What is a Product Emissions Benchmark?
The CarbonChain platform calculates and displays the carbon emissions intensity of your products. But how can you know if the emissions intensity is good or bad, or if your product is better or worse than others on the market?
The Product Emissions Benchmark helps you evaluate and compare the emissions intensity of your product.
The Product Emissions Benchmark represents the global average annual emissions intensity required for the production of your product, across its life cycle. If your product has a lower emissions intensity than the benchmark, your product emissions are better than average, and vice versa.
How are Product Emissions Benchmarks calculated?
The Product Emissions Benchmark is identical to the global average emission factor for a given product, and the two are calculated the same way. Specifically:
The Product Emissions Benchmark is a weighted average annual emissions intensity of the global production of the product, across its life cycle:
Weighted average: Not all production sites produce the same amount. A weighted average accounts for this divergence, by 'weighting' each site relative to the quantity of product produced at that site, before averaging across sites.
Example:
Asset A produces 8,500 kt of iron ore, with an emissions intensity of 0.007 tCO2e/t.
Asset B produces 17,000 kt of iron ore, with an emissions intensity of 0.013 tCO2e/t.
The weighted average emissions intensity of the two assets is:
Global production: The CarbonChain database contains emissions data from thousands of production sites across the globe, representing millions of metric tonnes of production across our different commodities. The Product Emissions Benchmark assesses all production sites for a given product within our database.
For major commodities, our database is representative of global production (for example, the CarbonChain database includes over 99% of global aluminium production for 2021).
For less common commodities, our database is less representative of global production (for example, our database includes 50% of global roasted molybdenum concentrate production for 2021).
CarbonChain continuously works to expand the coverage of our database, and new assets and production routes are regularly added to our database for a given product. The Product Emissions Benchmark is updated on an annual basis, which means newly added assets/routes may not yet be incorporated into the current Benchmark.
In addition, the emissions from production at any given site fluctuate over time (ideally trending downwards as the world decarbonises!!), therefore, the Product Emissions Benchmark is not static, and will periodically update as our database reflects the latest global emissions and production values.
Note: Where the CarbonChain database contains less than 50% of global production, the Product Emissions Benchmark is obtained from publicly available industry averages, and not from a weighted average of our database.
Product: The definition of a product is intuitively straightforward (aluminium ingot, LNG, copper anode, steel rebar…), but for benchmarking purposes, some products are grouped and benchmarked together, while others are split and treated separately.
Product differentiation:
Ferronickel is a different product to nickel cathode
Copper concentrate is a different product to refined copper
Refined energy products are benchmarked separately (diesel vs naphtha vs fuel oil)
Product grouping:
All low carbon ferrochromium is grouped together, although the exact composition (carbon, iron, chromium…) of the ferrochromium can vary
All crude oil grades are grouped together
Note that for some products, no benchmark is shown, due to lack of data availability. This includes alloyed products and some niche products that are only traded/manufactured in small volumes, or for which CarbonChain does not have sufficient data.
Life Cycle: The emissions intensity of an individual product is calculated based on all the emissions that occur across the life cycle of your product, from extraction of the raw materials (the 'cradle'), through to completion of the product at the 'gate' of the production site (so-called 'cradle-to-gate'). The Product Emissions Benchmark includes the emissions from all life cycle stages and all transport legs from all refineries and their upstream production routes included within the CarbonChain database.
A given production route may include emissions from a number of sites. In the example below, the production of 82 kt of nickel cathode from refinery A in 2022 required the production of 120 kt of nickel matte from 2 smelters, and the production of 500 kt of nickel ore from 3 mines. The emissions of the production of nickel ore at each mine, of nickel matte at each smelter, and of nickel cathode at the refinery (including the emissions from the (offsite) production and (onsite) use of all energy and materials used at the site), as well as emissions from all transport routes, combine to produce the total annual embodied emissions of the nickel cathode produced at refinery A.
This annual embodied emissions of nickel cathode from refinery A is then combined with the annual embodied emissions from all other refineries producing nickel cathode in the CarbonChain database.
The annual total emissions is then divided by the annual total production across all refineries, to produce the final Product Emissions Benchmark:
Filling Data Gaps
CarbonChain does not always have full insights into a supply chain. For a known refinery, the following combinations are possible in our database:
Supply chain knowledge | Example |
Known mine(s) -> known smelter(s) -> known refinery | |
Unknown mine(s) -> known smelter(s) -> known refinery | 
|
Some known mine(s) -> known smelter(s) -> known refinery | 
|
Unknown mine(s) -> unknown smelter(s) -> known refinery | |
Some known mine(s) -> some known smelter(s) -> known refinery |  |
Unknown mine(s) -> some known smelter(s) -> known refinery |
Note: this example assumes the supply chain is a mine(s) -> smelter(s) -> refinery supply chain for nickel cathode, but the same logic applies to all supply chain routes, including for products that have multiple production technologies and therefore multiple supply chain route types.
Where a mine or smelter is unknown, an average mine or smelter emission factor will be used to represent this unknown asset and complete the supply chain:
A country average emission factor, where the country of the mine or smelter is known
A global average emission factor, where the country is unknown
Note that the refinery needs to be known in order to exist in our database.
When we calculate the product emissions benchmark/global average, all supply chains with known refineries are included in the calculation, regardless of whether their full supply chains are known or not (i.e. a refinery with unknown smelters and mines feeding into that refinery is still included in the calculation of the average).
Country/Global Averages
Country and global average emission factors for intermediate products (i.e. nickel ore, nickel matte) are calculated analogously to how the global average emission factor (aka the product emissions benchmark) is calculated for the final product (i.e. nickel cathode), as set out in this document.
For a country average smelter EF for example, all the cradle-to-gate emissions from all known smelters in that country are added together and divided by the total smelter production in that country, regardless of whether the upstream mines are in the same country, and regardless of whether the upstream mines are known (where they are unknown, a global average mine will be used for that supply chain).
How should I use the Product Emissions Benchmarks?
Compare your product emissions against the benchmark to understand how your product performs against the global average.
Note that your individual product intensity will likely include additional emissions sources that are not included in the 'cradle-to-gate' Product Emissions Benchmark:
Energy products: Are evaluated 'cradle-to-grave' and additionally include emissions from transport to customer, any further refining activities, and combustion of the product during use.
All other products: Are evaluated 'cradle-to-customer' and additionally include emissions from transport of the product to the customer
However, in order to compare products on a like-for-like basis, only the cradle-to-gate emissions of your product are compared to the Product Emissions Benchmark.
RAG Ratings
We use a Red, Amber, Green (RAG) schema to denote whether an activity’s carbon intensity is worse than average (Red), average (Amber), or better than average (Green).
Red >20% worse (higher) than the benchmark Amber +-20% of the benchmark Green >20% better (lower) than the benchmark |
This allows for easy comparison of transactions of different materials, weights, and sources.
Aggregating for a product
Having assigned RAG ratings to individual transactions, we aggregate across transactions for a particular product according to the weight (or volume) of that transaction.
This yields a RAG breakdown in terms of tonnes of product.
Example RAG split for Aluminium. The RAG rating of each trade contributes to the product-level RAG according to the trade’s weight: a 1000 tonne trade contributes 1000x a 1 tonne trade.
Aggregating for a portfolio
In order to assess a portfolio, we need to aggregate across products to derive a portfolio level RAG breakdown.
However, we cannot simply aggregate by weight as we do for individual products, because products vary radically in their weight and emissions intensity. Copper concentrate, for instance, is heavy and emissions-light; aluminium is light and emissions-intense.
Instead, we take the product-level RAG breakdown and aggregate it to a portfolio level using the total emissions associated with each product as a fraction of the total emissions for that period. This ensures that products which are more important from an emissions perspective contribute more to the portfolio’s performance, aligning incentives to decarbonize the most polluting products.
Aggregating product-level RAGs to a portfolio level. Each product’s pie chart is effectively scaled by the total emissions for that product category (here highest for Aluminium and lowest for Gold).