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Expressing environmental impact in euro's (or dollars): the ECI

Timber construction is advancing further in the Netherlands due to a low ECI score. But what is the ECI? And is it interesting for your company?

Timber construction is advancing further. One of the reasons for this is wood's low environmental cost indicator, or ECI (in Dutch we speak of the Milieukosten indicator, or the MKI-score). Thanks to this score, timber construction projects now stand a chance more often in government projects. But what exactly is the ECI? And is it interesting for your company?

Environmental cost indicator explained

The ECI, or environmental cost indicator, is an indicator expressed in euros. The indicator is a weighted average and represents the cost of the environmental impact of a product or project. Of course, the real environmental impact is difficult to express in monetary terms. For the ECI, an estimate is made of the maximum costs incurred to prevent the environmental burden, the shadow price. 

The costs are calculated over the entire chain of a product. They may be in the production phase and the use phase or the waste processing of the product. The environmental impact can also take various forms. We are all familiar with CO2 emissions and nitrogen deposition. But the same production chain can simultaneously deplete certain raw material resources or emit toxic substances. The ECI summarises all impacts into one figure expressed in euros.

How do you get to the ECI?

The requirements for the ECI calculation are written down in the SBK Determination Method (Environmental Performance of Building Works). This can be divided into a few steps. The calculation starts with the collection of the right data. Input in electricity consumption, transport, materials, chemicals, etc., is investigated and collected. When you commission an MKI calculation, this data is retrieved by our experts. Then the output in the form of emissions to air or soil, for example, is calculated. Using a life cycle assessment (LCA), all this data is translated into a score on several impact categories. The ECI is calculated based on 11 impact categories (set 1 from the Determination Method).

This complete analysis is extremely useful for determining the impact hotspots of a chain. It can also draw up an Environmental Product Declaration (EPD). 

Perhaps you already have an LCA report. This can be used to determine the MKI, as long as it is a Dutch report with all the necessary impact categories. Unfortunately, many foreign LCAs and EPDs are not satisfactory. The MKI is a Dutch invention, which is why foreign reports often lack a number of the necessary impact categories (toxicities).

A category that emerges from an LCA is, for example, the Global Warming Potential, better known as climate change (expressed in CO2 emissions). But also less well-known categories such as human toxicity and acidification are calculated. The 11 different categories give a complete picture of the environmental damage but are not easy to interpret. That is where the MKI score comes in!

A fixed price, the shadow price, has been determined (see figure). This shadow price is determined by the maximum cost of preventing environmental damage. Take climate change; the price is €0.05 per kg CO2 equivalent. So if 20 kg of CO2 equivalent is released, the EQI is €1.00. This is done for all categories, and these are added up to the total MKI score. Some categories are more 'expensive' than others. By summarising all the categories, products or projects can easily be compared.

That is exactly the purpose of the ECI score, to easily compare environmental impacts. This makes it easier for you to choose between different products. Take a concrete hollow core slab floor and a wooden floor (European softwood). The EIP of the concrete floor is 3.745 €/m2, while the wood floor has an EIP of 0.7783 €/m2. Of course, the whole life cycle has to be taken into account. These and other ECIs can be found in the National Environmental Database*. An excellent example of the application of the ECI is the way it is taken into account when outsourcing construction projects.

Cost of different environmental impact categories according the Dutch calculation method.

From ECI to more wood construction

The score has become even more interesting for project developers in the Netherlands since July 2021. The maximum Environmental Performance of Buildings (Milieu Prestatie Gebouw, or MPG), the ECI score for buildings, is more stringent since last summer. The MPG score is the ECI score per m2 of gross floor area per building life span (50 or 75 years). The score of all materials in a building is taken into account. The total cost is ultimately divided over the gross floor area and the life span of a building.

Initially, a maximum score of €1.00 per m2/year was applied, but this has been lowered to €0.80 per m2/year for dwellings since 1 July 2021*. As a result, projects with an exceptionally high MPG score are excluded. In addition, projects with even lower MPG scores are rewarded. Thus, buildings with a low score are eligible for the Environmental Investment Allowance (MIA)*.

In addition, contractors for government projects can submit their projects and EIP score. Subsequently, projects with a low ECI score can receive a fictitious discount on the total project costs. As a result, these projects have a greater chance of actually being chosen and realised. 

The more important is that the products in a building have a low ECI! Read more about our ECI service here. 





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