Material Flow Analysis

Heinz Schandl, Commonwealth Scientic and Industrial Research Organization, Canberra, ACT, Australia
Anke Schaffartzik, Institute of Social Ecology, Alpen-Adria University, Vienna, Austria
2015 Elsevier Ltd. All rights reserved.

Abstract
All societies depend on natural resources to feed, house, and transport people and to produce the goods and services everyday
life depends upon. The magnitude of the physical interaction between society and nature may be measured through material
ow accounting. The accounts measure the amount of materials extracted domestically biomass, fossil fuels, metal ores, and
construction materials as well as traded materials and also measure the disposal of waste and emissions to the environment
by taking a whole life cycle perspective. The accounts measure yearly material ows in tonnes and provide an information
base about the scale of natural resource use that underpins human development and economic prosperity. Material ow
accounts have become part of the system of integrated economyenvironmental accounts and inform modern environmental
policy making that understands environmental outcomes are greatly related to the process of consumption and production.
Indicators based on material ow accounts play a major role in the environmental policy process and gure prominently in
international debates about sustainable consumption and production, resource efciency and decoupling, and the green
economy.

Introduction

History of MFA

The study of material ow accounting (MFA) focuses on the

natural resource requirements of national economies, specic
economic activities (such as construction and housing, transport, and mobility), or geographical units such as cities. MFA
accounts for the input of primary materials biomass, fossil
fuels, metal ores, and minerals and semimanufactures and
nal goods into economic activities. MFA also accounts for the
outputs of economic systems including nal goods for export,
waste, and emissions. MFA often conceptualizes the economic
system as a black box. There are, however, accounting strategies for material ows within economic systems available as
well.
Material ow accounts are complementary to economic
accounts and measure tonnes of materials that are associated
with production and consumption processes. The accounts
measure the physical implications of economic systems and
allow links to be established between economic activities
and the natural resource base and natural environment they
depend upon. Material ow accounts can therefore be used
as tools in both environmental and economic policy.
Material ow accounts have grown in political importance
over the past decade in response to converging environmental and economic pressures such as climate change, food
security, rising energy costs, and the global nancial crisis of
2008.
MFA has a sound theoretical base in the theory of socialecological systems and the concept of social metabolism and
industrial metabolism (Ayres and Simonis, 1994). MFA operationalizes the concept of metabolism, provides an understanding of the amounts of natural resources used in different
economies at different times in history, and has a multitude of
application scales global, regional, national, subnational,
urban, businesses, and households and a variety of policy
applications in the context of integrated economic and environmental policy making.

For a long time, there has been recognition that all economic
activities depend on the timely availability and affordability of
natural resources. Major economic powers such as the Soviet
Union and the United States of America have established
accounts of their natural resource base and resource requirements and the supply systems that deliver those resources. The
most prominent example is the Paley report of the 1950s
(Paley, 1952) comparing the resource base of the United States
and its allies to those of the Soviet Union.
Early research that pioneered a physical accounting
approach in economics includes the work of Nicholas
Georgescu-Roegen, Herman Daly, and Robert Ayres.
Georgescu-Roegen was one of the rst economists who
assessed the interplay of economic activity and the natural
environment within the concept of thermodynamics
(Georgescu-Roegen, 1971). Herman Daly introduced the
notion of scale referring to the total volume of resource ows:
the matterenergy throughput taken from the environment as
low-entropy resources and returned to the environment as
high-entropy waste. Scale, according to Daly, is relative to
environmental carrying capacity and is often ignored by
mainstream economics (Daly, 1992). Robert Ayres published
an early material ow account for the United States that set an
analytical standard for the next generation of MFA studies
(Kneese et al., 1970).
National material ow accounts were pioneered in Germany, Japan, and Austria in the early 1990s (Fischer-Kowalski
and Httler, 1998). The World Resources Institute published
two groundbreaking comparative studies Resource Flows: The
Material Basis of Industrial Economies (Adriaanse et al., 1997)
and The Weight of Nations (Matthews et al., 2000) that
highlighted differences in methodology and triggered a process
of methodological harmonization and standardization. The
European statistical ofce EUROSTAT has since been netuning methods and has produced several iterations of the

760

International Encyclopedia of the Social & Behavioral Sciences, 2nd edition, Volume 14

http://dx.doi.org/10.1016/B978-0-08-097086-8.91060-2

Material Flow Analysis

MFA methods guidebook (Eurostat, 2012). The OECD, supported by a political decision of the leadership of the group of
eight (G8) at Sea Island in 2008, identied the policy implications of MFA data and indicators in a series of reports and
further supported the process of standardization of material
ow and resource productivity information (OECD, 2008).
Most recently, MFA was integrated into the system of environmentaleconomic accounting helping to establish a sound
base for environmental accounts at national, regional, and
global levels (UN, 2014).
The sustainable development discourse that emerged in the
1990s profoundly changed the way in which the policy
community viewed environmental problems. The new
sustainability discourse helped establish the notion of decoupling of economic activities from environmental pressures and
impacts. In essence, sustainable development suggested a new
path to development in which the exploitation of natural
resources, the direction of investments, the orientation of
technological development, and institutional change are all in
harmony and enhance the current and future potential of
socioeconomic systems to meet human needs and aspirations.
As a consequence of the new sustainable development
discourse, many national governments and international
organizations such as the United Nations have moved from
a conservationist approach in environmental politics to
a new understanding of the social and economic drivers that
cause environmental pressures. MFA measures a specic
aspect of environmental pressures and allows progress in
resource efciency and decoupling to be assessed. This new
policy orientation has inspired a large number of global and
regional studies into natural resource use and economic
development.
Scientically, MFA is used as a data organization strategy
and an analytical tool in the research elds of industrial
ecology and ecological economics, but also gures prominently
in physical environmental history (Krausmann et al., 2008)
and environmental sociology (Fischer-Kowalski and Haberl,
1997).

Accounting Standards and Headline Indicators

MFA assembles data on material use, often at the national level.
The accounting is based on the concept of industrial metabolism and starts from a clear denition of system boundaries
between economy and nature (and national borders between
economies) and an assessment of physical stocks, for example,
buildings and transport infrastructure, but also livestock
animals and people. It measures the yearly ows of materials
required to fuel and maintain existing stocks, to replace stock
that has become depreciated, and to build new stock. The
accounts provide data on material inputs into, the changes in
material stock within, and the material outputs in the form of
goods for exports or discharge of waste and emissions to the
domestic environment of an economy. MFA covers all solid,
gaseous, and liquid materials that are mobilized in economic
activities with the exception of bulk water and air. Water is
usually treated in a separate water account and air is dealt with
as a memorandum item when closing the material balance of
an economy.

761

The unit of measurement of an MFA is most commonly

(metric) tonnes. Inputs are distinguished by their origin, i.e.,
whether they are extracted domestically (domestic extraction,
DE) or are imported goods from other countries (imports, IM
and exports, EX). Primary material inputs are most commonly
grouped into four main aggregate material groups: biomass
(renewable), and fossil fuels, metal ores, and industrial and
construction minerals (nonrenewable). The outputs are
distinguished by gateways through which they leave the
economy and include goods exported, waste to landll, and
emissions to air and water. Material ow accounts aim for close
complementarity with economic accounts and include materials at the commodication stage, i.e., when a natural resource
becomes a primary material and a market value is attached. In
order to provide a complete picture of the physical interaction
of the economy with the environment, this complementarity to
economic accounts cannot always be upheld and the accounts
include a number of inputs that have no market value attached.
This is the case for biomass grazed and scavenged by livestock,
crop residues that are used economically in the context of
a farm, the waste rock component of metal ores, and sand and
gravel that is extracted within the connes of a construction
company on the premises of the company to mention the most
important categories. Overall, material ows that have no
market value attached make up 20% of global materials
extraction.
Materials that are mobilized in the course of economic
activities but do not enter the production process as such are
classied as unused extraction. They may include earth movement in mining and agriculture, by-catch in sheries, and byharvest of timber and are usually left where they occur. These
ows are classied as unused DE (Figure 1).
A full material ow dataset hence comprises all economically relevant material exchanges and enables the construction
of a set of indicators. These are increasingly used by national
governments and businesses. The standard headline indicators
derived from an MFA account include the following:
Direct material input (DMI), which measures the overall
material input into a national economy and is calculated as the
sum of DE and imports (DMI DE IM).
The physical trade balance (PTB) is a measure of net trade
and is calculated as the difference between imports and
exports. The PTB is the reverse of the monetary terms of trade

Air and
water

Water
vapour

Imports

Exports
Economy

Domesc
extracon

Addions
to stock

Domesc
processed
output

Stocks

Domesc environment

Figure 1

The material cycle.

762

Material Flow Analysis

and shows whether a country is a net importer of materials

and hence depending on the world market for primary
materials to satisfy the physical requirements of its economy,
or a net exporter supplying primary resources to global
markets (PTB IM EX).
Domestic material consumption (DMC) is a measure of
apparent consumption of an economy and is calculated by
adding imports and subtracting exports from DE of materials
(DMC DE IM EX or DMC DE PTB).
Domestic processed output (DPO) provides a comprehensive
measure of all materials that leave an economy at any stage.
Included in DPO are emissions to air, industrial and household
waste deposited in landll, material loads in wastewater, and
materials dispersed into the environment as a result of
product use.
Net additions to stock (NAS) measures the yearly addition to
the stock of buildings, transport infrastructure, productive
capacity, and durable consumer goods. It subtracts materials
that are discarded from gross additions to stock (NAS DMI
DPO EX).
MFA accounts are a rst step toward a satellite account for
materials to the system of national accounts (SNA) and provide
a rich analytical database and indicators to inform modern,
integrated economic and environmentally minded policy
decisions.
The complementarity of MFA and national accounts allows
material efciency (ME) indicators to be calculated. The ME is
usually expressed as material intensity, i.e., the amount of
material required per unit of economic output. It is measured
by dividing DMC by gross domestic product (GDP). Efciency
can also be expressed as material productivity (GDP/DMC)
which is the inverse of material intensity.
Most studies and policy reports to date have focused on
these indicators and hence have presented a productionfocused perspective on the material requirements, waste and
emissions of economies. In the context of global concern for
resource supply security and global fairness a consumptionbased approach to material use has been introduced, to
complement other consumption-based indicator systems such
as those for energy use (Wiedmann, 2009) and carbon emissions (Hertwich and Peters, 2009) which have pioneered
consumption-based analysis. When countries import goods,
the primary resources required to produce those goods remain
in the country of origin. At the same time, when a country
exports goods the primary resources required to produce the
good remain in the country. Traded goods are measured at the
time when they cross the boundary between countries (direct
imports and exports) but they are related to an indirect material
requirement referred to as the raw material equivalent (RME).
RME refers to the primary materials that were required to
produce the goods and can be measured with various analytical
techniques (Munoz et al., 2009).
More recently, the notion of material footprint (MF) of
consumption was introduced (Wiedmann et al., 2013). The
MF of an economy is accounted for through the attribution of
global material extraction to nal consumption in a country
and requires a global, multiregional inputoutput framework
as an analytical tool. Alternatively, the upstream and downstream requirements of traded goods could also be measured
by employing life cycle analysis coefcients REF. Both

approaches have been tested but are still considered immature

with regard to the robustness and reliability of results. Technically, MF can be expressed as DE plus the RME of imported
goods, RMEIM minus the RME of exported goods, RMEEX
(MF DE RMEIM RMEEX).
The MF indicator allows the establishment of a revised ME
indicator which is sensitive to the burden shifting that occurs
between nations importing and exporting natural resources.
Material intensity is now measured by dividing MF by GDP.

Applications of MFA
Most commonly, material ow accounts are established for
national economies. These accounts complement economic
accounts and report progress in the ME of nations. Such
accounts now exist for most OECD countries and a number of
developing countries. While early studies focused on descriptive aspects of a countrys material use, the level of analytical
sophistication has continued to increase. More recent studies
discuss the social and economic drivers of material use, look at
the economic structure of a country and the role the country
plays in the world economy, analyze trade patterns and their
material underpinnings, and unpack policy implications of
material ow accounts.
Material ow accounts often conceptualize the economy as
a black box and focus on those inputs and outputs for which
data are more easily accessible than for material exchanges
within an economy. As a consequence, material ow accounts
for specic economic activities have been rare. To gain a good
understanding of the material interrelationships within
a national economy requires a full physical inputoutput table
(PIOT) of that economy. Establishing such a table is very data
and time intensive and for this reason PIOTs are often outdated
when they are published. PIOTs do, however, exist for
Denmark and Germany (Weisz and Duchin, 2006) and provide
in-depth insight into the material interactions within those
economies.
Material ow accounts for cities have been another focus of
the research community and many case studies have become
accessible recently. Urban material ow accounts also have
a long history and go all the way back to the early work of
Stephen Boyden (Boyden et al., 1981) and Abel Wolman
(Wolman, 1965). Accounting for urban metabolism using
similar accounting strategies to national MFA has become
a very active area of research more recently (Weisz and
Steinberger, 2010).
During the past two decades, material supply and demand
relationships in the world economy have become ever more
complex and have introduced a new focus in MFA, looking at
upstream and downstream material requirements for traded
goods.
Globalization of production and consumption processes
has increased the spatial disconnect between primary natural
resource supply and centers of demand and has added
complexity to societies metabolism. In many economies,
a proportion of resources extracted domestically is used for the
production of traded goods while at the same time high-end
processed goods with substantial amounts of embodied
materials and energy are imported. Standard MFA does not

Material Flow Analysis

distinguish whether resources are extracted to satisfy domestic

or foreign nal demand and the structure of production and
the origin of material inputs remains unknown within the
black box that represents an economy. Environmentally
extended inputoutput analysis (EE-IOA) based on the work of
economist Wassily Leontief (Leontief, 1970) supports the
analysis of production structure and intra-industry relationships within the black box.
MFA and EE-IOA cover the ows of material, energy, and
money within the economy, but not accumulated physical
and monetary capital or the stocks of buildings, infrastructure, productive capital, and durable consumer goods which
play a central role in the economy, and in consumption and
everyday life. They provide physical services such as shelter,
mobility, and industrial capacity, representing large accumulations of material and investment. They are usually long
lived and their depreciation time determines the amount of
material required to maintain or replace them. Physical
stock also determines the speed at which new technologies
can penetrate markets, and there are technical properties
that link service provision with energy and material
throughput. Understanding the dynamic properties of
physical stock in use is the subject of dynamic stock
modeling (Muller, 2006).
MFA has also underpinned a variety of local studies, mostly
in developing countries REF looking into the current metabolic
transition, and historical studies of social metabolism
providing long-time accounts (centuries) of industrial development and changing natural resource bases (Fischer-Kowalski
et al., 2011). MFA data and indicators have assisted in empirically exploring the nonlinear relationship between material
and energy use and human development (Steinberger and
Roberts, 2010).

Policy Use
The information provided by material ow accounts is
increasingly being used by the policy and business communities. Most notably, material ow accounts have become an
essential part of environmental satellite accounts to the SNA and
offer an alternative to the green accounting approaches of the
1970s and 1980s (Bartelmus, 2003). Material ow data show
the quantity of natural resources required per unit of output in
a national economy, for a certain economic sector or activity,
and provide insight into the eco-efciency of the production
process in different countries and different economic sectors.
They allow for benchmarking and target setting and for monitoring progress in resource efciency and waste minimization.
They also form an important part of triple bottom line
accounting in businesses and industries (Foran et al., 2005).
Material ow accounts allow the creation of a set of pressure
indicators to monitor the physical ow of natural resources and
waste and emissions between economy and environment.
Pressure indicators allow for a swift policy response, even
before pressures have led to changes in the state of the environment and are causing visible impacts. This allows much
shorter response times for environmental policy making with
regard to major environmental problems including the depletion of natural resources, climate change, biodiversity loss, and

763

problems related to growing amounts of household and

industrial waste.
Decoupling has become a signature concept of modern
integrated economicenvironmental policy (UNEP, 2011a)
and refers to the ability to expand the economy while reducing
material and energy use, as well as waste and emissions. This
may occur through the adoption of new technologies and
innovations in major systems of provision including agriculture and food, construction and housing, and transport and
mobility but also in heavy industries such as iron and steel,
cement, and paper production. Decoupling is based on the idea
of achieving more human well-being with less environmental
disruption. The potential for efciency gains is very large in
many sectors of the economy, sometimes up to 80% (Von
Weizsaecker et al., 2009).
The new policy concepts of sustainable consumption and
production, resource efciency and waste minimization, and
investing in a green and low carbon economy depend on
information about material ows to set objectives and targets,
monitor progress, and evaluate policy outcomes. Many countries and regional bodies have developed their national strategies and framework policies to deliver human development and
economic growth while minimizing natural resource depletion
and environmental degradation. Examples include the European Union Resource Strategy supporting a resource-efcient
Europe (EU, 2011) and the material ow accounts delivered by
member countries and published by the European statistical
ofce to monitor progress, the Chinese law to promote
a circular economy (UNEP, 2011b), and the Japanese policy
framework for a Sound Material Cycle Society REF which
includes a set of material ow-related targets including material
productivity of the economy, the recycling rate, and the amount
of nal waste disposal (Takiguchi and Takemoto, 2008).
The economic context for material use has changed
profoundly. Economic development in the twentieth century
was fueled by affordable natural resources, and prices were
declining during most of the century. Since 2000, the price of
most natural resources has been rising and price volatility has
increased because of the vast resource demand of many
developing economies, especially China, and supply capacities
have fallen behind demand. In this new economic context,
national governments and business leaders require an extended
set of information for decision making beyond monetary
economic indicators. Material ow accounts and indicators
provide this information.

See also: Ecological Economics; Environmental Sociology;

Industrial Ecology; Sustainable Production and Consumption.

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Relevant Websites
http://is4ie.org/ International Society of Industrial Ecology.
http://www.unep.org/resourcepanel/ UNEP International Resource Panel.