A trade-based method for modelling supply markets in consequential LCA exemplified with Portland cement and bananas

This study proposes a method based on the analysis of trade networks over time for modelling the marginal supply of products in consequential life cycle assessment (LCA). It aims at increasing the geographical granularity of markets, accuracy of transport distances and modes and material losses during transit by creating country-specific markets, instead of region-based supply-origin markets as currently proposed by ecoinvent. It leads to a better consideration of the environmental weight of trade following a change in demand on a local market and may serve as an inspirational basis for future releases of consequential life cycle inventory (LCI) databases.

The method uses ecoinvent v.3.3 as a support LCI database and two distinct traded products: bananas and grey Portland cement. Each country involved in the trade of a said product has a corresponding market created in the LCI database. The behavior of market to a marginal change in internal demand is modelled after its marginal trading preferences: it can either affect local production, imports, exports or a mix of the first two. Markets are linked to one another based on the linear regression analysis of their historical trade relations. The inventories that follow an increase in demand of 1000 kg of bananas and grey Portland cement are calculated for each market involved in their trade and are environmentally characterized and compared to the generic region-based market datasets provided by ecoinvent to assess the gains in accuracy through a higher geographical granularity. Furthermore, the characterized inventories of the markets for bananas are compared to a parallel scenario where transport distances are kept to a minimum using the shortest path method. It isolates the environmental burden associated to the utility maximization of the demand.

When comparing the characterized impacts of country-specific markets with the generic ecoinvent market datasets, disparities in results appear. They highlight the importance of transport induced by demand displacement and losses of material during transport, both being the consequences of the extent a given market decides to be supplied directly from producing markets at the margin. These are aspects that may go unaccounted for when using generic regional markets. Second, optimizing transport distances for each market decreases the environmental impacts for most categories by more than 70%.

This study shows there is a need for modelling and understanding market relations to more accurately define the role of trade, supply chain efficiency and import policies in LCA.