The material manufacturing localisation method (formerly called Local compensation) solves the lack of local environmental profiles for projects all over the world. It adjusts automatically manufacturing electricity to the local electricity mix so that you can always get more representative results for your projects. It is important to note that this does not change the manufacturing process fuel mix (e.g. from coal or oil to natural gas). The process applies only to electricity as that invariably changes between locations of manufacturing, while the same process fuels may be used in plants making similar products across the globe.
How does it work?
Material manufacturing localisation takes place by adjusting the material manufacturing process emissions for grid electricity and energy efficiency to the desired country instead of the original country the material is produced in. The amount of consumed electricity is estimated on material sub-type level (eg plastic flooring / XPS insulation etc).
This is taking place by calculating a compensation factor, equation (1) and (2), which is later on deducted from the original impact (3).
The default equation for the compensation factor is the following:
Compensation factor = ((Aoriginal * Boriginal) - (Atarget * Btarget)) * C (1)
A = Electricity use efficiency
B = Electricity impacts, kg CO2-equivalent
C = Required electricity for the manufacturing of this material subtype, Kwh
In some cases, where manufacturing is adjusted between locations with very significant differences, there is a back-up mechanism for avoiding overcompensation. This mechanism is applied automatically when needed in the new version. The new method will automatically apply an "over-compensation brake" and limit the maximum impact the method can have on results in a manner appropriate to the materials subtype.
Expert license users can see the actual calculation by clicking on the carbon impacts that are demonstrated next to each material, and then clicking on “See calculations”.
Is it mandatory to use?
Using material manufacturing localisation is not mandatory. It is recommended for cases where materials are sourced from a region where local data has gaps, as well as for all BREEAM International Mat 01 LCA calculations.
What is the default version and how can I adjust it in my projects?
The software enables material manufacturing localisation by default. The default version remains version 1 in order to avoid confusion in projects were targets were established using this version. Users can review the versions, switch from one to another and disable it from the project parameters and all results will be directly recalculated for the whole project.
Can I adjust it for some of my materials?
Material manufacturing localisation is enabled on a project level, by using a target country. Still, Expert license users can disable/enable it, or switch it from a target country to another for each individual material depending on where they are sourced. This is explained here: Adjusting compensations settings
The difference between version 1 and version 2 of the method
What is changing from material manufacturing localisation v1 to v2?
Material manufacturing localisation version 2 increases accuracy regarding the amount of electricity used in the manufacturing of different material subtypes. Also, the new version is better calibrated against extreme scenarios related to compensation among countries with very different electricity mixes. Finally, version 2 is in a beta version and will be fine-tuned.
How does it affect my existing projects?
Your existing projects are not affected unless you change the project parameters and save them. Every time you change these parameters, all results in the project are recalculated.
When a baseline/reference is set, the assessments and the baseline/reference shall be calculated using the same compensation method.
Which version should I select in my ongoing or new projects?
When there is a baseline building calculated and targets were set accordingly, it is strongly suggested to use the same settings as the baseline.
For ongoing projects, in cases where the analysis and reporting are in an advanced stage, it is suggested to complete the project with the same settings.
While version 2 is significantly improved, it is still in a beta version and being fined tuned and switching to it is recommended only for projects that would not have negative impacts from slight adjustments to results resulting from such configuration changes.
Which countries are more sensitive to compensation?
Compensation is influenced by the energy mix of the different countries. Consequently, the most sensitive countries are the ones that deviate most from the average energy mix.