One slag sack, one rule

Why IDDI WG2 should pick economic allocation now and name no allocation as the net-zero end-state
Hand-drawn brief · IDDI White Paper (Dec 2023) & PCR Harmonization Guidance v1.0 (Apr 2024) · WG2 chair working material

Six-panel hand-drawn storyboard: pour, swing, tug, sieve, handshake, horizon

The story in six scenes: the same cube of concrete, five allocation methods, two industries — and the one deal that works.

① The swing on concrete

Same cubic metre, same plant, same day — only the slag allocation method changes. Reported GWP moves from 0.20 to 0.41 tCO₂e/m³: a swing of up to 55% between the extremes.

0.20
No allocation
(IDDI-principles fit)
0.22
Economic allocation
(IDDI-principles fit)
0.27
Physical partitioning
0.31
System expansion
(disallowed by EN/ISO PCRs)
0.41
Mass-based
(rejected by cement)

tCO₂e per m³ of concrete by allocation method (White Paper, Exhibit 1.6). Mirror image for steel: crude steel moves 2.33 → 1.83 tCO₂e/t across the same five methods. A buyer comparing two EPDs may just be comparing two accounting choices.

② The deal between steel and cement

The symmetry rule (Guidance 2.7) is what makes this a negotiation: whatever burden steel allocates away to slag, cement must inherit with the slag — nothing may be deleted at system level. Each industry pulls in the opposite direction; economic allocation is the point where both can let go of the rope.

STEEL MILL's view of economic allocation
  • Slag earns only ~1–2% of revenue → steel keeps ≈ the full burden it already reports under no-allocation; barely any change to today's EPDs
  • Ends the fight over system expansion (disallowed by EN 15804 / ISO 21930 anyway, despite being worldsteel's LCI method)
  • One consistent story to automotive & construction buyers
  • Gives up the big slag credit system expansion would grant (≈2.33 → 2.10 tCO₂e/t crude steel)
  • Steel-price cycles nudge the split → needs reference prices / long-term averages
CEMENT PLANT's view of economic allocation
  • Slag (GGBS) arrives nearly burden-free — priced at its tiny revenue share — so clinker substitution stays the strongest decarb lever
  • Already common practice in the EU cement industry → low switching cost
  • Kills mass-based allocation (0.41!) which would wreck the low-carbon-cement business case
  • Accepts a small burden vs. today's no-allocation practice outside the EU (0.20 → 0.22)
  • Depends on transparent slag price data — currently opaque and regional
The handshake: the transfer is small enough for steel to concede and cheap enough for cement to accept — and it is the only method on the principles shortlist that both industries have already partly adopted (White Paper, Exhibit 1.7). That is why it can actually harmonize, not just win the theory debate.

Zoom-in: five methods → the sieve → the deal, in one chart

Detail chart: five allocation methods enter the seven-principles sieve, three are rejected with reasons, two survive, handshake mechanics on the right

What gets filtered out and why: mass-based crushes slag users (cement says no) · system expansion relies on guessed credits and is banned by EN/ISO PCRs · physical partitioning is too complex and untested beyond slag. Survivors: no allocation (parked as end-state) and economic allocation (the deal) — sealed by the 98/2 price split, the rule-2.7 symmetry, and reference-price guardrails.

③ Economic allocation — the ledger

Why it works (+)

  • Relevance: revenue is why the blast furnace runs — allocation mirrors real decision-making (GHGP principle)
  • Passes all seven IDDI principles (GHGP ×5 + IEA ×2)
  • Adoption-feasible: accepted by the cement industry, major steel players and global organisations
  • No emissions deleted: steel's allocation = cement's inherited burden
  • Waste co-outputs get nothing — consistent with how every method already treats zero-value outputs

What must be managed (–)

  • Slag price data is opaque and varies by region → needs published reference data
  • Cyclical steel prices shift the split → fix with long-term price averages
  • If slag scarcity raises its value long-term, baselines drift — at 1–2% revenue share the effect stays trivial, but the guardrail must be written down
  • Needs one common application guide, or "economic allocation" fragments into local variants

④ Why "no allocation" is the end-state — not the starting point

End-state logic (+)

  • Satisfies all seven principles; the IEA names it the right approach in a net-zero world
  • Simplest possible rule: steel carries 100%, slag carries 0 — nothing to game, trivially explained to any buyer
  • Most conservative: no product ever looks greener through bookkeeping
  • As all sectors decarbonize, the burden being shuffled shrinks toward zero anyway — the two rules converge

Why not today (–)

  • Allocation is embedded in today's EN/ISO PCRs and in the majority of published steel EPDs — flipping now breaks continuity of thousands of declarations
  • EU cement practice (economic allocation) would also have to move
  • Slag would arrive at cement with zero burden by rule, not by price — removes the market signal on slag value
  • Forcing it now risks a standoff; a transition rule gets both industries onto one method first

⑤ And who checks the checkmark?

A harmonized rule is only as strong as its verification. Guidance 1.1 asks PCRs for a self-declared "statement declaring alignment" — with zero checking mechanism behind it. Any PCR can stamp itself compliant. The fix comes in two steps: a WG2 self-check checklist now (cheap, immediate), and a real conformity assessment inside the ISO Technical Specification (durable, enforceable).

Four-panel storyboard: self-stamp, hollow badge, checklist, ISO TS gate

The alignment badge's journey: self-inked → hollow under the magnifier → ticked against a checklist → properly sealed at the ISO TS gate.

⑥ The WG2 self-check — what's actually on the clipboard

Ten ticks, straight out of Guidance v1.0, grouped in three families. The rule of use: 10/10 with one line of evidence each = the PCR may carry the alignment statement; anything less must say "partially aligned" and name the open items. Items 9 and 10 — machine-readable EPDs and RAND licensing — are the empirically weakest, so the gate bar holds the badge back until they are closed.

Hand-drawn clipboard with the 10-point WG2 self-check checklist and a gate bar holding back the WE ALIGN badge

Checklist v0 for WG2 discussion. Group A: identity & references (rules 1.1, 1.2, 1.3, 2.7) · Group B: data & disclosure (1.4, 1.6, 2.12) · Group C: usability & access (1.9/2.14, 1.10). Sunset clause: retires when the ISO TS conformity assessment enters into force.

Why a checklist works now (+)

  • Zero new institutions — the PCR committee ticks, the program operator attests under rule 1.8
  • Turns a hollow claim into ten falsifiable statements with a one-page evidence file
  • Feeds the landscape study: the same ten items double as coding indicators
  • Creates the paper trail the ISO TS conformity assessment will later formalize

Its honest limits (–)

  • Still self-assessment — a determined greenwasher can tick boxes; only the TS brings independent checking
  • Needs WG2 endorsement and a template, or ten variants will bloom
  • Items 9 & 10 depend on third parties (EPD platforms, standards bodies' licensing) — a PCR can be blocked through no fault of its own

⑦ Gap report: what 2026 adds to the 2024 corpus — and what is still missing

The 2024 corpus (White Paper Dec 2023 + Guidance v1.0 Apr 2024) drew the blueprint: seven issues, seven principles, a technical grid, and a dated work programme. 2026 has expanded the evidence (42-document landscape study), the institutional pathway (ISO TS via TC207/SC5, DIN secretariat interest), the verification scaffolding (self-check + register) and the usability lens. But none of the substantive 2024-dated decisions has been closed.

Six-panel gap storyboard: draw, expire, map, gate, check, bridges

The blueprint's journey 2024 → 2026: drawn → deadlines expire (~21 dated promises) → 42-document study → ISO TS gate → chair's checks & register → four bridges still missing.

Where 2026 expands 2024 (+)

  • Evidence: desk study → systematic 42-document map + structured interviews (public + private reports)
  • Institution: "propose revisions via TCs" → concrete ISO TS route, SC5 chair supportive, DIN secretariat interest
  • Verification: bare self-declaration → 10-item self-check + evidence file + operator attestation
  • Governance: dated promises → obligations register with owners and destinations
  • Scope: construction materials → extension debate (hydrogen, methanol, SAFs)

The four missing bridges (–)

  • ALLOC: single allocation method — due 2025, still open; the 55 % swing persists until decided
  • CCU: accounting philosophy (system-estimate vs full abatement, storage duration) — workstream promised 2024, no position
  • CoC: mass balance / book & claim permissibility — working group promised 2024, certificates racing ahead
  • DEFS: low/near-zero definitions — study and TS may each assume the other closes it
  • Plus six second-order gaps (primary-data metric, carbonation thresholds, prEN 17662 status, open database, data refresh, non-construction steel) — see the full gap report

Downloads: WG2 Self-Check deck (PPTX, one slide per check) · full gap report in the KB: Study-equilibria/2024-WhitePaper/GAP-REPORT_2024-corpus-vs-2026-workstreams.md

Sources: IDDI White Paper "Driving Consistency in the Greenhouse Gas Accounting System" (5 Dec 2023), §4.3 & Exhibits 1.3, 1.6, 1.7 · IDDI Guidance for PCR Harmonization v1.0 (Apr 2024), rules 1.1, 2.7, 2.12 · HEAT WG2 chair assessment 2026-08-08. Numbers are illustrative sensitivity ranges from the White Paper (2023 BCG analysis) — flag for refresh before external use. Internal working material — not an IDDI position.