Carbon balance vs. LCA: what are the differences?

Marie Voyer
April 2024

Managing the environmental impact of corporate and organisational activities is an essential challenge in the face of climate change.

Carbon Footprints and Lifecycle Assessments (LCA) of products are among the tools that enable companies to measure the impact of their activities on the environment, with the aim of implementing actions to reduce their overall carbon footprint.

Do these tools share the same objectives? Are they aimed at the same stakeholders, and can they be substituted for each other?

Carbon Footprint and Product LCA are two very distinct protocols, and it is important to clearly distinguish their respective scopes, analysis criteria and interpretation methods.

Definitions of carbon balance and product LCA

What is the carbon balance ? 

A diagnostic tool developed by the French Agency for Ecological Transition (ADEME) and made compulsory for certain organisations by the Grenelle Environment Summit, the Bilan Carbone is a protocol for measuring the GHG (greenhouse gas) emissions of a product, service or activity. It takes into account direct and indirect CO2 emissions, as well as other greenhouse gases: methane, hydrofluorocarbons, nitrous oxide, sulphur hexafluoride and perfluorocarbons are all converted into carbon equivalents (eq.CO2) to produce an overall balance sheet.

The scope of the Bilan Carbone is threefold. It is broken down into scopes 1, 2 and 3 based on the international GHG Protocol methodology. These scopes distinguish between direct GHG emissions (scope 1) and indirect GHG emissions, linked respectively to energy consumption (scope 2) and to all indirect emissions linked to the company's activity (scope 3), both upstream and downstream of the value chain: from the purchase of raw materials to the delivery, use and end-of-life of products.

What is product LCA ?

Product Life Cycle Assessment, or LCA for short, is a comprehensive procedure based on the ISO 14040 and ISO 14044 standards, which provides standardized steps for assessing the environmental impact of a product or service from its creation to its end-of-life. The scope of the study is broad, and can therefore include greenhouse gas emissions as well as impact on natural resources, toxicity on living organisms or harmfulness to soils and oceans. The LCA assessment method, which has been recognized and standardized since the mid-90s, quantifies impacts at every stage of a product's life cycle, from the extraction of raw materials to end-of-life recovery or waste treatment, via the manufacture of the product and its packaging, transport, distribution and use by the consumer.

The major differences between the carbon balance and the life cycle assessment of a product lie in the scope assessed, and in the criteria studied.

How does the Carbon Balance differ from LCA?

Perimeters of the two methods

The scope of the carbon balance is twofold, both operational (with different emission items) and organizational (on different sites and facilities of the same company or organization).

Lifecycle Assessment, on the other hand, focuses on the value chain of a product or service, from inputs to outputs.

Criteria studied by each protocol

The carbon balance method is considered mono-criteria, since it only measures the carbon footprint of the company's activities, whereas the product LCA protocol takes the form of a multi-criteria analysis, including not only CO2 emissions, but also water use and impact on soil, for example.

Carbon Balance and Lifecycle Assessment : common goals

The common goal of the Carbon Balance and Product LCA is to enable companies to quantify their environmental impact, in a global context of ecological transition of society and the economy. Both tools provide precise data on the climatic and environmental impacts of an activity. Quantifying their impact is also a way for companies (whether or not they are subject to Carbon Balance) to meet or anticipate regulatory obligations: legislation on non-financial reporting is regularly broadening its scope, and new requirements are set to come into force.

Both processes are performance levers in a rapidly changing market, where environmental criteria play an increasingly important role in the choices made by consumers and partners. Both the Carbon Balance and the Product Life Cycle Assessment enable companies to communicate their efforts to reduce their impact, without any suspicion of greenwashing.

Carbon balance and LCA, two complementary approaches

Given their differences in scope and approach (mono-criteria and multi-criteria), Carbon Balance and Product Lifecycle Analysis are two complementary and non-substitutable tools for measuring the environmental impact of a company's activities and taking concrete steps to reduce them.

First and foremost, the carbon balance appears to be the quickest and simplest tool for measuring the ecological impact of a product or activity as a whole, in order to implement actions to reduce greenhouse gas emissions. But because the method only concerns GHG emissions, and not the use of water resources or possible soil pollution, there is a risk that the measures taken will result in a transfer of environmental impact rather than a reduction of it. Reducing the Carbon Balance may therefore in some cases mean increasing the organization's overall environmental impact.

As a complement to the Carbon Balance, the multi-criteria LCA protocol provides a highly detailed analysis of a product's environmental impact, across the entire value chain and according to different environmental criteria. It thus serves as a basis for other actions, such as comparing the life cycle of different products from the same company, changing suppliers or seeking alternative materials with a view to eco-design.

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