What is a System Model in an LCA?

Real-world manufacturing is rarely simple. A single industrial process often creates multiple outputs at the same time—for example, a sawmill produces both timber and sawdust. When conducting a Life Cycle Assessment (LCA), practitioners need a standardized rulebook to determine exactly how much of the factory’s environmental burden belongs to the timber and how much belongs to the sawdust.

A system model is this rulebook. It provides the methodological rules for allocating environmental impacts, linking markets, and determining how burdens are assigned between products, by-products, recycled materials, and market effects.

The Three Primary System Models

To handle interconnected global supply chains, system models are defined by international LCA standards (such as ISO 14040/14044) and implemented by major life cycle inventory databases (such as ecoinvent). The choice of model depends on the goal of the study:

Consequential (Substitution, consequential, long-term): While Cut-off and APOS measure historical averages, the Consequential model predicts the future. It is designed to show the macroeconomic consequences of a change in demand. Instead of using average, everyday data, it looks at “marginal” suppliers. These specific facilities will actually scale up or down if the market changes. It also uses a method called substitution (rather than allocation) to calculate how generating new by-products might displace other established products on the global market.

Cut-off (Allocation, cut-off by classification): This is the most widely used “attributional” model. In an attributional LCA, the assessment strictly accounts for the historical, physical supply chain and average environmental burdens directly tied to a product. It operates on a simple philosophy: a producer is fully responsible for creating their primary product and for treating any useless waste. However, if the process generates a recyclable by-product (like scrap metal), that material is “cut off” from the original environmental burden. The next company that purchases and uses that recycled scrap starts with a clean, burden-free slate.

APOS (Allocation at the point of substitution): Also an attributional model, APOS takes a different approach by focusing on shared responsibility. Instead of cutting off burdens, APOS dictates that if a process creates a useful by-product, the environmental costs of the factory should be proportionally distributed across all the valuable outputs. In this model, the environmental burden follows the material throughout its entire lifecycle.