Calculating a marginal mix

On identifying the mix of marginal suppliers within the modern, competitive technology that will be affected by a change in demand for a product.

Consequential LCA studies the consequences of a change in demand for a product or service, and for this reason only marginal suppliers are included in the product system. There is rarely only one supplier of a specific product. The typical situation is therefore that a group of suppliers will be affected by the change in demand. These marginal suppliers can use different technologies that are all unconstrained, or they can be located in different countries, of which only some will be able to react to a change in demand.

The mix of marginal suppliers can be identified by extrapolating the recent market trends. When future scenarios or other forms of forecasts for the markets are available, these are typically preferable to a simple extrapolation of past trends. Only those suppliers/technologies that contribute to the forecasted trend in the market are included in the marginal mix. For example, if the market is forecasted to grow, only suppliers/technologies with a forecasted growth in output are included in the mix (see example on marginal electricity in Denmark).

Once the marginal suppliers/technologies are identified, their relative contributions to the actual supply mix are calculated as their net annual change in capacity, taking into account the capital replacement rate, which may different for each technology, divided by the net annual change in the overall market (see example on marginal electricity in Denmark).

How to cite this: Consequential-LCA (2020). Calculating a marginal mix. Last updated: 2020-10-01. www.consequential-lca.org.