Marginal production refers to the production activities that respond to changes in market demand by adjusting their production capacity. This concept is synonymous with and defined by the marginal supplier (long-term), which represents the supplier or producer that will change production capacity in response to a change in demand for a product, whether that demand increases or decreases.
In consequential Life Cycle Assessment, identifying marginal production is fundamental to modelling the actual environmental consequences of decisions. When demand for a product changes, not all suppliers respond equally. Some producers operate at fixed capacity due to technical, economic, or regulatory constraints, whilst others can flexibly adjust their output. The marginal suppliers are those flexible producers whose output will actually change in response to the demand shift being studied.
Understanding marginal production is essential because it determines which environmental impacts should be attributed to a decision in consequential LCA. Rather than modelling an average of all current producers (as in attributional approaches), consequential LCA focuses on the specific production technologies and activities that will actually increase or decrease as a result of the change being assessed. This distinction ensures that LCA results reflect the real-world consequences of decisions rather than theoretical averages.
The identification of marginal production typically requires analysis of market dynamics, production costs, capacity constraints, and technology trends. Long-term marginal suppliers are particularly important for strategic decisions, as they represent the production technologies that will expand or contract capacity over time in response to sustained changes in demand.
