3.1.2. The Application of Substitution as System Expansion Method

Beyond the use of substitution in ALCA, two other critical aspects of substitution have been discussed in the LCA methodological articles. First, the high uncertainties introduced by the use of the substitution approach since it can lead to different results depending on the choice of substituted and/or substituting by-product [3,60,61]. A sensitivity analysis should be therefore recommended. Second, when substitution is suitable, the substitution of co-products should be avoided by checking the physical/economical significance of the products delivered by the multifunctional process [3,27]. However, some authors (for example [3]) argue that the importance of the co-products' physical significance is not emphasized enough in ISO 14044:2006 and the ILCD handbook. When physical significance is not checked and a by-product is credited for the replacement of co-products, the practitioner could obtain significantly distorted results [3,62]. A common practice to account for physical significance is to select the primary functions based on the main source of revenues [35,63]. In cases where the primary co-function(s) cannot be directly identified, the ILCD handbook proposes that they should be assumed to be those that jointly contribute to more than 50% of the combined market value of all co-functions of the analyzed multifunctional process [27].

Clear rules for differentiating by-products from the co-products are important, because, in substitution, all the credits from substituting by-products are attributed to the main co-product. If another LCA on the same process is made in which a by-product is considered to be the main product, the impacts of the process "get counted twice", so that the impacts for different products no longer add up to the total for the process (this would be a problem in an attributional model—for further details see the next Section).
