A traditional LCA, also called process LCA, takes into account the emissions from all stages from cradle to grave. When a product or a service is used by a process, all upstream processes and the associated emissions are also included. The processes in a product system are linked via physical relationships/engineering knowledge and information on market mechanisms. Exactly the same principle is used in IO-LCA, but here the processes are linked via information on economic transactions. Information on economic transactions is obtained from statistical agencies, and the basis for an IO-table is a total account of a nation’s economy (supply-use tables) and a total inventory of a nation’s emissions (NAMEA). In principle, the only difference between process LCA and IO-LCA is the way data are collected and linked. Once the data is structured in a common LCA data format, there are no differences in the calculations required to carry out an LCA for the two types of LCA.
An IO-LCA is characterised by being based on the total economy and emissions, thus it is related to a very high degree of completeness. A weakness of IO-LCA is that the level of detail is typically between 60 and 500 different industries and products. This is a very highly aggregated compared to process LCA where e.g. the ecoinvent database represents data collection for approximately 4000 different processes. Thus, process LCA is characterised by having the potential for being very detailed in it’s modelling, but it is not related to the same completeness as IO-LCA. It is not unusual that IO-LCA shows results which are 100% higher than of process LCA.
The emissions in environmental reporting can be divided into Scope 1 (the company’s own direct emissions), Scope 2 (indirect emissions related to the company’s purchase of energy), and Scope 3 (all other indirect emissions related to company’s remaining purchases). It is relatively easy to determine Scope 1 and Scope 2 emissions, but Scope 3 emissions are harder to inventory. But having an IO-table and a company’s total purchases in monetary units sorted in accordance with the product categories in the IO-table for a specific year, it is very easy to have a complete green account representing life cycle based emissions for Scope 3 emissions.