Decarbonization News

Review of LEED v4.1 EPD credits

Source: US Green Buildings Council

LEED v4.1 EPD credits — what’s changed and what needs to change

LEED v4.1 introduces a number of changes that make materials credits more accessible for projects. One particular focus area of the updates is the material credits. This is our take on the changes introduced to the EPD credits, being MR credit 2: Building Product Disclosure and Optimization – Environmental Product Declarations – Option 1. Environmental Product Declaration, and Embodied Carbon/LCA Optimization (1 point). They are defined identically in BD+C and ID+C manuals. This review is as much a review of the text to date, as a how-to guide for fixing the credits, and it follows our earlier review of the MRc1 Building Life-Cycle Impact Reduction credit. The review is based on the text as written and does not prejudge intentions. One purpose of this review is to highlight a potential mismatch between intentions and the actual language to allow adjusting the latter for the final version v4.1. Considering these supposedly minor version updates impact significantly all manufacturers and consultants, we chose to publish our analysis on the credits.

Overview of the changes

LEED v4.1 lowers the thresholds for credit achievement, which is a benefit for most projects. At the same time, changes in Option 1 invalidate most product-specific EPDs on the market today (excluding some US-based ones) and generate a substantial workload for consultants who will have to perform to do critical reviews on already verified EPDs. This is easily fixed by reverting the problematic definition back to LEED v4 text. Minor changes were made in the text for industry-average EPDs in LEED v4.1. The changes in the Option 2 are generally positive. Yet, some improvement is clearly needed to ensure plants and comparisons are relevant for the purpose and the entire process does not fall prey to paper pushing. When every document requires a critical review or a third-party verification, a consideration for the actual benefit needs rigorous analysis. Outside these credits, healthcare projects now have the option to use EPDs as one of the options for MR credit Furniture and Medical Furnishings.

MRc2: Environmental Product Declarations — changes in Option 1, EPDs

Summary of changes:

Core and Shell, Warehouses & Distribution Centers are able to get the credit with 10 permanently installed products with EPDs from 3 suppliers.
Other project types still need 20 permanently installed products with EPDs from 5 suppliers.
All types of LCAs and EPDs count as ‘1 product’ for the purposes of this credit, except the last category that counts as 1.5 products.

Credit language introduces non-typical market practices such as ‘external critical review’ and ‘internally critically reviewed LCA in accordance with ISO 14071’ for product-specific EPDs. The credit has clearly improved in feasibility for warehouses and distribution centers, and the near-elimination of product weighing is an improvement as it simplifies the accounting. These improvements, however, do not come near to overcoming the problems introduced.

So what’s wrong with Option 1? Most product-specific EPDs no longer qualify

LEED v4.1 invalidates most product-specific EPDs, except some US ones, from qualifying for the credit. This is caused by nominally small, but essential changes compared to the v4 manual. These changes will not lead to any improvements in terms of products, but will doubtlessly generate additional verification business for EPD consultants and makes creating EPDs even more costly.

It’s worth clarifying that the requirements for industry-average EPDs were not changed in v4.1 and those are not affected. The heart of the matter is the type of verification applied to the EPDs. The first thing to understand is that the cornerstone standard ISO 14025 (Type III environmental declarations) applies to all EPDs. And this standard requires independent verification for every EPD and requires the EPD program operators to vet and monitor the verifiers. All this is happening for every Type III EPD, and all of them comply with ISO 14025. Type III EPDs in LEED v4 and v4.1

Remains the same between v4 and v4.1	Product-specific Type III EPD. Environmental Product Declarations which conform to ISO 14025, 14040, 14044, and EN 15804 or ISO 21930 and have at least a cradle to gate scope.
LEED v4 – product-specific	Products with third-party certification (Type III), including external verification in which the manufacturer is explicitly recognized as the participant by the program operator.
V4.1 draft, internally reviewed	Product-specific Type III EPD — Internally Reviewed. Products with an internally critically reviewed LCA in accordance with ISO 14071.
V4.1. draft, external critical review	Products with third-party certification (Type III), including external verification and external critical review in which the manufacturer is explicitly recognized as the participant by the program operator.

How can such simple changes exclude most product-specific EPDs? It is because USGBC is attempting to introduce a new critical review to the EPD market, which is relatively established, and these requirements have not been applied to EPDs released to date. Critical review in a sense is normally understood as also not applied in the US EPD programs, but a statement to that effect is included on the cover leaf on a number of EPDs. Critical reviews are done on LCAs but almost never on EPDs. ISO 14040 and ISO 14044 both refer to critical reviews. ISO TS 14071 (not a standard status) further defines how critical review is performed. These standards do not refer to independent verification at all. Independent verification (internal or third-party verification), on the other hand, is done on EPDs, but not on other LCAs. ISO 14025 defines independent verification as the core requirement. Independent verification may be also done by a third party. ISO 21930 and EN 15804 only define verification mainly by reference to ISO 14025. These standards do not refer to critical reviews at all.

Option 1. Environmental Product Declaration (1 point)

The requirement of the credit is to use at least 20 different permanently installed products sourced from at least five different manufacturers that meet one of the disclosure criteria below.

Products with a publicly available, critically reviewed life-cycle assessment conforming to ISO 14044 that have at least a cradle to gate scope – 1 product.
Product-specific Type III EPD (Internally Reviewed) – 1 product.
Industry-wide Type III EPD — Products with third-party certification (Type III), including external verification – 1 product.

Product-specific Type III EPD (Products with third-party certification (Type III), including external verification and external critical review) – 1.5 products.

We also took the liberty to give our indicative estimate for the number of product-specific EPDs complying below. We have sent requests for detailed figures to some of the larger construction product manufacturers and will update the article based on the responses in the very near future.

Requirement	Estimated share of product-specific EPDs complying	Basis of the estimate
v4 “external verification”	Over 95 %, nearly all	All EPD programs require verification, and almost all require it to be external. This can be easily seen on the reviewer signature, visible on the EPD itself.
v4.1 “internally critically reviewed LCA in accordance with ISO 14071.“	None at all	The EPD process, as set out in ISO 14025, is based on independent verification. This makes other reviews needless. No critical reviews have been done as per ISO 14071.
v4.1 “external critical review”	Below 1 %	As stated above, the independent verification is the norm, so further critical reviews are very, very rare.

Thus, in a minor upgrade, virtually all product-specific EPDs in the world (over 10 000 by now, not counting mechanically generated non-public ones) became ineligible for LEED v4.1 EPD credits. This does not equate to the same as GBCI reviewers actually understanding and applying the new rules as written, as this requires understanding the standards and their meaning. Still, let’s consider this as if it were so.

Consequences, and how to fix them

There are two approaches to fix this. Manufacturers can start to write up internal critical reviews, or more likely, as they’re short of specialist staff, they contract the jobs to consultants or become ineligible. Boon to some, paperwork too many, no environmental benefits of any kind achieved. It could also be worked around by adding a statement of such critical review on the cover leaf of EPDs. Or USGBC could fix the manual text. The way it was written in LEED v4 is fine: external verification. This is the industry norm. The changes are very simple, too – revert the text back to LEED v4.

LEED v4 text	Current v4.1 text	Fixed v4.1. text
Product-specific Type III EPD — Products with third-party certification (Type III), including external verification in which the manufacturer is explicitly recognized as the participant by the program operator.	Product-specific Type III EPD — Internally Reviewed. Products with an internally critically reviewed LCA in accordance with ISO 14071.	Product-specific Type III EPD — Products with third-party certification (Type III), including external verification in which the manufacturer is explicitly recognized as the participant by the program operator.

There is no problem for the industry in maintaining a bonus for products that have a third-party critical review. The latter definition can remain as it is with its’s associated bonus, as long as normal EPDs qualify too.

MRc2: Environmental product declarations — changes in Option 2, Multi-attribute optimization

In this credit the following changes were introduced: The multi-attribute optimization threshold is lowered to 10% of the cost of permanently installed products in the building (from the former 50%), or alternatively use at least 10 qualifying products from at least three different manufacturers. Multi-attribute optimization can now be shown using a life-cycle impact reduction action plan (value is halved) or life-cycle impact reductions in embodied carbon, or several categories. The life-cycle impact reduction approach requires demonstrating how the reductions were achieved and showing the performance with third-party verified published comparisons. The weight of a product showing improvement can be increased with more reductions. There is no longer a cap on how much structure and enclosure can contribute to this. This credit was largely unattainable in economic terms – the paperwork and documentation required to meet the previous target were substantial. Scaling the scope to 10% of the cost, or 10 products from three manufacturers is a substantial improvement. The Life Cycle Impact Reduction Action Plan is a new, and very useful mechanism for goading the manufacturers to publicly commit to improvements. Manufacturers have to start with an EN 15804 or ISO 21930 compliant LCA (EPD), show-specific, and timed plan to mitigate or reduce life-cycle impacts for the product, including showing key impact areas and steps. The plan has to be critically reviewed. This is a well-thought-out incentive and very welcome. It is valued at 50%, as less demanding than the demonstrated performance improvement. The Life Cycle Impact Reductions in Embodied Carbon is a rework of the previous v4 manual. It is also based on a third-party EPD or verified LCA and asks products to have demonstrated environmental impact reductions for a specified functional unit. This is based on third-party verified published comparisons and requires a narrative describing how reductions in impacts were achieved. The minimum starting point is any reduction in global warming potential (GWP), and products are weighed at 150% if the GWP reduction is at least 10%, and at 200% if the GWP reduction is at least 20%, and two of the other required LCA impact categories show a reduction of at least 5%. The approach is sound, yet the comparisons need to beefed up in terms of substance they must demonstrate, rather than ensure nominal value available from third-party verifications. Products are valued according to the table below.

Option 2. Embodied Carbon/LCA Optimization (1 point)

Report type	Reference Document(s) for the Optimisation Report	Report Verification	Valuation
Embodied Carbon/LCA Action Plan	Product-specific LCA or Product-specific Type III EPD	Prepared by the manufacturer and signed by company executive	0.5 product
Reductions in Embodied Carbon: <10% reduction in GWP relative to baseline	Baseline: Product-specific LCA, Product-specific Type III EPD, or Industry-wide Type III EPD Optimised: Product-specific LCA or Product-specific Type III EPD	Comparative analysis is verified by an independent party	1 product
Reductions in Embodied Carbon: 10%+ reduction in GWP relative to baseline			1.5 product
Reductions in Embodied Carbon: 20%+ reduction in GWP and 5%+ reduction in two additional impact categories, relative to baseline	Baseline: Product-specific LCA or Product-specific Type III EPD Optimised: Product-specific LCA or Product-specific Type III EPD		2 products

For more details refer to LEED v4.1

Changes needed in Option 2, Multi-attribute optimization – avoid paper-pushing exercise

While Option 2 is generally an improvement over the v4, several improvements are still needed. As written today, the credit could be largely accomplished with a paper-pushing exercise.

Life Cycle Impact Reduction Action Plan needs the following additions to be an effective measure:

Impact reduction plans must set a numeric impact reduction target for the global warming potential of the product that is targeted to be achieved during the timeline of the plan.
Impact reduction plans must not be older than 4 years at the time of specification of the product.
If the impact reduction plan is updated, the update must also contain targets, achievements, and non-achievements from past plans.
Critical review is not necessary for the first plan issued by a manufacturer, however, for any updates it is required (this is optional).

The above definitions will ensure that the plans are timely, relevant and help drive measurable progress. Still, industrial investments take time to prepare, approve and execute. This is why a four-year cycle (or similar length) would be appropriate to measure and refresh performance goals. Setting these definitions will not cause a higher burden. On the other hand, waiving the critical review component of the first plan from any manufacturer seems reasonable. There is no critical review standard or practice for this type of plan, and what the review would amount to is anyone’s guess today. However, critical review would be welcome for a plan update, if at that point the manufacturer has not achieved a level that beats the market (see next).

Life Cycle Impact Reductions in Embodied Carbon needs following additions to be effective:

Comparative analysis must not be older than 4 years
Comparative analysis must be relevant for the region of the project
Comparative analysis must attempt to include all relevant comparable products for which information is publicly available at the time of comparison
The published comparisons must be third-party verified, or the comparison must provide all the publicly available data points used in the comparison as EPDs

These provisions are essential as the market continues to develop, and comparative analysis will fluctuate as competing products enter the market. A comparative analysis for a product in one country will not say much for the comparative situation in another country. Moreover, it is essential that a comparison can’t be selective, it needs to attempt to include all relevant comparable products, and not just a small slice of the market. This, on the other hand, requires that for products that have local markets, such as concrete and insulation, comparisons can be performed cost-efficiently at the local level. This makes exclusive reliance on third-party verification a substantial barrier. If this is desired, it could be maintained for the highest level of comparison (which doubles the product value for the credit). Otherwise, this limits the applicability of the credit significantly.

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