# How does the closed loop approximation method work out the virgin material displacement factor, and where must it be shown?

Canonical: https://senseible.earth/answers/closed-loop-virgin-material-displacement-factor

In a product footprint under the Greenhouse Gas (GHG) Protocol Product Standard, the displacement factor is the recycling rate times the attributable processes of virgin material acquisition and preprocessing. It is subtracted from the total, but shall be reported separately so the end-of-life stage does not show a negative value.

## The three pieces of the sum

1. Material acquisition and preprocessing: all attributable processes, counted as if every input were virgin, even where recycled input is also used.
2. End-of-life stage: all attributable processes due to end of life, including recycling. In the standard's example (figure 9.5) this includes collection, waste treatment, the material recovery facility and preprocessing of the recycled material. The standard defines the last two together as general terms for the attributable processes needed to convert recovered material into a recycled material output.
3. Virgin material displacement factor: the recycling rate of the material (recycled output divided by virgin material input) multiplied by the attributable processes for virgin material acquisition and preprocessing.

## Where the factor goes

- It is subtracted from the total inventory results.
- The standard says it shall be reported separately from the percentage of inventory results by stage, to avoid a negative end-of-life value.
- It also says companies shall report displaced emissions and removals separately from the studied product's end-of-life stage inventory.
- This is for a product footprint. In a company Scope 3 inventory, avoided emissions from recycling are not deducted; see the linked page on avoided emissions.

## When the method is allowed

- It assumes the recycled material displaces virgin material with the same inherent properties. The recycled material has to be similar enough to the virgin input to be used interchangeably without additional changes to the product's life cycle.
- The factor is worked out only for virgin material with the same inherent properties as the recycled material. For a product with several material inputs, only the attributable processes of the displaced material count.
- The standard says it is also known as the 0/100 method and the end-of-life approach as used by many in the metal industry, and that the International Organization for Standardization (ISO) standard 14044:2006 calls it the closed loop method.

## If you also buy recycled input

The standard says to calculate material acquisition as if all input were virgin. It names an alternative, the recycled content method for the recycled input and a closed loop approach for the remaining net output, and says this could be difficult and is therefore not advised.

The method can also be used for recycling inside one stage, for example scrap created and reused during production.

## Example: one tonne of glass bottles

- Virgin acquisition and preprocessing, all input counted as virgin: 800 kilograms of carbon dioxide equivalent (CO2e)
- Production: 500 kilograms of CO2e. End-of-life stage: 150 kilograms of CO2e
- Total before displacement: 800 + 500 + 150 = 1,450 kilograms of CO2e
- Recycling rate: 700 kilograms recycled output / 1,000 kilograms virgin input = 0.7
- Displacement factor: 0.7 x 800 = 560 kilograms of CO2e
- Net: 1,450 minus 560 = 890 kilograms of CO2e. Show the 560 on its own line, so the end-of-life stage stays at plus 150, not a negative figure.

All numbers are example values written for this page. They are not factors and not from the standard.

## What Senseible does here

Senseible reads fuel invoices, electricity bills and fuel slips into a dated emission record. Picking a recycling method for a product footprint stays with you and your buyer.

- [Situations that pick the recycling method](https://senseible.earth/answers/recycling-method-situations-product-standard)
- [Can I subtract emissions avoided by recycling?](https://senseible.earth/answers/recycling-avoided-emissions-can-i-deduct)
- [Avoided emissions from recycled plastic](https://senseible.earth/answers/plastic-recycler-avoided-emissions-claim)
- [Free calculators](https://senseible.earth/calculators)

Sources: [GHG Protocol Product Life Cycle Accounting and Reporting Standard (chapters 7, 9 and 11)](https://ghgprotocol.org/sites/default/files/standards/Product-Life-Cycle-Accounting-Reporting-Standard_041613.pdf), [GHG Protocol Technical Guidance for Calculating Scope 3 Emissions, Category 5 Waste Generated in Operations](https://ghgprotocol.org/sites/default/files/2022-12/Ch5_GHGP_Tech.pdf)

Last reviewed 2026-11-05. Wording is from sections 9.2 and 9.3.6 of the Product Standard. The Scope 3 Technical Guidance for Category 5 says claims of avoided emissions should not be included in, or deducted from, the Scope 3 inventory, so keep the two reports apart.