Hybrid Life-Cycle Assessment

The limitation of traditional approaches

Life Cycle Assessment (LCA) is the most widely used tool for quantifying the environmental impacts of products and services. However, in its traditional formulation — called process-based LCA — it suffers from a methodological problem known as truncation error.

The problem arises from the need to "cut" system boundaries: in practice, only direct suppliers and at most a few upstream levels are considered. But real supply chains extend for dozens of levels, involving hundreds of sectors and countries. Everything outside the boundaries is simply ignored.

Scientific literature documents systematic underestimations, varying widely by product and impact category. That is the crux of it: how much the missing part weighs is unknown, because it is precisely what the system boundary decided not to look at.

The hybrid approach

The solution to this problem is Hybrid LCA, which integrates two complementary types of data:

• Process data — Detailed inventories for key value chain processes: energy consumption, materials, transport, waste. These data offer high spatial and temporal resolution, allowing to capture the specificities of the analysed system.
• Multi-regional input-output tables (MRIO) — Matrices representing flows between all sectors of all countries. MRIO databases contain information on hundreds of sectors and regions, with environmental extensions that allow calculating emissions embodied in each transaction. These tables guarantee systemic completeness: no flow is truncated, because the system includes the entire global economy. Also, they are intrinsically internally consistent in terms of reference time scope, but they are limited in technological detail.

By combining both approaches, we get the best of both: the precision of process data where needed (processes under the client's direct control) and the completeness of MRIO tables for the rest of the supply chain.