Improving the Data and Disclosure of the Environmental Impact of Building Materials
How the ideal Environmental Product Declaration (EPD) facilitates fair and competitive carbon reduction policies.
Intro
It’s no secret, the relevance of environmental product declarations (EPDs) is steadily growing. Public and private actors are increasingly using these building material “nutrition labels” as core data sources for the development and implementation of environmental policies.
With the recent announcement of EPA’s grant program to support businesses that manufacture construction materials and products to develop and verify EPDs, the US is on the cusp of transformative change in the availability, quality, and comparability of embodied carbon emissions data. As such, we aim to demystify these “nutrition labels” for environmental impact and lay out a vision for the ideal EPD that will facilitate fair and competitive carbon reduction policies.
Overview
What is an EPD?
Environmental product declarations are independently verified documents that report the environmental data from a life-cycle assessment (LCA) of a building material in accordance with international standards. EPDs are often referred to as “nutrition labels” for building products because they report a variety of life-cycle impacts, including global warming potential, acidification, eutrophication, ozone depletion, and smog formation. Global warming potential (GWP), expressed in carbon dioxide equivalent units (CO2e), is a quantified measure that allows for comparisons of the global warming impacts of different products. EPDs can also include additional manufacturer and product data, such as materials, manufacturing processes and locations, and resource use. EPDs are intended to be published for consumers to use in their material selection process and are valid for up to five years.
How are EPDs used?
EPDs are the predominant tool for GWP disclosure in the building and construction industry. Building professionals use EPDs to evaluate the environmental impacts of a product and to compare data between functionally equivalent products. They are also used to benchmark current practice and guide future improvements.
Functional equivalency in products occurs when products are intended to be used for the same purpose and have the same LCA scope to allow comparison. Current rules around the creation of EPDs allow for variation in data sources used to conduct LCAs, resulting in data discrepancies between products with the same LCA scope. Despite this, EPDs remain the best type of disclosure for building products and are essential for tracking embodied carbon in the construction industry.
Policies targeting the reduction of carbon emissions associated with building products require the disclosure and verification of GWP data via EPDs. Procurement policies known as Buy Clean are the most frequent example of policies using EPDs in the United States. The US General Services Administration (GSA) and the states of California, Colorado, New York, New Jersey, Oregon, and Maryland all require EPDs from material suppliers and for those suppliers to meet GWP thresholds that become increasingly stringent over time. Policymakers often require the submission of product- or facility-specific EPDs and reference data from industry-wide EPDs to set GWP thresholds. Read more about the types of EPDs below.
Exhibit 1: Comparison of EPD types
EPD Development
Life-cycle assessments
To create an EPD, a product manufacturer must engage with a third-party service provider to conduct a life-cycle assessment, evaluating a product’s environmental performance over its life cycle, taking into consideration carbon emissions due to material extraction, transportation, and manufacturing.
Product category rules
EPDs are governed by product category rules (PCRs), which dictate how practitioners perform the LCA to develop an EPD of that product category. Examples of PCR-governed product categories include structural steel, rebar, and ready-mix concrete.
PCRs are developed by program operators in an open process that allows industry stakeholders to review the draft PCR, ask questions, and share comments. Participating stakeholders may include manufacturers, material suppliers, consumers, trade associations, nongovernmental organizations, public agencies, LCA practitioners, and certification bodies.
Program operators are also responsible for updating PCRs to address relevant changes in the industry.
PCRs establish calculation and reporting requirements for EPD development, including:
- Scope and system boundaries
- Declared unit or product
- Environmental impacts to be included in the LCA
ISO standards for PCR development dictate the process must:
- Involve a range of stakeholders throughout the PCR development process
- Include a public comment and review process
- Expire every 3–5 years and then be reviewed and updated
The Ideal EPD
As mentioned above, several types of EPDs exist, each providing a different level of data specificity.
For an industry-wide EPD to be optimal, it should present statistical data, such as the mean and standard deviation of GWP impacts, before averaging the collected data. Moreover, it should offer transparency regarding market representativeness of the data by detailing the volume of products sold and the number of companies contributing data versus the total number in the industry. This process of assessing data representativeness and comparing manufacturer averages with production-weighted means and standard deviations is crucial to ensure the accuracy of industry benchmarks.
While industry-wide EPDs are valuable for product analysis, the subsequent discussion focuses on facility- and product-specific EPDs, which are vital for compliance with policies. Ideally, these EPDs should be built upon harmonized universal background datasets established by a single governing PCR, thereby minimizing uncertainty when compared with other products within the same category.
Exhibit 2: Features of an ideal EPD
How to achieve the ideal EPD
PCRs are the key to achieving the ideal EPD that is facility- and supply-chain-specific and based on a universal dataset, making it truly comparable with its peers. For EPDs to meet these standards, PCRs must include the following requirements:
Limit product variation within a single reported value in an EPD. PCRs should prescribe what constitutes a single product and should not allow reporting of an average impact for multiple products that significantly differ in their GWP per declared unit unless they can also provide an equation that would allow the average impacts to be adapted for each specific product covered by the EPD. For example, EPD values for steel products with different coatings or insulations with different compressive strengths that significantly alter the GWP per declared unit should be reported separately.
Report facility-specific data for all EPDs instead of allowing the reporting of results based on average data from across multiple facilities. This is readily implementable and currently done today for some products.
Require supply-chain-specific data (i.e., primary data collected from an upstream supplier) for upstream processes or facilities that individually contribute to the final product’s disclosed GWP. Where supply-chain-specific data is not available, the PCR may use a secondary data source — ideally one that is publicly available.
Accounting for EPD limitations
Until this ideal state is reached, the best available solution is to require uncertainty calculations for secondary data as part of PCRs, so that EPDs report the statistical confidence interval of environmental impact values, including GWP.
Exhibit 3: How EPDs can account for current data limitations
Prescribe uncertainty factors to apply to the portions of the LCA model that do not use facility-specific or supply-chain-specific data (i.e., use secondary data sources or industry averages for nonuniversal background data). These should be determined by conducting a sensitivity analysis on the template/baseline LCA model used in PCR development and prescribed by the PCR.
Require standardized reporting of the level of specificity of the EPD data (e.g., “This EPD is product-specific, manufacturer-specific, and facility-specific, but is not batch-specific. Thirty percent of the contribution to GWP is from supply-chain-specific data.”)
Current barriers to EPD standardization and adoption
Although the number of product and material EPDs is growing rapidly, several barriers to EPD standardization and adoption remain, including:
- Up-front costs to set up with an EPD service provider can be prohibitive for some small businesses.
- EPD development is often out of sync with PCRs, which expire every five years, affecting the validity of EPDs.
- Inconsistencies in EPD development result in incomparable data. For example, product-specific EPDs using industry average values across multiple facilities will not be as accurate as EPDs developed using facility-specific data.
- Lack of a universal public database to reference means the various EPD-generating software pull from different proprietary background datasets, resulting in different estimates for the same product.
- There is a lack of industry-wide EPDs for certain types of products, making material or product GWP baselining difficult.
- Sources of high-quality supply-chain-specific upstream data are not available in certain raw material categories for which PCRs have not yet been developed.
Conclusion
LCA professionals and academics, nonprofit organizations, and government bodies recognize the need to address the current barriers to EPD standardization and adoption. The US Inflation Reduction Act of 2022 provides significant funding for the advancement of EPDs, including the establishment of an EPD Assistance Program and a low-embodied-carbon “eco-labeling” system for construction materials currently under development by the US Environmental Protection Agency.
Several industries have also taken action to simplify, centralize, and streamline the EPD development process, including the ready-mix concrete and asphalt pavement industries. The National Ready Mixed Concrete Association (NRMCA) has established an EPD development program under which concrete producers and concrete product suppliers work with NRMCA program operators to develop and certify EPDs. The American Concrete Association is also in the process of developing an EPD tool for its industry.
Although EPD programs and tools are crucial to ideal EPD development, the rigor of PCRs must be improved to ensure the quality and comparability of EPDs. One such initiative seeking to identify the limitations of current PCRs, alongside potential improvements, is currently being led by the Clean Energy Ministerial Industrial Deep Decarbonization Initiative, under the United Nations.
As EPDs continue to be used as important tools to support policy, it is critical for industry, private and public organizations, and government to work together to address the barriers so that EPDs are easy and affordable and have a greater degree of fairness, reliability, and comparability.
