# Circularity assessment

Projects that reduce GHG emissions and are issued Rainbow Carbon Credits typically also contribute to a circular economy. The assessment of a project's circularity is considered under the co-benefits criteria and represents the [Sustainable Development Goal (SDG)](https://unstats.un.org/sdgs/indicators/Global-Indicator-Framework-after-2024-refinement-English.pdf) number 12.2.

The Material Circularity Indicator (MCI) is the selected measure of circularity, due to its comprehensive assessment of material flows and alignment with global standards, notably established by The Ellen MacArthur Foundation.

The MCI examines the mass of material flows throughout a product's lifecycle. It evaluates how efficiently materials circulate within a closed-loop system, assigning “more circular” scores to systems that minimize waste and optimize resource reuse. The formula uses input parameters such as material feedstock amount and type (e.g. from recycled, reused, or biological sources), recycling rates, and lifespan extension potential to quantify a product's circularity.

[A detailed description and formulas for calculating the MCI are documented](#user-content-fn-1)[^1] in the dedicated [methodology document](https://content.ellenmacarthurfoundation.org/m/77e62bc9924c20d0/original/Circularity-Indicators-Methodology.pdf), on pages 22 to 31, following the Product-level Methodology under the Whole product approach). Figure 3 modified from [Cottafava, D. and Ritzen, M. (2021) ](#user-content-fn-2)[^2]summarizes the MCI material flows.

The MCI is a unitless indicator that varies from 0 to 1, where 0 represents a fully linear product and 1 is fully circular. The project scenario MCI is compared to the baseline scenario MCI, measuring how much more circular the project scenario is than the baseline.

The MCI methodology has been applied to the battery's second life using the input data presented in Table 5.

<figure><img src="https://1461901304-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FE1FUJsBoIj20nqp3CtMf%2Fuploads%2FT5tp7Rhz1WaPXOBiJz2A%2FClimate%20team%20-%20Schemes%20-%20Circularity%20KPI%20-%20battery%20second%20life.jpg?alt=media&#x26;token=2e7198e4-1989-4db1-8e78-3a4cf031674b" alt=""><figcaption><p><em>Figure 3 Summarized representation of the MCI material flows. Modified from Cottafava, D. and Ritzen, M. (2021). * Only landfill is considered in the MCI for battery second life. Energy recovery as part of a circular strategy only applies to biological materials following the MCI's conditions.</em></p></figcaption></figure>

*Table 5 All variables needed to calculate the Material Circularity Indicator (MCI) for the Rainbow Battery Second Life methodology are detailed below. The full methodology and equations can be found in the dedicated* [*methodology document*](https://content.ellenmacarthurfoundation.org/m/77e62bc9924c20d0/original/Circularity-Indicators-Methodology.pdf)*.*

<table data-header-hidden data-full-width="true"><thead><tr><th width="114"></th><th width="224"></th><th width="358"></th><th></th></tr></thead><tbody><tr><td><strong>Symbol</strong></td><td><strong>Definition by the MCI</strong></td><td><strong>Guidelines for the project scenario</strong></td><td><strong>Guidelines for the baseline scenario</strong></td></tr><tr><td><span class="math">M</span></td><td>Mass of a product</td><td><p>Total mass (kg) of second life batteries in the project scenario.</p><p><span class="math">M = N_{i_B.c.sold}*W_{i_B.c. sold}</span></p><p>Where <span class="math">N_{i_B.c.sold}</span> and <span class="math">W_{i_B.c. sold }</span> are defined in <span class="math">Eq.2</span> in the <a href="../ghg-quantification#calculations-project-battery-collection">Calculations project battery collection </a>section.</p></td><td>Consider the same guidelines as for the baseline scenario</td></tr><tr><td><span class="math">Fr</span></td><td>Fraction of mass of a product's feedstock from recycled sources</td><td>Assumed zero</td><td>Assumed zero</td></tr><tr><td><span class="math">Fu</span></td><td>Fraction of mass of a product's feedstock from reused sources</td><td><p>Considers the mass of second life batteries (<span class="math">M</span>) and the mass of new components acquired (<span class="math">N_p</span>, in kg):</p><p><span class="math">Fu = (M-N_p)/M</span></p><p><span class="math">N_p</span> is the sum of new Battery materials as described in <span class="math">Eq.11</span> and <span class="math">Eq.16</span> (for Pb-acid batteries)</p></td><td>Assumed zero</td></tr><tr><td><span class="math">Fs</span></td><td>Fraction of a product's biological feedstock from Sustained production.</td><td>It is assumed that no biological feedstock is used in batteries.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">V</span></td><td>Material that is not from reuse, recycling or biological material from sustained production.</td><td>The amount of virgin materials used in the project scenario is the same as the Np when virgin material shall be extracted to produce new pieces.</td><td>All the input materials are considered virgin as no reuse or recycled materials are assumed in a status quo scenario.</td></tr><tr><td><span class="math">Cr</span></td><td>Fraction of mass of a product being collected to go into a recycling process</td><td>Value is based on the collection rates from the baseline scenario as presented in <a href="../appendix#appendix-3-detailed-baseline-scenario-market-shares">Appendix </a>3. After the end of the battery's first and second life, the product is assumed to follow the country's recycling rates where waste is generated.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Cu</span></td><td>Fraction of mass of a product going into component reuse</td><td>Fraction considered under the Cr variable, according to the baseline's rates.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Cc</span></td><td>Fraction of mass of a product being collected to go into a composting process</td><td>As no biological feedstock is used in batteries, this value is assumed to be zero.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Ce</span></td><td>Fraction of mass of a product being collected for energy recovery where the material satisfies the requirements for inclusion</td><td>Energy recovery as part of a circular strategy only applies to biological materials, according to the MCI methodology. This value is assumed to be zero.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Wo</span></td><td>Mass of unrecoverable waste through a product's material going into landfill, waste to energy and any other type of process where the materials are no longer recoverable</td><td>Following the MCI calculation methodology, this value is the same for both scenarios. Due to the comparative approach, it can be excluded.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Ec</span></td><td>Efficiency of the recycling process used for the portion of a product collected for recycling</td><td><p>According to the EU Regulation for batteries, recycling efficiencies are determined based on their chemical composition rather than their usage category:</p><ul><li><strong>Li-ion</strong>: 65%</li><li><strong>Pb-acid</strong>: 75%</li><li><strong>NiMH (other)</strong>: 50%</li></ul></td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Wc</span></td><td>Mass of unrecoverable waste generated in the process of recycling parts of a product</td><td>Following the MCI calculation methodology, this value is the same for both scenarios. Due to the comparative approach, it can be excluded.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Ef</span></td><td>Efficiency of the recycling process used to produce recycled feedstock for a product</td><td>Assumed equal to Ec as no data are available specifically for batteries. Additionally, since Fr is considered zero, this variable is not impactful.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">Wf</span></td><td>Mass of unrecoverable waste generated when producing recycled feedstock for a product</td><td>Following the MCI calculation methodology, and considering Fr equal to zero, this value is zero.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">W</span></td><td>Mass of unrecoverable waste associated with a product</td><td>Following the MCI calculation methodology and Rainbow's guidelines, this value is the same for both scenarios. Due to the comparative approach, it can be excluded.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">LFI</span></td><td>Linear flow index</td><td>Varies from 0 to 1, where 1 is a completely linear flow and 0 is a completely restorative flow. In a circular project, the LFI shall be closer to zero, while the baseline shall be closer to 1.</td><td>Consider the same guidelines as for the project scenario</td></tr><tr><td><span class="math">L</span></td><td>Actual average lifetime of a product</td><td>Sum of the lifespan of the product's first and second life according to <a href="../appendix#appendix-2-lifetimes-of-new-and-refurbished-batteries">Appendix 2</a>, using an average weighted across the battery types refurbished or regenerated by the project.</td><td>Assumed 1</td></tr><tr><td><span class="math">Lav</span></td><td>Average lifetime of an industry-average product of the same type</td><td>Average lifespan of the product's first life, weighted across all battery types refurbished or regenerated by the project as presented in <a href="../appendix#appendix-2-lifetimes-of-new-and-refurbished-batteries">Appendix 2</a>.</td><td>Assumed 1</td></tr><tr><td><span class="math">U</span></td><td><a data-footnote-ref href="#user-content-fn-3">Actual average number of functional units</a> achieved during the use phase of a product</td><td>Calculated based on the extended lifetime of the project's product.</td><td>Assumed 1</td></tr><tr><td><span class="math">Uav</span></td><td>Average number of functional units achieved during the use phase of an industry-average product of the same type</td><td>Assumed 1</td><td>Assumed 1</td></tr><tr><td><span class="math">X</span></td><td>Utility of a product (function of the product's lifespan and intensity of use)</td><td>In battery second life projects, X is higher in the project scenario, as the project extends the product's life (<a href="https://content.ellenmacarthurfoundation.org/m/77e62bc9924c20d0/original/Circularity-Indicators-Methodology.pdf">MCI methodology, p. 29</a>)</td><td>Equal to 1 as the baseline scenario regards the status quo market (average industry scenario).</td></tr><tr><td><span class="math">MCI_p</span></td><td>Material Circularity Indicator of a product</td><td>Varies from 0 to 1, where 0 represents a fully linear product and 1 is fully circular.</td><td>Consider the same guidelines as for the project scenario</td></tr></tbody></table>

[^1]: Goddin, J., Marshall, K., Pereira, A., Tuppen, C., Herrmann, S., Jones, S., Krieger, T., Lenges, C., Coleman, B., Pierce, C., Iliefski-Janols, S., Veenendaal, R., Stoltz, P., Ford, L., Goodman, T., Vetere, M., Mistry, M., Graichen, F., Natarajan, A., Sullens, W., 2019. Circularity Indicators: An Approach to Measuring Circularity, Methodology. <https://doi.org/10.13140/RG.2.2.29213.84962> ↑

[^2]: Circularity indicator for residential buildings: Addressing the gap between embodied impacts and design aspects. Resources, Conservation and Recycling, 164, p.105120. doi:<https://doi.org/10.1016/j.resconrec.2020.105120>.

[^3]: Represent the function of a product's use