Physical allocation

Miguel Brandão and Bo P. Weidema

Chapter 122 in Elgar Encyclopedia of Life Cycle Sustainability Assessment, 2026, pp 457-460 from Edward Elgar Publishing

Abstract: According to the ISO standards, all types of allocation should be avoided. Allocation excludes the parts of the product system that are related to the co-products, the fate of the excess production of by-products, and the decrease in the marginal supply to the markets that the by-products supply. At the same time, it assumes that an increase in demand for the by-products will stimulate an increase in output from the co-producing activity, an increase that cannot occur in reality. Physical allocation thus results in a biased model of the market reactions in the product system, in addition to the violation of monetary conservation principles. We give five examples of physical allocation. Despite its wide use in attributional LCA, its application generates uncertain results and does not contribute to the more representative modelling of systems. It cannot support robust decisions and thus its use should be minimised.

Keywords: Physical Allocation; Life Cycle Assessment (LCA); Co-products; ISO 14044; Multi-functional Systems; Allocation Hierarchy (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035309887
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