Are You Calculating Module D Correctly? Common Errors and Correct Approach

1. What is Module D in EPDs?

A product system from a life cycle perspective often generates the flows which are used in subsequent life cycles (e.g. scrap, energy etc.). Module D represents the potential environmental benefits and loads associated with the reuse, recovery, and recycling of materials after a product’s end-of-life. Unlike Modules A–C, which quantify the environmental impacts directly attributed to the product, Module D accounts for the future consequences of material recovery, specifically when recovered materials substitute primary materials in subsequent product systems. Because Module D reflects future system interactions rather than the product’s own life cycle, it is reported separately from Modules A–C and is outside the system boundary of the system and hence it must not be aggregated with the product’s life cycle impacts. In essence, Module D answers this simple question:

"What environmental impacts are avoided because this product provides recyclable materials to future product systems?"

This distinction makes Module D conceptually different from all other EPD modules:
   Modules A–C → Impacts caused by the product
   Module D→ Impacts avoided or added in future product systems

2. Is Reporting Module D Mandatory?

The requirement to report Module D depends on the applicable standard, product category rules, and program operator requirements being followed. For EPDs reported in compliance with EN 15804+A2, which governs construction product EPDs in Europe, reporting Module D is absolutely mandatory. There are some exceptions for intermediate products (e.g. paints, adhesive etc.) for which if all of the below specific requirements are met then it’s allowed to exclude end of life stages and Module D –

1. The product or material is physically integrated with other products during installation so they cannot be physically separated from them at end of life, and

2. The product or material is no longer identifiable at end of life as a result of a physical or chemical transformation process, and

3. The product or material does not contain biogenic carbon

In contrast, ISO 21930 does not make Module D mandatory, and its inclusion depends on the specific PCR and program operator requirements. Under EN 50693, Module D is not applicable because the standard follows a different allocation principle based on the point of substitution (POS) rather than the end-of-waste (EoW) approach used in EN 15804 / ISO 21930. In the POS approach, recycling benefits and burdens are allocated at the point where the material actually substitutes primary material within the product system itself, eliminating the need to report separate benefits beyond the system boundary in Module D.

3. Is Module D Always Negative?

No, Module D is not always negative. While Module D often shows negative values (environmental benefits or credits) due to the substitution of primary materials with secondary materials, the result depends on the balance between the avoided impacts of primary production and the impacts of recovery, processing, and recycling. If the avoided impacts are greater, Module D is negative (benefit). If the recycling and recovery impacts are higher, Module D becomes positive (burden).

For example, structural steel products typically show strongly negative Module D values because recycled steel efficiently substitutes primary steel, which has high environmental impacts. Similarly, aluminum products often demonstrate large Module D benefits due to the significant energy savings from secondary aluminum production compared to primary production. In contrast, materials such as composite products, insulation materials, or plastics with low recycling rates may show small benefits or even positive Module D values, especially when recovery involves energy-intensive processing or when recycled material quality limits its ability to fully replace virgin material.

Another critical factor influencing Module D is the net flow of secondary material, i.e., the difference between the amount of recycled material leaving the product system at end-of-life (MRout) and the amount of recycled content entering the product system during production (MRin). If a product exports more recyclable material than it imports (net exporter: MRout > MRin), it generates a Module D benefit, as it contributes secondary material to future product systems. Conversely, if a product uses high recycled content as input but has low recovery at end-of-life (net importer: MRin > MRout), Module D will be positive, reflecting that the product consumes circular resources without returning equivalent material for future use. This net balance ensures that recycling benefits are not double counted across successive product life cycles.

4. Common Mistakes in Module D Calculation

Based on my experience verifying EPDs, the following are the most common mistakes observed in Module D calculations -

1. Not accounting for burdens beyond the End-of-Waste stage up to the point of substitution :

   A frequent mistake is stopping the system boundary at the End-of-Waste (EoW) point and assigning full credit for avoided primary material production. In reality, the recovered material must undergo further processing (e.g., sorting, remelting, refining) before it can substitute primary material. The environmental burdens associated with these processing steps up to the point of substitution must be included in Module D. Ignoring these burdens leads to overstated environmental credits.

2. Ignoring recycling efficiency and material losses :

   Many EPDs assume that 100% of the material sent for recycling is converted into usable secondary material. In practice, all recycling processes have losses due to sorting inefficiencies, contamination, oxidation, and process yield limitations. For example, if 1 kg of material is sent for recycling but only 0.85 kg becomes usable secondary material, only 0.85 kg can substitute primary material. Assuming 100% efficiency overestimates Module D benefits.

3. Assuming a substitution ratio of 1:1 without considering quality difference :

   Secondary materials do not always fully replace primary materials on a one-to-one basis due to differences in material quality, purity, or performance. For instance, recycled plastics may be downcycled into lower-grade applications rather than replacing virgin material in the same product. Assuming a substitution factor of 1 without technical justification can significantly overstate the avoided impacts.

4. Using non-functionally equivalent datasets for avoided primary production :

   The avoided burden must reflect the primary material that the recycled material can realistically replace. For example, recycled aluminum from mixed scrap may only substitute cast aluminum, not high-purity wrought aluminum. If Module D credit is calculated using a primary wrought aluminum dataset, the benefit will be overstated because wrought aluminum has higher production impacts. The avoided product must be functionally equivalent in terms of grade, quality, and application.

5. Selecting datasets that artificially maximize Module D credits (geographic inconsistency) :

   A common issue is using datasets from regions with higher environmental impacts (e.g., China or India) to increase Module D credits, even when the EPD assumes a global or different regional end-of-life scenario. This inflates the avoided burden. The dataset used for substitution must be geographically consistent with the defined end-of-life scenario and market where substitution occurs, such as using global or regionally representative datasets.

5. How to Correctly Calculate Net Flows for Module D

Annex D of EN 15804+A2 provides the most comprehensive and authoritative guidance for calculating Module D. It defines a structured approach to quantify the potential benefits and loads beyond the system boundary by accounting for the net flow of materials and energy leaving the product system and their ability to substitute primary production.

Annex D specifies four separate equations, each addressing different recovery pathways:

• Net flow of secondary materials (e.g., recycled steel, aluminum, copper)

• Net flow of secondary fuels (e.g., waste used as fuel replacing fossil fuels)

• Exported energy from incineration (electricity and/or heat recovery)

• Exported energy from landfill gas recovery

In this equation:
MRout  = Amount of material being recycled /recovered, [in kg]
MRin = Amount of recycled material in the input stream of raw materials, [in kg]
EMR after EoW out = impacts after the end of waste till the point of substitution and functional equivalence (for e.g. remelting, casting, refining etc.). [in kg CO2 eq. and other impacts]
EVM Sub Out = Impacts from the virgin material being substituted at the point of functional equivalent, [in kg CO2 eq. and other impacts]
QRout / QRin = Quality adjustment factor between the scrap and the material being replaced, [no units]

Each equation ensures that Module D reflects only the actual substitution potential after accounting for recycling efficiency, recovery rates, and material quality, while avoiding double counting.

Equation 1

Note that in above equation, the first part of the equiation (MRout – MRin) will often decide whether the results in Module D be negative or positive, this is also called the net flow. The second part of the equation is the net credit that the system receives which is often negative as impacts of virgin materials are often higher compared to the efforts used in recycling the scrap (otherwise there is no motivation for recycling, and it will not exist in practicality for this type of material). The third part of the equation is the quality adjustment factor which metals is often 1, for default values for each material type the PEF can be referred. Therefore, in general, if net flow is positive, Module D will be negative.

Equation 2

In this equation:
MERout = Amount of material leaving the product system as secondary fuel before it’s incineration, [in kg]
MERin = Amount of material entering the product system as secondary fuel before it’s incineration, [in kg]
EER after EoW out = Emissions and impacts from the processing and combustion of secondary fuel, [in kg CO2 eq. and other impacts]
EER average = emissions and impacts from the substitute energy source: heat and electricity, [in kg CO2 eq. and other impacts]

The first part of the equation represents the net flow of secondary fuels, i.e., the difference between the amount of secondary fuel leaving the product system after End-of-Waste and any secondary fuel already used as input. The second part represents the net credit or burden due to substitution of conventional fuels, calculated as the difference between the impact of the substituted fuel and the impact of the secondary fuel after End-of-Waste. This term can be either a benefit or a burden depending on the substituted energy source and regional energy profile. For example, if waste is incinerated in Sweden and the recovered secondary fuel substitutes grid electricity, the credit may be small because Swedish electricity has low impacts, potentially resulting in a net burden; however, if it substitutes fossil-based heating such as natural gas or oil, which have higher impacts, a net environmental benefit is more likely.

Equation 3

In this equation:
MINCout  = Amount of waste that is incinerated for energy recovery in Module C, [in kg]
LHV = lower heating value (calorific value) of the material, [in MJ/kg]
XINC Heat = efficiency of the incineration process for heat, [in %]
XINC Elec = efficiency of the incineration process for electricity, [in %]
ESE Heat      = Emissions and impacts from the substituted heat source, [in kg CO2 eq. and other impacts]
ESE Elec = Emissions and impacts from the substituted electricity source, [in kg CO2 eq. and other impacts]

The calculations from this equation are negative (net credits), as the impacts related to incineration are already captured in Module C (C3 or C4 depending on the efficiency of incineration).

Equation 4

In this equation:
MLF = Material being landfilled in Module C which generates exported energy, [in kg]
LHV = lower heating value (calorific value) of the material being landfilled, [in MJ/kg]
XLF Heat    = efficiency of the landfilling process for heat, [in %]
XLF Elec = efficiency of the landfilling process for electricity, [in %]
ESE Heat   = Emissions and impacts from the substituted heat source, [in kg CO2 eq. and other impacts]
ESE Elec = Emissions and impacts from the substituted electricity source, [in kg CO2 eq. and other impacts]

The calculations from this equation are also negative (net credits), as the impacts related to landfilling are already captured in Module C (often C4). If the landfill process doesn’t generate any heat and electricity, i.e. no energy recovery, then XLF Heat and XLF Elec becomes ‘0’ and no credits are calculated.

6. Conclusions and final thoughts

Module D provides important insight into the circularity potential of a product by quantifying the potential benefits and loads beyond the system boundary. However, its accuracy depends heavily on correct modeling of net material and energy flows, recycling efficiencies, substitution assumptions, and the use of functionally and geographically appropriate datasets. Annex D of EN 15804+A2 provides a clear framework, but the results are only as reliable as the assumptions and methodological rigor applied. Incorrect modeling can significantly distort results and misrepresent the true environmental contribution of material recovery.

Module D should not be treated as an automatic credit, but as a conditional outcome reflecting the realistic ability of recovered materials and energy to substitute primary production. When applied correctly, it strengthens the credibility of EPDs and provides meaningful insight into resource efficiency. When applied incorrectly, it undermines comparability and trust. As EPDs increasingly influence procurement decisions and sustainability claims, ensuring the correct calculation and interpretation of Module D is not just a methodological requirement—it is a responsibility.

About the Author:

Vijay Thakur is a sustainability and life cycle assessment professional with experience in LCA studies, critical reviews, and EPD-related work across multiple sectors. His work focuses on methodological rigour, transparency, and credible sustainability claims aligned with international standards. He is an approved verifier with leading global program operators - EPD International, PEP Ecopassport, EPD Global (Norway), KIWA, and Smart EPD.