Ricardo’s Report on Establishing the Environmental Impact of Chemical Products 2024

In an era where sustainability has become more than just a trend and is now a critical necessity, industries around the globe are under increasing pressure to reevaluate their processes, products, and environmental impact.

With approximately 96% of manufactured goods dependent on some form of chemical process, the chemical industry plays a crucial role, exerting significant influence over global supply chains and environmental outcomes. Life Cycle Assessments (LCAs) have become an essential tool in the pursuit of sustainability, providing a comprehensive framework to assess the environmental impact of products and processes throughout their entire life cycle. From resource extraction and production to product use and disposal, LCAs offer critical insights into the cradle-to-grave environmental effects of chemical products.

For the chemical industry, adopting LCAs is more than a step toward environmental responsibility—it reflects a deep commitment to the broader green transition.

With the world’s eyes increasingly focused on reducing carbon footprints, minimising waste, and conserving resources, the chemical sector has a unique opportunity to lead by example. By integrating LCAs into their operations, chemical companies can proactively identify areas for improvement, optimise resource utilisation and innovate towards more sustainable solutions. Nonetheless, navigating the intricacies of LCAs can be daunting, especially for those unfamiliar with the methodology or its application within the chemical industry.

Regulatory frameworks provide a direct requirement for organisations to take positive action towards their sustainability agenda. In some cases, organisations must adhere to legal requirements or face penalties – potentially with financial implications.

With an ever-increasing focus on sustainability from across society, showing a commitment to climate change is becoming a minimum requirement in the competitive market, the loss of a customer base resulting in a less competitive business. An avoidable issue when organisations seek to proactively engage with a sustainability strategy.

Regulatory requirements

A number of explicit environmental regulatory requirements will impact chemical products.

These include The European Commission’s Chemical Strategy for Sustainability; the Ecodesign for Sustainable Products Regulation (ESPR) and, the introduction of digital product passports (DPP) along with voluntary frameworks such as Safe and Sustainable by Design (SSbD).

Numerous forthcoming regulations and frameworks aim to better protect citizens and the environment from harmful chemicals and will require insight into a product’s component materials and its environmental impact. LCA is a decision-making tool. It provides insights into product systems, which in turn gives organisations the capability to adjust aspects of the system within their control and encourage improvements across the whole value chain, to potentially improve the environmental performance of their products.

A further benefit is that LCA helps avoid ‘carbon tunnel vision’ and provides a more holistic view of the sustainability of a product. LCA can be used to assess the potential environmental impacts of product systems over a wide range of environmental indicators preventing the potential for ‘burden shifting’ – the outcome of decreasing one particular environmental impact at the expense of increasing another, inadvertently or otherwise.

The results of an LCA can be shared with stakeholders and customers, especially as the increasing emphasis on sustainability and environmental awareness begins to shape purchasing decisions. A well-executed LCA can provide evidence to substantiate sustainability claims, potentially offering a competitive advantage over alternative products with higher environmental impacts.

The European Ecodesign for Sustainable Products Regulation (ESPR) aims to promote climate action and improve circularity within the EU. A key feature of the ESPR is the introduction of the ‘digital product passport,’ designed to store and share information throughout a product’s lifecycle. This system will help industry stakeholders, businesses, public authorities, and consumers better understand the materials used in a product and its environmental impact.

An Environmental Product Declaration (EPD) is an independently verified document that quantifies the environmental impact of a product throughout its life cycle, following specific standards and guidelines. While EPDs are primarily used for business-to-business communication regarding environmental performance, they can also provide marketing advantages by demonstrating a company’s commitment to sustainability through transparent environmental disclosures to customers.

The difference between a Product Carbon Footprint (PCF) and LCA:

A carbon footprint measures the total greenhouse gas emissions related to a product over its life cycle. The ‘Together for Sustainability Product Carbon Footprint Guideline of the Chemical Industry’ is industry-specific guidance on calculating PCFs for chemical products. Compliant with ISO 14067 and GHG Protocol accounting standards, it is based on life cycle assessment methodologies but focuses on the single issue of greenhouse gas emissions.

With more accurate data obtained, corporate organisations will have a clearer picture of their upstream supply chain emissions. This enables collaboration with suppliers and the wider supply chain through sharing accurate PCF data, meaning areas for improvement can be identified and collaborative solutions can be sought to deliver reduced emissions measurements.

Greenwashing

Greenwashing is the term given to a company falsely presenting their products as being environmentally conscious. ‘Greenwashed’ claims are often unsubstantiated and aim to capitalise on the sustainability motivations of consumers using environmental imagery or misleading product labelling. Beyond product claims, organisations can also be accused of greenwashing corporate sustainability achievements and ‘carbon washing’, aiming to minimise the perceived environmental impact of its operations. Hitting the headlines, litigation cases on the grounds of misleading promotional messages, or greenwashing, have impacted organisations with both legal costs and penalties. In short, chemical labels will need to be careful of greenwashing going forward.

Greenhushing

The term ‘greenhushing’ has been coined to refer to companies purposely keeping quiet about their sustainability goals, even if the organisation has objectives that are well intentioned or plausible due to fear of being labelled ‘greenwashers’. The Financial Conduct Authority (FCA) is introducing a number of measures to support consumers in navigating the market for sustainable investment products.

By fully interrogating a product and its component parts through a life cycle assessment, organisations can gain clarity over the true impact while generating evidence to inform and support sustainability claims. The Sustainability Disclosure Requirements (SDR) and Investment Labels regulation includes an anti-greenwashing rule to reinforce that sustainability-related claims must be fair, clear and not misleading.

Product Environmental Footprint

With the aim of mitigating against the challenges relating to the inconsistency of LCA approaches, the European Commission has introduced the Product Environmental Footprint (PEF) methodology.

Key features of PEF:

  • Specifies 16 impact categories to use.
  • Provides Category Rules for products (PEF-CRs).
  • Mandates which life cycle stages to include.
  • Provides a database of approved secondary datasets to use.
  • Mandates a new end-of-life methodology, the Circular Footprint Formula (CFF).
  • Dictates how quality control and interpretation should be performed.

PEF is likely to become the key methodology for assessing the impact of products intended for sale within the European Union. At present, the list of Category Rules is not exhaustive and some products do not have a corresponding PEF-CR, meaning that for some products an LCA cannot be PEF compliant. Ricardo recommends that LCA studies should attempt to align with PEF where compliance is not possible, and that companies trading within the EU should start to understand the PEF requirements.

Bio-based Raw Materials

Bio-based chemicals derived from renewable feedstocks, such as agricultural residues, or algae can reduce reliance on fossil resources. Agricultural residues, for example, can be converted into bioplastics and bio-based chemicals can be co-produced alongside biofuels in biorefineries which maximise resource utilisation. Compared with fossil-based materials, bio-based materials may have lower environmental impacts.

Switching to or developing products using bio-derived feedstocks and away from fossil-derived feedstocks may result in a lower environmental impact in categories such as climate change or greenhouse gas emissions, but what might the effect of this switch be on other environmental aspects such as land or water use?

LCA can help to provide a holistic assessment of the potential environmental impact of a product across a broad range of categories. It can also be used to support decision-making through the identification and assessment of potential alternative raw materials.

Carbon Capture and Use

Capturing CO2 at source is another potential route for organisations to reduce their carbon emissions and the overall impacts of their products. Carbon capture and storage (CCS) processes intervene before carbon dioxide is released, enabling it to be captured, transported and stored securely.

Carbon capture and utilisation (CCU) is an emerging field for emissions mitigation and seeks to find alternative uses for stored carbon, and the range of products that could be produced is vast. The challenges here are the ability to source cheap, renewable energy to power the chemical process, geographic location, and market demand for the resulting products. CCU is complex due to the double role of CO2 as both feedstock and emission. The potential benefits need to be assessed over the entire product life cycle.

Product Circularity

Product circularity aims to stop waste from being produced by recovering materials for reuse and remanufacturing these into new products. Products are designed with end-of-life in mind and kept in use for as long as possible through practices like repair, recycling, and redesign.

Circularity, through the use of renewable energy and re-use of materials, can help minimise the impact an organisation’s activities have on the depletion of finite resources. The development of circular products offers organisations resilience and provides wider benefits to businesses, people, and the environment through resource efficiency and responsible design. LCAs can identify where circularity may be achieved as they consider the entire life cycle of a product and provide the opportunity to model interventions, changes or alternatives to traditional materials or methods that could be used.

Timeline to LCA

The cost of LCA can be high. Resource and time-hungry, and often take months to complete, LCA requires commitment from subject matter experts to ensure high-quality results. For businesses which generate multiple products this approach can be cost-prohibitive. What’s more, the value of LCA assessment can be time-limited due to the changing manufacturing environment, so development of LCA tools to allow for in-house calculation can be of benefit.

Life cycle assessments are complex, requiring experience and knowledge of the processes and frameworks they support to ensure effective and reliable assessment – and correct interpretation of results. Businesses can gain insight to current environmental impacts which can be used to inform development in alignment with the global sustainability agenda. Consumers and regulatory bodies are aligned in the direction of travel, and demand for visible change is increasing rapidly. Minimising risk and the unintended consequences of uninformed change is essential.