At this stage in the framework (after completing Step 7), a list of possible alternatives has been developed after considering physicochemical properties, comparative exposure assessment, human health, and ecotoxicity. The next steps in the committee’s framework (Steps 8 and 9, Figure 10-1) consider trade-offs between these domains and other factors, such as product efficacy, economics, process safety, and resource use.
Estimating the materials and energy consumed and substances emitted by a product over part or all of its life cycle, and the human, environmental, and social impacts associated with those flows, are topics beyond the human health and ecological impacts evaluated in earlier analyses. Thus, additional steps to consider whether a life cycle analysis44 is required, and to provide guidance on selection of an appropriate life cycle approach when needed, are included in the committee’s framework. Step 8 is a required element that uses Life Cycle Thinking (LCT) and other screening methods to determine if additional detail and quantitation are required. The need to complete subsequent analyses (optional Step 9.1) is based on the output of this initial analysis. Additional consideration of broad environmental impacts, such as greenhouse gas emissions and energy resources, and social impacts, such as labor practices and human rights concerns, also occurs during Step 9.
Box 10-1 provides the elements of the committee’s suggested approach to Steps 8 and 9.1. These steps should be performed in accord with Step 2 (problem formulation) of the committee’s framework. They may also include other life cycle concerns identified as important by the assessor while progressing through the alternatives assessment. Step 8, which is required under the framework, asks the assessor to determine if significant differences exist between the chemical of concern and the possible alternatives over their respective life cycles. Box 10-2 provides definitions for the terms used in this chapter.
- Use Life Cycle Thinking (LCT) to qualitatively determine if differences in material or energy flow or synthetic history exist between the original chemical and the potential alternatives. These may be assessed across a number of risks, including those to human health, the environment, or society. This analysis should determine if those risks exist at a place or time other than the subject application.
- If the Life Cycle Thinking identifies a significant difference in these areas when the life cycle of the original chemical is compared to that of the life cycle of an alternative, then a Life Cycle Inventory or “screening LCA” or Life Cycle Impact Assessment should be performed to provide quantitative information. If these analyses reveal that additional, quantitative information is required to support decision-making, then the assessor may wish to proceed to Step 9.1 and perform a Life Cycle Impact Analysis (see Box 10-2).
Before accepting a chemical as an alternative, it must be determined that the chemical can perform adequately in the intended application(s) identified early in the alternatives assessment process (Step 2, see Chapter 4). This early problem formulation step should have identified performance and economic criteria. To follow up on the findings from Step 2, the committee also includes optional performance (Step 9.2) and economic (Step 9.3) assessments in its framework. These steps are considered optional because the entity performing the assessment may
44 As used in this chapter, the term “life cycle analysis,” written in lower case, refers collectively to the family of methodologies that use a systems approach to compile and evaluate the inputs, outputs, and potential environmental impacts of a product system throughout its life cycle. Specific methods, such as Life Cycle Thinking (LCT), Life Cycle Inventory (LCI) and Life Cycle Impact Assessment (LCIA), will be capitalized or represented by their initials.
not be a business, and thus would not be in a position to evaluate performance and economics as a business would. The converse is obviously true; a business would be critically interested in establishing performance and economic performance criteria (Step 2 of the framework) and ensuring that any selected alternatives meet those criteria.
Note that it is beyond the scope of this committee to provide specific guidance on the best practices for performing the assessments in Steps 8 and 9. Instead, this chapter will provide an overview of these assessments and a brief discussion of how they might affect the final decision of which alternative chemical moves forward.
Three frameworks studied by the committee evaluate whether life cycle concerns indicate a need for a life cycle assessment, while three other frameworks suggest or require consideration of factors, such as greenhouse gas emissions, that would normally be addressed through a life cycle assessment. The six frameworks were IC2, BizNGO, the German Guide, CA SCP, REACH, and UCLA MCDA. LCT takes many different forms across these frameworks. Life cycle assessments come into play in three different ways: as a separate, specific element or module of an assessment, such as in BizNGO; as a requirement folded into many elements of the assessment, such as in the CA SCP assessment plan; or as a guiding principle or value of an overall analysis, such as in the German Guide. In IC2, the Life Cycle Module can be treated as a separate element, though life cycle effects are also noted as being relevant in the Cost and Availability, Social Impact, and Materials Management modules. In frameworks where considering life cycle of a chemical is called out specifically, it is described as a method to assist in distinguishing between potential alternatives by drawing attention to considerations outside of the area of technical feasibility. Recognizing the complexity of a full life cycle analysis, it is often left to the assessor to determine if it would be beneficial for the assessment to move beyond Life Cycle Thinking to a quantitative analysis.
It is important that attention be given to language used when discussing life cycle considerations. For this reason, brief descriptions are provided here, and additional detail can be found later in this chapter.
- Life cycle Assessment (LCA) is a “compilation and evaluation of the inputs, outputs and the potential environmental impacts of a product system throughout its life cycle” (ISO 2006a).
- Life Cycle Thinking (LCT) as defined by Christiansen, is “a mostly qualitative discussion to identify stages of the life cycle and/or the potential environmental impacts of greatest significance e.g. for use in a design brief or in an introductory discussion of policy measures. The greatest benefit is that it helps focus consideration of the full life cycle of the product or system; data are typically qualitative (statements) or very general and available-by-heart quantitative data” (Christiansen et al. 1997).
- Life Cycle Inventory (LCI) is a “phase of life cycle assessment involving the compilation and quantification of inputs and outputs for a product throughout its life cycle” (ISO 2006a).
- Life Cycle Impact Assessment (LCIA) is a “phase of Life Cycle Assessment aimed at understanding and evaluating the magnitude and significance of the potential environmental impacts for a product system throughout the life cycle of the product” (ISO 2006a).
Several frameworks (IC2, REACH, Lowell, the German Guide, UCLA MCDA, and UNEP support an option to consider social impacts beyond those already addressed in other steps. These frameworks consider whether there are worker issues, local community issues, or societal issues not addressed by other steps and whether differences between alternatives are expected to be significant. Two frameworks (IC2, REACH) assess potential social and socioeconomic impacts of each alternative across its life cycle.
Discussion of social impacts and how those assessments are performed also varies across the different frameworks. For example, in IC2, social impacts assessment is in a module that can be used if appropriate. Under REACH, the social impacts are contained in the socioeconomic analysis. In the Lowell framework, consideration of social impacts, including social justice performance, is described as
important for future development of that framework. In the German Guide, social responsibility across the life cycle is a clear factor for assessing alternatives. The main themes across these different assessment approaches are corporate values about social responsibility, social justice as it relates to areas such as labor practices and human rights, and social impacts that affect communities and states with regard to management of chemicals during their manufacture, use, or disposal.
Assessment of performance is a critical element or module in every framework examined. Technical feasibility and performance is evaluated for each alternative, but for direct replacement chemicals, the performance of the chemical of concern is a starting point for evaluation. Thus, BizNGO notes that care should be taken to ensure that the performance requirements for existing products are not higher than necessary for the application so that screening out of potential alternatives is not done unnecessarily. Multiple frameworks note that if an alternative is in use in the commercial stream already, market information and assessments may provide useful technical and performance analyses that can be drawn upon for the new use. IC2 notes that feasible modifications of products or processes could be considered if an alternative falls outside the range of conditions required by the current chemical of concern.
Economic analysis generally falls into four categories across the reviewed frameworks:
- direct, business-relevant impact;
- market analysis, including potential changes to availability of the alternative, relevant regulations that might be affected, and competition from other vendors;
- costs to other entities, such as public agencies, stakeholders, and communities; and
- cost-benefit analyses.
The direct costs include positive and negative changes to revenue if an alternative is adopted. Both the market analysis and the cost-benefit analyses may entail some consideration of regulatory and social elements that can be easily quantified, such as cost of re-registration of approval of an end product or material, and those that may not be readily quantified, such as potential future liabilities in case of release, reduced risk of accidents during production, or potential changes to public perception of that product. In every assessment, the economic analysis is performed after the completion of the technical assessments. The complexity and detail of required or recommended analyses varies considerably across the various assessments; however, all recognize that there is a potential for no alternative to be viable due to cost concerns, and
FIGURE 10-2 Unit processes within a product system (ISO 2006a). This excerpt is from ISO 14040:2006, Figure 2 on page 10, with the permission of ANSI on behalf of ISO. (c) ISO 2014 - All rights reserved.
this may result in additional considerations. For example, the CA SCP framework specifies that in cases where the requirement to identify a substitute chemical is initiated by regulatory schemes, if no financially viable alternative can be identified, then a clear description of end-of-life management plans for the chemical of concern must be presented as part of the assessment and cost comparisons.
Considering Impacts beyond the Point of Chemical Use/Application
Up until this point in the committee’s framework, all of the analyses have focused on the impacts of the chemical of concern and possible alternatives at the point of use. However, it is always the case that impacts to human health, the environment, and society may occur throughout a product’s life cycle, not just at the point of application. Therefore, life-cycle analysis is appropriate for identifying and understanding the impacts posed by a chemical of concern and alternatives in a product’s life cycle, from manufacture to disposal, and to determine if these impacts warrant preference for one possible alternative over another. In considering each chemical’s role in the product’s full life cycle, the assessor can identify where there may be “burden shifting”—eliminating an impact at one point in a product’s life cycle with the consequence of an equal or greater impact appearing at another point in a product’s life cycle.45 The initial consideration of life cycle effects occurs in Step 8.
Step 8: Life Cycle Thinking
The committee framework includes qualitative LCT in Step 8. One purpose of LCT is for the assessor to thoughtfully consider potential upstream and downstream impacts. This section describes the components of such thinking. Step 8 often provides enough information from which to make a decision, and in these cases, a quantitative analysis may not provide additional value. LCT can therefore identify whether an additional, optional quantitative assessment would be useful. Fundamental to any life cycle analysis, including LCT, is mapping the product system. Each stage in the product system (raw material acquisition, etc.) can be viewed as a collection of one or more unit processes.46 Product systems can be subdivided into a network of unit processes that are linked to each other by the flow
For the Substance of Concern:
Substep 1: At the unit process stage, identify all material and energy inputs to the unit process and all outputs (products, co-products, and by-products) and releases from the unit process.
Substep 2: For each material input, identify the unit process from which the material was an output. This is identified as the present unit process.
Substep 3: For the present unit process, identify all material and energy inputs to the unit process and all outputs (products, co-products, and by-products) and releases to the environment.
Substep 4: Repeat Steps 2 and 3 for all the inputs taken directly from Earth (minerals, agricultural products, forest products, water, air, etc.).
Substep 5: For each output identified in Step 1, identify the unit process to which the material is an input. This, too, is identified as the present unit process.
Substep 6: For the present unit process, identify all material and energy inputs to the unit process and all outputs (products, co-products, by-products, and releases) from the unit process.
Substep 7: Repeat Steps 5 and 6 until all the outputs are disposed (managed as waste, reused, or recycled).
The result of Substeps 1 through 7 will be a product life cycle map for the chemical of concern.
Substep 8: Repeat Steps 1 through 7 for each potential alternative.
The result of this exercise will be a product life cycle map for each potential alternative.
45 For example, introducing a biofuel may decrease the risk of harm to the environment by reducing emissions of greenhouse gases while increasing the risk of harm to the environment by increasing runoff of nutrients to waterways with concomitant eutrophication.
46 ISO 14040 (ISO 2006a) defines a “unit process” as “the smallest element considered in the life cycle inventory analysis for which input and output data are quantified.”
The sequence of unit operations that proceed from acquisition of raw materials to production of chemical intermediates to production of the chemical of concern (or possible alternative) is of particular interest. This process is known as the “synthetic history” of a chemical. Examination of the synthetic history can quickly reveal unit processes that present impacts to human health or the environment (for example, building block chemicals or byproducts of a production unit process). It is also possible to look at the synthetic history of a chemical and, without using LCT, screen for possible hazards. Using this approach could provide the basis for preferring one alternative to another without the rigor of mapping a product system.
The potential replacement of a dialkyl phthalate with its cyclohexyl analog as a polyvinyl chloride plasticizer serves as a useful illustration of this point. If we examine the life cycle (as noted in the description of LCT above), we see that the process and raw material history of the cyclohexyl alternative maps completely onto that of phthalate except for the final step, where the phenyl group is hydrogenated to form the presumably safer cyclohexyl product. In this case, the initial top-level LCT analysis clearly suggests that (assuming the cyclohexyl alternative is safer in its application) an LCIA does not need be performed, because the only difference in the synthetic history of the compounds is an extra hydrogenation step for the alternative. Conversely, if we were to propose an alternative for a given compound that exhibits a dramatically different life cycle (revealed in the LCT step), where clear “red flags” appear at some point during the compound’s synthetic history, then an LCIA would still be unnecessary, because these “red flags” suggest that the proposed alternative would be a regrettable substitution. An example might be the proposed substitution of N-vinyl formamide for acrylamide. While each is a monomer for a high molecular weight water-soluble polymer, acrylamide is a potent neurotoxin, N-vinyl formamide is a safer alternative. However, acrylamide is derived in a single step from acrylonitrile via enzymatic hydrolysis, while N-vinyl formamide is manufactured in a multi-step process, where toxic hydrogen cyanide is a key raw material. The solution here may be to seek an alternative synthetic pathway to N-vinyl formamide.
of intermediate products, releases to the environment, and waste (ISO 2006b). A process for constructing a product system map is outlined in Figure 10-2 and Box 10-3. Note that the procedure is intended to be illustrative, not prescriptive. Other procedures for developing a product system map are available (e.g., EPA 2006; ISO 2006a).
Dividing a product system into its component unit processes facilitates identification of the inputs and outputs of the product system. Inputs from the environment into the unit operations of the product system are resources consumed (such as chemicals and energy). Useful outputs from the product system are products and co-products. Releases to air, water, and land are the environmental emissions of the product system. These mass flows are the basis for subsequent life cycle assessments.
After constructing the product system map, the next step is to compare the map of the chemical of concern system with the map of each potential alternative system. Unit operations that are unique to either system should be identified, and the inputs and releases to the environment noted and qualitatively assessed. If no unit process unique to an alternative presents a greater risk of harm to human health, the environment, or society than the chemical of concern in its subject application, then the alternative remains viable.
If a potential alternative has a unique unit operation containing a significant hazard not present in the product system of the original chemical, then a determination should be made as to whether the hazard is easily mitigated. For example, if the hazard is in a controlled workplace where engineering controls or effective personal protective equipment (PPE) are readily installed and occupational health protections in place, then the alternative may remain viable. Consideration of the “synthetic history” of the chemical subject to the alternatives assessment is also a useful exercise at this point (see Box 10-4). In cases where an alternative includes an “upstream” chemical hazard, another possibility is to perform an alternatives assessment to determine if safer alternatives to that upstream chemical exist and if not whether the alternative subject to the original assessment remains viable. Consideration of the “synthetic history” of the chemical subject to the alternatives assessment is also a useful exercise at this point.
Step 9 contains three optional steps (See Box 10-5 for additional information):
9.1: Additional Life Cycle Assessment
9.2: Performance Assessment
9.3: Economic Assessment
Whether these optional steps are performed will be largely dependent on the problem
formulation defined in Step 2 of the assessment. There may be cases where new concerns arise during Steps 3-8 that trigger inclusion of these assessments, but this is likely to be a rare occurrence. All of the optional assessments in this step should be considered comparative in nature. They can be used to assist in decision making by allowing the assessor to compare the original chemical and a given alternative or the original chemical and the potential alternatives to identify a best fit for the purpose. For businesses, these may be particularly useful steps for assessing the market viability and potential effect on costs within the company.
Additional Life Cycle Assessment (Step 9.1)
While Step 8 is required in the committee’s framework and will often provide an adequate level of detail, assessors and decision makers may find that they require additional information to inform their decision-making process (as defined through the problem formulation step), and will continue to Step 9.1. Figure 10-3, provides a useful conceptual structure for identifying the stages of a product life cycle. Stages are composed of the “unit processes” identified in Step 8. Though the life cycle stages may be considered individually to identify process-specific hazards, it is important to remember that when a change is made to one life cycle stage, it may also result in changes to other life cycle stages.
- (9.1) Use the information provided from Step 8 and perform an LCI, “screening LCA”, or LCIA for the chemical of concern and each alternative to determine if unique impacts to human health, the environment, society, or other areas identified during the problem formulation step exist for the chemical of concern or its alternatives.
- (9.2) Consider the performance criteria for a given chemical to meet the functional use requirements for the product. Determine if the potential alternatives are favorable for the desired application and meet the performance requirements.
- (9.3) Use tools and standards common to the field, such as cost of materials, cost of the product—including, for example, production costs, energy costs, equipment costs, and direct costs—and net present value calculations to evaluate the economic impact of each alternative.
FIGURE 10-3 Example of a product system for life cycle assessment (ISO 2006a). This excerpt is from ISO 14040:2006, Figure 3 on page 10, with the permission of ANSI on behalf of ISO. (c) ISO 2014 - All rights reserved.
TABLE 10-1 Output of a Life Cycle Inventory (LCI)
Note: This is an abbreviated LCI output. This example only shows data for substances whose names begin with A. A complete LCI resource and release table typically has hundreds of entries.
|Admium, 0.30% in sulfide, Cd 0.18%, Pb, Zn, Ag, In, in ground||Raw||µg||651.9|
|Barite, 15% in crude ore, in ground||Raw||mg||326.13|
|Basalt, in ground||Raw||mg||32.022|
|Borax, in ground||Raw||µg||1.4415|
|Actinides, radioactive, unspecified||Water||mBq||3.8371|
Screening Life Cycle Analysis
Depending on the problem formulation defined in Step 2 of the assessment or the surfacing of a material change in product systems identified in Step 8, a more quantitative comparison of the inputs and releases to the environment may be necessary to adequately evaluate the impact of a chemical substitution. For example, changing from a plastic to a metal housing for a computer may eliminate the need for an added flame retardant, but may also result in increased environmental and social impacts from mining. In these cases, a preliminary quantitative assessment, such as a screening LCA, may be performed as part of Step 9.1.
As shown in the description of LCT associated with Step 8, dividing a product system into its component unit processes facilitates identification of the inputs and outputs of the product system. When the data from the mass flows are summed across all unit operations (all resources consumed, all releases to air, water, and land) the result is a Life Cycle Inventory, or LCI (Table 10-1).
An obvious disadvantage of a system-specific, ISO-compliant LCI is that collecting the resource, output, and release data for each unit process in a product system is an enormous undertaking, and the resulting list of several hundred resources used combined with the list of several hundred releases to the environment may be difficult to interpret. Fortunately, databases and software tools have been developed to perform LCI analyses. These software tools use data that are not necessarily specific to the product system under consideration. For example, they may use industry average data or data from an unrelated facility making a similar product.
Life cycle inventories conducted with such data and software are often referred to as “screening LCAs” to differentiate them from life cycle studies, which use system-specific data. Additionally, screening LCAs often do not include peer review or fully meet the other requirements of ISO 14040 and ISO 14044 (ISO 2006a,b). Despite these limitations, screening LCAs can be used to estimate the materials and energy flows needed to conduct Life
|Impact Category||Common Possible Characterization Factor||Description of Characterization Factor|
|Global warming||Global warming potential||Converts LCI data to carbon dioxide (CO2) equivalents Note: Global warming potentials can be 50, 100, or 500 year potentials.|
|Stratospheric ozone depletion||Ozone depleting potential||Converts LCI data to trichlorofluoromethane (CFC-11) equivalents.|
|Acidification||Acidification potential||Converts LCI data to hydrogen (H+) ion equivalents.|
|Eutrophication||Eutrophication potential||Converts LCI data to phosphate (PO4) equivalents.|
|Photochemical smog||Photochemical oxidant creation potential||Converts LCI data to ethane (C2H6) equivalents.|
|Terrestrial toxicity||LC50||Converts LC50 data to equivalents; uses multi- media modeling, exposure pathways.|
|Aquatic toxicity||LC50||Converts LC50 data to equivalents; uses multi- media modeling, exposure pathways.|
|Human health||LC50||Converts LC50 data to equivalents; uses multi- media modeling, exposure pathways.|
|Resource depletion||Resource depletion potential||Converts LCI data to a ratio of quantity of resource used vs. quantity of resource left in reserve.|
|Land use||Land availability||Converts mass of solid waste into volume using an estimated density.|
|Water use||Water shortage potential||Converts LCI data to a ratio of quantity of water used vs. quantity of resource left|
SOURCE: Adapted from EPA 2006
Cycle Impact Analyses, which are discussed in the next section. Such analyses may assist in determining whether there is value in moving forward with a system-specific, ISO-compliant life cycle analysis.
Life Cycle Impact Analysis (LCIA)
Environmental and Human Health Impacts
An LCIA is a quantitative evaluation of potential human health, environmental, and social impacts of the material flows (resources acquired from the environment and releases to the environment) identified during the Life Cycle Inventory. That is, an LCIA attempts to establish a relationship between a product system and risk of harm to human health, the environment, and society. Other risks and impacts may be included if identified during problem formulation. The LCIA approaches this role by looking at each resource acquired and each release to the environment and assessing its impact relative to a “standard” material.
This is best illustrated by considering the impact of a product system on global warming. Carbon dioxide is the primary gas contributing to global warming. Methane also contributes to global warming and is approximately 22 times more potent than carbon dioxide. That is, 1 kilogram (kg) of methane has the same global warming impact as 22 kg of carbon dioxide. A product system might add carbon dioxide and methane to the atmosphere through incomplete combustion of natural gas. By converting the mass of methane released to carbon dioxide equivalents (multiplying the mass by 22) and adding the mass of carbon dioxide released, a global warming potential (GWP) equivalent to so many kg of carbon dioxide released can be calculated. This approach can be taken for all resources acquired and releases to the environment for a basic set of impacts. Table 10-2 summarizes some commonly used impact indicators.
released to the environment without consideration of exposure pathways available at each point of release. Indeed, due to the spatial scales of LCA datasets and the number of chemicals being assessed simultaneously, the mass data are often divorced from any location and concentration data, so no assessment of risk is possible. This may change in coming years as spatial representations of both LCI and LCIA data and methods for developing these representations are improving, particularly for air and water emissions. These improvements are due to efforts such as ImpactWorld method or the USEtox fate-exposure-effect model. Until these become commonplace, however, as reported in the LCIA, the human health and aquatic toxicity characterizations are directional indicators of the mass of hazardous materials released to the environment; in no way do they consider the actual risk of harm from the releases. An extension of this point is that in comparing two product systems, releases with a local effect, such as human or aquatic toxicity, are best handled by LCT and evaluations of risk to human and aquatic health as described in Chapters 7 and 8.
More generally, some of the releases identified using LCIA, such as greenhouse gases (GHGs), will have global impacts. Others, such as oxides of sulfur or nitrogen, will have regional impacts. Still others, such as inherently toxic chemicals, will have local impacts. Each field of impact (global, regional, or local) needs to be evaluated differently. Releases with global impacts, such as GHGs, may be aggregated over a product’s life cycle because it is the global atmospheric concentration of GHGs that is of concern, not the concentration at the point of origin. In contrast, releases with only a local impact should be identified using LCT and the relative risk of harm assessed using the methods described in Chapters 7 and 8.
Finally, the choice to proceed from an LCT to an LCIA would likely only be warranted if additional information is required to resolve trade-offs to reach a substitution decision. If screening LCAs or LCT can provide sufficient insight to inform trade-off resolution as part of the substitution decision, it may not be necessary to conduct system-specific, ISO-compliant Life Cycle Impact Analyses.
The committee acknowledges that an alternatives assessment may consider social impacts of a chemical choice. In contrast to other frameworks that considered social impacts separately from other life cycle impacts, the committee considers social impacts as part of the life cycle assessment because LCT and LCIA methods increasingly integrate social impacts (Jorgensen 2008).
Many factors leading to production and disposal may differ between the chemical of concern and the potential alternatives, including the routes and methods for acquiring the raw materials needed for production, the sites and methods of manufacture, and the availability of disposal methods. These differences may result in differential social impacts, and a company may wish to compare the effect of choosing a given chemical on, for example, workers’ rights and safety, community rights, and rights of indigenous peoples. These issues are typically associated with developing economies, but areas of concern are found in developed countries as well. Because social impacts may occur at any point in the life cycle of a product, identifying the possible occurrence of social impacts requires a life cycle approach similar to that used when assessing possible risks to human health and the environment that occur at a time or place beyond the point of use or application. For this reason, the committee advises considering environmental life cycle impacts and social life cycle impacts concurrently rather than separately.
The committee does not recommend a specific set of social impacts to be considered. Rather, those impacts should be decided between the entity authorizing the alternatives assessment and its stakeholders during problem formulation early in the assessment process (Step 2). Table 10-3 summarizes social impact categories and possible characterization factors that may be considered.
Identifying and Managing Consequential Impacts
Life cycle considerations are, by their nature, complex. LCIs produce a large number of outputs, and it is rare for one product system to show advantage over another product system for every impact indicator. This reality strongly argues for the entity authorizing the alternatives assessment and affiliated stakeholders to identify, prioritize, and document life cycle considerations during problem formulation (Step 2) of this framework. It may also be necessary to use an integration approach similar to that described in Chapter 9 to determine whether one alternative is preferred over another.
The committee also notes that life cycle differences are primarily relevant if they are inherent
|Social Impact Categories||Possible Characterization Factors|
|Human rights||Non-discrimination, including indicators on diversity, such as composition of employees on all levels according to gender, age group, disabled, part-time workers, and other measures of diversity Freedom of association and collective bargaining Child labor, including hazardous child labor Forced and compulsory labor|
|Labor practices and decent work conditions||Wages, including equal remuneration on diverse groups, regular payment, length and seasonality of work, and minimum wages Benefits, including family support for basic commodities and workforce facilities Physical working conditions, including rates of injury and fatalities, nuisances, and distance to workplace Psychological and organizational working conditions, such as maximum work hours, harassments, vertical, two-way communication channels, health and safety committees, job satisfaction, and worker contracts Training and education of employees|
|Society||Corruption, including incidents/press reports concerning fraud, corruption and illegal price-fixing, and violation of property rights Development support and positive actions toward society, including job creation, support of local suppliers, general support of developing countries, investments in research and development, infrastructure, and local community education programs Local community acceptance, such as complaints from society and presence of communication channels Ensuring commitment to sustainability issues from and toward business partners|
|Product responsibility||Integration of customer health and safety concerns about the product, such as content of contaminants/nutrients, other threats/benefits to human health (including special groups) due to product use, and complaint handling system Information about the product to users, such as labeling, information about ingredients, origin, use, potential dangers, and side effects Marketing communications, such as ethical guidelines for advertisements|
SOURCE: Adapted from Jørgensen et al. 2008.
to, or otherwise directly associated with, the specific alternatives. For example, if generic databases are used as sources for the global warming potential associated with producing certain alternatives, and those data show an apparent difference, care should be taken to understand if the differences are based on factors inherent to the manufacturing process (such as a process that requires an elevated temperature) or due to where the substance may have been made at the time the data was collected (e.g., a country with coal-generated electricity vs. a country with wind-powered electricity). Differences that are not inherent or directly linked to a particular alternative may be of limited value in differentiating between alternatives, especially if those differences are the primary or only differences between alternatives. Fortunately, most life cycle analysts are familiar with these concerns and should be able to identify meaningful differences for the purpose of an alternatives assessment.
Conclusions about Including Life Cycle Considerations
Clearly, performing an LCIA adds significant effort, time, and cost to an alternatives assessment. Therefore, the decision to proceed with such an assessment should be based on a clear need. Need, or lack thereof, can be demonstrated by LCT and identification of significant differences between product systems.
There are no hard and fast rules that prescribe when such an assessment should proceed and when it can be avoided. The scope of the alternatives assessment, as defined by stakeholders during the problem formulation step, should ultimately determine this choice. Regardless of the decision, the basis for including or excluding an LCIA should be clearly documented.
Performance and Economic Factors in the Committee’s Framework
The performance and economics of alternatives are primary considerations in substitution decisions. A substance will often be considered a possible alternative because it has already been used to provide the needed function, but if it is not known whether performance and economic criteria are met, then additional analyses will often be desirable. See Chapter 4 for a discussion of these concerns. Chapter 11 has a discussion of pilot testing as a means to evaluate unintended performance and health and safety impacts during the implementation phase of an alternative.
The elements of performance and economics are specific to the substance being evaluated and to its application. For example, when considering a chemical substitution for a flame retardant used in polymeric electronics housings, the final product must meet flame retardant requirements for each jurisdiction in which the product is sold. Typically, a range of acceptable performance and economic requirements will exist for products performing the same function. For example, some products are available in a “premium” format that offers higher performance at an increased price, and an “economy” format that offers lesser performance at a lower price. The range of cost-performance options that need to be considered is often based on internal and external stakeholder input and assurances that a range of customer needs are being met. Engaging direct customers or downstream users may be necessary to understand the critical functions or functionality and economics of a product.
Performance Assessment (Step 9.2)
A product provides specific functionality under a defined set of conditions. Customers for a product expect and often require that alternatives are favorable for the desired application and that they meet certain performance requirements. Often, customers expect a “drop in replacement,” or a functionally identical product when considering an alternative. This expectation is often hard to achieve and may require additional discussion and deeper understanding of the customers’ needs and expectations. There also may be additional specifications that the product must meet before it can be approved or used. Most companies understand the need to test their products before commercialization using internal testing regimens or consensus standards and methods, such as those published by ASTM International, ANSI, ISO, and others.
Economics Assessment (Step 9.3)
Although the statement of task did not require the committee to directly address economic factors in its framework, understanding the potential financial impacts of alternatives is important in most substitution decisions. It should be noted that economic assessments are not a requirement of the committee’s framework since there may be situations in which financial analyses cannot be completed. For this reason, economic analyses are considered an optional step in the framework. In cases where an economic assessment is required by regulators, as with CA SCP or REACH legislation, then obviously this option must be exercised. However, there may be times when the user conducting the alternatives assessment is different from the entity that will be executing the substitution, so there may be insufficient financial information for a thorough evaluation at this stage in the assessment. This situation could arise when an alternatives assessment is being conducted by a regulator, a consortium, or a public-private partnership. In these cases, or any time financial information is not immediately needed or available, economic analyses may be deferred to later stages of the assessment or delegated to users of the final report.
Chemical substitution in a product is expected to have an economic impact, since most supply chains have been optimized to minimize cost. Thus, the most likely economic impact of a chemical substitution will be an increase in the cost of materials or retooling of manufacturing equipment to accommodate the alternative. The cost of materials is one of several factors contributing to the cost of a product (cost of goods sold, or COGS). Direct labor costs, direct energy costs, equipment costs, and other direct costs also contribute to the total cost. Any price increase in COGS for the final product will be the cost differential between the cost of the alternative and the cost of the chemical of concern. This is an important consideration because the economic viability of a product is typically measured in margin percent, the price minus the COGS divided by the price, times 100. Thus, if an ingredient represents 10% of the cost of a product and an alternative costs double that amount, the product cost will increase by 10%; it will not double.
Other production costs, such as increased processing time and energy, may also factor into the economics of the substitution. For example, a less reactive monomer may have a longer cure time in a reactor. This would reduce the productivity of the reactor (less product per hour) and increase the product cost. However, these costs can only be known after prototype products are made and evaluated, which is beyond the scope of this committee’s charge.
This simple analysis reflects the comparative costs of materials for a given substitute, assuming that it is a one-for-one “drop-in” replacement, where no other changes in the final formulated product are required. For consumer products, drugs, materials, plastics, and other items of commerce, which are highly formulated, the cost and time required for reformulation to accommodate the substitute may be considerable. While the simple analysis is a useful illustration of the concept, a total economic analysis would be needed to include the costs and time to re-formulate a final product and, depending on the product, any reregistration costs that may be required. This broader analysis could also include consideration of indirect costs, such as those of waste and end-of-life management and potential medical costs. As described in the summary of other frameworks earlier in this chapter, in some cases, these analyses might be required as part of local or state regulatory requirements.
The committee acknowledges that some manufacturers consider an increased cost of goods as an impediment to substitution. In contrast, these same economic considerations may also stimulate development of novel innovations by other entities (see Chapter 13). Most companies, however, manage increased material costs by looking at their product holistically, and adjusting other costs, margin expectations, and price to offset the cost increases (and concomitant benefits) of a chemical substitution. In addition, over time, an initially more expensive chemical or material may become more cost competitive as the supply chain adjusts.
Another approach companies use to calculate the worth of a product innovation is Net Present Value (NPV). NPV is based on cash flow to the company over time (based, for example, on sales of a product), and calculates the equivalent amount of capital needed to produce that same cash flow at an assumed internal rate of return (IRR). If the investment to bring the product to market is less than the NPV, then the product is economically desirable. An obvious disadvantage of the NPV approach is that no consideration is given to the loss of value caused by harm to human health, the environment, or society, nor is consideration given to liabilities associated with managing restricted hazardous substances.
An example of a cost-effective substitution that may not have occurred if an NPV analysis had been conducted is one company’s substitution of a surfactant in laundry and dish products to eliminate a carcinogenic byproduct. The company’s product contained sodium lauryl ether sulfate (SLES), an anionic surfactant used in some laundry and dishwashing products, as well as for other applications. During production of SLES, a byproduct, 1,4-dioxane, is formed. The World Health Organization and the NTP have categorized 1,4-dioxane as a possible human carcinogen. In this scenario, the company chose to eliminate 1,4-dioxane in its products by replacing SLES with sodium lauryl sulfate (SLS), which does not contain 1,4-dioxane. At considerable investment, the company successfully formulated a higher-performance product that could be produced at a lower cost than the original formulation.
Subsequently, intense pressure from consumer and environmental advocacy groups, and a law-suit by the State of California, forced conventional companies to limit the presence of 1,4-dioxane in their consumer products. Thus, though there was considerable initial outlay of funds to develop the alternative formulation, ultimately the substitution avoided liability, improved performance, and lowered the COGS for the company. A simple NPV analysis at the outset of the process may not have identified these potential future financial benefits to the company.
Conclusions on Performance and Economic Considerations
The committee’s framework does not require a performance assessment to support a substitution decision because the entity requiring the alternatives analysis may not be a commercial entity, and therefore may not have the ability to prototype and test alternatives. However, it is likely that the substitution decision will eventually affect a commercial entity, which will conduct performance tests to ensure that its products meet user needs, industry standards, and regulatory requirements. Companies routinely perform such tests when innovating new products, and the committee expects they will do so when implementing a chemical substitution.
Similarly, the committee’s framework also does not require an economic assessment to support a substitution decision because the entity authorizing the alternatives analysis may not be a commercial entity, and therefore may not have access to the information necessary to support an economic analysis. However, it is likely that the substitution decision will eventually affect a commercial entity, which will conduct economic analyses to ensure that its products meet user needs, industry standards, and regulatory requirements at a commercially viable price. As with a performance evaluation, companies routinely perform such economic analyses when innovating new products, and the committee expects they will do so when implementing a chemical substitution.