Hotspot Analysis In The PEF Approach
Although LCA is ideal for identifying all the hotspots within a product’s life cycle or an organization’s value chain, it did not provide clear guidance on how to select the most relevant ones. Now, from the PEF pilots, the European Commission has established guidelines to select the most relevant hotspots and determine which data should be collected.
Nowadays, most businesses are committed to reducing their carbon or environmental footprint. To do this, it is important that they focus their improvement efforts on the activities that contribute most to the total environmental impact of a product’s life cycle or of an organisation’s value chain.
Hotspots are processes and activities that have a large contribution to the total environmental impact. Life cycle assessment is one way to identify these hotspots, and doing so has always been the focus of LCA studies. But LCA is not consistent in this, as there are no clear rules to help you find out which hotspots are the most relevant for you to focus on. So what’s different about hotspot identification in the PEF initiative?
Clear Guidelines For Hotspot Analysis in the PEF initiative
In the PEF pilot phase, four types of hotspots are considered (see image below). Two of them are relevant for determining data collection and data quality requirements, while the other two are relevant for external communication. Of these four, three are relevant for internal decision-making at the company level.
Traditional LCA has been used to identify hotspots for a long time. But what are the five most relevant ones? Or the top three? Or the ones that cause 90% of the total impact? The answer is simple: it depends.
It depends on the LCA practitioner and the choices he or she makes, as there are no clear rules in LCA on how to do this. In the scope of the PEF pilot phase, all that has changed. With PEF, a hotspot can be identified at different levels of granularity: impact category, life cycle stage, process or elementary flow.
A clear threshold is proposed: when ranked from most to least impact, the life cycle stages, processes or elementary flows that together make up 80% of the cumulative impact to any impact category should be considered relevant. Elementary flows that individually contribute more than 5% should also considered be relevant. Normalized and weighted results should be used to identify the most relevant impact categories, although deviations are possible if justified. Lastly, it’s important to mention that these rules apply for both, Product as well as Organisation Environmental Footprint.
The table documents the Hotspot Analysis as proposed by the European Commission for PEF and OEF. Source: “Guidance for the implementation of the EU Product Environmental Footprint (PEF) during the Environmental Footprint (EF) pilot phase. Version 5.2 – February 2016”
So, Where To Focus Your Improvement Efforts?
In the PEF pilot phase, the Commission introduced the hotspot as conceptual element. This offers you the focus needed to improve the environmental performance of your product (PEF) or organisation (OEF). In the context of the PEF pilot phase, a hotspot was defined in one of two ways:
- Option A: (1) identifying, after sorting from high to low contribution, the life cycle stages, processes and elementary flows cumulatively contributing at least 50% of the characterised results to any impact category. There is no fixed number of elements to identify; the number depends on the threshold of 50%.
- Option B: identifying the two or more most relevant life cycle stages, processes and elementary flows (at least six in total).
To illustrate how this would work in practice, let’s look at an example with one impact category, namely climate change, and at one of the elements of hotspot analysis, namely the life cycle stages. After calculating the four characterized results specified per life cycle stage for climate change and ranking the six life cycle stages from high to low, the following results were obtained.
In this example, the hotspot analysis with regards to the life cycle stages would result in the following:
Implications Of PEF Hotspot Identification
The PEF pilot phase will soon start to test the using the most relevant impact categories and life cycle stages in external communication. More importantly, identifying the most relevant processes and impact categories has implications for the data collection and data quality requirements. A future article will address the data needs in the PEF pilot phase.
Learn More About PEF
If you want to learn more about our role in the PEF initiative, please drop me an e-mail. See other episodes of this series: