Environmental management — Material flow cost accounting — Guidance for phased implementation in organizations

This document gives practical guidelines for the phased implementation of material flow cost accounting (MFCA) that organizations, including small and medium-sized enterprises (SMEs), can adopt to enhance their environmental performance and material efficiency. The phased approach provides flexibility that allows organizations to develop their MFCA activities at their own pace, according to their own circumstances. The resulting information can act as a motivator for organizations to seek opportunities to simultaneously generate financial and environmental benefits by reducing material losses and energy consumption. This document is applicable to any organization, regardless of its level of development, the nature of its activities, or the location at which these activities occur. This document provides basic calculation procedures to analyse saving potentials by avoiding material losses. Detailed calculation procedures or information on techniques for improving material or energy efficiency are out of the scope of this document.

Management environnemental — Comptabilité des flux matières — Recommandations pour la mise en application par phases dans les organisations

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Status
Published
Publication Date
15-Feb-2021
Current Stage
6060 - International Standard published
Start Date
16-Feb-2021
Completion Date
16-Feb-2021
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INTERNATIONAL ISO
STANDARD 14053
First edition
2021-02
Environmental management —
Material flow cost accounting —
Guidance for phased implementation
in organizations
Management environnemental — Comptabilité des flux matières —
Recommandations pour la mise en application par phases dans les
organisations
Reference number
ISO 14053:2021(E)
ISO 2021
---------------------- Page: 1 ----------------------
ISO 14053:2021(E)
COPYRIGHT PROTECTED DOCUMENT
© ISO 2021

All rights reserved. Unless otherwise specified, or required in the context of its implementation, no part of this publication may

be reproduced or utilized otherwise in any form or by any means, electronic or mechanical, including photocopying, or posting

on the internet or an intranet, without prior written permission. Permission can be requested from either ISO at the address

below or ISO’s member body in the country of the requester.
ISO copyright office
CP 401 • Ch. de Blandonnet 8
CH-1214 Vernier, Geneva
Phone: +41 22 749 01 11
Email: copyright@iso.org
Website: www.iso.org
Published in Switzerland
ii © ISO 2021 – All rights reserved
---------------------- Page: 2 ----------------------
ISO 14053:2021(E)
Contents Page

Foreword ........................................................................................................................................................................................................................................iv

Introduction ..................................................................................................................................................................................................................................v

1 Scope ................................................................................................................................................................................................................................. 1

2 Normative references ...................................................................................................................................................................................... 1

3 Terms and definitions ..................................................................................................................................................................................... 1

4 Principles ..................................................................................................................................................................................................................... 3

4.1 Understand the basic material flow and energy use .............................................................................................. 3

4.2 Ensure the reliability of physical data ................................................................................................................................ 3

4.3 Estimate and attribute costs to material losses and energy use .................................................................. 3

4.4 Link physical and monetary data ............................................................................................................................................ 3

5 Cost calculations in a phased approach ........................................................................................................................................ 3

5.1 General ........................................................................................................................................................................................................... 3

5.2 Preparation phase — Identification of the most relevant production process in the

organization............................................................................................................................................................................................... 3

5.3 Calculation phase 1 — Quantification of material flows in physical units .......................................... 4

5.4 Calculation phase 2 — Calculation of material costs and waste management costs ................. 4

5.5 Calculation phase 3 — Calculation of energy costs ................................................................................................. 4

5.6 Calculation phase 4 — Calculation of system costs................................................................................................. 4

5.7 Analytical phase — Analysis of material loss costs ................................................................................................. 4

6 Calculation methods in a phased approach and development of an improvement plan ..........4

6.1 General ........................................................................................................................................................................................................... 4

6.2 MFCA summary sheet ....................................................................................................................................................................... 4

6.3 Example template for the preparation phase ............................................................................................................... 5

6.4 Example template for calculation phase 1 ...................................................................................................................... 6

6.5 Example template for calculation phase 2 ...................................................................................................................... 7

6.6 Example template for calculation phase 3 ...................................................................................................................... 7

6.7 Example template for calculation phase 4 ...................................................................................................................... 8

6.8 Example template for the analytical phase ..................................................................................................................... 8

6.9 Development of an improvement plan ............................................................................................................................10

7 Extended approach .........................................................................................................................................................................................10

Annex A (informative) Example of a phased MFCA implementation by an organization ...........................11

Bibliography .............................................................................................................................................................................................................................16

© ISO 2021 – All rights reserved iii
---------------------- Page: 3 ----------------------
ISO 14053:2021(E)
Foreword

ISO (the International Organization for Standardization) is a worldwide federation of national standards

bodies (ISO member bodies). The work of preparing International Standards is normally carried out

through ISO technical committees. Each member body interested in a subject for which a technical

committee has been established has the right to be represented on that committee. International

organizations, governmental and non-governmental, in liaison with ISO, also take part in the work.

ISO collaborates closely with the International Electrotechnical Commission (IEC) on all matters of

electrotechnical standardization.

The procedures used to develop this document and those intended for its further maintenance are

described in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the

different types of ISO documents should be noted. This document was drafted in accordance with the

editorial rules of the ISO/IEC Directives, Part 2 (see www .iso .org/ directives).

Attention is drawn to the possibility that some of the elements of this document may be the subject of

patent rights. ISO shall not be held responsible for identifying any or all such patent rights. Details of

any patent rights identified during the development of the document will be in the Introduction and/or

on the ISO list of patent declarations received (see www .iso .org/ patents).

Any trade name used in this document is information given for the convenience of users and does not

constitute an endorsement.

For an explanation of the voluntary nature of standards, the meaning of ISO specific terms and

expressions related to conformity assessment, as well as information about ISO's adherence to the

World Trade Organization (WTO) principles in the Technical Barriers to Trade (TBT), see www .iso .org/

iso/ foreword .html.

This document was prepared by Technical Committee ISO/TC 207, Environmental management,

Subcommittee SC 1, Environmental management systems.

Any feedback or questions on this document should be directed to the user’s national standards body. A

complete listing of these bodies can be found at www .iso .org/ members .html.
iv © ISO 2021 – All rights reserved
---------------------- Page: 4 ----------------------
ISO 14053:2021(E)
Introduction

Achieving the Sustainable Development Goals (SDGs) established by the United Nations in 2015 has

become a high priority for society. In particular, Goal 12 requires both governments and private sectors

to ensure sustainable consumption and production patterns. Companies of all sizes need to achieve

improvements in material and energy efficiency for sustainable production.

A number of International Standards provide guidance on material flow cost accounting (MFCA), which

is an approach to assess material efficiency within an organization (see ISO 14051) and to enhance

material efficiency in cooperation with supply-chain partners (see ISO 14052). While organizations

are encouraged to implement MFCA based on ISO 14051, depending on levels of operations, they may

prefer a more simplified approach to MFCA. To address this need, this document provides guidance

for organizations to initiate a phased implementation of MFCA. This approach focuses on the most

relevant production process to enhance material efficiency along with cost reductions, possibly leading

to additional business opportunities (e.g. a green supply chain).

This document can be used independently of ISO 14051 and ISO 14052. However, the basic philosophy

of MFCA as well as the terms and definitions are the same as in ISO 14051. In addition, this document

has been designed to help organizations to identify new business opportunities regarding material

and energy efficiency. Large organizations can also use this document as a starting point for their

implementation of MFCA in a specific department or process.
This document provides:
— common terminologies;
— principles;
— a calculation approach, analysis and improvement;
— an application of the MFCA implementation result.
Annex A gives a case example of an MFCA implementation in organizations.
© ISO 2021 – All rights reserved v
---------------------- Page: 5 ----------------------
INTERNATIONAL STANDARD ISO 14053:2021(E)
Environmental management — Material flow cost
accounting — Guidance for phased implementation in
organizations
1 Scope

This document gives practical guidelines for the phased implementation of material flow cost accounting

(MFCA) that organizations, including small and medium-sized enterprises (SMEs), can adopt to enhance

their environmental performance and material efficiency.

The phased approach provides flexibility that allows organizations to develop their MFCA activities at

their own pace, according to their own circumstances. The resulting information can act as a motivator

for organizations to seek opportunities to simultaneously generate financial and environmental

benefits by reducing material losses and energy consumption.

This document is applicable to any organization, regardless of its level of development, the nature of its

activities, or the location at which these activities occur.

This document provides basic calculation procedures to analyse saving potentials by avoiding material

losses. Detailed calculation procedures or information on techniques for improving material or energy

efficiency are out of the scope of this document.
2 Normative references
There are no normative references in this document.
3 Terms and definitions
For the purpose of this document, the following terms and definitions apply.

ISO and IEC maintain terminological databases for use in standardization at the following addresses:

— ISO Online browsing platform: available at https:// www .iso .org/ obp
— IEC Electropedia: available at http:// www .electropedia .org/
3.1
energy cost
cost for electricity, fuels, steam, heat, compressed air and other like media

Note 1 to entry: Energy cost can be either included under material cost or quantified separately, at the discretion

of the organization.
[SOURCE: ISO 14051:2011, 3.4]
3.2
energy use
application of energy

EXAMPLE Ventilation; lighting; heating; cooling; transportation; data storage; production process.

Note 1 to entry: Energy use is sometimes referred to as “energy end-use”.
[SOURCE: ISO 50001:2018, 3.5.4]
© ISO 2021 – All rights reserved 1
---------------------- Page: 6 ----------------------
ISO 14053:2021(E)
3.3
material
substance that enters and/or leaves a process
Note 1 to entry: Materials can be divided into two categories:

— materials that are intended to become part of products, e.g. raw materials, auxiliary materials, intermediate

products;

— materials that do not become part of products, e.g. cleaning solvents and chemical catalysts, which often are

referred to as operating materials.

Note 2 to entry: Some types of materials can be classified into either category, depending on their use. Water is

one such material. In some cases, water can become part of a product (e.g. bottled water), while in other cases it

can be used as an operating material (e.g. water used in an equipment washing process).

Note 3 to entry: Energy carriers like fuels or steam can be identified as materials, at the discretion of the

organization.

[SOURCE: ISO 14051:2011, 3.10, modified — "quantity centre" changed to "process".]

3.4
material flow cost accounting summary sheet
MFCA summary sheet

spreadsheet that reflects the MFCA (3.6) information for a production process that is treated as a

single process
3.5
material cost
cost for a substance that enters and/or leaves a process

Note 1 to entry: Material cost can be calculated in various ways, e.g. standard cost, average cost, and purchase

cost. The choice between cost calculation methods is at the discretion of the organization.

[SOURCE: ISO 14051:2011, 3.12, modified — "quantity centre" changed to "process".]

3.6
material flow cost accounting
MFCA

tool for quantifying the flows and stocks of materials (3.3) in processes or production lines in both

physical and monetary units
[SOURCE: ISO 14051:2011, 3.15]
3.7
material loss
all material outputs generated in a process, except for intended products

Note 1 to entry: Material losses include air emissions, wastewater and solid waste, even if these material outputs

can be reworked, recycled or reused internally, or have market value.

Note 2 to entry: By-products can be considered as either material losses or products, at the discretion of the

organization.

[SOURCE: ISO 14051:2011, 3.16, modified — "quantity centre" changed to "process".]

3.8
system cost

cost incurred in the course of in-house handling of the material (3.3) flows, except for material cost

(3.5), energy cost (3.1) and waste management cost (3.9)
EXAMPLE Cost of labour; cost of depreciation and maintenance; cost of transport.
[SOURCE: ISO 14051:2011, 3.21]
2 © ISO 2021 – All rights reserved
---------------------- Page: 7 ----------------------
ISO 14053:2021(E)
3.9
waste management cost
cost of handling material losses (3.6) generated in a process

[SOURCE: ISO 14051:2011, 3.22, modified — "quantity centre" changed to "process", notes to entry have

been deleted.]
4 Principles
4.1 Understand the basic material flow and energy use

The material flows related to products and energy use, including material losses in the most relevant

production process, are identified and quantified as physical data.
4.2 Ensure the reliability of physical data

Physical data on material flows and energy use are collected in consistent measurement units.

NOTE Refer to ISO 14033.
4.3 Estimate and attribute costs to material losses and energy use

The costs associated with material losses and energy use are estimated, and these costs are attributed

to the material losses and energy use.
4.4 Link physical and monetary data

Decision-making on environmental and management issues within organizations is supported by

linking physical data with associated cost.
5 Cost calculations in a phased approach
5.1 General

Data on material flows and energy use should be translated into monetary units to support decision-

making according to the cost calculations. This process consists of one preparation-phase, four

calculation-phases and one analytical phase. Organizations can incrementally implement MFCA as

indicated in 5.2 to 5.7.

5.2 Preparation phase — Identification of the most relevant production process in the

organization

The organization should identify its most relevant production process. If there is a single production

process in the organization, all of the material losses and energy use should be examined. If multiple

processes are present, the organization can select either the most relevant production process or

multiple processes as one single production unit for calculation.

A selection approach for the most relevant production process should be divided into two steps:

a) assess the magnitude of the different material losses and energy use;

b) select the process with a high raw material unit cost, large volume of material losses and defective

products, etc. as the most relevant production process.

If the organization wants to assess several relevant processes, adoption of ISO 14051 is recommended.

© ISO 2021 – All rights reserved 3
---------------------- Page: 8 ----------------------
ISO 14053:2021(E)
5.3 Calculation phase 1 — Quantification of material flows in physical units

The amounts of material inputs and outputs should be quantified in physical units such as mass, length,

number of pieces or volume, depending on the type of materials. Outputs are divided into products and

material losses.

5.4 Calculation phase 2 — Calculation of material costs and waste management costs

Cost calculations should be started with material costs. This includes costs related to the materials

used in the most relevant production process which may include raw materials, auxiliary materials,

operating materials and intermediate products. The costs of all material inputs are assigned to

products and material losses according to the physical quantity. In addition, waste management costs

are calculated.
5.5 Calculation phase 3 — Calculation of energy costs

The calculation of energy costs is at the discretion of the organization. When it is determined to be

necessary, energy costs should be calculated and allocated to products and material losses according to

the physical data quantified in calculation phase 1.
5.6 Calculation phase 4 — Calculation of system costs

The calculation of system costs is at the discretion of the organization. When it is determined to be

necessary, system costs should be calculated and allocated to products and material losses according to

the physical data quantified in calculation phase 1.
5.7 Analytical phase — Analysis of material loss costs
Along w
...

FINAL
INTERNATIONAL ISO/FDIS
DRAFT
STANDARD 14053
ISO/TC 207/SC 1
Environmental management —
Secretariat: BSI
Material flow cost accounting
Voting begins on:
2020­10­19 — Guidance for practical
implementation in SMEs
Voting terminates on:
2020­12­14
RECIPIENTS OF THIS DRAFT ARE INVITED TO
SUBMIT, WITH THEIR COMMENTS, NOTIFICATION
OF ANY RELEVANT PATENT RIGHTS OF WHICH
THEY ARE AWARE AND TO PROVIDE SUPPOR TING
DOCUMENTATION.
IN ADDITION TO THEIR EVALUATION AS
Reference number
BEING ACCEPTABLE FOR INDUSTRIAL, TECHNO­
ISO/FDIS 14053:2020(E)
LOGICAL, COMMERCIAL AND USER PURPOSES,
DRAFT INTERNATIONAL STANDARDS MAY ON
OCCASION HAVE TO BE CONSIDERED IN THE
LIGHT OF THEIR POTENTIAL TO BECOME STAN­
DARDS TO WHICH REFERENCE MAY BE MADE IN
NATIONAL REGULATIONS. ISO 2020
---------------------- Page: 1 ----------------------
ISO/FDIS 14053:2020(E)
COPYRIGHT PROTECTED DOCUMENT
© ISO 2020

All rights reserved. Unless otherwise specified, or required in the context of its implementation, no part of this publication may

be reproduced or utilized otherwise in any form or by any means, electronic or mechanical, including photocopying, or posting

on the internet or an intranet, without prior written permission. Permission can be requested from either ISO at the address

below or ISO’s member body in the country of the requester.
ISO copyright office
CP 401 • Ch. de Blandonnet 8
CH­1214 Vernier, Geneva
Phone: +41 22 749 01 11
Email: copyright@iso.org
Website: www.iso.org
Published in Switzerland
ii © ISO 2020 – All rights reserved
---------------------- Page: 2 ----------------------
ISO/FDIS 14053:2020(E)
Contents Page

Foreword ........................................................................................................................................................................................................................................iv

Introduction ..................................................................................................................................................................................................................................v

1 Scope ................................................................................................................................................................................................................................. 1

2 Normative references ...................................................................................................................................................................................... 1

3 Terms and definitions ..................................................................................................................................................................................... 1

4 Principles ..................................................................................................................................................................................................................... 3

4.1 Understand the basic material flow and energy use .............................................................................................. 3

4.2 Ensure the reliability of physical data ................................................................................................................................ 3

4.3 Estimate and attribute costs to material losses and energy use .................................................................. 3

4.4 Link physical and monetary data ............................................................................................................................................ 3

5 Cost calculations in a phased approach ........................................................................................................................................ 3

5.1 General ........................................................................................................................................................................................................... 3

5.2 Preparation phase — Identification of the most relevant production process in the

organization............................................................................................................................................................................................... 3

5.3 Calculation phase 1 — Quantification of material flows in physical units .......................................... 4

5.4 Calculation phase 2 — Calculation of material costs and waste management costs ................. 4

5.5 Calculation phase 3 — Calculation of energy costs ................................................................................................. 4

5.6 Calculation phase 4 — Calculation of system costs................................................................................................. 4

5.7 Analytical phase — Analysis of material loss costs ................................................................................................. 4

6 Calculation methods in a phased approach and development of an improvement plan ..........4

6.1 General ........................................................................................................................................................................................................... 4

6.2 MFCA summary sheet ....................................................................................................................................................................... 4

6.3 Example template for the preparation phase ............................................................................................................... 5

6.4 Example template for calculation phase 1 ...................................................................................................................... 6

6.5 Example template for calculation phase 2 ...................................................................................................................... 7

6.6 Example template for calculation phase 3 ...................................................................................................................... 7

6.7 Example template for calculation phase 4 ...................................................................................................................... 8

6.8 Example template for the analytical phase ..................................................................................................................... 8

6.9 Development of an improvement plan ............................................................................................................................10

7 Extended approach .........................................................................................................................................................................................10

Annex A (informative) Example of a phased MFCA implementation by an organization ...........................11

Bibliography .............................................................................................................................................................................................................................16

© ISO 2020 – All rights reserved iii
---------------------- Page: 3 ----------------------
ISO/FDIS 14053:2020(E)
Foreword

ISO (the International Organization for Standardization) is a worldwide federation of national standards

bodies (ISO member bodies). The work of preparing International Standards is normally carried out

through ISO technical committees. Each member body interested in a subject for which a technical

committee has been established has the right to be represented on that committee. International

organizations, governmental and non­governmental, in liaison with ISO, also take part in the work.

ISO collaborates closely with the International Electrotechnical Commission (IEC) on all matters of

electrotechnical standardization.

The procedures used to develop this document and those intended for its further maintenance are

described in the ISO/IEC Directives, Part 1. In particular, the different approval criteria needed for the

different types of ISO documents should be noted. This document was drafted in accordance with the

editorial rules of the ISO/IEC Directives, Part 2 (see www .iso .org/ directives).

Attention is drawn to the possibility that some of the elements of this document may be the subject of

patent rights. ISO shall not be held responsible for identifying any or all such patent rights. Details of

any patent rights identified during the development of the document will be in the Introduction and/or

on the ISO list of patent declarations received (see www .iso .org/ patents).

Any trade name used in this document is information given for the convenience of users and does not

constitute an endorsement.

For an explanation of the voluntary nature of standards, the meaning of ISO specific terms and

expressions related to conformity assessment, as well as information about ISO's adherence to the

World Trade Organization (WTO) principles in the Technical Barriers to Trade (TBT) see www .iso .org/

iso/ foreword .html.

This document was prepared by Technical Committee ISO/TC 207, Environmental management.

Any feedback or questions on this document should be directed to the user’s national standards body. A

complete listing of these bodies can be found at www .iso .org/ members .html.
iv © ISO 2020 – All rights reserved
---------------------- Page: 4 ----------------------
ISO/FDIS 14053:2020(E)
Introduction

Achieving the Sustainable Development Goals (SDGs) established by the United Nations in 2015 has

become a high priority for society. In particular, Goal 12 requires both governments and private sectors

to ensure sustainable consumption and production patterns. Companies of all sizes need to achieve

improvements in material and energy efficiency for sustainable production.

A number of International Standards provide guidance on material flow cost accounting (MFCA), which

is an approach to assess material efficiency within an organization (see ISO 14051) and to enhance

material efficiency in cooperation with supply-chain partners (see ISO 14052). While organizations

are encouraged to implement MFCA based on ISO 14051, depending on levels of operations, they may

prefer a more simplified approach to MFCA. To address this need, this document provides guidance

for organizations to initiate a phased implementation of MFCA. This approach focuses on the most

relevant production process to enhance material efficiency along with cost reductions, possibly leading

to additional business opportunities (e.g. a green supply chain).

This document can be used independently of ISO 14051 and ISO 14052. However, the basic philosophy

of MFCA as well as the terms and definitions are the same as in ISO 14051. In addition, this document

has been designed to help organizations to identify new business opportunities regarding material

and energy efficiency. Large organizations can also use this document as a starting point for their

implementation of MFCA in a specific department or process.
This document provides:
— common terminologies;
— principles;
— a calculation approach, analysis and improvement;
— an application of the MFCA implementation result.
Annex A gives a case example of an MFCA implementation in organizations.
© ISO 2020 – All rights reserved v
---------------------- Page: 5 ----------------------
FINAL DRAFT INTERNATIONAL STANDARD ISO/FDIS 14053:2020(E)
Environmental management — Material flow cost
accounting — Guidance for practical implementation in
SMEs
1 Scope

This document gives practical guidelines for the phased implementation of material flow cost accounting

(MFCA) that organizations, including small and medium­sized enterprises (SMEs), can adopt to enhance

their environmental performance and material efficiency.

The phased approach provides flexibility that allows organizations to develop their MFCA activities at

their own pace, according to their own circumstances. The resulting information can act as a motivator

for organizations to seek opportunities to simultaneously generate financial and environmental

benefits by reducing material losses and energy consumption.

This document is applicable to any organization, regardless of its level of development, the nature of its

activities, or the location at which these activities occur.

This document provides basic calculation procedures to analyse saving potentials by avoiding material

losses. Detailed calculation procedures or information on techniques for improving material or energy

efficiency are out of the scope of this document.
2 Normative references
There are no normative references in this document.
3 Terms and definitions
For the purpose of this document, the following terms and definitions apply.

ISO and IEC maintain terminological databases for use in standardization at the following addresses:

— ISO Online browsing platform: available at https:// www .iso .org/ obp
— IEC Electropedia: available at http:// www .electropedia .org/
3.1
energy cost
cost for electricity, fuels, steam, heat, compressed air and other like media

Note 1 to entry: Energy cost can be either included under material cost or quantified separately, at the discretion

of the organization.
[SOURCE: ISO 14051:2011, 3.4]
3.2
energy use
application of energy

EXAMPLE Ventilation; lighting; heating; cooling; transportation; data storage; production process.

Note 1 to entry: Energy use is sometimes referred to as “energy end-use”.
[SOURCE: ISO 50001:2018, 3.5.4]
© ISO 2020 – All rights reserved 1
---------------------- Page: 6 ----------------------
ISO/FDIS 14053:2020(E)
3.3
material
substance that enters and/or leaves a process
Note 1 to entry: Materials can be divided into two categories:

— materials that are intended to become part of products, e.g. raw materials, auxiliary materials, intermediate

products;

— materials that do not become part of products, e.g. cleaning solvents and chemical catalysts, which often are

referred to as operating materials.

Note 2 to entry: Some types of materials can be classified into either category, depending on their use. Water is

one such material. In some cases, water can become part of a product (e.g. bottled water), while in other cases it

can be used as an operating material (e.g. water used in an equipment washing process).

Note 3 to entry: Energy carriers like fuels or steam can be identified as materials, at the discretion of the

organization.
[SOURCE: ISO 14051:2011, 3.10, modified]
3.4
material flow cost accounting summary sheet
MFCA summary sheet

spreadsheet that reflects the MFCA (3.6) information for a production process that is treated as a

single process
3.5
material cost
cost for a substance that enters and/or leaves a process

Note 1 to entry: Material cost can be calculated in various ways, e.g. standard cost, average cost, and purchase

cost. The choice between cost calculation methods is at the discretion of the organization.

[SOURCE: ISO 14051:2011, 3.12, modified]
3.6
material flow cost accounting
MFCA

tool for quantifying the flows and stocks of materials (3.3) in processes or production lines in both

physical and monetary units
[SOURCE: ISO 14051:2011, 3.15]
3.7
material loss
all material outputs generated in a process, except for intended products

Note 1 to entry: Material losses include air emissions, wastewater and solid waste, even if these material outputs

can be reworked, recycled or reused internally, or have market value.

Note 2 to entry: By-products can be considered as either material losses or products, at the discretion of the

organization.
[SOURCE: ISO 14051:2011, 3.16, modified]
3.8
system cost

cost incurred in the course of in­house handling of the material (3.3) flows, except for material cost

(3.5), energy cost (3.1) and waste management cost (3.9)
EXAMPLE Cost of labour; cost of depreciation and maintenance; cost of transport.
[SOURCE: ISO 14051:2011, 3.21]
2 © ISO 2020 – All rights reserved
---------------------- Page: 7 ----------------------
ISO/FDIS 14053:2020(E)
3.9
waste management cost
cost of handling material losses (3.6) generated in a process
[SOURCE: ISO 14051:2011, 3.22, modified — The notes to entry have been deleted.]
4 Principles
4.1 Understand the basic material flow and energy use

The material flows related to products and energy use, including material losses in the most relevant

production process, are identified and quantified as physical data.
4.2 Ensure the reliability of physical data

Physical data on material flows and energy use are collected in consistent measurement units.

NOTE Refer to ISO 14033 Quantitative Environmental Information.
4.3 Estimate and attribute costs to material losses and energy use

The costs associated with material losses and energy use are estimated, and these costs are attributed

to the material losses and energy use.
4.4 Link physical and monetary data

Decision-making on environmental and management issues within organizations is supported by

linking physical data with associated cost.
5 Cost calculations in a phased approach
5.1 General

Data on material flows and energy use should be translated into monetary units to support decision-

making according to the cost calculations. This process consists of one preparation­phase, four

calculation-phases and one analytical phase. Organizations can incrementally implement MFCA as

indicated in 5.2 to 5.7.

5.2 Preparation phase — Identification of the most relevant production process in the

organization

The organization should identify its most relevant production process. If there is a single production

process in the organization, all of the material losses and energy use should be examined. If multiple

processes are present, the organization can select either the most relevant production process or

multiple processes as one single production unit for calculation.

A selection approach for the most relevant production process should be divided into two steps:

a) assess the magnitude of the different material losses and energy use;

b) select the process with a high raw material unit cost, large volume of material losses and defective

products, etc. as the most relevant production process.

If the organization wants to assess several relevant processes, adoption of ISO 14051 is recommended.

© ISO 2020 – All rights reserved 3
---------------------- Page: 8 ----------------------
ISO/FDIS 14053:2020(E)
5.3 Calculation phase 1 — Quantification of material flows in physical units

The amounts of material inputs and outputs should be quantified in physical units such as mass, length,

number of pieces or volume, depending on the type of materials. Outputs are divided into products and

material losses.

5.4 Calculation phase 2 — Calculation of material costs and waste management costs

Cost calculations should be started with material costs. This includes costs related to the materials

used in the most relevant production process which may include raw materials, auxiliary materials,

operating materials and intermediate products. The costs of all material inputs are assigned to

products and material losses according to the physical quantity. In addition, waste management costs

are calculated.
5.5 Calculation phase 3 — Calculation of energy costs

The calculation of energy costs is at the discretion of the organization. When it is determined to be

necessary, energy costs should be calculated and allocated to products and material losses according to

the physical data quantified in calculation phase 1.
5.6 Calculation phase 4 — Calculation of system costs
The calculation of system costs is at the discretion of the organizatio
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