Tracking and allocation of emission reductions across goods and actors in global supply chains

Main Presenter: Kai Nino Streicher 

Co-Authors: Gustave Coste Rodrigo Castro

A growing number of major corporates are setting ambitious goals to reduce their environmental impacts in the upcoming two decades. This concerns the reduction of Green House Gas (GHG) emissions, reaching all the way to net-zero emission targets [1]. To achieve these ambitious goals, companies are required to make strong reduction in the carbon footprint of their products and services, with most of these impacts often occurring outside of the scope of the major end product producers [2]. Reducing emissions through interventions further upstream in the supply chain is hindered by unclear incentives and jurisdiction, as well as challenges related to the tracking and allocation of these emission reductions across the various goods and actors inside the supply chains. This study presents a Life Cycle Assessment (LCA) based framework that allows to track and allocate the emission reductions of intervention across the different goods and actors in the related supply chains.

The mapping of impacts and their accumulation along the supply chain is demonstrated based on a case study of the beef cattle production in Australia. Here, agricultural activities represent around 13.5% of the national emissions, whereas the majority is related to enteric methane at the feedlot stage [3]. This study focuses on an intervention at the feedlot, by estimating the impacts of feed additives reducing methane production [4], [5]. A mass balance approach together with the identification of distinctive product systems is used to account for the amounts of all the potentially impacted goods. The product systems contain the potential child or co-products of a good as well as any of their competitive usage. As for the allocation of the realized emission reductions, this study uses different physical and economic allocation approaches adjusted for waste streams.

The results show that the production of beef cattle can be broken down into three major product systems with up to 11 distinctive goods in total. To reach the end-product producer, up to 12 distinct stages are identified in the supply chain. Depending on the selected allocation approach, the production of 1kg of beef retail cuts at the Mid-Product storage level can accumulate up to 26.8 kg CO2e emissions, while only representing around 37% of the total mass balance of the beef cattle. Enteric methane inhibitor could reduce these emissions by up to 15%. Corporates could use this approach to include the impact of their supply chain intervention into their GHG reporting.

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