Life cycle analysis means evaluating the costs (life cycle costing – LCC) and the potential environmental impacts (life cycle assessment – LCA) of a product system throughout its life cycle, from cradle to grave, i.e. from the raw material extraction to its disposal (end-of-life - EoL).
To identify the real potential on energy and resource efficiency within the context of a circular economy, the results must be interpreted in a different - circular - way. The costs of manufacturing a product must be directly compared with the revenue from its EoL (credits for the reuse or recycling of individual product components). The resulting difference is the system loss of a circular economy, referred to as the »life cycle gap«.
Life cycle gap-analysis (LCG-A) was developed as a methodical interpretive approach - rooted in the fourth methodological phase of an LCA (the interpretation) - which enables various stakeholders from research and development, industry and politics to identify and disclose these circularity gaps for individual products. The mandatory sequence of steps within the methodology means that new solutions to close these gaps can be evaluated against the backdrop of total cost optimization, i.e. taking account of possible negative trade-offs of other stages in the life cycle, making an effective contribution to sustainability.