What is a functional unit, and why does an avoided-emissions number depend on it?

Short answer. The functional unit is the service both options have to deliver: what, how much, how well and for how long. Avoided emissions only mean something when the solution and the incumbent deliver that same service. Carbbin states it on every case, service life included, because a wrong functional unit is where most inflated numbers start.

Why it matters

An avoided-emissions number is a difference between two systems. If the two do not do the same job, the difference measures the job, not the technology. A battery compared per kilogram, a heat pump compared on one year of a twenty-year life, steam compared with lower-grade heat: each one gives a number that looks precise and means little.

What the standards say

ISO 14067 defines the functional unit as the quantified performance of a product system, used as the reference unit (3.1.3.7). The reference flow is what the system needs in order to deliver it (3.1.3.9), and the service life is the period in which the product in use meets its performance requirements (3.1.3.11).

• A study specifies its functional unit clearly and measurably, and defines the reference flow that goes with it (6.3.3).
• Products are compared on the same functional unit. A declared unit, such as one kilogram of material, is only for partial footprints, and comparisons on it are limited to business-to-business cases where the omitted stages are identical (6.3.3).
• Service-life information has to be verifiable, and the use profile is based on published technical information where it exists. Where it does not, the assumptions are stated and tested with a sensitivity analysis if they matter (6.3.7).
• For any comparison, the functional unit is identical and the full life cycle is covered (Annex B, normative).

The ILCD Handbook makes the four aspects explicit. Provision 6.4 IV (p. 68), a SHALL, specifies the function provided (what), its quantity (how much), its duration (how long) and its quality (how well). Item IV.e adds that changes in performance over time, such as ageing, are considered and quantified as far as possible.

• For materials and other products with no single application, a functional unit cannot be given, and only the reference flow with its technical specification is used (Provision 6.4 VII.a, pp. 68 to 69).
• Compared systems have the same functional unit, for the primary function and any secondary functions (Provision 6.10 VIII, p. 147). The use scenario should be typical for the market (Provision 6.10 X, p. 147).
• Where a product has to be replaced to cover the full duration, the comparison should consider that a newer model may replace it (Provision 6.10 XI, p. 147).

Project Frame compares "the smallest replicable instance of a solution sold, such as a heat pump" with "the equivalent product it would displace" (Guidelines 2024, Section 1, p. 6). The units chosen should match the ones the company and its investors use to plan the business (Section 3, p. 14). Frame's Foundational Best Practices ask for a functional unit that equates both options on their end use, comparing two batteries on kilowatt-hours, or on the size needed to drive a given distance, rather than on mass. Its Scope of Analysis Worksheet notes that the incumbent unit is also called the reference flow in LCA.

How Carbbin does it

• Carbbin states the functional unit on every case, in the report and on the summary dashboard, next to the assumed service life.
• Carbbin specifies all four aspects. What service, how much of it, at what quality and for how long.
• Carbbin puts the service life inside the functional unit. The reference flow is one unit delivering its function for its whole life, so both sides are assessed over that same period.
• Carbbin counts Frame's units and compares on the functional unit. Volumes are units sold, as Frame does; the comparison behind each unit is made on the service it delivers.
• Carbbin matches quality, not just quantity. Heat at the temperature the process needs, transport at the payload it carries.
• Carbbin credits only the service the solution actually delivers. If the incumbent stays in place for peaks or back-up, only the share the solution takes over counts.
• Carbbin never assumes a one-for-one swap without saying so. Where the ratio between solution and incumbent is uncertain, the report shows the value at which the result would break even.
• Carbbin sets a functional unit per segment when use differs. A fleet truck and a private truck do not do the same job.

Common mistakes

• Comparing per kilogram or per unit sold when the products deliver different amounts of service.
• One year of service for a product that lasts twenty. It understates the impact and breaks the like-for-like rule (ISO 14067 Annex B).
• Different quality on each side, such as lower-temperature heat or a smaller payload, without correcting for it.
• Crediting the whole incumbent when the solution only takes over part of its work.
• Ignoring ageing. Efficiency and output drift over the years (ILCD Provision 6.4 IV.e).
• A service life nobody can check. If it drives the result, it needs a source and a sensitivity (ISO 14067 6.3.7).
• A silent one-for-one equivalence. It is often the largest unstated assumption in the number.
• Different time bases on each side of the subtraction, such as energy per year for the incumbent and energy per use for the solution.
• An annual basis for a consumable functional unit. Removing one tonne of CO2 uses its energy once, not every year.
• Equipment installed counted instead of service delivered, so the reference flow no longer follows the functional unit.

Sources

• ISO 14067:2018. Greenhouse gases: Carbon footprint of products. Requirements and guidelines for quantification. Clauses 3.1.3.7, 3.1.3.9, 3.1.3.11, 6.3.3, 6.3.7 and Annex B.
• European Commission, JRC. ILCD Handbook: General guide for Life Cycle Assessment, Detailed guidance. First edition, March 2010. Provisions 6.4 and 6.10.
• Project Frame. Project Frame Methodology: Evaluating Greenhouse Gas Impact for Early-Stage Investments. December 2024. https://projectframe.how/s/2024-Project-Frame-Methodology.pdf
• Project Frame. Additional Resources: Foundational Best Practices for GHG Impact Assessment and Scope of Analysis Worksheet. https://projectframe.how/additional-resources