Methodology of ecoinvent 3

Methodology of ecoinvent 3

What is a market and how is it created?

A market activity is an activity that does not transform inputs, but simply transfers the intermediate exchange from one transforming activity to another transforming activities that consumes this intermediate exchange as an input, e.g. from glycerine at the supplier to glycerine at the consumer.

A market dataset collects all activities with the same reference product in a certain geographical region. Furthermore, it includes average transports of that product within the geography, as well as inputs of the product itself to cover losses in trade and transport. In other words, they are consumption mixes of a certain product in a certain geographical region. There are either global or local markets, depending on real-life conditions and on the availability of local transforming activities for specific products.

The inputs of the activities into the market are collected automatically by the database service layer identified by the product name and the geography.

This example demonstrates how the same product is produced in different geographies which are connected in one market where they are traded on. The global (GLO) "market for glycerine" is generated automatically by the database service layer based on the production volume of the product in given geographies.

If the activities have a production volume of 2, 10, 0.5 and 3 million kg/year, then they are contributing to the global market in 0.13:0.65:0.03:0.19 ratios.

When using glycerine as an input in an activity, the data provider will normally not specify a specific supplier of the glycerine. The input will then automatically be linked to the market for glycerine. In this concrete example, it would mean that 13% of the glycerine in the market mix (consumption mix) comes from Brazil, 65% from the rest of the world from technology where glycerine is produced as a by-product of esterification of soybean, 3% from France and 19% from the rest of the world from technology, where glycerine is produced as a reference product.

If a specific group of enterprises are so closely linked in a supply chain that the production volumes of the specific suppliers can be shown to fluctuate with the demand of the specific customers the data provider will add a so-called "activity link" (direct link) to reflect this.

The justification for linking directly to a specific supplying activity is provided in the comment field for the linked exchange. When transforming activities are linked directly, thus avoiding the market activities, the activities and data that are normally included with the market activities, are instead added directly to the activity requiring the input.

 

In the consequential System Model, only the marginal suppliers are feeding the market.