A marginal supplier (long-term) is a supplier or producer that will change production capacity in response to a change in demand for a product, whether that change represents an increase or decrease. This concept is central to consequential Life Cycle Assessment modelling, where the aim is to identify which activities will actually respond to changes in demand for a functional unit.
In consequential LCA, according to ISO 14040 and ISO 14044 principles, the focus is on modelling the consequences of decisions. When demand for a product changes, not all suppliers in a market will respond equally. Whilst some suppliers operate at fixed capacity or are constrained by various factors, marginal suppliers possess the flexibility and economic incentive to adjust their production levels. These are the suppliers whose activities should be included in a consequential product system model.
The "long-term" specification distinguishes this from short-term market responses. Long-term marginal suppliers can make capital investments to expand production capacity or can close down facilities to reduce it. This contrasts with short-term responses that might involve only adjusting utilisation of existing capacity. The long-term perspective matters for decisions with lasting consequences, such as policy changes, new product development, or significant shifts in consumption patterns.
The marginal supplier concept directly shapes system modelling choices in consequential LCA, determining which activity datasets should be linked to represent the supply of intermediate products within the product system being studied.
As Chief Operating Officer, Iris leads our organisational development and oversees day-to-day operations. Before joining 2-0, she worked in the biotechnology sector. As an LCA consultant, Iris has devoted her expertise primarily to the domains of sustainable agriculture and food production. She is dedicated to teaching LCA and is responsible for our educational efforts. Iris holds an M.Sc. in Biology – Biotechnology from the University of Copenhagen.
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Glossary terms are clearer once you have seen them applied. Our guide to what LCA is and how it works walks through the complete methodology: goal and scope, inventory modelling, impact assessment, and interpretation.
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