.
For the government
Evaluate Market Steering
Regularly check whether the market steering initiated through the attributional LCA method delivers the desired results at the system level.
Evaluate Policy
When developing and assessing policy, use a consequential LCA method to gain a more comprehensive picture.
Download Report
The full report ‘The Influence of Allocation in Life Cycle Assessment on Calculating Greenhouse Gas Emissions of the Dutch Agro Sector’ is available for download. The report is only available in Dutch.
More Information on PPS Klimaatperspectief Nederlandse agroproductie
This report is part of the PPS Klimaatperspectief Nederlandse agroproductie (Climate Perspective Dutch Agro Production). The aim of this PPS is to develop knowledge to better align the monitoring of climate effects of Dutch Agro & Food production between businesses and the government. The PPS runs from 2020 to 2024. The consortium includes the Ministry of LVVN, Nevedi (Dutch Association for Animal Feed Industry), NZO (Dutch Dairy Organization), CoViVa (Coalition for the Vitalization of Pig Farming), and SBK (Foundation for Industry Organization in the Veal Sector). In addition to WUR, Mérieux NutriSciences | Blonk is also involved as a knowledge partner.
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Hans Blonk
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