Material Flow Accounting as a Tool for Industrial Ecology
Yuichi Moriguchi
Social and Environmental Systems Division, National Institute for Environmental Studies,
16-2 Onogawa Tsukuba Ibaraki 305-8506 Japan
inoriputik2nies. po.ip
Abstract
Materirtl Flow Accounting (MFA) has been developed rind
applied to systematically describe the jlow of materials
including resources, products. wristes, and other emissions.
Overview of MFA methodolog?. and empirical resirlts fiom
an international joint stirdy of MFA at the nation -wide scale
are presented. From nation-wide scale to conipon!’ or
process level, MFA can play an iniportanr and rrse/irl role
f o r benchmarking and improvement of resowce
productivity and environmental efjiciency. At any scales,
fiirther integration of MFA with monetary / cost accounting
will provide lis with better insights. Meso-scale stlid-v with
economic inpiit-orrtpirt anal-vsis of inter-industrial ntaterial
flow is one of the promising approaches to link micro level
studies and macro level studies. MFA for specific
local/regional areas will be another interesting target of
study from the perspective of the indiisrrial ecology.
1. Introduction
A number of key concepts have been proposed to
transform industrial ztivities into more environmentally
harmonious manner. In particular for manufacturing
industries as key players and audiences, Japanese research
communities have been organizing three international
conferences with the prefix ‘Eco’, namely, Eco-design,
Eo-balance and Eco-material. In addition, a large-scale
exhibition on Eco-products has also been organized.
Internationally, the International Society for Industrial
Ecology (ISIE) was recently established, which may cover
all of above research fields. Needless to say, these key
concepts are inter-related and often overlapping with each
other. Therefore, tools for supporting these concepts can
be commonly used. Although this paper is titled with
‘tool for industrial ecology’, the tool can be shared by
0-7695-1266-6/01 $10.00 0 2001 IEEE
similar inter-related key concepts towards the same target.
Keeping such situation in mind, this paper intends to
introduce the overview of Material Flow Accounting
(MFA), one of the tools for above-mentioned research
fields, show the empirical results from recent international
joint study, and discuss the perspective of studies for
linking the MFA with other inter-related tools.
2. Industrial Ecology as a concept and as
practices
According to the description in the ISiE website[l],
“industrial ecology asks usto understand how the industrial
system works, how it is regulated, and its interaction with
the biosphere; then, on the basis of what we know about
ecosystems, to determine how i t could be restructured to
make it compatible with the way natural ecosystems
function .”
Although the term ‘industrial ecology’ itself has not
been very widely used in Japan, numerous academic
studies and practical efforts have been undertaken in
related fields, and those activities have been expanding
rapidly. Industries, universities as well as public research
institutes have been playing active roles according to their
individual nature.
When the term ‘industrial ecology’ is used as a
metaphor applying analogy of natural ecosystem to
industrial production system, a key feature of the ‘ecology’
lies in the inter-dependence and/or co-existence among
multiple components of a whole system. “Metabolisd’
seems to be another key word in this analogy.
Understanding of material and energy flows plays a key
role both in natural ecosystem and industrial system.
Besides such conceptual discussions, a lot of actual
practices have been undertaken mainly by manufacturing
industries and various tools to support such practices have
been developed, in order to move towards the goal of the
880
industrial ecology. Typical tools include Life Cycle
Assessment (LCA), Design for the Environment ( D E ) , and
so on.
In order to promote the mutual understanding among
different research communities, it will be useful to learn
what kind of topic is studied in this field. For this purpose,
the following list of research subjects is quoted again from
the ISIE website
- Material and energy flow studies ("industrial
metabolism")
- Dematerialization and decarbonization
- Technological change and the environment
- Life-cycle planning, design and assessment
- Design for the environment ("eco-design")
- Extended producer responsibility ("product stewardship")
- Eco-industrial parks ("industrial symbiosis")
- Product-oriented environmental policy
- Eco-efficiency
Needless to say, the first item of the above list denotes
the MFA itself and other similar studies..
3. Framework of Material Flow Accounting
3.1 Conceptual framework of MFA
MFA is a systematic tool, which comprehensively
describes material inflows to a system of concern, material
outflows from the system, as well as material throughputs
throughout the system [2]. Both of the terms, Material
Flow Accounting and Material Flow Analysis are
abbreviated as MFA. "Accounting" is often used in the
integration of environmental and economic aspects,
whereas "Analysis" is used more in general. However,
both of them are often used as an identical term without
Inputs
Resource
a
Household
Process
Energy
Company
Industry
City Product &
Country by product(s)
J
&
n Emissions Outputs
& Wastes
Fig.1 Framework of Material Flow Accounting
definite differences.
88 1
In the field of the industrial ecology, MFA (or more
widely, material and energy flow studies) is applied as a
tool to understand an "industrial metabolisd'. For
industrialized systems, typical inputs are raw materials and
energy resources, and typical outputs are products and
by-products including undesirable ones, such as solid
wastes and pollutants. Thus the term materials used here
refers not only to industrial raw materials such as metals
and minerals, but also any other materials or substances in
broader sense, for example, fossil fuels, sand and gravel for
construction activities, agricultural, forestry and fishery
products, manufactured products, solid wastes, and so on.
MFA deals mainly with solid materials, but sometimes
accounts for air and water as well. Accounting for water
and air is often important so as to keep the mass balance
between inputs and outputs.
The system to be analyzed by MFA is a unit of human
activities, for example, a household, an industrial process,
an enterprise, an economic sector, a municipality, or a
country, as shown in Fig. 1 . Later in this paper, empirical
results from the macroscopic MFA for nation-wide
economy are to be presented. However, for the
perspective of the Eco-design, microscopic studies targeted
on products and companies may be more relevant. In this
context, special attention has to be paid to the similarities
with the Flow Cost Accounting developed in Germany [ 3 ] .
3.2 Linkage with other systemanalytic
methodologies
An origin of conceptual framework of MFA can be
found in the material balance approach in the field of
environmental economics and environmental extension of
economic Input-Output analysis since early 1970s.
Recently, similar studies have been made active under the
field of environmental accounting mainly by statisticians
and economic accountants. First atention was paid to
flows of natural resources, because their massive flows
often accompany with significant environmental
implications. As will be described later, amounts of wastes
associated with mining of metal ores are much heavier than
the concentrated and refined metals imported to Japan. In
addition, the natural resource accounting was extended to
physical account not only for inputs of resources to the
economic activities but also for their output of wastes and
pollutants.
MFA at a nation-wide level is expected to supply a
basis of the development of indicators to measure the level
of environmental performance towards sustainable
production and consumption. At a microeconomic level,
MFA for a company has already been applied to corporate
environmental reporting, and expected to play an important
role for benchmarking of environmental performance.
Special attention has to be paid to the similarity of MFA
and on-going efforts in the field of Life Cycle Assessment
(LCA). LCA is being developed and applied mainly to lies in its simple principle of the mass conservation law.
industrial products in order to assess overall environmental
impacts throughout their life cycle from the cradle to the 4. Empirical studies of natiowwide MFA
grave. One of the essential steps of LCA is life cycle
inventory (LCI), in which input of energy and resources 4.1 Characterization of material flows in Japan
and output of wastes and pollutants are inventoried for each
life stage of the product to be assessed. This step can be
The material flows to be characterized in this section
considered as a microscopic MFA applied for an industrial
are based on the data compiled through participation in the
process.
international joint project on the nation-wide MFA [5],[6].
This similarity can be understood easily, if we recall
An overview of Japanese material flows in 1995 is shown
the fact that economic Input-Output analysis has been
in Fig. 2. On the input side, about 2 billion metric tons of
actively used for the compilation of database both for LCI
materials form input to the national economy, 1.25 billion
and for MFA. Input-Output tables, though written mainly
tons of which are from domestic extraction, the remaining
in monetary term, are very useful tool to understand
inter-sectoral flows of various materials. In Germany, the 0.75 billion tons being imported. Compared to the 1990
data previously published [2], the share of import increased
Federal Statistical Office has already published the first
so as to make up more than one third. Domestic
official Input-Output table in physical term. Other
extraction consists mainly of construction minerals such as
statistical authorities in Europe are also interested in
stones, sand and gravel, limestone, and so on. Import
physical 1-0 and MFA, thus, environmental extension of dependency is particularly high for metal ores and fossil
1-0 analysis may become mo re popular internationally [4].
fuels, as Japan has only poor stocks of these resource
In these ways, MFA has close relationship with many
categories within its domestic territory. Dependency is
other methodologies for the analysis of the interactions also high for timbers; timber imports to Japan constitute a
between the environment and the economy. The reason
why MFA can play the role as an interface with other tools significant portion of the international timber trade

Including international

_.......
...... ....._....

Fig. 2 Overview of nation-wide material flows in Japan in 1995 (unit million tons)

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altogether.
On the output side, the largest output flow from the
economy to the natural environmcnt is the emission of
carbon dioxide. Apart from the fact that CO2 is
contributing to climatic change, we must also recognize
that CO2 is the heaviest ‘waste’ generated by industrialized
economies.
Solid waste disposal to controlled landfill sites is also
major component of outputs from the economy to the
environment. Waste disposal implies greater environmental
significance than its nominal weight alone. Reclaiming
coastal areas for this purpose has resulted in a reduction of
wildlife habitats. The weight of waste disposal to landfills
is much smaller than that of the total waste generated,
because three quarters of municipal solid wastes (MSW)
are incinerated to reduce waste volumes, and a large
percentage of industrial wastes are re-used and recycled.
The amount of landfill wastes was almost constant until
1990, but recently a decreasing trend can be observed,
thanks to waste minimization and recycling efforts.
Other output flows include digested food and feed and
the dissipative use of products (e.g. solvents, fertilizers and
pesticides). .
The total of these output flows is much lower than the
total of input flows. More than half of direct material
inputs are added to the stocks, which include consumer
durables, industrial capital, and public infrastructure.
Their implication is twofold. The stocks may save hture
material inflows if they are useful for future generation.
However, they can be deemed as potential sources of
wastes in the future if they become useless and must be
substituted by new durable products.
4.2 Hidden material flows
By the international joint study, in addition to direct
material inflows and outflows, hidden flows (originally
named ecological rucksacks in Germany) were quantified,
that was the most essential point of the study. The
ecological rucksack means indirect material flows, which
do not actually enters the economy but occurs when
providing those commodities that do enter the economy.
The term implies heavy burdens behind our back. The
ecological rucksack includes ancillary flows (impurities
separated by selection and smelter) as well as excavated
or disturbed flows (overburdens) to obtain natural
resources.
For example, Japan imports large amount of copper as
concentrate and refined metal. Amount of mining wastes
behind the actual amounts of imported copper is
enormous, of which magnitude is hundred times of
commodity mass. Such waste generation is hidden from
our view, firstly because the scale of similar industrial
activities in Japan is rather small, secondly because we
can purchase these refined resources from everywhere in
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the world under the globalized market economy.
However, if the life-cycle-thinking is applied, producers
and consumers should also pay attention to these upstream
problems hidden behind intermediate and final products.
4.3 International comparison of MFA-based
indicators
In the first publication [5] of the joint study by
Germany, Japan , the Netherlands and the United States in
1997, the focus was put on material inflows and hidden
flows accompanied by resource extraction. Two inflow
indicators were proposed; DMI (Direct Material Input) and
TMR (Total Material Requirement). The TMR is the sum
of DMI and hidden flows. Japanese TMR is about 45 tons
per capita, which is much lower than other three countries
(around 85 tons per capita). This is mainly because
smaller energy consumption per capita and lower
dependency on coal. In terms of DMI per capita, Japanese
figure is only slightly smaller than Germany and the United
States. DMI per capita for the Netherlands is also in the
similar level, if the influence by huge transit import flows
to other European countries is adjusted
Dependency on imported material flows varies largely
among countries, from less than 10 YOfor the United States
to 70 % for the Netherlands. Ecological rucksacks
accompanied by imports imply various environmental
impacts in trade partners. More specific analysis will be
necessary to identify individual problems behind
ecological rucksacks.
In the second phase of the study, collection of data and
calculation of indicators for total material outflows were
undertaken by 4 original partners plus Austria. Proposed
outflow indicators are DPO (Direct Processed Output) and
TDO (Total Domestic Output). TDO is the sum of DPO
100
90
I oDornestic Hidden Flows 1
2
BO
70
2 60
.S 50
8
40
yI
c
30
e 20
10
0
A UT G ER JA P NET U SA
Fig. 3 International comparison of material outflows
and domestic hidden flows such as excavated soils. The
absolute level of DPO per capita in Japan is about 4 metric
tons without oxygen for combustion and 11 metric tons
with the oxygen. These values are relatively small among
the countries studied. Fig. 3 shows international
comparison of outflow indicators.
According to the analysis of historical trends of inflow
indicators, Japanese TMR per capita has shown upward
trends. This coincides with the increase of waste outflows.
DPO and TDO in Japan grew 20 percent during the period
1975- 1996. These growths occurred mainly after the late
1980s. Before then, DPO was almost constant and TDO
decreased slightly.
Material output intensity, that is, DPO or TDO per
constant unit of GDP declined until 1990 because of larger
growth in the monetary economy than in physical
throughput. However, since 1990, de-coupling between
economic growth and material throughput has not been
improved, because DPO and TDO have continued to
increase, while economic growth has slowed down.
Net additions of materials to the stock (NAS) in the
Japanese technosphere have fluctuated in accordance with
patterns of governmental and private investment. NAS
increased significantly in the late 1980s, then stabilized at a
lower level in 1990.
5. Possible applications of MFA
5.1 Implications of MFA for Eco-design studies
In contrast to above-stated massive material flows,
mainstream of Eco-design studies seems to focus on
microscopic issues of assembly-based industries, typically,
electronic and office equipment industries. Nevertheless,
MFA is still relevant to such industries. Because of
extensive spread of equipments such as personal computers,
and photocopiers, overall resource input streams and waste
output streams, as well as energy consumption during their
use contribute considerable share in the total national
activity. Even if the absolute size of impact by a single
equipment is small, overall effect of improvements in
environmental efficiency of these equipments is quite
significant even in the nation-wide level.
As the ecological rucksacks are relatively large for
non-ferrous metals, the issue is quite relevant to electronic
and office equipments, which are typical target of
Eco-Design studies. Ecological rucksacks of imported
intermediate and final products have not been estimated in
detail, because of limited data availability and enormous
efforts needed, as in the case for LCA. This gap has to be
filled because target products of Eco-design studies often
contain many environmentally significant elements.
Quantity aspect as well as quality aspect of wastes for
mining and refining the ores of these metals has to be
884
carefully studied. If the larger environmental burdens
associated with the extraction of virgin materials is taken
into account, material recycling will be able to claim the
relative environmental benefit.
5.2 Linking bottomup MFA and topdown MFA
The above-stated nation-wide MFA is based on the
top-down approach, in which national statistics are used as
main data sources. On the other hands, a bottomup
approach to account for inflows and outflows is actually
carried out as a LCI studies (as so-called foreground data),
environmental reporting and material flow cost accounting
at a corporate level. Such a bottomup MFA may directly
contribute to improvements in daily environmental
management. In addition, more hopefully, the bottomup
data may fill the gap of the top-down approach.
In order to strengthen a linkage of two approaches, it
will be useful to employ a framework of economic
Input-Output tables. As already stated, the framework of
1-0tables is suitable to systematically describe the flow of
materials among industrial sectors. Fig. 4 is a schematic
diagram that describes how to capture inter-industrial
material flows and how to link bottom up material flow and
1-0 tables. This approach ensures the consistency
between monetary flows and physical material flows.
Another opportunity of useful application exists in
MFA at a local level, namely MFA within a small
geographical system boundary. MFA can be a useful tool
to describe how different activities within a studied area are
inter-related, and to find how better inter-dependence of the
activities can be realized. This is an essence of “industrial
metabolism”. Within the terminology list of industrial
ecology, studies on “eco-industrial parks (industrial
symbiosis)” fit to MFA of this type. Some of
Zero-Emission studies in Japan are quite relevant to this
point.
5.3 MFA for better understanding of waste flows
Minimization of solid wastes disposal is one of h e
environmental policy agenda in many countries including
Japan. Conventionally, the amount of solid wastes has
been measured at “the end of pipe”, wherever wastes are
actually generated or treated. However, statistics based on
this approach often overlook some of waste streams.
Alternative approach can be derired from MFA, where
waste streams are captured as a part of whole material
flows and ensuring the consistency with inflows in terms of
mass conservation. Accounting of recycle flows of
materials is an issue of high priority. Such accounting is
essential to develop and measure indicators representing
the state and performance of material recycling activities.

Fig.4 Extended view of industry’s interaction with the environmnt through Input Output tables
6. Conclusion
MFA can play an important and useful role for
benchmarking and improvemnt of resource productivity
and environmental efficiency. At any scales, further
integration of MFA with monetary / cost accounting will
provide us with better insights. Meso-scale study with
economic input-output analysis of inter-industrial materia 1
flow is one of the promising approaches to link micro level
studies and macro level studies. MFA for specific
local/regional areas will be another interesting target of
study from the perspective of the industrial ecology.
On the other hand, there still remain many issues to be
solved. The most critical problem is data availability; in
particular, poor availability for estimating imported hidden
flows. Institutional/statisticalbacking for data gathering
and compilation is not sufficient. To meet the policy
needs for MFA, m n y detailed technical issues have to be
discussed.
885
environmental
Referencecs
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