Download III. harmonization of carbon footprint related standards

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WORLD TRADE
WT/CTE/M/49/Add.1
28 May 2010
ORGANIZATION
(10-2963)
Committee on Trade and Environment
SUMMARY REPORT OF THE INFORMATION SESSION ON
PRODUCT CARBON FOOTPRINT AND LABELLING SCHEMES
17 FEBRUARY 2010
Note by the Secretariat1
Addendum
1.
The Information Session on Product Carbon Footprint (PCF) and Labelling Schemes was held
on 17 February 2010 in response to the requests by a number of developing country Members for
information on the various initiatives being developed at the national and international levels in the
area of product carbon footprint standards and labelling schemes.2
2.
This Report provides a detailed summary of the key points of the presentations and of the
issues that arose from the discussions during the information session. The full presentations made by
the speakers are available on the WTO trade and environment website.3
_______________
TABLE OF CONTENTS
I.
OVERVIEW: RECENT STUDIES IN THE OECD ............................................................. 2
II.
NATIONAL EXPERIENCE SHARING: PUBLICLY AVAILABLE
SPECIFICATION (PAS 2050) – LESSONS LEARNED ...................................................... 3
III.
HARMONIZATION OF CARBON FOOTPRINT RELATED STANDARDS ................. 4
A. WRI/WBCSD PRODUCT LIFE CYCLE ACCOUNTING AND REPORTING STANDARD ................. 4
B.
ISO 14067 CARBON FOOTPRINT OF PRODUCTS - PART 1: QUANTIFICATION AND
PART 2: COMMUNICATION ....................................................................................................... 6
1
This document has been prepared under the Secretariat's own responsibility and is without prejudice
to the positions of Members and to their rights and obligations under the WTO.
2
See meeting of November 2009 of the Committee on Trade and Environment (CTE), WT/CTE/M/48.
3
http://www.wto.org/english/tratop_e/envir_e/events_feb10_e/event_17feb10_e.htm
WT/CTE/M/49/Add.1
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I.
OVERVIEW: RECENT STUDIES IN THE OECD
3.
By way of introduction, Mr Dale Andrew, OECD Trade and Agriculture Directorate, recalled
the typical features of PCF labels. They: displayed the total amount of greenhouse gas (GHG)
emissions that were emitted during the entire life cycle of a product or a service; they were expressed
in grams of CO2 equivalent per unit of the product; and were displayed not only directly on
packaging, but also on websites or on the store shelf.
4.
PCF labels could have different objectives. For producers, the key objectives were to help
companies prioritize GHG reduction efforts along the supply chain and to demonstrate their
commitment to climate change mitigation (as part of their corporate social responsibility efforts).
PCF labels were a tool to compare the carbon footprint of similar products from different origins or
with different packaging characteristics (e.g. a fruit juice bottled in a can, a glass bottle, or a plastic
bottle). Knowing the carbon footprint of a product could also help offset emissions that could not be
reduced, e.g. as suggested by the "Stop Climate Change" scheme in Germany, and help consumers
reduce their "personal" carbon footprint.
5.
The OECD recently conducted a survey on the extent to which PCF labels influenced
consumer, buyer and investor behaviour. The survey showed that, in purchasing decisions,
environmental concerns ranked after quality and price. He explained that although PCF schemes had
first appeared in 2007, their number had quickly grown since then. Such schemes had started out with
limited coverage, mostly food and drink, but had then been extended to a wide range of products.
Moreover, many schemes that started as private and voluntary had now seen the involvement of
governments and international organizations. As at the end of 2009, the OECD had identified PCF
schemes in the following ten countries: Canada, France, Germany, Japan, Republic of Korea,
Sweden, Switzerland, Thailand, the United Kingdom and the United States.
6.
Some examples of PCF schemes included: (i) Japan's voluntary carbon footprint labelling
scheme for products launched in 2009 on a trial basis; (ii) two French PCF schemes, initiated by
supermarket chains, for application either on products themselves or on the receipt as the sum of all
purchases; and (iii) a private PCF label for biofuels, developed by a Swedish association and the
Brazilian ethanol industry, which covered both environmental and labour conditions.
7.
The following comments could be made on the schemes surveyed by the OECD: only about
half of the schemes had published methodologies; the quality of the documentation varied greatly;
most schemes reflected a full life cycle analysis, but with different starting or ending points; most did
not appear to create market access barriers for producers in developing country or distant countries,
mainly due to the use of a life cycle analysis; some ignored short distance transport flows, such as
internal domestic transport; the calculation of shipping emissions relied on various factors; there
were uncertainties on how to treat the loss of soil carbon in agricultural practices; the schemes used
different communication strategies, e.g. displaying the actual value of the CO2 emissions equivalent
per unit or showing carbon-free claims (i.e. for companies offsetting their GHG emissions); and it
was very difficult and costly to determine the exact carbon footprint of a product, particularly due to
the lack of relevant data.
8.
In Mr Andrew's view, conformity assessment was a major weakness of the current schemes.
He reported that only four schemes relied on third party verification of the PCF and that the
conformity assessment procedures generally lacked clarity and transparency. In response to a
question about conformity assessment, Mr Andrew drew a parallel between carbon footprint and
certification of organic products, where an entirely new industry had emerged in order to certify
organic products. He acknowledged that certification was expensive, especially when producers had
to seek certification for different schemes at the same time.
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9.
Finally, in terms of the effects of these schemes on small and medium-sized enterprises
(SMEs), Mr Andrew explained that some supermarket chains had worked very closely with all
suppliers upstream, including farmers, importers and retailers. He noted that one problem of some of
the earlier schemes was that they relied heavily on so-called secondary data, or default values,
particularly in developing countries, in calculating the carbon footprint without actually measuring the
emissions in the respective countries. He noted that at present no empirical work existed on the
effects of PCF labels on SMEs, but previous work done in the OECD on private labelling schemes
could provide valuable insights.
II.
NATIONAL EXPERIENCE SHARING: PUBLICLY AVAILABLE SPECIFICATION
(PAS 2050) – LESSONS LEARNED
10.
Ms Maureen Nowak of the United Kingdom's Department for Environment, Food and Rural
Affairs (DEFRA) presented the United Kingdom's experience in developing a standard to measure
embodied GHG emissions across the life cycle of goods and services, the so-called Publicly Available
Specification (PAS) 2050, published in October 2008.
11.
The development of PAS 2050 started in 2007 in response to a demand from the business
community to better understand the GHG emissions of their supply chains, identify hotspots where
GHG emissions could be reduced most effectively and share information about its work internally,
with their supply chains, and with customers. The objective was to develop a tool for measuring
GHG emissions that could be applied across a wide range of products, services and supply chains, and
would allow a consistent and comparable approach to supply chain measurement of GHGs across
different markets. The project was overseen and managed by the British Standards Institute (BSI) and
co-sponsored by DEFRA and the Carbon Trust. The development process of PAS 2050 involved
consultations with over 1,000 stakeholders, both national and international. Over 3,000 comments
were received and PAS 2050 had been tested as part of pilot projects across a wide range of products,
services, sectors and companies, including manufacturers, retailers and traders.
12.
PAS 2050 had the following key characteristics: it was built on internationally recognised
life cycle assessment methods, specifically the ISO 14044; covered all GHGs specified by the
Intergovernmental Panel on Climate Change (IPCC); included the whole lifecycle of a product;
could be applied to any product or service, by any company and in any geographic location; allowed
a full internal assessment of GHG emissions and thus the identification of emissions hotspots;
facilitated evaluation of options, e.g. for purchasing and sourcing decisions; supported corporate
reporting and communications with consumers; and it enabled comparability within an organisation
since PAS 2050 was suitable for comparing the impact of changing materials, processes, distribution,
use profiles, end of life opportunities, changes over time and the different formulations of similar
products. However, Ms Nowak pointed out that PAS 2050 did not provide the level of detail
necessary for product comparison.
13.
PAS 2050 was already being used by many companies, including several leading retailers,
across long and complex international supply chains. For example, the Carbon Trust had completed
many projects worldwide, including in Europe and in South America as well as in Canada, China,
South Africa and the United States. It had certified footprints of over 5,500 individual product lines,
with a total carbon footprint of eight million tonnes of CO2 equivalent.
14.
Ms Nowak then shared some lessons learned from a User Trials Project: the step-by-step
approach in PAS 2050 provided a good structure for undertaking product or service carbon
footprinting; the accompanying Guide to PAS 2050 was found to be clear and user-friendly and to
provide a good overview; the primary data requirements of the PAS 2050 could be time consuming,
but allowed important insights into the supply chain; difficulties were encountered in collecting
secondary data. Recommendations from the user trial projects included the need for a recognized
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source of full life cycle emission factors for common flows, such as energy, transportation and waste
management; and wider publicly available databases needed to be more accessible.
15.
A review of PAS 2050 will be conducted and take into account the related international
initiatives, specifically the developing ISO 14067 standard and the WRI-WBCSD GHG Protocol
Product Standard, as well as the European Commission's work on PCF. Ms Nowak explained that the
review process of the PAS 2050 would also include wide consultations with stakeholders, a high level
of technical expert input and extensive evidence gathering to support any proposed changes. It was
expected that the overall process would take about nine months, for completion by late 2010.
16.
To conclude, Ms Nowak noted that PCF had a key role to play in motivating businesses to
reduce their carbon emissions and hence move towards a low carbon economy. The effectiveness of
PAS 2050 needed to be assessed and if necessary improved in order to increase uptake by businesses.
For instance, some practical aspects in PAS 2050 needed to be addressed, most notably the
availability and accessibility of reliable and relevant data. Moreover, some products, such as
agriculture and chemical products, were inherently more difficult to assess than others, as they had for
instance complex and variable supply chains and multiple ingredients. She acknowledged that PAS
2050 did not work as a 'one size fits all' and that for practical purposes it needed to be supported by
specific rules or guidance for each sector.
III.
HARMONIZATION OF CARBON FOOTPRINT RELATED STANDARDS
A.
WRI/WBCSD PRODUCT LIFE CYCLE ACCOUNTING AND REPORTING STANDARD
17.
Ms Andrea Brown-Smatlan, representing the World Resource Institute (WRI) and the World
Business Council for Sustainable Development (WBCSD), presented the GHG Protocol Initiative. 4
The GHG Protocol Initiative started in 1998 as a response to an increasing demand for harmonization
coming from various stakeholders. This was a multi-stakeholder initiative, which included business,
NGOs, governments, academics and others, intended to develop internationally accepted
GHG accounting and reporting standards and promote their use worldwide.
18.
Under the GHG Protocol Initiative, WRI/WBCSD had published a Corporate Accounting and
Reporting Standard for GHG emissions in 2001 (revised in 2004). This so-called GHG Corporate
Protocol had since become the most widely used international accounting standard for corporate GHG
accounting. It provided the accounting framework for almost every GHG standard and was used by
various programs across the world, such as ISO 14064 (Part I), the Climate Registry, the Carbon
Disclosure Project, the Californian Climate Action Registry, Dow Jones Sustainability Index, the
European Union Emissions Trading Scheme, World Wildlife Fund Climate Savers, etc. The initiative
also led to a number of other protocols and sector-specific programs, such as the GHG Protocol for
Project Accounting, which was a methodology to account for emission reduction activities, and a
reporting program for the cement sector.
19.
Ms Brown-Smatlan reported that a survey conducted by WRI/WBCSD in 2008 had indicated
a strong need for additional information on supply chain and product GHG emissions. The increase in
the number of GHG accounting initiatives and regulations at the company level, at the sector level,
within organisations and national governments demonstrated the need for an internationally accepted,
standardized and credible approach to measure GHG emissions. Therefore, in 2008, the
WRI/WBCSD Secretariat initiated the development of two new standards. First, the Scope 3
Accounting and Reporting Standard quantify, manage and report GHG emissions in the corporate
value chain. This standard was built on the GHG Protocol Corporate Standard. And second, the
4
For
copies
of
the
draft
Scope
3
and
http://www.ghgprotocol.org/standards/product-and-supply-chain-standard
Product
Standards,
see:
WT/CTE/M/49/Add.1
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Product Life Cycle Accounting and Reporting Standard to quantify, manage and report the life cycle
GHG emissions of individual products. It was built upon the existing life cycle assessment standards,
PAS 2050 and ISO 14011. The initial drafts of both standards had been released in November 2009,
the second draft would be available for public comment by mid-2010 and the final standards were
expected to be published by year end.
20.
For WRI/WBCSD, the primary objective of a product standard was the public disclosure of
GHG emissions of goods and services. Implementing the standard might also support additional
business goals, namely the identification of the GHG reduction opportunities within a product supply
chain, the engagement of the supply chain in order to obtain better quality data, and product
differentiation. The standard was sufficiently flexible to accommodate GHG quantification and
reporting for many types of goods or services. However, the standard did not fully support product
comparison, as that level of comparison would require a greater degree of prescriptiveness.
WRI/WBCSD intended to include guidance on how programs, product category rule developers and
other organizations or governments could specify additional prescriptiveness in order to make a valid
product comparison possible. In response to a question, Ms Brown-Smatlan added that WRI/WBCSD
was also considering developing an SME-targeted guidance document to help them better understand
the requirements to measure the PCF.
21.
As for the structure of the process, Ms Brown-Smatlan explained that the WRI/WBCSD
Secretariat convened and facilitated the process. A Steering Committee of 25 members included
government representatives, academia, major businesses and international organisations. The process
structure included several technical working groups, with about 170 experts, for the development of
both standards, and a stakeholder advisory group, with about 1,200 members, who were kept
informed about the standard development and who were able to provide comments throughout the
process. Five stakeholder workshops were held (in Berlin, London, Guangzhou, Beijing and
Washington D.C.), inviting the stakeholder advisory group to provide comments.
22.
In response to a question, Ms Brown-Smatlan noted that WRI/WBCSD attached great
importance to an open and inclusive process, with a representation of over 40 countries, in developing
the new standards. A majority of representatives originated from Europe and North America, but
WRI/WBCSD specifically sought out participation from developing countries, such as Brazil, China
and India. WRI/WBCSD also organized a public comment period and thus received over 2,000
individual comments from around 65 different companies and organisations. Ms Brown-Smatlan
explained that a road testing phase was underway (from January to June 2010) with the participation
of 70 companies from a wide range of sizes, sectors, geographical locations and experiences in GHG
accounting. Companies from Brazil, China, India and South Africa were involved in this testing of
the standards. The results of the road testing would be used to revise the two standards before final
publication.
23.
Finally, Ms Brown-Smatlan noted that harmonization of standards could accomplish several
important goals, such as: the reduction in compliance costs for business; an increased confidence in
the marketplace; the facilitation of a valid comparison and thus more informed choices by consumers;
and an improvement in the availability of quality data. She noted that the current versions of all three
PCF standards that existed or were being developed, namely PAS 2050, ISO 14067, and GHG
Product Life Cycle Standard, were generally aligned and that all three institutions would continue to
work together towards further harmonization over the coming year. She was of the view that there
was room in the marketplace for more than one standard with an aligned methodology.
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B.
ISO 14067 CARBON FOOTPRINT OF PRODUCTS - PART 1: QUANTIFICATION AND
PART 2: COMMUNICATION
24.
Mr Rob Steele, Secretary-General of the International Organization for Standardization (ISO),
and Mr Klaus Radunsky, ISO Working Group Convener for ISO 14067, gave a joint presentation on
the work of ISO to develop an international standard on carbon footprint of products, namely
ISO 14067. Mr Steele provided an introductory overview of the ISO system. He emphasized that
ISO aimed to ensure the effective participation by developing countries in the standard setting
process. He clarified that ISO encouraged the proper implementation of standards, but was not
involved in certification.
25.
Mr Steele introduced an ISO study, published in February 2010, on "International standards
and private standards".5 He noted that a distinction should be made between international standards,
which used principles for international standards set out in the context of WTO Agreement on
Technical Barriers to Trade (TBT) as well as disciplines established through acceptance of the
TBT Code of Good Practice, and other standards that may be described as consortia standards. He
voiced the opinion that there should be a move over time towards international standards in order to
avoid the creation of non-tariff barriers to trade. He stressed the need for formal international
standardisation with wide participation across countries and between industries, consumers and
governments.
26.
Finally, Mr Steele outlined ISO's current work relating to climate change, such as GHG
emissions quantification and reporting as well as carbon footprint of products. Furthermore, ISO was
working on energy efficiency and performance with the aim to assist industry to improve their energy
management; on renewable energy sources, such as solar and wind energy; on the measurement of
the impacts of climate change, on transportation and on sustainability perspectives.
27.
In the second part of the presentation, Mr Radunsky updated the CTE on the recent work in
the Working Group 2 of TC 207, Sub Committee 7, which was developing the ISO standard 14067.
The development of this standard started in April 2008 and its publication was expected by the end of
2011, or at latest by the beginning of 2012. He pointed out that due to growing interest, an increasing
number of experts were participating in the meetings. At every stage, the Working Group had
received about 1,000 comments which substantially helped further improve the standard. He
highlighted the fact that several of these technical committee meetings took place in developing
countries in order to ensure their active participation. In this context, he mentioned that Sweden
(SIS/Sida Project) provided a capacity building program for countries in the Middle East and North
Africa region in order to facilitate their effective participation in the standard setting process.
Mr Radunsky also explained that about 100 experts from 30 countries, including developing
countries, such as Argentina, Brazil, China, Indonesia, Malaysia and Mexico participated regularly in
the meetings of Working Group 2.
28.
Mr Radunsky also provided a short overview of the standard. The objective of this standard
was to provide clarity and consistency for quantifying, monitoring, reporting and verifying the PCF to
the benefit of organizations, governments, project proponents and stakeholders. In response to a
question on definitions, he clarified that although the standard was called carbon footprint of products
(and not GHG footprint of products), it addressed all relevant GHGs. In fact, Annex A, which was
mandatory to the standard, referred to all GHGs identified by the IPCC and its Fourth Assessment
Report. The name PCF was chosen because it was already a common name in the marketplace.
29.
Part 1 of the standard laid down the principles and requirements to quantify PCF based on the
method of life cycle assessment. At the heart of the new standard would be the methodological
5
Study available at http://www.iso.org/iso/private_standards.pdf
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framework with an inventory analysis of PCF. It would also address the question of allocation, which
arose when processes yielded more than one product. Mr Radunsky highlighted that the standard set
some detailed product category rules in order to allow consumers to compare carbon footprints across
products. Part 2 aimed to specify requirements for the development of information to communicate
the PCF and give guidelines on how to use such information on PCF. The requirements and
procedures for communication would be different between business-to-business communication and
business-to-consumer communication. On verification, he clarified that ISO was taking a flexible
approach, allowing verification according to various ISO standards.
30.
Mr Radunsky also emphasized that harmonization was a common goal for PAS 2050,
WRI/WBCSD and ISO. In his view, it was of particular importance to have similar requirements,
principles, terms and definitions, and a similar level of verification in all three standards. In order to
ensure harmonization, he explained that representatives of the three initiatives participated actively in
each others' meetings. He echoed the previous speaker by stating that there was an added value of
having more than one approach: PAS 2050 was mainly driven by the needs of investors,
WRI/WBCSD mainly by the needs of the owners of the supply chain, whereas ISO was broader,
including the interests of consumers and governments.
31.
As for the role of PCF, it was not meant to be a barrier to trade, but rather a tool to facilitate
the participation in supply chains, which were required to provide information about the carbon
footprint. PCF standards helped ascertain and manage the GHG emissions along the supply chain and
respond to new regulatory, shareholders and consumers pressures. PCF standards also helped
improve the understanding of risks and opportunities of the supply chain and eventually achieve a
higher productivity of the supply chain. Key challenges in the development of PCF standards
included the need to achieve the right balance between practicality and environmental
integrity/credibility, the definition of product category rules and the question of timing. In his view,
measuring and reporting the PCF of all goods and services could contribute to the transition to a zero
or low carbon society. He believed that the economic crisis offered a unique opportunity to
restructure the supply chains of products and to make them more efficient in terms of GHG emissions.
32.
As a follow-up to the reference to the Swedish capacity building program, the representative
of Sweden mentioned a conference held in Stockholm in November 2009, where several developing
countries gave insightful presentations.6 A representative of the Swedish Standards Institute (SIS)
also informed that pre-seminars were conducted for the Middle-East and North African region in
order to prepare eleven countries to participate more actively in the development of the ISO carbon
footprint standard. He mentioned that one of the issues brought up during the pre-seminars was the
importance to have, especially for SMEs, a cost-benefit approach of various methodologies in order to
facilitate compliance with PCF standards.
__________
6
See http://www.sis.se/