Revenues in Life Cycle Costing LCC

Question

Hi Community,

I'm trying to conduct a Life Cycle Costing (LCC) analysis for my LCA, but I keep getting results that seem far too low. I believe this is because the revenues of each process are being subtracted from the costs, which causes the costs of every process from ecoinvent to be zero.

Does anyone know how I can set the revenues of all processes in my product system to zero and include only the costs in the calculation?

Thank you in advance and best regards,
Jonathan

Answer 1

Hey Jonathan,

Do you have a more specific example? In ecoinvent, there is costs inside each reference product. Be aware that these costs are only for allocation purposes, for hotspots screenings or very rough estimates. The prices from ecoinvent are only per flow and not per exchange, so you will find e.g. the same price for electricity in the whole world.

Technically, openLCA will calculate the costs from inputs and outputs of all processes in the product system. The output costs of each process is typically the price of the reference flow and input costs of each process are known by the amount and the price of the provider flow.

In case you calculate the LCC for an ecoinvent process, make sure to copy/paste it and to remove the price from the reference product. Otherwise this price will also go into the result as a revenue.

Also check the contribution tree to see the contribution and the cost values of each input and output.

Best wishes,

Conrad

Comments

Hi Conrad, thank you for your answer. I did a little example in OpenLCA with wood manufacturing process followed by wooden table manufacturing. The costs for the tabel should be 33 EUR. I then set the revenue of the manufactured wood to 1 EUR and 5kg of wood are needed for the table. The costs then went down to 28 EUR. I assume because the revenue of the wood was substracted. In practice this does not make sense because I do not sell the wood but use it for the table and sell the table. I think the same happens in my big case because all processes from the ecoinvent database have revenues for the ouput product. I would love to set all revenues to 0 but that is impossible to do manually for all ecoinvent processes. I hope that explains my problem.

Best regards,
Jonathan

---

But when your input is 5 kg * 1 EUR/kg, you have 5€ of costs to produce the table. And if the table has a revenue of 33 EUR in the output, you have an added value of 28€. All good, no?

If you would set all market values of the quantitative references to 0, you would not get any result. Because the next process in the supply chain will not know what the costs of the inputs are.

Via script it is possible to write all prices into the inputs and remove all the prices in the outputs, but I don't know what will be the use of it, since you would add up all thousands of inputs of a complex product system in ecoinvent, which will lead to a very high, unreasonalbe result. Just imagine a market process where a product flow "hikes" through. You will double count all these input prices in processes.

An advise that I can give you is maybe removing all prices from ecoinvent and only do the LCC for your own foreground and manually for the linked ecoinvent processes to your model. This will be more accurate anyway. So you build your own foreground model where you give prices to everything, but you do not add prices inside "proctected" ecoinvent processes.

You can remove all prices (do a backup database before) with SQL:
UPDATE TBL_EXCHANGES SET COST_VALUE = NULL;

---

The table manufacturing has two previous processes: Iron manufacturing and wood manufacturing. The costs for the wood manufacturing are 10 EUR and for the iron manufacturing 23 EUR if all revenues are zero. So the costs should be 33 EUR for the manufacturing of the table. With the revenues from the wood manufacturing the result drops to 28 EUR which does not make sense because I only need the costs and revenues should be ignored. But if there is no simple way to do that in OpenLCA, it is probably the easiest to do the LCC manually. Thank you for your help

---

Hard to know what is the problem without pictures and seeing how the processes are modeled. In openLCA you get easy sums of inputs and outputs, also the provider costs are automatically calculated from the costs of the reference product in the supply chains. So there is nothing hidden or complex behind.

You also have to take care how you model your waste and product flows and to model it correctly, since a waste in the output has a cost, a product in the output has a revenue, a waste in the input has a revenue and a product in the input has a cost. But this is all indicated by the colors, too, and can be also inverted with negative signs if needed somehow.