Greenhouse gas emissions are generated at every stage of a product’s lifecycle, from raw material extraction to disposal, contributing significantly to climate change. The Product Carbon Footprint (PCF) is a critical methodology that quantifies these emissions, enabling businesses to identify, evaluate, and address their environmental impact. As a subset of Life Cycle Assessment (LCA), the PCF provides a comprehensive view of the greenhouse gas emissions associated with a product's lifecycle, helping organizations make informed decisions to reduce their carbon footprint.

The PCF is usually expressed in terms of CO₂-equivalents (CO₂e), accounting for all Greenhouse Gases (GHGs) such as methane (CH₄), nitrous oxide (N₂O), and others, using their global warming potentials (GWPs).

Quantifying Standards

Various standards have been developed to assist in quantifying the carbon footprint of products and services. Here are some of the well-known standards

• GHG Protocol: The GHG Protocol Product Life Cycle Accounting and Reporting Standard also called the product standard, offers clear requirements and guidance for organizations to measure, quantify, and publicly report greenhouse gas (GHG) emissions and removals associated with a specific product. This standard serves as a general framework, empowering companies to make informed decisions to reduce the carbon footprint of the goods or services they design, produce, sell, or use.
• PAS 2050: This is the world’s first carbon footprint standard, designed to help businesses accurately assess the environmental impact of their operations, services, and product life cycles, including their total greenhouse gas emissions. By providing a consistent framework to evaluate the carbon footprint of goods and services, PAS 2050 enables businesses to improve productivity, reduce emissions, and optimize their supply chains. PAS 2050:2011, the updated version of PAS 2050, was revised to enhance accuracy, tackle sector-specific challenges, and align with the latest advancements in carbon footprinting methodologies.
• ISO 14067: This is an international standard developed by the International Organization for Standardization (ISO). It provides guidelines and principles for quantifying and reporting products’ carbon footprints (CFP). The standard aims to harmonize methodologies and ensure consistency in assessing the environmental impact of products related to greenhouse gas (GHG) emissions. Covers the full product life cycle, that is product manufacturing

Assessment of Product Carbon Footprint

PCF is rooted in the Lifecycle Assessment methodology(LCA), which evaluates emissions across all stages of a product's lifecycle:

1. Cradle-to-Gate: Covers raw material extraction, production, and transportation to the factory gate.
2. Cradle-to-Grave: Includes the entire lifecycle from raw materials to disposal or recycling.

Why Product Carbon Footprint (PCF) Matters for Businesses

Measuring and managing Product Carbon Footprint goes beyond environmental stewardship, impacting profitability, competitiveness, compliance, and stakeholder relationships. Here are some of the reasons why PCF is critical for businesses

1. Regulatory Compliance

• Global Climate Policies: With initiatives like the EU Carbon Border Adjustment Mechanism (CBAM) and national carbon taxes, businesses are being required to account for and disclose the carbon footprint of their products.
• Avoiding Penalties: Understanding PCF helps businesses prepare for regulations, avoid penalties, and ensure compliance with international trade requirements.
• Proactive Positioning: Businesses that act early can stay ahead of evolving standards, reducing risks of future disruptions.

2. Market Competitiveness

• Consumer Demand for Transparency: Eco-conscious consumers prefer products with a lower carbon footprint, and businesses that provide clear PCF data have a competitive edge.
• Differentiation in the Market: A low-carbon product can become a unique selling point (USP), attracting environmentally aware customers and partners. According to new international research released by the Carbon Trust in 2019, most consumers support the idea of a recognizable carbon label to demonstrate that products have been made with a commitment to measuring and reducing their carbon footprint.
• Green Certifications and Labels: Demonstrating a commitment to reducing PCF can open doors to certifications like Carbon Neutral or Environmental Product Declarations (EPDs), enhancing marketability.

3. Cost Optimization and Resource Efficiency

• Identifying Potential Hotspots: PCF analysis helps pinpoint areas with high emissions, often linked to inefficiencies in energy consumption, raw material sourcing, or transportation. For example, the extraction of rare earth metals like lithium for batteries and materials such as aluminum for the body involves energy-intensive processes, typically powered by fossil fuels. These processes are identified as significant hotspots in the raw material sourcing phase.
• Operational Savings: By optimizing processes to reduce PCF, businesses can lower energy and resource costs while simultaneously reducing emissions.
• Supply Chain Efficiency: Streamlining supply chains and collaborating with low-carbon suppliers can result in both cost savings and reduced emissions. For instance, businesses can partner with suppliers to prioritize energy efficiency in production, as manufacturing is typically a major contributor to a product’s carbon footprint. By encouraging the use of cleaner energy sources and more sustainable practices, companies can significantly lower emissions throughout the supply chain.

4. Access to Investment and Funding

• Sustainability-Driven Capital: Investors increasingly favour businesses that integrate sustainability into their operations. A transparent PCF assessment demonstrates a commitment to ESG (Environmental, Social, Governance) principles.
• Green Finance Opportunities: Businesses showcasing reduced carbon footprints are better positioned to access green loans, carbon credits, and other climate-related financing options.