Introduction

Bulk emission of gasses is the major cause of various issues, such as climate change, acidification, eutrofication, ecotoxicity, human toxicity and smog.

Indicators

The characterization factors and leading chemicals are used following the EcoCost system. (Be aware: the EcoCosts and background ESCU’s of for instance CH4 are calculated as 30,5 times the impact of the same amount of CO2. Only foreground data can provide the real product- and emission-specific ESCU’s for CH4 mitigation).

The leading indicators are based on the impact of the following chemical emissions:

Global Warming Potential – CO₂
Acidification – SO2
Eutrophication – Phosphate
Ecotoxicity – Zn
Winter Smog – Dust (2,5mm)
Summer Smog – Ethene, CxHx
Human toxicity – Carcinogens – PAH

The following list of gaseous emission is considered.

CO2 (carbon dioxide)
CFC’s (Chlorofluorocarbon compounds)
NH3 (Ammonia)
NOx or NO2 (Nitrogen dioxide)
NO (Nitrogen monoxide)
N20 (Dinitrogen monoxide)
SO2 (Sulfur Dioxide)
CO (Carbon monoxide)
Lead
Mercury
Methane
Particulates < 10 um (mobile source)
Particulates < 10 um (stationary source)
Particulates  < 2,5 um
Carcinogenic particles
Radioactive particles
Non carcinogenic Volatile Organic Compounds (VOC’s)
Other gaseous substances

Targets

Internationally determined no- (or acceptable-) effect levels

Background calculations

Following the EcoCost system, all chemicals are measured by the product of the preventative costs of the leading indicator for the issue and the impact based characterization factor for the specific chemical (the relative impact compared to that of the leading indicator). ESCU’s are calculated by:
ESCU’s = å (Qc x EcoCosts_c ), where:

å is the sum of all the following for all emitted gasses.
Qc is the quantity of the emitted chemical per unit of product.
EcoCosts_c is the background Ecocosts for the chemical.

Note that in the O.S., where a gas emission affects several aspects, the highest costs of prevention was taken instead of the aggregate for all affected aspects, because for gaseous emissions the prevention is almost always mitigation of the emission itself, affecting all aspects by the same prevention measure.

Global Warming – CO2

The calculation of the 0.116 euro/kg CO is based on the replacement of electricity by a coal fired power plant, by renewable energy from an offshore wind farm as marginal measure.
For the eco-costs 2022, the results of a tender for the Dutch ‘Borssele 1+2’ windfarm (94 windmills of 8 MW) were taken as a norm: 7.27 euro cent per kWh excluding the electricity cable to the shore. For ‘Borssele 1+2’ the costs of the cable is 1.4 euro cent per kWh. Since the future windfarms have more than double distance to the coast, a price norm for the connection to the shore is set to 2.8 euro cent per kWh. Therefore, the costs of this type of renewable electricity is 10.07 euro cent per kWh. The Danish ‘Horns Rev3’ windfarm costs 10.30 cents per kWh. This electricity is supposed to replace electricity from a coal fired power plant. The marginal costs of electricity from coal is estimated at 1.40 euro cent per kWh (derived from 55 euro per ton coal and an efficiency of a modern power plant of 45%). The CO2 emissions are 0.75 kg/kWh. This results in (0.1007 – 0.0140) / 0.75 = 0.116 euro/kg CO2.

Note 1. For nuclear power, see the section on electricity.

Note 2. The intention of the O.P.T. is that also energy suppliers provide their foreground ESCU’s.

Acidification – SO2

The eco-costs 2022 of acidification: 8.75 euro / kg SO2 equivalent (= 6.68 euro / mol H+ eq). These eco-costs are related to the current revealed preference of Ultra Low Sulphur Diesel Production in the EU of 10 ppm. For acidification, the latest development of diesel desulphurization has been applied as revealed preference which costs 0.036 $/gal from 600 ppm -> 5 ppm.
This stems from 0.0104 euro per kg diesel (1 gallon = 3.785 litre, 1 litre = 0.83 kg, 1.13 US$ = 1 euro) for 0.595 g Sulphur per kg diesel, resulting in 17.51 euro per kg Sulphur or 8.75 euro per kg SO2.

Eutrophication – Phosphate 

The eco-costs 2022 of eutrophication: 4.70 euro / kg PO4 equivalent (= 14.40 euro / kg P eq).
These eco-costs of eutrophication in water are related to the costs of sustainable manure treatment. The price in the EU is about 4.7 euro/kg PO4.
Note: To avoid double counting, the lowest of acidification and eutrofication impact of NH3 and NO2 emissions in air and water have been set to zero.

NH3 via air is allocated to eutrophication due to the big issue of eutrophication of protected natural areas in EU. The marginal prevention measure for NH3 is an air scrubber for cattle stables; the prevention costs are 17.2 euro/kg NH3 (De Pue, 2019).

NOx in air is also allocated to eutrophication. The prevention costs of NOx through air scrubbers is 6.37 euro per kg, because of the molecular weight ratio of 2.7 for both substances.

Ecotoxicity – Cu

The eco-costs 2022 of ecotoxicity: 340 Euro/ kg Cu equivalent.
The ‘leading indicator substance’ (the most important emission in the list) is Copper, since the emissions of Copper in our society and its ecotoxicity are quite high.
The prevention costs were 55 euro / kg Copper, derived from the water treatment costs in big municipal water treatment facilities. The water treatment costs of smaller industrial systems are, however, a factor 6 higher (Bijstra et al. 2018).

Photochemical oxidant formation (“Summer Smog”) – Ethene, CxHx

The eco-costs 2022 of summer smog: 5.35 Euro/ kg NOx equivalent = 9.08 euro/kg C2H4 eq.
NOx emissions (primarily from cars and trucks) and Volatile Organic Compounds (VOC)  from the chemical industry are the main causes of Summer Smog.
There is a revealed preference now for NOx emissions (the last, and most expensive measure of the prevention curve) related to new strict norms in Europe for reduction of NOx emissions by cars (and trucks) in cities: Euro 6D.  The revealed preference is that all vehicles should have AddBlue Selective Catalytic Reduction (SCR) filter.

For an average middle class European car (e.g. Opel Insignia or Peugeot 508) the prevention of these emissions requires injection of 1 litre AdBlue (32.5% urea in demineralized water) per 1000 km. The costs of AdBlue at a fuel station is 60 euro cents, so the prevention costs is 0.6 / (0.18×4.0×0.9) = 0.92 euro per kg NOx, where 0.9 is the filter efficiency. For background information on the factors 0.18 and 4.0, see (Baldino et al 2017). The investment costs of the filter itself is estimated at 1750 euro (AutoBild 2019). When we assume a life span of 250.000 km , an amount of 0.65 x 250 = 162 kg NOx is reduced, resulting in prevention costs of 1750/162 = 10.80 euro per kg NOx. The SCR filter plus the AdBlue has 10.80 + 0.92 = 11.72 euro/kg NOx prevention costs in total.

Avoiding double counting:
We have to allocate the 11.72 euro per kg NOx to 2 midpoints: eutrophication (see above) and summer smog.  In eutrophication the contribution is 6.37 euro per kg NOx.  So 11.72 – 6.37 = 5.35 euro per kg should be allocated to summer smog.

Winter smog – Dust (2,5mm)/Fine dust PM 2.5 

The eco-costs 2022 of fine dust PM 2.5: 35 euro / kg fine dust PM2.5 equivalent.
The PM2.5 midpoint data are from the UNEP/SETAC report (Fantke et al., 2016).

The factor of 35 euro / kg PM 2.5 equivalent has been based on data for fine dust filters of cars (case: Volvo V70), and the jump from Euro 3 to Euro 5. The emission reduction is 0.05 g/km, with a life time of 300.000 km. The price of a filter is 525 euro.

Human toxicity (cancer and non-cancer) 

The eco-costs 2022 of human toxicity, carcinogens: 3754 Euro/ kg Benzo(a)pyrene equivalent.
The eco-costs of human toxicity is characterized the DALY (Disability Adjusted Life Years), where 1 Case for cancer in the UseTox Tables equals 11.5 DALY.
In medical science, the DALY is used to make comparisons in terms of prevention costs.
Although the DALY cannot be used as tool for medical decision making on the level of the individual patient (Cleemput et al., 2011), it is often used for general guidance for higher level policy decisions. For medical cure in hospitals, such as the price of a kidney dialysis, Zorginstituut Nederland (2015) proposes 80.000 euro per DALY in the Netherlands, see also (Mohnen et al. 2019) for costs of kidney patients.

Applying the factor 11.5 DALY per Case and 80.000 euro/DALY to the tables (11.5 x 80.000 = 920.000 euro per DALY), you will find 3754 Euro/ kg Benzo(a)pyrene equivalent.

The eco-costs of human toxicity, non-cancer: 25500 euro/kg Mercury.
This is also based on the DALY, where one case of illness in the non-cancer UseTox tables is equivalent to 2.5 DALY (2.5 x 80.000 = 200.000 euro per DALY)

Foreground calculations

These must always be based on demonstrable foreground quantitative emission data.
Without a foreground determination of the price factor, the ESCU’s are calculated as the product foreground Quantity and the O.P.T. provided background price factor.
A foreground price factor must be based on a demonstrable investment or cost calculation of impact mitigation for the specific product, including a realistic expectation of the percentage of impact mitigation. For the remaining impact, the O.P.T. allocates ESCU’s based on the EcoCost system based background price factors.
The foreground ESCU’s are calculated with the following formula:
ESCU’s = å (Qc x (EM%_c x MC_c + (1- EM%_c) x EcoCosts_c ), where:

å is the sum of all the following for all emitted gasses.
Qc is the quantity of the emitted chemical per unit of product.
EM%_c  is the Expected mitigation % of the chemical.
MC _c is the foreground costs to achieve the expected mitigation %.
EcoCosts_c is the background Ecocosts for the chemical.

Electricity

Introduction

The emissions from power generation differ considerably in the different countries, depending on the mix of power sources and the quality of the power distribution network.
Country specific data for average emissions per KwH from the net were taken from the Idemat_2021_Global_Electricity_Calculation to ESCUs 2022 database at www. ecocostvalue.com. For country unknown, worst case is assumed. Indonesia has the highest ESCU’s of the top power using countries together generating 80% of global electricity.
Nuclear energy presents both opportunities and threats. Scientific assessment without emotions is virtually impossible. An international body controls the development and use of nuclear technology.
Although nuclear power mitigates GHG emissions and present a temporary solution in a time of a climate crisis, nuclear energy remains unsustainable and therefore, nuclear obtained KwH’s are assumed and allocated equal ESCU’s to CO2 emission-based KwH’s, because also nuclear power has the same preventative measures for GHG emissions as fossil fuels.

Indicator

See directly under Subcategory: Type A pollution.

Targets

Scientifically determined no-effect levels

Background calculations

Country specific data for average emissions per KwH from the net were taken from the Idemat_2021_Global_Electricity_Calculation to ESCUs 2022 database at www.ecocostvalue.com.

For country unknown, the worst case is assumed Indonesia. Indonesia had in 2022 the highest ESCU’s of the top power producing countries together generating 80% of global electricity production (KwH’s).
Not included yet in the O.P.T. are the power losses at charging and recharging batteries. In the database, a 10% extra ESCU’s is assumed.

Foreground calculations

Every organization should be able to demonstrate its power consumption. An unknown power consumption is not accepted by the O.P.T. If the distribution of the total power consumption of a specific product between several products, is unknown, the ESCU’s are divided between the products relative to their financial share in the organization’s turnover.
Organizations are challenged to determine the specific price factor for their power consumption, e.g. considering:

• Requiring the power supplier to adopt the O.S. and transfer its specific ESCU’s.
• Investigate other power suppliers.
• Determine costs self production of renewable power (including distribution and storage).
• Determine all options and costs to mitigate its own power consumption in its specific circumstances.

For power suppliers, the O.P.T. uses the same formula as for bulk gas emissions:
ESCU’s = å (Qc x (EM%_c x MC_c + (1- EM%_c) x EcoCosts_c ), where:
å is the sum of all the following for all emitted gasses.
Qc is the quantity of the emitted chemical per unit of product.
EM%_c  is the Expected mitigation % of the chemical.
MC _c is the foreground costs to achieve the expected mitigation %.
EcoCosts_c is the background Ecocosts for the chemical.

For users of power the calculation formula is:
ESCU’s = KwH x (EM% x MC + (1- EM%) x EcoCosts_country ), where:
KwH is the amount of kilowatthours per unit of product.
EM% is the expected mitigation %.
MC is the costs to achieve the expected mitigation %
EcoCosts_country ) is the country specific EcoCosts per KwH, provided by the system.

Fuels (industrial use)

Introduction

Burning fossil fuels is globally the largest contribution to global warming. Oil and gas are used in almost every industry, transport; burning of coal power generation is responsible for around 46% of total carbon emissions. Major emitting sectors are (in sequence of quantity): Power generation, transport, manufacturing and construction, buildings and land use change and forestry.   (https://ourworldindata.org/emissions-by-sector).
Fossil fuels not only cause climate change by emission of CO2, but also by emission of methane during their extraction. In addition, burning fossil fuels contributes to acidification and smog by emissions of sulfur- and nitrogen compounds and to eutrofication by emission of ammonia.

Indicator

See directly under Subcategory: Type A pollution.

Targets

Zero emissions

Background calculations

Without a foreground price factor, foreground fuel quantities are multiplied with the system provided ESCU’s.
If the distribution between various products of the total fuel consumption of a specific product is unknown, the ESCU’s are divided between the products relative to their financial share in the organization’s turnover.

Background ESCU’s for all commonly used fuels were taken from the Idemat database (Delft University of Technology, 2022). The ESCU’s represent the total life cycle of fuels including combustion as purchased by the organization.

Foreground calculations

Organizations are challenged to determine the specific price factor for their emissions by fuel burning, e.g. considering:

• Requiring the fuel suppliers to adopt the O.S. and transfer its specific ESCU’s.
• Investigate all options to minimize emissions by using the fuels by taking into account both the fuel properties and the used equipment.
• Investigate different fuel suppliers.
• Investigate the use of different fuels, or better change to renewable fuels (including distribution and storage).
• Determine all options and costs to mitigate its own fuel consumption in its specific circumstances.

Commuting

Introduction

Transport globally accounts for about 24% of global CO2 emissions, of which around 45% is by personal road traffic (https://ourworldindata.org/co2-emissions-from-transport), more than half of which is work related by commuting and business trips (Sutton-Parker, 2021).

Indicator

Emissions of CO2 + NOx +SO2

Targets

Zero emissions

Background calculations

The ESCU’s for commuting were calculated by multiplication of the average emissions per km for transport means (Otten et al., 2015) and the EcoCosts for emissions at Idemat_2021_Global_Electricity_Calculation to ESCUs 2022. The background commuting distance was calculated as the average commuting distance per day in 13 countries, as reported by (Eurostat Statistic Explained, 2021), multiplied by 233 (working days).
Assumed was (worst case) that all commuting occurs with an average petrol car.

Foreground calculations

Organizations are challenged to demonstrate an accurate bookkeeping of the kilometers and transport means made by their workers for commuting. This can be done by only enter the travelled distances and transport means. The tool will than multiply the travelled distances by an average emission for the transport means. But the organization can also determine the costs for means to mitigate commuting emissions.

Business trips

Introduction:

Transport accounts for about 24% of global CO2 emissions, of which around 45% is by personal road traffic (https://ourworldindata.org/co2-emissions-from-transport), more than half of which is work related by commuting and business trips (Sutton-Parker, 2021).

Indicator

Emissions of CO2 + NOx +SO2

Targets

Zero emissions

Background calculations:

The ESCU’s for business trips were calculated by multiplication of the average emissions per km for transport means (Otten et al., 2015) and the EcoCosts for emissions at Idemat_2021_Global_Electricity_Calculation to ESCUs 2022. The background business trip distance was calculated as the average commuting distance per day in 13 countries, as reported b y (Eurostat Statistic Explained, 2021), multiplied by 233 (working days).
Assumed was (worst case) that all business trips occur with an average petrol car.

Foreground calculations:

Organizations are challenged to demonstrate an accurate bookkeeping of the kilometers and transport means made by their business trips. This can be done by only enter the travelled distances and transport means. The tool will than multiply the travelled distances by an average emission for the transport means. But the organization can also determine the costs for means to mitigate commuting emissions.

Transport of goods

Introduction

Transport accounts for about 24% of global CO2 emissions, of which around 42% is for transport of goods (freight) (https://ourworldindata.org/co2-emissions-from-transport).

Indicator

emissions of CO2 + NOx +SO2

Targets

Zero emissions

Background calculations

Without foreground price factors, the number of “tonkilometers” is multiplied by the EcoCosts for emissions for the specific transport means, both at Idemat in (Delft University of Technology, 2022). (Partly) empty return trips shall be included.
Without demonstrable distances, worst case distances and transport means shall be determined and entered in the O.P.T.

To account for differences in “last mile” transport (conventional retailing compared online to retailing), online retailers are required to enter their specific transport data and conventional retailers are requested to determine the average transport data for their consumers. Consumer km’s heavily depend on shopping behavior. The default value for supermarkets and similar shops are based on averages of a roundtrip with petrol car of 5 km and a shopping basket of 30 items, and for other shops of a roundtrip of 12,5 km and a shopping basket of 1 item. Data were obtained from (Van Essen et al., 2011; Van Loon et al., 2015).

Foreground calculations

Organizations are assumed and otherwise challenged to be able to demonstrate freight tonkilometers. Organizations are also challenged to determine their costs of mitigation of freight caused emissions, e.g. by more efficient logistics, low emitting transport means, routes, packaging and product size, transport means, delivery times, load factors, cooperation, reducing returns, etc.).

Idemat indicates the average weight to volume factor (and therewith the average payload) where the data for the listed transport means are based on. However, average payloads may differ from the Idemat listed data. For foreground average payloads, the following ESCU correction applies:

Relative to the average calculated payloads in the closest applicable transport means in the Idemat selection box (included in the O.P.T.) the closest transport means to the used means, the following correction calculation is applied:

Corrected ESCU’s = ESCU’s x (FAP – IAP)/ 0,7, where:
FAP is the foreground average payload in tons.
IAP is the Idemat listed payload in tons.
0, 7 tons is the payload difference (positive or negative), that causes a 1% difference in fuel economy (Coyle, 2007; Volvotrucks.nl, 2020). Although this calculation only applies to trucks and only for flat journeys in well developed countries, preliminarily the O.P.T. applies it for all means of transport of goods under all circumstances.

Subcategory Use-Pollution

Introduction

Products may cause emissions during their use by:

• Running on electricity
• Running on fossil fuels
• By wear, leakings or evaporation
• By consumption parts (batteries, lubrication oils, replacement parts, washing soaps, paint protective coatings or other chemicals)

The use-sections of the Oiconomy Pricing Tool only request foreground data and only need answered by end-producers.

Indicator

See directly under Subcategory: Type A pollution

Targets

Zero emissions

Background calculations

The properties of a utensil are the determining cause of future pollution. The higher the pollution per time or distance unit of use and the longer the product life, the higher the future pollution.
Therefore the ESCU’s caused by the use of a utensil is calculated by the foreground emissions per time- or travelled distance unit, multiplied by the product life and multiplied with the background price factors for the emissions obtained from the EcoCost system (Delft University of Technology, 2022).
Important here is to realize that the product is the utensil, for instance a car, which gets its total lifetime ESCU’s for burning fuels allocated. However it that product (the car) becomes a capital good for business purposes (covered by the sections on transport), ESCU’s are only allocated for the emissions by the transport related to that other product. This prevents double counting.
In this stage of the O.P.S., most capital goods are not yet included. If, in the future, capital goods are included, the allocated use-ESCU’s must be allocated, depreciated proportionally to organization’s financial depreciation methods. However, in that case double counting of pollution ESCU’s will become an issue and requires a compensation.

Currently, there are not enough data on use related emissions to create background data for the quantitative factor (emissions per time- or distance unit) on a reasonable amount of products or even product categories.
However, because the use phase of a product is the responsibility of the end-producer, there are no unknown suppliers involved and therefore, the end producers should be able to provide the data and not being able to demonstrate these consequences of the product is not acceptable.

Foreground calculations

As argued above, foreground quantitative data should always be available.
The organization is challenged to also determine methods for product-use emission mitigation and the demonstrate the involved costs, in order to be able to calculate fully foreground ESCU’s.

Introduction

In agriculture, it is sometimes very difficult or even impossible to measure the exact emissions of added or created chemicals to water, air and soil. In this case, the third part of the methodology applies: determination of the maximum emissions with a governance dependent reducing multiplication factor.

Indicators

The maximum emissions are determined by the quantity of purchased chemicals or by the maximum created chemicals (e.g. ammonia). These are multiplied by the price factor from the EcoCost system (Delft University of Technology, 2022).
Emission impacts are categorized in  the following categories and characterized by their relative impact compared with the impact of the leading indicator for the impact category and listed below next to the impact category.

Global Warming Potential – CO2
Acidification – SO2
Eutrofication – Phosphate
Ecotoxicity – Zn
Winter Smog – Dust (2,5mm)
Summer Smog – Ethene
Carcinogens – PAH
Summer Smog – CxHx

In this case, it is not possible to replace the background data by foreground data, because even the emission quantities are unknown.

Targets

Zero emissions or no-effect levels or in this case perfect governance of emission prevention.

Background calculations

If quantitative emission data are lacking, but the nature of the potentially emitted chemicals known, e.g. because they are (almost) impossible to measure, but quantities of purchased agri-chemicals are available, the ESCU’s are determined by the total purchased quantities of agri-chemicals, multiplied with a reducing factor for the governance level on prevention of emissions. Without any proof of good governance and due diligence in preventing emissions, the full quantity of purchased amount of chemicals is assumed emitted. As better governance can be demonstrated, the ESCU’s are reduced.
All-background ESCU’s, allocated if even data on purchased agri-chemicals are lacking (e.g. because un unknown supplier is concerned) are obtained from the Idemat database: agricultural products, which is integrated in the O.P.T. This situation is unwanted and continuous pressure should be exercised on suppliers to involve the further tier suppliers and provide ESCU’s.

Foreground calculations

In principle, foreground data are not available for category B pollution
All organizations are challenged to analyze their specific emissions and determine their specific costs to mitigate the emissions related to the product and provide, which will place the emissions in the subcategory of type C -emissions.  

Introduction

The subcategory Type C Pollution assesses the measurable chemical emissions. Some of these are not easy to measure, such as what leaves the chimneys, but usually specialized bodies of analyses are able to measure the types and quantities of emitted chemicals, which shall be executed at average conditions, at least yearly and at process changes that may alter the emissions.

Indicators

The quantity of emissions in water, soil and air of all chemicals listed in the system, per unit of product. The maximum emissions are determined by the quantity of purchased chemicals or by the maximum created chemicals (e.g. ammonia). These are multiplied by the price factor from the EcoCost system (Delft University of Technology, 2022).
Emission impacts are categorized in  the following categories and characterized by their relative impact compared with the impact of the leading indicator for the impact category and listed below next to the impact category.

Global Warming Potential – CO2
Acidification – SO2
Eutrofication – Phosphate
Ecotoxicity – Zn
Winter Smog – Dust (2,5mm)
Summer Smog – Ethene
Carcinogens – PAH
Summer Smog – CxHx

Targets

International standards or no-effect levels.

Background Calculations

If emitted quantities are availabe, ESCU’s = Q x P, where Q is the quantity of the emitted chemical per unit of product and P is the price to be calculated, equal to the EcoCosts per unit of emitted chemical. The EcoCosts system (Delft University of Technology, 2022), integrated in the O.P.T., provides background data for a wide range of chemicals, which are based on the relative impact compared with the impact of the following leading indicators for the impact categories:

For lacking emitted quantities, e.g. from an unknown further tier supplier, the O.P.T. provides Idemat based background data.  This situation is unwanted and continuous pressure should be exercised on suppliers to involve the further tier suppliers and provide ESCU’s.

Foreground Calculations

Because applications and conditions differ and because the background values are not based on the prevention of the specific chemical, the specific preventative costs may differ. The practitioner is challenged to investigate the foreground costs of prevention and use these if available and demonstrable.

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(Note: still missing, also in the tool.)