Environmental Impacts of Product/Service-Systems - Broadening the Life Cycle Assessment Methodology

Product/Service-Systems (PSS) are products and services combined in a system, designed to satisfy user needs, often with a focus on delivering product functionality rather than ownership through a number of means, such as sharing systems, performance-based contracts, subscriptions etc. PSS can foster new business opportunities and are often also associated with improved sustainability, e.g. in relation to paradigms such as Circular Economy.

However, PSS offerings are not necessarily more sustainable from an environmental perspective. For this reason, systematic and quantitative assessments of their actual environmental performance are needed. This thesis investigates the ability of Life Cycle Assessment (LCA) to serve this purpose and proposes how the method can be adapted and tailored to support environmental assessments of PSS.

During the research, it was found that existing LCA guidelines suffered from the fact that they were predominantly product focused and that service inclusion in LCA was a challenge. As such, it was found that there was a need to broaden the LCA methodology to: i) better allow for service inclusion when assessing environmental impacts of products systems; and ii) better support environmental evaluations of PSS, e.g. when comparing a PSS to a traditional business model.

In order to develop the needed support, this project was structured in two subsequent phases, which involved both theoretical and empirical developments as illustrated in Figure i. Ten publications documented the findings, of which articles A to E are embedded as chapters in this thesis. The empirical development started within the maritime industry, investigating the life cycle of tanker ships and opportunities and barriers for PSS adoption, seen from a customer perspective.

Later, the research moved on to investigate PSS in other industries, in order to ensure generic contributions. The theoretical development dealt with LCA applied to services and PSS. In project phase 1, it was first investigated how LCA can be applied to complex systems, in order to ensure service inclusion and to allow for integration with Life Cycle Costing (LCC), covering the economic dimension.

Hybrid environmental input-output (EIO) LCA was the method applied, the results of which are documented in articles A (case application on a tanker ship) and B (multi-case application). The method was found to serve the purpose of ensuring system boundary completeness and service inclusion but also had weaknesses, with the most pronounced being data aggregation, which can influence data representativeness.

In parallel, challenges for using LCA on PSS were derived, resulting in article C, which presented three overall challenges: i) identifying and defining the reference system to ensure that the right substitutions are compared; ii) defining the functional unit to ensure functional equivalence between the compared alternatives; and iii) ensuring a sufficient system boundary completeness, not to leave out any important processes.

In project phase 2, a framework linking PSS to Circular Economy and ultimately absolute resource decoupling was proposed to inspire discussion on when circular strategies based on PSS do in fact lead to improved sustainability, resulting in article D. Also during this phase, different PSS solutions, both within and outside the maritime industry, were assessed, with supplementary articles F, G and H documenting the results.

A book chapter on LCC (publication I) supplemented the studies that included economic assessments. Finally, with support of expert consultations and structured user feedback, the work was combined in the development of the main research outcome: Generic guidelines for environmental evaluations of PSS through LCA.

The guidelines are documented in article E and in a published User Guide (publication J), aimed at both industry and research stakeholders. The guidelines consist of 6 steps, which are aligned with the phases of an LCA. The focus is on addressing the three above mentioned challenges and defining a proper study scoping to ensure: (i) that the reference system to which the PSS is compared is explored, in order to identify the relevant product systems that the PSS substitutes; (ii) that the systems chosen for analysis are comparable in terms of functional outcome and perceived value, since differences in user perceived outcome might trigger rebound effects; and (iii) that all relevant processes on which the PSS depends are included in the assessment.

Future work includes full-scale case applications and further enhancement of the User Guide through collaboration with relevant stakeholders. Suggestions for future research opportunities include a continued investigation of PSS opportunities and barriers from a customer perspective and development of structured methods for addressing the dynamic complexity of PSS, to further support knowing under which circumstances PSS lead to environmental improvements, taking into account user behaviour, systemic changes and rebound effects.