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Life cycle

​​​Figure 1. Life cycle of a biofuel product and the possible inputs and environmental impacts.

Is life cycle assessment method suitable to guide policy decisions? Case of European sustainability 
criteria for biofuels

Kati Koponen | 8.12.2016

​Life cycle assessment (LCA) is a widely used tool to assess the environmental impacts of various products and services. At VTT several experts work with LCA in order to ensure the sustainability of new technical innovations.

In LCA, the whole life cycle of a product or a system is analysed – from the production of raw material to the end use or disposal. For example, for a biofuel chain an LCA study starts from the cultivation, harvest and transport of raw materials, continues to processing and distribution of the biofuel product, and ends up to the final use of biofuel in vehicles. All the production phases require several inputs and at the same time produce several impacts to the environment. An LCA study aims to capture all these impacts (Figure 1). However, in practise LCA studies often concentrate on specific impacts, e.g. the greenhouse gas (GHG) emissions.

LCA has its roots in energy flow analysis from which it started to develop in the 1970’s. In the 1980’s and 90’s LCA evolved into a comprehensive environmental burden analysis. The two ISO standards, ISO 14040 and ISO 14044, set a framework for LCA studies (ISO 2006a; ISO 2006b). Additional guidance for LCA practitioners is given in the ILCD handbook (JRC-IES 2010), which is a significant effort to clarify the principles of LCA studies. 

In practise, it can be challenging to track all the environmental impacts related to often very complicated production chains. To start an LCA study one must thus first define the system boundary of the study. This means definition of which impacts and production phases are included in or excluded from the study. Another important factor to define is the functional unit per which the impacts are studied (e.g. MJ of biofuel or a km driven by biofuel). In case where co-products are produced in the process in addition to the main product (e.g. animal feed as a co-product of a biofuel), one has to define how the emissions are allocated between the products (e.g. based on their energy content or economic value). The LCA standards guide the life cycle inventory and impact assessment processes. However, they also leave room for interpretation and open questions. As many choices need to be made by the LCA practitioner, the results are always somewhat subjective. Thus, the assumptions made should be transparently reported.

Bioenergy and LCA 

Bioenergy is often considered as an important source of renewable energy for replacing the use of fossil fuels. European Union (EU) has set a 20% mandatory target for renewable energy by year 2020 (EU 2009), and a target of 37% for 2030 (EC 2015b). In addition, a separate 10% target has been set for renewable energy in transportation by 2020 in the Renewable 
Energy Directive (EU 2009). As electric vehicles will not be widely commercialised by 2020, the target will be mainly filled by liquid biofuels.
Bioenergy can provide a renewable energy solution with several benefits. First, bioenergy can be produced from varied biomass sources and with several types of technologies (Chum et al. 2011). Second, it can be used as an energy storage and thus support the implementation of other renewable energy options such as solar and wind power, which require balancing energy production capacity. Third, liquid biofuels can provide a renewable energy solution for applications where the use of other renewable energy sources can be challenging, such as aviation or heavy transport. The advantage of liquid biofuels is that they can be used in the existing transportation infrastructure as drop-in fuels, with no need for a total adjustment of the transportation sector. 

The ambitious targets to increase the production of biofuels in the EU and elsewhere in the world have however resulted in a discussion on the environmental sustainability of bioenergy production (Koponen 2016). The sustainability of biofuels is often studied by applying LCA method. Two principal concerns have been identified: First, bioenergy production competes on land available with other land uses, such as food, feed, fibre and raw material production, as well as with other ecosystem services such as conservation for carbon 
sequestration, nutrients or biodiversity. 
The growing human population and changing diets including rising meat consumption put a great pressure on the land use globally. These effects combined with the additional biofuel policies could increase the food prices, land conversion (e.g. deforestation), land degradation and pressure on protected areas. Second, several LCA studies on the environmental sustainability of biofuels showed that the emissions from the production of biofuels, when evaluated for the whole life cycle, were significant and could even be as high as 
those for fossil fuels. In addition, the energy consumption of biofuel production compared to the energy output of the end product could be high. Need for careful sustainability evaluation of biofuels became evident.

LCA in legislation – Case EU and biofuels

In order to respond to the concerns on the sustainability of biofuels, the EU Renewable Energy Directive (RED) introduced sustaina­bility criteria for liquid and gaseous biofuels used in transportation and other bioliquids used e.g. in heating (later biofuels). Only biofuels in compliance with these criteria can benefit from national support systems and be counted in the national targets and renewable energy obligations. The EU sustainability criteria give qualitative restrictions concerning biofuel raw materials– e.g. they restrict the use of certain land areas from which the feedstock can be obtained. This is in order to ensure that biofuel production does not harm areas with high biodiversity or destroy important carbon stocks.

For the greenhouse gas (GHG) emissions the RED established quantitative criteria. The GHG emission saving from the use of biofuels compared to the fossil fuels should be at least 35% for current biofuels, at least 50% from 1 January 2017, and at least 60% from 1 January 2018 for biofuels produced in installations where production started on or after 1 January 2017. The directive also introduced a method for calculating the actual GHG emissions of 
biofuels, as well as a relative GHG emission-
saving indicator to compare the biofuels with fossil fuels (EU 2009). This method is an application of the LCA approach, as the GHG emissions of the whole life cycle of biofuels are taken into account. To the knowledge of the author, the EU RED sets the first legally binding sustainability criteria applying an LCA based approach for GHG emissions of any product. The actors of the biofuel sector need to carry out their GHG calculations and provide the results for the auditors and authorities surveying the compliance of the criteria in each EU Member State.

Challenges and further development

Even though LCA has been widely used for sustainability assessment of biofuels several challenges remain. In policy context, the needed simplifications of the LCA framework create an extra challenge. As stated earlier, the LCA studies are always subjective due to several modelling choices and assumptions to be made (Soimakallio et al. 2015). This can be a problematic in a situation where the market acceptability of a biofuel product depends on the result of a GHG assessment. The EU is currently considering the development of the bioenergy sustainability criteria for period after 2020. Several challenges of the method have been analysed and solutions for the development of the RED criteria have been proposed (Koponen 2016). 

One of the challenges related to the RED criteria is that it leaves room for interpretation and can thus be implemented differently in different EU Member States. This may create a problematic situation for biofuel producers, if their product is accepted in one Member State with certain conditions and in another Member State with different conditions. In addition to the different implementations in the Member States, the Voluntary Schemes accepted by the European Commission can be utilised to demonstrate the sustainability of the biofuels, providing  additional methods on how the GHG emission saving should be calculated (EC 2015a). Consequently, the final overall system can be very ambiguous at the EU level, hence creating confusion and inconsistency. Thus, room for interpretation of the criteria should be reduced and its implementation harmonised. 

The more specific challenges are related e.g. to the definition of the calculation parameters in the GHG calculation. There is always para­meter uncertainty related to the LCA studies, as many calculation parameters can be uncertain or badly known. The RED method, however, ignores this uncertainty. The results of Koponen (2016) show that the inclusion of the parameter uncertainty to the GHG calculation can create challenges in recognizing, if a biofuel can be accepted in accordance with the EU sustainability criteria or not, as the results can vary on both sides of the required emission-saving limit. A change in only one calculation parameter, especially in the most important ones, can change the status of a biofuel product from an accepted to a non-accepted one. Thus, clear rules for parameter determination should be defined or even fixed in the RED. It could also be possible to provide acceptable data or data sources for the biofuel producers calculating the emissions in order to avoid the use of varying principles in defining the particular emissions.

Another challenge is the energy allocation method chosen to attribute the emissions between biofuel and co-products.  Energy allocation (based on product’s lower heating value LHV) is problematic as not all products from biofuel processes are used for energy purposes, such as various materials or animal feed. This makes the general suitability of the particular allocation procedure more or less uncertain depending on the end-use purposes of the co-products. In addition, if heat or steam is generated as a co-product of biofuel processing, as it can be the case e.g. in FT-diesel process, the RED method does not define how the allocation should be carried out as heat does not have LHV. If no emissions are allowed to be allocated to heat produced and utilised, the method does not encourage integration of biofuel production into a system which can utilise the heat (e.g. pulp and paper mill), even though this could improve the overall efficiency. The allocation is an unsolvable problem in LCA, and no single correct answer for the allocation question exists even in theory (Guinée et al. 2004). However, one option would be to use allocation based on economic value of the products instead of energy allocation based on LHV. The economic value created by the process can be considered the reason for the process to exist at all. Thus the economic value can best reflect the economic causality of processes and the changes in market conditions of the products. It allows allocation to all useful co-products (despite their physical qualities) and on the other hand prevents allocating emissions to co-products that have no economic value or use.

Defining the research question at 
different decision making levels 

An important choice affecting the conclusion on the sustainability of biofuels is the setting of the system boundary of the assessment. The system boundary of the RED GHG assessment has been set narrow. It only includes the direct emissions due to biofuel production, ignoring the possible market mediated impacts. The indirect market mediated impacts can occur for example due to occupation of land for bioenergy production instead of other land uses, which can relocate these other land uses e.g. to pristine forests (so called indirect land use change ILUC). Indirect impacts can also occur in the fuel market due to introduction of biofuels and related price effects.  The question is should the RED method be able to capture also these indirect impacts?

The modelling of market mediated impacts is challenging and requires different modelling tools and integrated assessment models, such as land use and energy system models. Thus, this type of LCA analysis is proposed to be used already in the policy planning phase by the decision makers. The analysis could be done by studying the question “What is the impact of increasing or decreasing the biofuels production by a certain amount in the EU?” To answer the question and to capture the total impacts of biofuels, the studied bioenergy system should be compared to the most likely alternative system. The analyse should also recognize the potential loss of ecosystem carbon stocks and possible foregone carbon sequestration related to bioenergy chains by comparing the land use for bioenergy to a reference land use that would take place if bioenergy was not produced. 

This type of complex modelling should rather not be on the responsibility of individual actors but the decision makers responsible for policy planning. If the EU biofuel policy and targets would base on an extensive analysis of the environmental (and social) impacts of increasing bioenergy production, these impacts could be better predicted and controlled. A more extensive, so called consequential, LCA approach could support the policy making process at high level. When the policy and targets would base on careful analyses, the more specific choices on biofuel products and processing technologies could be supported and evaluated by simpler LCA methods. Thus, LCA can be considered a suitable tool to support policy decisions – as long as the research questions studied by LCA are clearly defined and suitable approaches are chosen to answer the questions in different decision making levels.


Even though the use of LCA in decision making can be challenging, it is a needed and probably the best available tool to assess different product chains and to enable their comparison by environmental indicators. However, the policy tools based on LCA framework need to be further developed, and a balance needs to be obtained between the comprehensiveness of the method and the clarity for the user. The sustainability criteria will probably need to be expanded also for other sectors in order to guarantee an even playfield for different types of bio-based products. As VTT is widely involved in the development of various products for future bioeconomy it holds an excellent position to participate the development of future sustainability criteria with its extensive knowledge on technology as well as on the 
LCA and other sustainability assessment methods. ​


Kati Koponen, Dr., works as a research scientist in Energy Systems research group. Her research focuses on sustainability assessment of renewable energy systems and she defended her Doctoral Thesis “Challenges of an LCA based decision making framework – the case of EU sustainability criteria for biofuels.” in June 2016 in Aalto University School of Engineering.


Chum, H. et al., 2011. Bioenergy. In IPCC Special Report on Renewable Energy Sources and Climate Change Mitigation, Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA. R. P.-M. O. Edenhofer  Y. Sokona, K. Seyboth,P. Matschoss, S. Kadner, T. Zwickel, P. Eickemeier, G. Hansen, S. Schlömer, C. von Stechow, ed.,
EC, 2015a. Biofuels, Voluntary schemes. European Commission. [referred 3.12.2015] Available:
EC, 2015b. Energy Union Package. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank. A Framework Strategy for a Resilient Energy Union w.
EU, 2009. Directive  of the European Parliament and of the Council on the promotion of the use of  energy from renewable sources. 2009/28/EC. The Official Journal of the European Union 05/06/2009.
Guinée, J.B., Heijungs, R. & Huppes, G., 2004. Economic Allocation: Examples and Derived Decision Tree. International Journal of Life Cycle Assessment, 9(1), pp.23–33. Available at:
ISO, 2006a. 14040:2006. Environmental management -- Life cycle assessment --  Principles and framework. International Organization for Standardization (ISO).  20 p.  ,
ISO, 2006b. 14044:2006.  Environmental management -- Life cycle assessment -- Requirements and  guidelines. International Organization for Standardization (ISO). 46 p., JRC-IES, 2010. International Reference Life Cycle Data System (ILCD) Handbook. Joint Research Centre - Institute for Environment and Sustainability. JRC-IES, Ispra.,
Koponen, K., 2016. Challenges of an LCA based decision making framework – the case of EU sustainability criteria for biofuels. Aalto University.
Soimakallio, S. et al., 2015. Attributional life cycle assessment: is a land-use baseline necessary? International Journal of Life Cycle Assessment, 20(10), pp.1364–1375.​​



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