Mass Balance and Attribution in Chemical Recycling: The Difference Under ISCC

In sustainability certification for agricultural biomass, biofuels, bio-circular feedstocks, and chemically recycled plastic waste, traceability governance is defined by Chain of Custody (CoC) standards. The ISCC framework (governed by System Document ISCC EU 203 Traceability and Chain of Custody for the regulated European Union renewable energy market under Directive RED III and ISCC PLUS 203 published by ISCC System for voluntary markets in polymers, petrochemicals, food, and feed ingredients) establishes three valid physical traceability models while strictly prohibiting Book-and-Claim (certificate trading divorced from physical material flow).

Compliance engineers, petrochemical and oilseed processing technologists, and commodity traders in the agriculture sector must distinguish between these Chain of Custody mechanisms and understand how ISCC compares with European schemes such as REDcert (REDcert-EU and REDcert²), the Polish Oil and Gas Institute scheme KZR INiG, and the French biomass scheme 2BSvs:

1. Physical Segregation (Hard Identity Preserved and Bulk Commodity Segregation):

   • Engineering mechanism: certified sustainable material is kept physically separate from non-certified (fossil or conventional) material across all storage tanks, silos, transfer pipelines, rail tank cars, and processing reactors. Under Hard Identity Preserved (IP), even mixing two distinct certified lots is forbidden; under Bulk Segregation, multiple certified batches sharing identical sustainability characteristics may be co-mingled.
   • Typical deployment: dedicated non-GMO food and feed lines (frequently integrated with GMP+ feed safety controls), segregated used cooking oil (UCO) storage, or dedicated bioethanol shore tanks.

2. Controlled Blending:

   • Engineering mechanism: certified and conventional streams are physically mixed in a known, fixed proportion (for example, $30%$ certified biomethanol blended with $70%$ fossil methanol), so that every physical metric ton of outgoing product contains exactly $30%$ physical sustainable content.

3. Mass Balance:

   • Engineering mechanism: certified biomass, mixed-plastic pyrolysis oil, or bio-naphtha is physically co-fed with conventional fossil feedstock into shared industrial infrastructure (such as a refinery hydrotreater, tank farm, or steam cracker furnace), where sustainable and fossil molecules become physically indistinguishable. In parallel, a verified bookkeeping ledger (ERP / Mass Balance Account) tracks exact input quantities, site-specific Conversion Factors ($CF$), and process losses, allowing the operator to administratively allocate (attribute) sustainability credits to designated commercial output batches without ever exceeding the mass of sustainable input minus process losses.
   • Cross-scheme comparison: while 2BSvs and KZR INiG focus primarily on linear agricultural biomass and liquid biofuel chains (rapeseed -> crude oil -> FAME biodiesel, or maize -> bioethanol under RED III) where mass balance follows direct physical or energy yields, ISCC (ISCC PLUS) and REDcert (REDcert² for the chemical industry) provide specialized non-proportional Attribution rules engineered for complex multi-output chemical complexes.

To prevent mass balance bookkeeping from degenerating into unbacked paper credit trading, System Document ISCC 203 enforces five strict engineering and accounting guardrails verified during every audit:

• Maximum 3-Month Balancing Period ($\le 90\ \text{days}$): every mass balance ledger must be reconciled and closed at least once every three months. Within an active three-month balancing period, a temporary negative credit balance is permitted (allowing a certified batch to be dispatched ahead of physical sustainable feedstock arrival within the same quarter), but at the close of the 3-month balancing period (End of Balancing Period), the net credit balance must be zero or positive ($\text{Balance}_{\text{end}} \ge 0$). Closing a balancing window with a negative credit balance constitutes a Major Nonconformity and an over-selling violation;
• Physical Stock Cap on Credit Carry-Over: a positive surplus of sustainability credits at the end of a 3-month period may be carried forward into the next balancing period only up to the actual physical inventory of equivalent material (certified plus non-certified raw material, intermediate, or finished product) physically present on-site on the closing date. If site storage tanks or silos are physically empty ($\text{Physical Stock} = 0\ \text{tonnes}$), any remaining unused bookkeeping credits immediately expire;
• Site-Specific Spatial Boundary: mass balance accounting is strictly confined to a single physical production site or storage terminal (Site-level). Transferring sustainability credits between two geographically separate plants owned by the same corporation without physically transporting the corresponding volume of equivalent feedstock or intermediate product between those sites is strictly prohibited (outside narrowly audited Multi-Site Processing pipelines within an integrated chemical park under ISCC PLUS);
• Physical and Chemical Feasibility (Molecular Link): sustainability credits can only be attributed to output products whose molecular structure can chemically and stoichiometrically contain carbon or hydrogen atoms derived from the certified input stream processed in that reactor.

In single-output or simple agricultural processing chains (such as storing maize or rapeseed in a port silo, or pressing sunflower seed into crude oil and meal), mass balance accounting is straightforward: if a grain terminal receives $1,000\ \text{tonnes}$ of ISCC-certified rapeseed and $4,000\ \text{tonnes}$ of conventional rapeseed into a shared silo, it may dispatch at most $1,000\ \text{tonnes}$ (adjusted for cleaning and drying moisture losses) accompanied by a sustainability declaration.

The engineering complexity multiplies in chemical recycling of mixed plastic waste (polyolefin pyrolysis, gasification to syngas, depolymerization) and petrochemical steam cracking, where a furnace is co-fed with conventional fossil naphtha alongside a smaller stream of certified circular or bio-circular feedstock - such as Pyrolysis Oil derived from post-consumer plastic waste or Bio-Naphtha co-produced during hydrotreated vegetable oil (HVO) refining.

Inside a steam cracker radiant coil operating at $+800^\circ\text{C}$ to $+850^\circ\text{C}$, long hydrocarbon chains crack simultaneously into a wide spectrum of co-products:

• Ethylene ($\text{C}_2\text{H}_4$) - approximately $28%$ to $32%$ by mass;
• Propylene ($\text{C}_3\text{H}_6$) - approximately $14%$ to $18%$;
• $\text{C}_4$ fraction (butadiene, isobutylene, raffinate) - approximately $9%$ to $11%$;
• Pyrolysis gasoline (Pygas rich in benzene, toluene, and xylenes - BTX aromatics) - approximately $15%$ to $20%$;
• Cracker fuel gas (methane $\text{CH}_4$, hydrogen $\text{H}_2$), pyrolysis fuel oil, and radiant-coil coke losses - approximately $22%$ to $28%$.

At the outlet of the cracking furnace, engineers must separate two distinct accounting layers:

1. Mass Balance (Quantitative Conservation Layer): enforces conservation of mass and deducts irreversible process losses. If $100\ \text{tonnes}$ of certified pyrolysis oil enters the steam cracker and irreversible process losses (coking, flaring, water removal) equal $5%$, the total pool of sustainability credits generated across all cracker outputs combined cannot exceed $95\ \text{tonnes}$.
2. Attribution (Credit Allocation Layer): defines the mathematical rule governing how those $95\ \text{tonnes}$ of available sustainability credits are distributed among ethylene, propylene, $\text{C}_4$ olefins, pyrolysis gasoline, and fuel gas - specifically, whether each stream can only receive its stoichiometric physical yield share, or whether credits from non-target co-products can be concentrated onto a high-value monomer such as polymer-grade propylene.

Under ISCC PLUS, operators may implement mass balance via two calculation mechanisms: the Rolling Average Percentage method (which assigns the average certified input percentage across all outputs produced during the balancing period) or the Credit Method (which converts certified input mass multiplied by the site Conversion Factor into transferable credit units). Within the Credit Method, ISCC defines three distinct Attribution Approaches. The selected approach must be explicitly declared on every outbound Sustainability Declaration (SD) because it determines regulatory eligibility for recycled-content claims in the European Union.

Under Proportional Attribution, certified input credits are distributed across all output streams of a chemical unit strictly in proportion to their actual physical mass yield fraction.

Suppose a steam cracker co-processes $1,000\ \text{tonnes}$ of certified plastic pyrolysis oil alongside $99,000\ \text{tonnes}$ of fossil naphtha, and the cracker's verified physical yield profile is $30%$ ethylene, $16%$ propylene, $10%$ $\text{C}_4$ fraction, $18%$ pyrolysis gasoline, $21%$ internal fuel gas (burned in the cracker furnaces), and $5%$ process losses. Under Proportional Attribution, the operator may issue ISCC PLUS Sustainability Declarations for at most:

• $300\ \text{tonnes}$ of certified ethylene;
• $160\ \text{tonnes}$ of certified propylene;
• $100\ \text{tonnes}$ of certified $\text{C}_4$ fraction;
• $180\ \text{tonnes}$ of certified pyrolysis gasoline.

Meanwhile, $210\ \text{tonnes}$ of credits remain locked in the internal fuel gas stream (consumed as thermal energy in the furnace burners), and $50\ \text{tonnes}$ are written off as process loss. Shifting the $210\ \text{tonnes}$ of fuel-gas credits or the $180\ \text{tonnes}$ of pygas credits onto ethylene is strictly prohibited under Proportional Attribution. While this method offers maximum stoichiometric transparency, it requires purchasing over three times more pyrolysis oil to produce a given tonnage of certified polyethylene.

Under Free Attribution (Non-Proportional Attribution), the chemical operator is permitted to freely concentrate the entire pool of net available credits (after deducting total process losses and non-recoverable wastes) onto one or more chosen commercial outputs, subject to three mandatory engineering guardrails:

1. Chemical Traceability Guardrail (Molecular Participation): the attributed output product must actually be synthesized in that reactor system from the input stream. An operator cannot attribute credits from bio-ethanol or crude glycerin to polystyrene if those molecules never participate in the styrene/polystyrene reaction pathway;
2. Physical Output Cap: the quantity of certified propylene sold with credits during a 3-month balancing period can never exceed the total physical tonnage of propylene actually produced by that unit during the same period;
3. Strict Prevention of Double Counting: every metric ton of credit reallocated from pyrolysis gasoline or fuel gas onto propylene is permanently deducted from the credit ledger, and the corresponding physical volume of pyrolysis gasoline is sold exclusively as $100%$ fossil material.

In our $1,000\ \text{tonne}$ pyrolysis oil example (with $5%$ irreversible losses leaving $950\ \text{tonnes}$ of total products), Free Attribution allows the cracker operator to allocate all $950\ \text{tonnes}$ of credits to polymer-grade ethylene or propylene (provided total physical ethylene/propylene output from the fossil-plus-circular co-feed exceeds $950\ \text{tonnes}$).

Why did European regulators and ISCC introduce the third option: Fuel-Use Excluded Attribution (widely referred to in EU legislation as Fuel-Exempt Mass Balance)? Under the EU Waste Framework Directive (Directive 2008/98/EC), the Single-Use Plastics Directive (SUPD - Directive (EU) 2019/904), and the Packaging and Packaging Waste Regulation (PPWR), reprocessing waste into fuels or burning streams for energy recovery does not qualify as Material Recycling.

When mixed plastic waste undergoes pyrolysis and steam cracking, roughly $20% - 25%$ of the hydrocarbon mass is converted into cracker fuel gas or liquid fuel fractions and combusted. European Commission implementing rules prohibit transferring sustainability credits from those combusted fuel fractions onto food-contact polyethylene or polypropylene packaging. Consequently, Fuel-Use Excluded Attribution in ISCC PLUS operates via a two-step calculation:

1. Step 1 (Proportional Deduction of Fuel Outputs and Process Losses): the mass fraction of certified input that physically ends up in fuel products (cracker fuel gas, heating oil, gasoline/diesel fuel blends, combusted coke) plus irreversible process losses is proportionally deducted from the credit pool and permanently excluded from material attribution;
2. Step 2 (Free Attribution Strictly Among Non-Fuel Material Outputs): the remaining non-fuel credit pool (in our example: $1,000\ \text{t} - 50\ \text{t losses} - 210\ \text{t fuel gas} = 740\ \text{tonnes}$ of chemical material credits) may be freely attributed exclusively among non-fuel chemical and polymer outputs (ethylene, propylene, butadiene, and chemical-grade BTX aromatics).

For polymer converters and packaging manufacturers integrating ISO 9001 quality management, ISO 14001 environmental management, and ISCC certification to supply EU brand owners, Fuel-Use Excluded Attribution is the benchmark required to substantiate statutory recycled-content mandates.

At the core of every technical audit under ISCC, REDcert, KZR INiG, and 2BSvs lies the metrological verification of the site Conversion Factor ($CF$) for each processing unit. The Conversion Factor defines the ratio of outgoing product mass (or sum of eligible products) to total incoming feedstock mass over a defined operating period:

$$CF_i = \frac{M_{\text{output}, i}}{M_{\text{input, total}}}$$

The aggregate process yield factor accounting for irreversible process losses ($M_{\text{loss}}$: moisture evaporation, degassing, radiant-coil coke formation, slag/char removal, flare combustion, wastewater stripping) is governed by:

$$CF_{\text{total}} = \frac{\sum_{i=1}^{n} M_{\text{output}, i}}{M_{\text{input, total}}} = 1 - \frac{M_{\text{loss}}}{M_{\text{input, total}}}$$

The volume of certified sustainability credits generated at the outlet of a processing step ($C_{\text{output}}$) that may be entered into the Mass Balance ledger is strictly the product of certified input mass processed ($M_{\text{input, cert}}$) and the verified Conversion Factor:

$$C_{\text{output}} = M_{\text{input, cert}} \times CF$$

Consider a two-stage chemical recycling value chain converting post-consumer polyolefin waste into high-density polyethylene (HDPE):

• Stage 1 (Thermal Pyrolysis Unit): the reactor processes $M_{\text{input, cert}} = 500\ \text{tonnes}$ of certified mixed plastic waste, yielding $360\ \text{tonnes}$ of liquid pyrolysis oil, $85\ \text{tonnes}$ of non-condensable pyrolysis gas (combusted in the reactor burner to maintain $+500^\circ\text{C}$ operating temperature), and $55\ \text{tonnes}$ of solid char and dechlorination mineral ash. Under Fuel-Use Excluded, the Conversion Factor into liquid pyrolysis oil is: $$CF_{\text{pyrolysis}} = \frac{360}{500} = 0.72\ (72.0%)$$ Zero credits from the $85\ \text{tonnes}$ of combusted fuel gas or $55\ \text{tonnes}$ of ash/char may be added to the liquid pyrolysis oil credit balance.
• Stage 2 (Polymerization into HDPE Pellets): if the polymerization reactor operates at $CF_{\text{polymerization}} = 0.985$ ($1.5%$ loss to low-molecular-weight wax and reactor purging), an additional $1.5%$ must be deducted when converting ethylene monomer credits into HDPE pellet credits.

Auditors rigorously inspect the empirical basis of every $CF$: while a newly commissioned plant undergoing its initial certification audit may temporarily apply engineering design yields from the technology licensor, by the first surveillance or recertification audit the operator must compute its Actual Site-Specific Conversion Factor derived from calibrated Coriolis mass flowmeters, weighbridge tickets, and tank gauging records over the preceding 12 months.

Transferring sustainability attributes across the supply chain from the First Gathering Point or waste Collecting Point down to the chemical complex or biofuel refinery requires standardized transaction documents:

• Under ISCC PLUS, batches move with a Sustainability Declaration (SD) specifying the exact feedstock designation from the ISCC PLUS Material List (e.g., Mixed plastic waste or Bio-circular pyrolysis oil), the raw material category (Circular or Bio-circular), the Chain of Custody option (Mass Balance), and the exact Attribution Approach (Free Attribution, Fuel-Use Excluded, or Proportional);
• Under ISCC EU (as well as REDcert, KZR INiG, and 2BSvs), consignments move with a Proof of Sustainability (PoS) and must be registered in the European Commission's Union Database (UDB) pursuant to Article 31a of Directive RED III (Directive (EU) 2023/2413).

For all regulated flows under RED II / RED III (ISCC EU) and voluntary Product Carbon Footprint (PCF) declarations under ISCC PLUS 205, each consignment must carry a verified lifecycle greenhouse gas (GHG) emission intensity (expressed in $\text{g CO}{2\text{eq}}/\text{MJ}$ for energy/fuels or $\text{kg CO}{2\text{eq}}/\text{tonne}$ of product) calculated via the statutory lifecycle equation:

$$E = e_{ec} + e_l + e_p + e_{td} + e_u - e_{sca} - e_{ccs} - e_{ccr}$$

Engineering breakdown of each parameter under ISCC 205 Greenhouse Gas Emissions:

• $e_{ec}$: emissions from extraction or cultivation of raw materials (for arable crops: seed, synthetic N/P/K fertilizers, soil $\text{N}2\text{O}$ field emissions, tractor diesel; for wastes and processing residues such as UCO or post-consumer plastic waste, upstream emissions at the point of origin are set to $e{ec} = 0$ prior to collection);
• $e_l$: annualized emissions from carbon stock changes caused by land-use change (reference baseline: January 2008);
• $e_p$: emissions from industrial processing (grid electricity, natural gas burned in boilers and pyrolysis/cracking furnaces, steam import, hydrogen for hydrotreating, chemical reagents/catalysts, and effluent treatment);
• $e_{td}$: emissions from upstream and downstream transport and distribution (road trucks, railcars, river barges, ocean vessels);
• $e_u$: emissions from the fuel in use (taken as zero for biogenic $\text{CO}_2$ in biofuels);
• $e_{sca}$: emission credits from soil carbon accumulation via improved agricultural management in agriculture (no-till farming, cover cropping, organic soil amendments);
• $e_{ccs}$ and $e_{ccr}$: emission savings from Carbon Capture and Geological Storage (CCS) and Carbon Capture and Replacement (CCR).

Co-Product GHG Allocation Rules: when a single process yields multiple co-products simultaneously (such as crude vegetable oil and meal in an oilseed crushing plant, or olefins and BTX aromatics in a cracker), regulated ISCC EU (RED III) requires all upstream and processing emissions ($e_{ec} + e_l + e_p + e_{td}$) up to the point of separation to be allocated among co-products strictly in proportion to their energy content (determined by Lower Heating Value - LHV) on a dry-matter basis. Under voluntary ISCC PLUS for non-fuel chemical products, mass-based or stoichiometric carbon allocation may be applied per ISCC PLUS 205.

Certification and surveillance audits under ISCC, REDcert, KZR INiG, and 2BSvs are executed exclusively by Certification Bodies accredited to ISO/IEC 17065 by national accreditation bodies that are signatories to the European co-operation for Accreditation (EA) multilateral agreement (in Ukraine, accreditation oversight is performed by the National Accreditation Agency of Ukraine - NAAU operating under the Law of Ukraine No. 124-VIII "On Technical Regulations and Conformity Assessment"). During pre-audit diagnostic assessments and on-site audit support, our engineering team most frequently identifies and resolves six critical nonconformities:

1. Hidden Negative Credit Balance at Quarter-End Due to Moisture or $CF$ Adjustment: an accounting team dispatches $1,000\ \text{tonnes}$ of certified product against $1,000\ \text{tonnes}$ of credits, overlooking $2.5%$ drying/handling shrinkage or a drop in actual plant yield. Once the auditor applies the real site $CF$, the ending balance drops to $-25\ \text{tonnes}$, triggering immediate certificate suspension;
2. Upgrading Attribution Hierarchy Between Incoming and Outgoing SD Documents: a converter purchases certified monomer carrying a Free Attribution declaration on the incoming SD, but issues an outbound SD to a packaging buyer stating Fuel-Use Excluded or Proportional. Under ISCC PLUS rules, attribution follows a strict one-way hierarchy: you may downgrade claims (Proportional -> Fuel-Use Excluded -> Free), but you may never upgrade Free Attribution into Fuel-Use Excluded;
3. Carrying Forward Paper Credits Across Zero Physical Inventory: at the close of a 3-month period, storage tanks are emptied for maintenance turnaround ($\text{Physical Stock} = 0\ \text{t}$), yet the compliance officer carries $400\ \text{tonnes}$ of unused credits into the next quarter;
4. Omission of Auxiliary Utility Emissions in the GHG Model ($e_p$): failing to include flare gas combustion, steam boiler blowdown, wastewater treatment methane, or updated national grid electricity emission factors from ISCC 205;
5. Unsegregated Interface Between Technical Biofuel/Chemical Streams (ISCC) and Feed Safety Streams (GMP+): when oilseed or grain processing plants sell co-products into both the biofuel/chemical sector (ISCC) and the animal feed chain (GMP+), failing to isolate technical processing aids violates feed hygiene rules;
6. Late or Unreconciled Union Database (UDB) Transactions: failing to accept incoming PoS records or log outbound PoS dispatches in the EU Union Database within mandatory regulatory windows.

If your facility is preparing for an initial certification or recertification audit under ISCC, REDcert, KZR INiG, or 2BSvs, or requires custom engineering of Mass Balance ledgers and ISCC 205 GHG calculators, contact our team via the contact page to book a turnkey implementation or pre-audit diagnostic audit.