SINE Strategy Wiki

PACT PCF Calculation Methodology

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The core technical content of PACT Methodology v3.0 (WBCSD, 2025): the rules for calculating a Product Carbon Footprint (PCF) so that it is consistent and comparable across companies, sectors, and geographies. This page documents the methodology on its own terms — a standards/methodology reference, independent of its role as a Data Commons use case (per Martin Pompéry: the wiki’s documentation task extends beyond Data Commons).

Scope and boundary

The methodology covers cradle-to-gate PCF only — life cycle stages 1-3 (material acquisition, production, distribution/storage). It explicitly excludes:

  • Product use and end-of-life (stages 4-5)
  • Outbound logistics from the reporting company to its customer

This is a deliberate boundary choice distinguishing PACT from cradle-to-grave methodologies (e.g. it does not compete with corporate-level standards covering the full life cycle).

The two mandatory PCF values

Because two incompatible conventions exist for treating biogenic CO2 uptake, PACT requires companies to calculate and exchange both:

  1. PCF excluding biogenic CO2 uptake — the “neutral” (0) approach, endorsed by the EU Product Environmental Footprint (PEF) method.
  2. PCF including biogenic CO2 uptake — the “−1/+1” approach, endorsed by ISO 14067:2018.

Both values must always be calculated and exchanged together — PACT does not pick a side between the EU PEF and ISO conventions, it requires reporting under both.

Allocation hierarchy

When a process yields co-products, PACT specifies a strict order of preference:

  1. Avoid allocation — via subdivision of the process or system expansion, if possible.
  2. Calculate the economic value ratio between the highest- and lowest-valued co-product (consistent regardless of which co-product is the one being studied).
  3. Decide the allocation method based on that ratio:
    • Ratio ≤ 5 → physical allocation (mass, volume, or energy basis)
    • Ratio > 5 → economic allocation

External view: the hierarchy is settled, but not sufficient

The Carbon Accounting Landscape Review (ICC, 2026) credits this “avoid → physical → economic” hierarchy (§6.1) as settled, shared ground across ISO, GHG Protocol, PACT and the ledger-based approaches. But it argues (§6.2) that endorsing the hierarchy is not enough: a decision-grade framework must also specify causal allocation and consistent treatment of co-products, circular/recycled flows, capital equipment and overhead — otherwise the same product from the same process can still yield different reported results depending on calculation choices.

Product Category Rules (PCR) hierarchy

PACT defers to existing rules where they exist, in this order:

  1. Product-specific PCRs
  2. Sector-specific PCRs
  3. Overarching cross-sectoral standards (GHG Protocol, ISO, EU PEF)

A valid PCR must meet four safeguards: alignment with the ISO 14000 series, development via a multistakeholder and peer-reviewed process, a 5-year review cycle, and defined geographic applicability.

Biogenic and land-sector emissions

Biogenic/land-sector sources account for roughly 22% of global emissions (per the document’s Foreword) and were “previously underrepresented” — v3’s expanded treatment is one of its headline improvements over v2. New mandatory reporting categories take effect from 2027 onwards (aligned to the release of the forthcoming GHG Protocol Land Sector & Removals Standard, GHGP LSRS v1.0):

  • Land Management CO2 emissions/removals
  • Fossil emissions — land management

LUC (land use change), dLUC, and sLUC calculation approaches vary by the traceability level a company has into its supply chain (Appendix C maps PACT’s categories onto the GHGP LSRS in detail; not transcribed here).

⟨Note: multiple footnotes in the source (10, 11, 44, 47, 49, 78) attach the identical caveat — “While companies should calculate and report this information, it is only required by end of 2027 (i.e., 31.12.2027)” — to each of these 2027-onwards requirements individually. Only the biogenic/land and DQR categories carry this 2027 deferral; PDS does not — see PACT Data Quality & Verification.⟩

Other calculation rules

  • Characterization factors: must use 100-year GWP (including carbon feedbacks) from the latest IPCC Assessment Report; companies must disclose which AR they used. Transition rule: when a new AR is released (e.g. hypothetically AR7 in 2026), both the old and new AR may be used for one year, then only the new AR from two years after release onward.
  • Exemptions: excluded emissions are capped at <3% of the total aggregated cradle-to-gate PCF. ⟨v2 (2023) used a two-part test — <1% per individual process AND <5% in aggregate; v3 replaced it with a single, tighter aggregate cap. See the v2 paper page.⟩
  • PCF validity: a calculated PCF is valid for a maximum of 3 years, or must be recalculated immediately if the underlying production process changes by ≥10%.
  • Carbon Capture and Storage (CCS)/Utilization (CCU): net CO2 stored via CCS may be accounted for only if specific requirements (Section 3.3.2.5) are met; CCU-derived products use a “cut-off approach” for emissions allocation.

What v2 (2023) added, and what v3 changed

The Pathfinder Framework v2 (January 2023) §2.3 lists the six areas in which it extended v1 (November 2021); four are calculation-methodology items documented on this page:

  1. PCR hierarchy — see above
  2. Quality safeguards for PCRs and secondary data sources
  3. More specific guidance on exemption rules, allocation, and biogenic emissions — all three sections of this page
  4. Incorporation of PCFs into Scope 3 inventories

(The other two — data quality indicators and the assurance/verification roadmap — are on PACT Data Quality & Verification.)

Endnote 38 of v2 marks as newly introduced in that version: biogenic PCF, biogenic carbon content, IPCC GWP version, standards used, data quality indicators and assurance information.

Changes from v2 to v3 affecting this page: the exemption rule tightened (see above). ⟨Inference: the rest of the calculation core — cradle-to-gate boundary, the allocation hierarchy, the PCR hierarchy, 100-year GWP, the 3-year/10%-variance validity rule — is stable across v2 and v3; the substantive v2→v3 movement is concentrated in the integrity and verification layer, not in the calculation rules.⟩

Relationship to other standards

Builds on and cross-references (does not replace): GHG Protocol Product Standard and Scope 3 Standard, ISO 14040/14044/14067/14025/14083, EU PEF/PEFCRs, GLEC Framework v3.1. Named industry-specific PCF guidelines in the same landscape: Together for Sustainability (chemical industry), Catena-X, Global Battery Alliance.

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