How does the Partnership for Carbon Transparency (PACT) method decide whether what comes out of my process is a co-product or waste?
PACT asks four yes or no questions. Is its further use certain? Can it be used without processing beyond normal industrial practice? Is it made as an integral part of production? Is its use lawful? Four yeses make it a co-product that shares the emissions. Any no makes it waste, which carries none.
Why it matters
A co-product is a second product made by the same process, like bran next to rice. It takes a share of the process emissions. Waste takes none. PACT says all cradle-to-gate emissions shall be given to the product and co-products, not to the waste. So the label changes your footprint.
The four questions, in order
All four yes: co-product. Any no: waste. PACT says to follow criteria set per industry, product type or national rule first, and use these questions only if none exist.
- Is further use certain? PACT wants evidence such as contracts or the existence of a market.
- Can it be used directly, with no further processing beyond normal industrial practice? PACT counts waste treatment, including recycling, as further processing. Reuse, washing and filtering are fine.
- Is it produced as an integral part of the production process, not in separate processing outside the core process?
- Is the use lawful, for example does it meet national health protection requirements?
Two cases, our reading
- Bran from a rice mill, sold to a cattle feed maker on a standing order: use is certain, it needs no extra processing, it comes out of the same milling and feed use is lawful. If all four hold, it is a co-product.
- Steel turnings from a machine shop, sold to a dealer who melts them: melting is recycling, which PACT counts as further processing, so question 2 fails. It is waste.
A difference from the general page here
The general allocation page on this site describes a co-product as an output with value. PACT's four questions do not mention price. When your buyer asks for PACT, use the four questions.
What happens next
A co-product moves on to allocation. Waste carries no production emissions, but its treatment is counted in the footprint of the product that made it.
A tally for one rice mill output, example
- Rice husk: sold under a monthly contract to a boiler operator (question 1: yes)
- Used as fuel as it is, no processing (question 2: yes)
- Comes off the huller in the same run (question 3: yes)
- Fuel use lawful (question 4: yes). Four yeses, so a co-product
The tally is an example of how to record your answers, not a ruling on any real mill. Keep the contract or sale record as the evidence for question 1. Whether burning husk for energy counts as processing under question 2 follows the sector rule or EU guidance; check before relying on it.
What Senseible does here
Senseible reads fuel invoices and electricity bills into monthly records, which give the process emissions that a co-product would share. Whether an output is a co-product is your call, with your contracts as evidence. Senseible builds figures in the PACT exchange format as a custom integration, on request.
- Allocation by price ratio under PACT
- Counting factory waste under PACT
- How to allocate between co-products
- Rice husk sold to a power plant
Sources: PACT Methodology Version 3.0, World Business Council for Sustainable Development (WBCSD)
Last reviewed 2026-11-07. Questions are from PACT Methodology 3.0, section 3.3.1.4 and Figure 8, which rests on the European Union waste directive guidance. The two cases are our reading.