Allocation in LCA

Allocation in general is defined in this ISO as: partitioning the input and/or output flows of a process to the product system under study.
In the Handbook on LCA, see tab references, economic allocation is advised as baseline method for most allocation situations in a detailed LCA.
In practice, economic allocation plays a major role in service systems, since the characteristic of a service is that it is supported by many subsystems which are partly used by that service. The issue is than which part of the environmental burden of that subsystem (the so called ‘indirect’ eco-burden) is to be allocated to that service. In complex products, like houses, the ‘indirect’ eco-burden plays also an important role.

The basic methodology for (economic) allocation in LCAs is dealt with in ISO 14041:
” Where physical relationship (i.e. kg, m2, m3, etc.) cannot be established or used as the basis for allocation, the inputs should be allocated between the products and the functions in a way which reflects other relationships between them. For example, environmental input and

output data might be allocated between co-products in proportion to the economic value of the products “.

Economic allocation can be explained by an example: the indirect environmental impact of building an air plane, allocated to a single trip (Fig. 5.7a) . The main parameters are:
– the value of a ticket for the single trip, W, of which a part of that value, X, is related to the depreciation (or leasing costs) of the plane
– the value of a plane, Y
– the eco- costs of a plane, Z (calculated from LCA data).

The question is now which part of the indirect environmental impact of building a plane, Z, has to be allocated to the trip. Applying economic allocation:

EI = ( X / Y ) x Z = “the economic proportion” x “Environmental Impact”

Where EI is the indirect environmental impact allocated to the ticket, which can be written as:

EI = ( Z / Y ) x X = EVR x “part of the value of the ticket related to the depreciation of the plane”

The equation shows how the EVR model can be used for economic allocation in a complex LCA, starting with a ‘cost-breakdown structure’ (e.g. the services of an airport, see Fig. 5.7b) . Especially in cases when proportions of weight are not known directly, which is often the case for services, the EVR model is a powerful tool.

In the example, the equation is applied to an ‘indirect’ environmental impact. This type of equation can also be