The environmental impacts created by human activity have exceeded planetary boundaries, leading to the need for change towards a circular economy (CE) from a linear economy. The CE aims to reduce environmental impact by focusing on responsible production and consumption. It is achieved by avoiding the outflow of materials and reducing environmental impact as much as possible. Analytical tools such as LCA are necessary to map the environmental impacts of different CE alternatives serving the same product system and assist in finding the most environmentally preferable option. It is essential to make credible, transparent and reproducible assessments of the environmental impact of circular strategies compared with incumbent ways of working. Many databases and software programs used to perform LCAs do not explicitly and transparently solve multifunctionality, which can lead to distorted information and inaccurate decision-making. The report emphasizes the importance of a systematic approach to solve and identify multifunctionality within CE-LCA and improve the reporting of LCAs to make them more transparent. While the CE concept, when implemented in practice by designing products, often leads to reductions in environmental impacts throughout product life cycles, this is not always the case. Design decisions should be based on credible, transparent and reproducible assessments of environmental impacts, and not on assumptions. The focus is on how different choices in modelling recycling and identifying multifunctionality are made in LCA literature, and how reporting can be improved. This report investigates the modelling and reporting of recycling loops in LCA studies that address circular economy systems, with a focus on the ecoinvent database.

This study aims to answer the research question ‘How are recycling loops modelled and reported in LCA studies addressing circular economy systems and in the most widely used LCA database ecoinvent; and how can reporting be improved to better and more transparently communicate conclusions of LCAs to product designers?’