Carbon and Cost Analysis Set (CC1)

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A BSRIA Guide www.bsria.co.uk

Life Cycle Costing

By David Churcher and Peter Tse

BG 67/2016

ACKNOWLEDGEMENTS

This guide supersedes BG 5/2008 Whole-Life Costing Analysis.

This revised edition was written by Peter Tse of BSRIA and David Churcher of Hitherwood Consulting. It was designed and produced by Claire Gould and Joanna Smith of BSRIA.

The guidance given in this publication is correct to the best of BSRIA’s knowledge. However, BSRIA cannot guarantee that it is free of errors. Material in this publication does not constitute any warranty, endorsement or guarantee by BSRIA. Risk associated with the use of material from this publication is assumed entirely by the user.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic or mechanical including photocopying, recording or otherwise without prior written permission of the publisher.

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PREFACE REFRIGERATION

This guide has been prepared by BSRIA to complement existing knowledge of life cycle costing, and training courses provided by BSRIA. These theoretical and practical training courses are intended to help engineers, architects, facilities managers and clients understand the mechanics of calculating life cycle costs.

The analysis of life cycle costs is something that we all do in our everyday lives. Its principles help us decide whether to replace our car as the servicing and MOT costs grow in relation to its trade-in value, or whether to buy a cheap and cheerful dishwasher instead of a premium brand that we hope will last longer. In these circumstances we do not go through the process in a systematic, step-by-step way as we work on the basis that our intuition is good enough. However, business decisions can be much more significant, involving larger sums of money and longer timescales.

There is also the issue of good stewardship of corporate or public resources to be considered. For these reasons, more emphasis is being placed on life cycle costing studies as part of the decision-making process for new- build, refurbishment and plant replacement projects so that all the costs – not just the initial capital investment – can be taken into account. Life cycle costing complements the move towards use of information models to improve asset and project management. The appreciation of life cycle issues is fundamental to the use of BIM Level 2 as mandated by the UK Government on its centrally procured projects, and it is expected that similar standards will be applied by other parts of the public sector and by many private sector clients and asset owners.

This guide presents a simple process for the practical calculation of life cycle costs, with examples to show how the different stages of the process relate to one another, to show how the results are obtained and what they mean. Of course, life cycle costing is only one form of project appraisal, focusing on the economic outcome. Ultimately, a decision will be a compromise between this and other assessments, be they technical, environmental or political, but these are outside the scope of this guide.

This guide has been deliberately kept short by omitting some of the more complex aspects of life cycle costing. However, it is compatible with the parts of ISO 15686 that provide recommendations for life cycle costing. Clients, estates managers, engineers, consultants, quantity surveyors or cost advisers will find some parts of the guide more relevant than others, but all are recommended to read the entire guidance.

Life cycle costing is just one of a number of assessment techniques that help identify the appropriate solution to a problem. It focuses on economic assessment using profiles of current and future costs and benefits to arrive at a discounted net present value of the life cycle costs, incorporating lump sum investments, operating costs, end of life costs, and end of study benefits such as residual value.

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PREFACE

Although the life cycle costs calculated during the analysis can be presented to any number of decimal places this is not necessarily appropriate. The users of the results must be made aware of the level of confidence that the analysts have in the life cycle costs. Cynics may say that life cycle costs are nothing more than educated guesses.

BSRIA’s view, in line with that of HM Treasury, the Office of Government Commerce and a wide range of academic and practitioner commentators, is that this is actually a marked improvement on making significant decisions based on uneducated guesses or gut instinct.

In addition, the life cycle costing process forces the client and the project team to challenge their own assumptions and those of others. This will lead to proposed solutions that have been thought through more rigorously and which will stand up to scrutiny. The discipline of documenting assumptions such as sources of life expectancy and cost data will significantly assist those who need to examine the analysis at some future date. The data that is acquired for the life cycle costing models will also contribute to a building or estate-specific database that can be re-used in future analyses.

Finally, it is worth considering that life cycle costing studies require time and effort to complete. The overhead of carrying out the studies must always be considered in relation to the potential savings that emerge from the modelling and calculations.

Peter Tse and David Churcher November 2015

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1 CONTENTS REFRIGERATION

INTRODUCTION TO LIFE CYCLE COSTING 1 1 DEFINING THE PROBLEM 9 2 ALTERNATIVE SOLUTIONS 11 2.1 Identifying alternative solutions 11 2.2 Specifying the fundamentals 12 2.3 Building the life cycle costing models 15 2.4 Sources of timing information for life cycle activities 17 2.5 Sources of cost information for life cycle activities 19 2.6 Storing data for future use 23

3 CALCULATING LIFE CYCLE COSTS 24 3.1 Net present values for lump sum costs and benefits 24 3.2 Net present values for recurring costs and benefits 29 3.3 Summarising net present values 36 3.4 Calculating equivalent annual costs 36

4 FINE-TUNING LIFE CYCLE COSTS 38

4.1 Single variable sensitivity 38 4.2 Dual variable sensitivity 42 4.3 Probabilistic simulation 43

5 INTERPRETING THE RESULTS 44 5.1 The Golden Rule 44 5.2 Initial rate of return 45 5.3 Payback 45 5.4 Independent projects 46 5.5 Economic planning 48 5.6 Precision in life cycle costing 53

BENEFITS OF THE LIFE CYCLE COSTING PROCESS 55

APPENDICES

APPENDIX A1 : LOOK-UP TABLES 56 APPENDIX A2 : EXAMPLE 60 APPENDIX A3 : GLOSSARY OF TERMS 76

REFERENCES 78

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INTRODUCTION TO LIFE CYCLE COSTING TABLES

Table 1: Discount rates for long-term public sector projects 12 Table 2: Selecting the required data 15 Table 3: Service life factors from ISO 15686 19 Table 4: Model of life cycle costing studies 37 Table 5: Example of projects with limited initial investment 47 Table 6: Example of projects with maximum savings for a limited initial investment 48 Table 7: Present value of £1 (discount factors for lump sums) 56 Table 8: Present value of £1 per year (discount factors for recurring sums) 57 Table 9: Equivalent annual cost discount factors 58 Table10: Future value of £1 (Inflation factors for lump sums) 59

FIGURES

Figure 1: The step-by-step process for life cycle costing 1 Figure 2: Assessments required for project decision-making 2 Figure 3: Definitions of whole life cost and life cycle cost in ISO 15686-5 4 Figure 4: Profile of inflation, gilt yields and corporate bond yields 13 Figure 5: Example of project timelines 17 Figure 6: Variability of life expectancy information 18 Figure 7: Profile of fuel prices 20 Figure 8: Project timelines for the base case and alternatives 1-3 22 Figure 9: Timeline for escalating energy costs 23 Figure 10: Graph of recurring cost net present value 29 Figure 11: Discount factor for a deferred recurring cost 31 Figure 12: Effect of different gas price rises on life cycle costs 40 Figure 13: Effect on life cycle costs of the varying discount rate 41 Figure 14: Plot of dual variable sensitivity analysis 43 Figure 15: Project timelines for Alternatives 2 and 2A 53 Figure 16: Example of life cycle cost precision at different stages of design 54

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INTRODUCTION TO LIFE CYCLE COSTING

This guide presents a practical approach to life cycle costing for the construction and operation of buildings. A detailed example is used throughout to illustrate the principles as they are discussed.

How to use this For ease of use, the process of life cycle costing is broken down into five guide sequential, colour-coded logical steps that are used throughout this guide. These are illustrated in Figure 1. Other guides to life cycle costing may use different numbers of steps, but the overall process is the same. As the figure also shows, life cycle costing is an iterative process. The number of iterations will depend on the degree of precision required from the end result, the type of assumptions made in Steps 1 and 2, and the quality of the data obtained for the costs and timings of the activities that make up the project.

STEP 1 Defining the problem

STEP 2 Alternative solutions

STEP 3 Calculating life cycle costs

STEP 4 Fine-tuning life cycle costs

STEP 5 Interpreting the results

Figure 1: The step-by-step process for life cycle costing

STEP 1 STEP 5 Scenario Defining the Interpreting Decision- and context problem the results making

STEP 2 STEP 4 Timing and Alternative Fine-tuning cost data solutions life cycle costs

STEP 3 Calculating life cycle costs

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1 INTRODUCTION TO LIFE CYCLE COSTING

Life cycle costing is about providing an economic appraisal of different REFRIGERATION solutions to a given problem, so that a better decision can be made. Of course there are other assessments that also have to be taken into account, as shown in Figure 2. The final decision will be a compromise between the recommendations obtained from the different assessments.

Figure 2: Assessments required for project decision-making

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C D T 1

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D E R

This section explains why life cycle costing is particularly important and sets out when it can and cannot be used. Subsequent sections of the guide explain each step in the life cycle costing process in turn.

Importance of life It is important that the underlying arguments supporting life cycle cycle costing costing, its core principles and the restrictions on how it can be used, are understood by everyone involved in scoping, designing and delivering the project. For public sector procurement, the government has set out a policy of making decisions on the basis of best value rather than lowest initial cost, which is the essence of life cycle costing. This is emphasised in the UK Construction 2025 strategy document dated July 2013. By working in partnership, the construction industry and Government jointly aspire to achieve, by 2025, a 33% reduction in both the initial cost of construction and the life cycle cost of assets.

The long term The built environment is a key ingredient in the UK’s post-industrial picture of building economy. It is a visible statement of our achievement and progress, ownership generating 8-10% of GDP and employment for 2 million people.

The longevity of the built environment, and of the organisations that use it, means that its cost cannot be judged just in terms of capital investment. The operational costs of construction and infrastructure are significant and have to be taken into account. The precise nature of the balance between construction cost, operation and maintenance costs, and the costs of the business processes enclosed in a building, have been argued in papers by

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INTRODUCTION TO LIFE CYCLE COSTING

Evans, Hargott, Haste and Jones — The Long Term Costs of Owning and Using Buildings[1], and by Hughes, Ancell, Gruneberg and Hirst — Exposing the Myth of the 1:5:200 Ratio Relating Initial Cost, Maintenance and Staffing Costs of Office Buildings[2]. The most important message is that these different types of costs and benefits, traditionally managed by separate groups of people, are not independent of each other. They all contribute to the economic value of a project.

The case for higher capital investment in return for lower running costs or improved worker productivity is there to be argued. Life cycle costing is one of the tools that can be used to support decision-making that takes account of the long-term view of the costs and benefits involved in building and infrastructure projects. Some other relevant assessments are shown in Figure 2.

In our own lives, we find no difficulty in balancing a higher capital investment with a reduced operating cost or a higher resulting value – these are the judgements we make when justifying the purchase of low energy lamps, loft insulation, or a new car with a higher resale value or greater fuel efficiency. Why then, should organisations find it so difficult to apply the same rational approach to their investments in buildings and plant?

Part of this is due to the much greater complexity of the projects, together with the fact that organisations break down complexity by dividing up roles and responsibilities, to the extent that they fail to see the big picture. Another issue is the difficulty of obtaining data with which to calculate life cycle costs. A third part may be a perception that very precise results are required and if these are not available then it’s better not to bother at all.

This guide shows how these issues can be overcome or dealt with, and the ways in which life cycle costing can provide valuable information for appraising projects.

International ISO 15686-5[3] provides an international code of practice for life cycle standard costing in relation to the built environment. This is part of a series of ISO15686-5 standards covering service life planning, or the long-term understanding of building elements, components and equipment.

ISO 15686-5 makes the distinction between life cycle costing and whole life costing. This is illustrated in Figure 3. Under the ISO definition, life cycle costing covers the initial construction and through-life activities associated with a built asset whereas whole life costing also includes non- construction activities and income generation such as receiving rent from tenants. The implication is that life cycle costing will be more pertinent to designers, contractors and facility or asset managers, whereas whole life costing will be more appropriate to owner-occupiers, developers and landlords. However, in practical terms the difference is one of scale rather than the techniques used and in this guide the term life cycle costing has been used to cover both situations.

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1 INTRODUCTION TO LIFE CYCLE COSTING

The components of life cycle costing in Figure 3 are explained in more REFRIGERATION detail in Section 2.3.

ISO 15686-5 also explains in detail how the principles of life cycle costing can be applied to the built environment at different levels of detail. This may be to a whole building or piece of infrastructure, to a system type within a building or asset, or to a range of alternative materials or manufactured products. At system or product level, life cycle costing may be focused on structural, enclosing, engineering or finishing elements, either singly or collectively.

Figure 3: Definitions of whole life cost and life cycle cost based on ISO 15686-5

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British standard BS 8544[4] is the second supplementary guide to ISO 15686-5[3], and BS 8544 provides a focus and standard methodology for the life cycle costing of maintenance costs, to complement the more established cost management of capital building works.

BS 8544 makes the distinction between renewal and maintain costs. This is illustrated in Figure 3. Renewal costs form the basis of a forward maintenance programme, comprising of major repairs/replacements and any refurbishment and upgrade works. Maintain costs cover annualised maintenance, including routine planned preventative maintenance (PPM), minor repairs and reactive unscheduled maintenance.

BS 8544 also provides guidance and recommendations on planning, prioritisation, budgeting, optimisation, implementation and monitoring of life cycle programmes of renewal and/or maintain works.

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A BSRIA Guide www.bsria.co.uk

Life Cycle Assessment

An introduction

by David Churcher

BG 52/2013

1 Acknowledgements

This guide was written as part of BSRIA’s work on the CILECCTA project which was funded under EU Framework 7 (grant agreement 229061). CILECCTA was a collaborative project involving 17 partners from 7 European countries that researched and developed an advanced software tool incorporating life cycle costing and life cycle assessment, probabilistic analysis and the modelling of as-yet-unmade decisions (also known as future options).

BSRIA’s technical author was David Churcher and the text was also reviewed by Hannes Krieg from University of Stuttgart (www.lbp-gabi.de). It was designed and produced by Joanna Smith of BSRIA.

The guidance given in this publication is correct to the best of BSRIA’s knowledge. However BSRIA cannot guarantee that it is free of errors. Material in this publication does not constitute any warranty, endorsement or guarantee by BSRIA. Risk associated with the use of material from this publication is assumed entirely by the user.

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contents

GLOSSARY AND LIST OF ACRONYMS 1

1 INTRODUCTION 3

2 STEP 1 – GOAL AND SCOPE 7 2.1 Defining the goal 7 2.2 Defining the scope 9

3 STEP 2 - PROCESSES AND INVENTORIES 16 3.1 Product system and unit process flows 16 3.2 Different ways of categorising the product system 19 3.3 Product processes and system processes 22 3.4 Completeness 22 3.5 Multifunctionality 23 3.6 Allocation at end of life 25 3.7 Collate existing inventories for unit processes 26 3.8 Quality of life cycle inventory data 26 3.9 Primary and secondary data 27 3.10 Building a new life cycle inventory 30

4 STEP 3 - IMPACT ASSESSMENT 35 4.1 Select impact categories and assign LCI results 36 4.2 Apply the characterisation factors to inventory results 39 4.3 Normalising the impact assessment 41 4.4 Grouping impact categories 43 4.5 Weighting impact categories 44 4.6 Data quality analysis 46

5 STEP 4 – INTERPRETATION AND REPORTING 49 5.1 Significant issues 49 5.2 Completeness 50 5.3 Sensitivity 51 5.4 Consistency 52 5.5 Conclusions, Limitations and Recommendations 52 5.6 Reporting the results of the study 53

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CONTENTS

REFERENCES and BIBLIOGRAPHY 55

List of items comprising the Worked Example Part 1 - Step 1 Goal Definition 9 Part 2 - Step 1 Scope Definition 15 Part 3 - Step 2 Model the Functional Unit 18 Part 4 - Step 2 Foreground and Background Systems 22 Part 5 - Step 2 Completeness 23 Part 6 - Step 2 Multifunctionality 24 Part 7 - Step 2 End of Life Allocation 25 Part 8 - Step 2 Collate LCIs 26 Part 9 - Step 2 Primary and Secondary Data 29 Part 10 Step 3 Selection of Impact Categories and Calculation Methodology 38 Part 11 Step 3 Impact Assessment Calculation 39 Part 12 Step 3 Endpoint Impact Assessment 45

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INTRODUCTION 1

1 INTRODUCTION

Life Cycle Assessment (LCA) is one of a number of environmental management techniques. It is a structured methodology for compiling and evaluating the environmental impacts* of a product system throughout its life cycle. It can be applied to any product or process. In construction and building services it can include manufactured products, processes, assemblies, entire HVAC systems or even whole buildings.

A life cycle can be assessed in different levels of detail. A cradle-to-grave life cycle assessment is the most comprehensive, covering materials extraction, component production, transport to site, installation, operation, decommissioning and disposal or recycling. Other possible scopes for LCA are cradle-to-gate, which covers the production of manufactured goods up to the point where they leave the factory and gate-to-gate which covers the sourcing of off-the-shelf materials and components and their assembly into a new product.

Recent studies have shown that in conventional buildings only about 10% to 20% of the life cycle energy is used in extracting the raw materials and constructing the building, whereas 80% to 90% of the life cycle energy is used during the operational phase of the building. Therefore, the full life cycle of buildings is relevant, not only the construction phase. LCA can help to systematically assess the entire life cycle. Current government policy, directed through changes to Building Regulations, is to reduce the operational energy used in buildings by making them more energy efficient and this is expected also to affect this balance between upfront energy consumption and in-use energy consumption.

How to use this guide Life cycle assessment is a complicated process, and this guide is deliberately written as an introduction for those who are new to the concept or who need a reminder of the basics. The LCA process has been divided into four key steps, as shown in Figure 1. The steps are used to organise the main text of this guide. • Step 1- Identify Goal and Scope – define boundaries and the functional unit - Section 2 • Step 2 - Model the processes and resources involved in the product system, collate the Life Cycle Inventories of these processes and resources, and generate any new inventories required - Section 3 • Step 3 - Analyse Life cycle Impacts in terms of mid-points (impact categories) and end-points (system categories) - Section 4 • Step 4 - Evaluate and Interpret results and generate report for decision making - Section 5

* In the context of this guide, environmental impacts include primary energy demand throughout the defined life cycle stages. Life Cycle assessment 3 © BSRIA BG 52/2013

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1 INTRODUCTION

As the dashed arrows in Figure 1 show, each of Steps 1, 2 and 3 can also be subject to interpretation and reporting. Part of this is because the work done in each of these steps is fundamentally different and should be evaluated in its own right. There is also the consideration that the scope of an LCA study might be to end at Step 2 (Processes and Inventories) or to continue through to Step 3 (Impact Assessment). Depending on the scope of the study, the nature of the report produced from Step 4 will vary accordingly.

Figure 1: The LCA process

Step 1 Goal and Scope

Step 4 Step 2 Interpretation Processes and Inventories and Reporting

Step 3 Impact Assessment

Note: ISO 14040[1] breaks the LCA process into five phases, with Goal and Scope as two separate phases.

The worked example

Many of the concepts involved in life cycle assessment are challenging to understand or to visualise in the abstract. To help explain the ideas, a single worked example is used throughout the guide. This is split into 12 parts, each in a red box. The example concerns a design decision between using a split air-conditioning system or a heavyweight concrete slab with embedded ducts to cool an office space.

This example is for illustration only. Although it is a building services oriented example, LCA does of course apply to all aspects of building and construction. All the numerical figures are fictitious and should not be relied upon even as an approximation of environmental impact.

Existing standards Life cycle assessment is standardised through a range of ISO documents. These include: • ISO 14040: 2006 Environmental management - Life cycle assessment - Principles and framework[1]. This standard sets out the major steps in the LCA process but does not describe the LCA technique in detail. • ISO 14044: 2006 Environmental management - Life cycle assessment - Requirements and guidelines[2]. This standard supports ISO 14040 with more detail about each of the LCA steps.

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STEP 4 – INTERPRETATION AND REPORTING 5

5 STEP 4 - INTERPRETation AND REPORTing

Sub-steps within the interpretation and reporting step are shown in Figure 20.

Figure 20: Interpretation and reporting step

Identify the significant issues

Analyse the completeness of the assessment

These three sub-steps Analyse the sensitivity comprise the evaluation of the assessment of the LCA findings

Analyse the consistency of the assessment

Draw conclusions and make recommendations

Prepare and issue report

Normalised and weighted LCIA results

5.1 Significant As with many analytical techniques, it is often the case that a large issues proportion of the overall result, in this case environmental impact, is derived from a relatively small number of data items. This is helpful to the analyst, as it makes most sense to make sure that these major contributors are as robust as they can be.

A gravity analysis or Pareto analysis is a statistical procedure for identifying those data items that make the greatest contribution to each part of the result. In the case of a full Life Cycle Assessment, this means finding out which processes contribute most to each impact category.

However, if the study has been restricted just to developing the Life Cycle Inventory, then the gravity or Pareto analysis will show which processes contribute most to each output or emission.

Input data can also be assessed according to their contributions or use of intermediate processes, such as transportation, or primary energy production.

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A BSRIA guide

Embodied Carbon

The Inventory of Carbon and Energy (ICE)

By Prof. Geoffrey Hammond and Craig Jones Ed. Fiona Lowrie and Peter Tse

The development of the Inventory of Carbon and Energy was originally joint funded under the Carbon Vision Buildings program by

A joint venture of

PREFACE

We are all now very familiar with the targets for reducing carbon. We have heard how we must make our buildings more energy efficient and are building to much higher standards than we were five years ago. But that concerns energy use. Another important factor in the climate change argument that we must take into account in buildings is the carbon in materials used in construction.

But how do we achieve this? The first thing to do is to find out how much carbon is actually embodied in these materials.

The report provides a lot of data and points you to lots more. It also demonstrates some of the complexities of making embodied carbon assessments. But just because the matter is complex we cannot ignore it. European legislation on carbon is tightening all the time: we must have a knowledgeable industry in the UK who are on top of the issues and deliver the best solutions to meet whatever targets are required – for energy use or for embodied carbon.

This report compiled by the University of Bath and edited by BSRIA is a welcome contribution to the development of this knowledge.

Dr Phillip Lee Member of Parliament for Bracknell and Member of the Select Committee for Energy and Climate Change 2010

This publication has been printed on Nine Lives Silk recycled paper.

©BSRIA BG 10/2011 January 2011 ISBN 978 0 86022 703 8 Printed by ImageData Ltd

EMBODIED CARBON: ICE

ACKNOWLEDGEMENTS

BSRIA is delighted to have been given the opportunity to publish this guide for the University of Bath. We have produced ICE in print to encourage the industry to consider embodied carbon, (not just operational) and for people to learn more about embodied carbon before legal requirements are imposed.

Building services engineers need to understand about embodied energy and carbon when they are involved in life cycle analysis, and to understand the trade-offs between high embodied carbon and low operational carbon and vice versa.

We also want to draw much wider attention to the ICE open source database, which is an ideal resource for any carbon design tool. We have been delighted to have the database available for our own research with the iCAT (Interoperable Carbon Assessment Toolkit) team.

This document is intended to give readers a flavour of the data and to indicate the main watch points. To use the data readers will need to refer to the most up-to-date and detailed version of the ICE database at www.bath.ac.uk/mech-eng/sert/embodied/. This document is based on version 2.0 of the ICE database.

For helping with this publication, we would like to thank: • The team working on the iCAT project, which is part funded by the Technology Strategy Board under the Low Impact Buildings Programme • Our industry reviewers, including Mitch Layng from Prudential Property Managers, Andrew Minson from the Concrete Centre, Andrew Pitman of TRADA, and John Dowling of British Constructional Steelwork Association • The BSRIA production team, Alex Goddard and Ruth Radburn.

Additionally the University of Bath authors would like to thank the following individuals for extensive feedback and assistance with revision of the ICE database: • Paul Slater (MPA The Concrete Centre) and David Collins (Future Conversations) for extensive feedback on the concrete data • Hafiz Elhag (British Precast) for extensive feedback on the precast concrete data • John Dowling and Nick Coleman (Tata Steel Europe) for extensive feedback on the steel data • The many other industry experts who have provided useful feedback and finally the many hundreds of ICE database users who have provided feedback and messages of gratitude.

EMBODIED CARBON: ICE

AUTHORS

Geoffrey Hammond is Professor of Mechanical Engineering and Director of the Institute for Sustainable Energy & the Environment (I-SEE) at the University of Bath.

Professor Hammond is a mechanical engineer with a multidisciplinary background, including environmental engineering and management. During the 1960s and early 1970s he worked as a design and development engineer in the UK refrigeration industry, before commencing an academic career at Uganda Technical College (under the auspices of Voluntary Services Overseas) teaching mainly in the field of applied thermodynamics. He held various academic appointments within the Applied Energy Group at Cranfield University (1976-1989) before moving to the University of Bath, where he took up a new Professorship partially supported by British Gas plc. Geoffrey Hammond's own research interests are mainly concerned with the technology assessment of energy systems, using a toolkit of methods derived from the engineering and environmental sciences (such as carbon and environmental footprinting, environmental life-cycle assessment, and thermodynamic analysis).

In recent years he has advised the UK Government’s Department of Energy and Climate Change, Department for Environment, Food and Rural Affairs, and the Government Office of Science on issues concerned with energy and the environment: environmental footprinting, renewable energy systems, sustainable production, and industrial energy efficiency. Professor Hammond is the joint recipient of the Dufton Silver Medal for one of his publications, and is the Joint PI of the first E.ON UK / EPSRC research consortium on ‘Transition Pathways to a Low Carbon Economy’.

Craig Jones is a highly motivated, innovative, and intelligent individual with a strong academic background and a genuine enthusiasm for environmental issues. After achieving a First Class Honours (MEng) degree in Mechanical Engineering at the University of Bath, Craig stayed at the university to work on the ‘Carbon Vision Buildings’ project under the supervision of Professor Geoffrey Hammond. It was on this project that Craig created the ICE database and had the vision of making it freely available on the internet. Since its first release the ICE database has gone from strength to strength and Craig has since become a world leading figure in embodied carbon assessment.

Craig has presented on the subject of embodied carbon to varied audiences around the world and his research is far reaching, appearing in countless books, media articles and carbon tools. He has also published many scientific articles on the methodology and application of embodied carbon, carbon footprinting, and life cycle assessment (LCA). The latter offering a truly holistic approach.

In 2010 Craig moved into industry to work for Sustain Ltd, a leading carbon reduction company based near Bristol in the UK. Craig will maintain good links with the University of Bath and he will be an integral part of the future development of the ICE database. Craig joined his new employers as a Senior Associate in Environmental Accounting, which includes embodied carbon, carbon footprinting and LCA.

EMBODIED CARBON: ICE

GLOSSARY

Allocation The sub-division of input and output flows between one or more product systems. Also applies to recycling methodology (see Annex B).

Biogenic Derived from living organisms, but not from fossil origin, e.g. biomass is considered biogenic, but coal is not.

(System) A set of criteria that defines which processes are included within the (boundaries of) Boundaries assessment.

By-product Material that is a sub-derivative of the processing operations but is considered to have an economic value (e.g. facilitated by an application and market demand).

Calorific value The energy content of a fuel (as may be released through combustion). It may be (CV) of energy expressed as a gross calorific value (GCV) or net calorific value (NCV). The former is always larger than (or equal to) the latter. The difference is due to latent heat (energy) remaining in condensation (water vapour) after combustion. The difference is typically 5-10 per cent (e.g. 10 per cent for natural gas, 5 per cent for coal).

Capital energy Energy required to manufacture capital inputs (e.g. ancillary infrastructure, such as buildings, machinery, tools).

Carbon dioxide See global warming potential (GWP).

equivalent (CO2e)

Carbon The extraction of carbon from the atmosphere, for example from trees and plants. sequestration

Co-product Material/product that is produced alongside the investigated product, i.e. co-production.

Cradle The cradle is defined as being the earth, i.e. material deposits within the ground.

Cradle-to-gate Encompasses all input and output flows (as applicable from the system boundaries) between the confines of the cradle up to the factory gate of the final processing operation.

Cradle-to-gate + Cradle-to-gate plus the end of life processes. This excludes the use phase. end-of-life

Cradle-to-grave Cradle-to-gate plus operation plus end of life processes. A complete study.

Cradle-to-site Cradle-to-gate plus delivery to the site of use (installation site).

Delivered energy Energy that is delivered to a consumer, e.g. a barrel of oil, kWh of delivered electricity, m3 natural gas, all at the point of use.

Downstream Impacts associated with processes that occur at future, downstream, points in the system impacts relative to the process under investigation. For example, in the case of a finished product sitting in storage its eventual delivery is a downstream process.

Embodied carbon Embodied carbon is the sum of fuel related carbon emissions (i.e. embodied energy which (EC) is combusted – but not the feedstock energy which is retained within the material) and process related carbon emissions (i.e. non-fuel related emissions which may arise, for example, from chemical reactions). This can be measured from cradle-to-gate, cradle-to- grave, or from cradle-to grave. The ICE data is cradle-to-gate.

Embodied energy Is defined here as the total primary energy consumed from direct and indirect processes (EE) associated with a product or service and within the boundaries of cradle-to-gate. This includes all activities from material extraction (quarrying/mining), manufacturing, transportation and right through to fabrication processes until the product is ready to leave the final factory gate.

EMBODIED CARBON: ICE

GLOSSARY

Feedstock energy Feedstock energy is derived from fuel inputs that have been used as a material rather than a fuel. For example, petrochemicals may be used as feedstock materials to make plastics and rubber. The energy is not released but retained and therefore feedstock energy may often be (partially) recovered at the end of product lifetime (e.g. through incineration).

Fuel related Carbon dioxide emissions emanating from the combustion of fossil fuels. carbon dioxide emissions

Functional unit A reference unit of study normally used for comparative purposes, e.g. “1 m2 of carpet over a lifetime of 10 years”. A fair functional unit is necessary for such assessments. See Section 5.1 for further discussion.

Global warming The release of GHGs into the atmosphere gives rise to climate change. There are many potential (GWP) GHGs and each has a different level of potency. Each gas is normalised relative to the impacts of one unit of carbon dioxide. For example each unit of methane is considered to be 25 times more harmful than a single unit of carbon dioxide (on a 100 year timescale),

consequently it has a global warming potential of 25 (kgCO2e).

Greenhouse gases Gases that when released into the atmosphere absorb and emit thermal infrared radiation. (GHGs) These gases trap heat within the atmosphere thus contributing to climate change.

Heating value See calorific value (CV). An alternative name for GCV is higher heating value (HHV). Net (HV) of energy calorific value is equivalent to lower heating value (LHV). They are equal metrics often expressed in Joules.

Life cycle A ‘tool’ where the energy and materials used and pollutants or wastes released into the assessment (LCA) environment as a consequence of a product or activity are quantified over the whole lifecycle (ideally) from cradle-to-grave.

Primary Electricity that has been generated without the need for secondary (fossil) fuel inputs, e.g. electricity hydro, PV, wind.

Primary energy Energy that has been traced back to the cradle. Delivered energy is traced upstream into its primary equivalents i.e. including the upstream impacts of delivery, refining, extraction.

Process carbon Non-fuel related carbon dioxide emissions, i.e. derived from chemical or physical reactions dioxide emissions during manufacturing processes, such as the carbon released from limestone in the kiln of cement clinker production.

Recycled content The fraction of material retained within the product that was derived from recycled materials. This differs from material recycling and recovery rates (i.e. metal recycling rates), which neglect to consider the difference between the quantity of material recovered and the changes in total market demand of material.

Renewable energy Energy (including electricity) extracted from renewable resources, such as wind, solar, water.

System expansion The expansion of system boundaries to include other processing operations (e.g. indirectly affected activities). This is often applied to assess the benefit of avoided burdens (see Annex B).

Upstream Impacts associated with processes that occurred at previous points in the system burdens (upstream). For example, in the case of a finished product sitting in storage material extraction, processing, previous transportation and fabrication are all upstream processes.

Waste product Material that is a sub-derivative of the processing operations and is considered to have no economic value (i.e. with no application or market demand).

EMBODIED CARBON: ICE

FOREWORD

Climate change is the most serious global sustainability issue and the energy required to operate buildings is a major component of global emissions, with 40 per cent of total carbon emissions coming from buildings. However, aside from climate change, our energy reserves are limited, and renewable energy alone is unlikely to be the answer to reducing carbon emissions to prevent the “lights going out” at some point in the future.

Therefore reducing our carbon emissions by assessing the whole life cycle of a building will become an increasingly important factor that will need to be assessed if we are to understand and manage the carbon emitted from buildings as a whole.

What is embodied carbon? It is the energy used, converted to carbon emissions plus the additional non-fuel related carbon, for the extraction of raw materials, the processing of these materials into products, the transport of the products to site, the installation of the material or product, the maintenance of the material product and the end of life disposal.

Previously, embodied carbon has typically made up between 20 per cent and 50 per cent of the total carbon footprint of a building, and so the Government has concentrated on the operational aspect of the carbon emissions in terms of regulation. However, as buildings become more efficient, and improve in operational performance towards zero carbon, the embodied carbon will increase to become the major proportion of the overall emissions. Added to this, if the calculation which is used to

convert KWh to CO2 by the national grid is reduced in 2050, as proposed by the Committee on climate change, then the proportion of operational versus embodied will reduce even further.

There are a number of different modelling tools on the market currently being developed, that deal with the complexity of data associated with the range of materials involved, and enable assessments to be made on achieving the best or most appropriate solution. These methods can also be used to assess total carbon emitted when looking at redeveloping a building, which may have an implication on whether to totally redevelop of refurbish. The Inventory of Carbon and Energy (ICE) is an established and recognised inventory that is used in the industry.

Mr. Mitchell Layng IENG ACIBSE Associate Director, Engineering, Prupim Member BSRIA Publications Panel

EMBODIED CARBON: ICE

CONTENTS

1 INTRODUCTION 1 1.1 Embodied carbon in construction 1 1.2 The rise of embodied carbon 2 1.3 This guide 3 1.4 Using this guide 3 2 THE CREATION OF A MATERIALS DATABASE 4 2.1 Background 4 2.2 Selection and quality of data 4 3 THE INVENTORY OF CARBON AND ENERGY 10 3.1 Main summary tables 10 3.2 Material profiles 24 3.3 Selected material profiles 29 4 APPLICATION – WORKED EXAMPLES AND CASE STUDIES 58 4.1 Basic worked examples 58 4.2 Case studies from industrial users of the ICE database 64 5 USING THE ICE DATA 78 5.1 The importance of functional units 78 5.2 Contextual knowledge 79 5.3 Pareto principle – the 80:20 rule 80 5.4 Transport 80 5.5 Waste 81 5.6 Completing the lifecycle 82 6 STANDARDS AND METHODS 84

7 RECYCLING OF METALS 85

8 CARBON STORAGE IN TIMBER PRODUCTS 87

9 SUMMARY 89

10 FREQUENTLY ASKED QUESTIONS 91

11 FURTHER RESOURCES AND REFERENCES 95 11.1 General resources 95 11.2 Tools 96 11.3 Environmental product declarations 97 11.4 General EPD resources and databases 98 12 READING LIST 99

REFERENCES 101

ANNEX A – ICE BOUNDARY CONDITIONS 115

ANNEX B – HOW TO ACCOUNT FOR METAL RECYCLING 117

EMBODIED CARBON: ICE

TABLES

Table 1: Inventory of Carbon and Energy (ICE) main summary. 10 Table 2: Aggregates material profile. 30 Table 3: Aluminium material profile. 32 Table 4: Cement material profile. 34 Table 5: Clay and bricks material profile. 38 Table 6: Concrete material profile. 40 Table 7: Glass material profile. 44 Table 8: Plastics material profile. 46 Table 9: Steel material profile. 50 Table 10: Timber material profile. 54 Table 11: Total per m2 of brick wall. 59 Table 12: Total per m2 of steel cladding. 61 Table 13: Cradle to grave energy for steel cladding under three different methods for recycling. 63 Table 14: Embodied carbon and carbon savings of the Olympic Park and Village. 67 Table 15: The embodied energy and carbon of UK new build dwellings. 79 Table 16: The ideal boundaries used in ICE. 115 Table 17: UK (EU) cradle-to-grave ICE aluminium and steel data under three different methods for recycling. 124

FIGURES

Figure 1: Creation and refinement method of the ICE database. 5 Figure 2: Guide to the material profiles. 25 Figure 3: Embodied carbon of the baseline design and the actual design of Farringdon station re-development. 65 Figure 4: dcarbon8 bill of quantities tool. 68 Figure 5: Embodied carbon of Masdar City designs. 69 Figure 6: Carbon emissions by source. 69 Figure 7: Embodied carbon of commercial offices. 70 Figure 8: Cross laminated timber construction. 72

Figure 9: Summary of embodied CO2 for different structural solutions. 73 Figure 10: Aerial view of the Open Academy during construction. 73 Figure 11: The embodied carbon from ‘cradle-to-commission’ for the four options. 75 Figure 12: Embodied energy and carbon breakdown of a new build primary school. 76 Figure 13: The relationship between embodied energy and embodied carbon. 77 Figure 14: Base case scenario. 118

EMBODIED CARBON: ICE

INTRODUCTION 1

1 INTRODUCTION

1.1 EMBODIED What it is and why it matters CARBON IN Modern society is underpinned by an intricate web of economic and CONSTRUCTION social activities; commerce, transport and leisure intertwine providing support to not only sustain, but also enhance our way of life. However, we have created unprecedented environmental impacts and significant demands upon our natural resources. Much of this is associated with our intense consumption activities, which require vast quantities of resources and thus places great burdens upon our natural environment. Clearly concerted action must be taken: not only to limit, but also to reverse any long term damage, and thus ensuring that we live on this planet in a sustainable manner.

In the coming years the United Kingdom (UK) faces significant challenges to meet its objective of reducing its carbon dioxide emissions by at least 80 per cent by 2050 against a 1990 baseline, and with significant progress to be made by 2020. Each sector will have an important role to play. The built environment is a significant contributing sector which underpins the needs of modern society by supporting commerce, education, entertainment, and provides accommodation to the masses. In sustaining these activities the UK has accessed an estimated 25·5 million domestic and 1·98 million non- domestic buildings (Brown et al. 2009). The UK building sector is responsible for more than 40 per cent of the UK’s final energy demand. However, such figures only consider the operational impacts. Improving energy standards, Building Regulations, cleaner fuels, along with targets for all new build homes to be zero carbon by 2016 and non-domestic buildings by 2019 will reduce operational impacts. The further energy required to construct materials, as embodied within these buildings, should begin to gain more attention.

Additional impacts may arise, for example, from the extraction, processing, transportation and fabrication of construction materials and is known as the embodied (energy/carbon) impact. Embodied energy (carbon) may be defined as:

“Embodied energy (carbon) is defined here as the total primary energy consumed (carbon released) from direct and indirect processes associated with a product or service and within the boundaries of cradle-to-gate. This includes all activities from material extraction (quarrying/mining), manufacturing, transportation and right through to fabrication processes until the product is ready to leave the final factory gate.”

The ICE database has the boundaries of cradle-to-gate but a robust assessment of carbon released would consider whole life implications, including operation and end of life, i.e. cradle-to-grave.

There are several embodied energy and embodied carbon material databases on the market but on the whole they are proprietary subscription based resources. If a serious attempt at accounting for embodied carbon is to be made, we need a transparent, robust and reliable database covering a broad range of construction materials and openly available to the general public. This guide and the ICE database aims to meet these needs.

EMBODIED CARBON: ICE 1

1 INTRODUCTION

1.2 THE RISE OF Embodied carbon is a subject of rising importance. There are various EMBODIED recent activities to support this, including: CARBON • The UK Low Carbon Construction Innovation and Growth Team (IGT), which was chaired by Paul Morrell (the UK Government Chief Construction Advisor), published its final report in Autumn 2010. The IGT was tasked by the government to consider how the construction sector could meet the low carbon agenda. They made a number of wider recommendations but specifically on embodied carbon: Recommendation 2.1: That as soon as a sufficiently rigorous assessment system is in place, the Treasury should introduce into the Green Book a requirement to conduct a whole-life (embodied + operational) carbon appraisal and that this is factored into feasibility studies on the basis of a realistic price for carbon Recommendation 2.2: That the industry should agree with Government a standard method of measuring embodied carbon for use as a design tool and (as Recommendation 2.1 above) for the purposes of scheme appraisal • The Institution of Structural Engineers (IStructE) is publishing a short guide on embodied carbon for their members. The guide will highlight some important issues and highlight what a structural engineer can do to save embodied energy and carbon • RICS has established a working group to examine embodied carbon and to also link it to the New Rules of Measurement (NRM) framework being developed by the QS and Construction professional group to ensure consistency and comparability of the data being produced. The first stage will be to incorporate environmental measures, including embodied carbon, into the NRM framework before tackling the more complex issues of developing a more detailed methodology and database to underpin the calculations • The Institute of Civil Engineers (ICE) Civil Engineering Standard Method of Measurement 3 (CESMM3) now includes carbon and prices for every material and unit of work. This enables users to calculate not just the economic, but also the embodied carbon of projects. The ICE database was used as one of the data sources • The Hutchins 2010 UK Building Blackbook (The Capital Cost and

Embodied CO2 Guide, Volume two: major works) also now includes both cost and embodied carbon for construction works. The ICE database was used as one of the data sources • BS 8903:2010 Principles and Framework for Procuring Sustainably was released in August 2010. Carbon footprinting is discussed extensively throughout this new standard.

Upcoming international standards There are new environmental and carbon footprinting standards expected from the International Standards Association (ISO), the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). A new French environmental labelling initiative, a revised version of PAS 2050 is due in 2011 and finally, of most relevance to construction, the CEN TC 350 series of

2 EMBODIED CARBON: ICE

INTRODUCTION 1

standards on the sustainability assessment of construction works is due to be rolled out in Spring 2011. For further details of these standards see Section 6.

1.3 THIS GUIDE Meeting needs of industry BSRIA is committed to assisting the construction industry in accounting for embodied carbon and energy. There are two main aims for this guide.

Firstly, the guide aims to provide industry with necessary data. This guide is a summary of the Inventory of Carbon and Energy (ICE), developed by Geoffrey Hammond and Craig Jones from the University of Bath, and contains vital information for its effective use. The data in this guide is based on ICE version 2.0. This Inventory contains a summary of approximately 1800 records of embodied carbon and energy for 34 classes of materials used in construction. As explained in Section 2, the raw data has been collated from independent sources and open literature and has been rigorously analysed to give users confidence in the reliability of the values. This raw data is then presented in a way that is readily usable in calculations, and examples of the ‘profiles’ of the most widely used construction materials are included in this guide. All the data is freely available on the internet at www.bath.ac.uk/mech- eng/sert/embodied and is updated. The data contained in this guide was up to date at the time of printing.

Secondly, BSRIA intends to show how the embodied carbon and energy of the construction industry can be accounted for and included in an assessment. It is acknowledged that there are other sources of embodied carbon data that users may prefer to use, rather than ICE data. Section 4 of this guide contains case studies that demonstrate how such data can be used to calculate embodied burdens and hence enable informed choices to be made about material selection. Section 5 gives further guidance on some of the more contentious issues relating to embodied carbon and energy.

This guide is aimed at a wide range of professionals involved in the construction industry and should be especially relevant to designers, architects, building engineers, building owners and end users, as well as manufacturers of building materials and products.

1.4 USING THIS This guide contains sections that are part reference and part reading text. GUIDE Readers already familiar with the ICE database may be more comfortable to dip in and out of the document at any appropriate point. However, new readers to the subject and to the ICE database may wish to read from the beginning. Sections 1 and 2 are background to the subject of embodied carbon and the ICE database. Section 3 contains the main embodied energy and carbon data, as a reference source. Section 4 onwards contains information that will be useful to apply to the database, including several examples, case studies, and further resources.

EMBODIED CARBON: ICE 3