Material flow accounts (MFA) — compilations of the overall material inputs into national economies, the changes of material stock within the economic system and the material outputs to economies of other countries or to the environment, made in physical units.
Economy-Wide Material Flow Account is one of the modules of Environmental Accounting. According to this model the modern society could be considered as living organism whose vital activity has an impact on the environment through extraction of materials and energy and return of emissions and wastes.
The direct and hidden material flows are distinguished in Material Flow Accounting. Direct material flow consists of all solid, liquid and gaseous materials which are of economic value and are used in production and consumption activities. Further these materials either accumulate in the economy where they are stored in the form of buildings, transport infrastructure and products or leave the economy to national environment as pollution and waste or to the rest of the world as exported commodities. Hidden material flow consists of so-called unused domestic extraction. Unused domestic extraction means materials, which are moved or extracted from the environment during economic activity, but which were not used in production or consumption process (for example mining overburden, soil and rock excavated during construction and not used elsewhere and harvest residues).
MFA comprises two main elements: material balance sheets compiled in physical units and material flow indicators derived from these tables. In input side of balance sheets all materials used in domestic economy – extracted from domestic economy and also imported – are indicated. Materials are classified according to the basic material categories to biomass, mineral resources and fossil fuels. For comparability all imported materials are recalculated for their basic natural resources indicating their processing level: raw material, semi-manufactured products and finished products. For example a refrigerator made mostly of metals is accounted as finished product of mineral resources, as metallic minerals were extracted for its production.
All emissions, land filled wastes and also exported materials as basic natural resources indicating their processing level are accounted on output side of material balance sheets. The material balance sheets include lot of detailed information, but are difficult to interpret for general public. Thereby a number of material flow indicators are derived from balance sheets, which are easily understandable and usable both in social decision-making and for journalists in informing the public. At the same time material flow indicators contain substantial information about special characteristics of domestic material use, its intensity and productivity and environmental risks connected with the use of natural resources. Material flow indicators are usually classified as material input, consumption, resource productivity and intensity, material output and balance indicators.
Input indicators are worked out to answer the questions like what is the material requirements of state economy; which material resources are mainly used; how much non-renewable resources are used; how dependent is the state economy on imported raw materials, etc.
Material consumption indicators describe the materials consumed by economic activities.
There are two aspects in the use of natural resources: the total quantity used and the efficiency of use. In order to reduce the total quantity usage natural resources sustaining the same production level, efficiency of natural resources’ use should be increased. This means that in addition to indicators characterising the absolute level of natural resources’ use (input and consumption indicators) also indicators expressing the efficiency use of natural resources are needed. For that purpose the material flow indicators are connected to (macro) economic indicators.
Material output indicators describe the material flow that has been used in the economy, but are now leaving it either in the form of emissions and waste, or as exported materials.
Material balance indicators describe physical growth of materials within economy. Balance indicators express the difference of materials input and materials output of the economy. One of the often used balance indicators is physical trade balance. Physical trade balance measures surplus or deficit of the physical trade of a country’s economy. Physical trade balance equals imports minus exports. Positive physical trade balance indicates that a country uses more natural resources of other countries than exports its own. Negative physical trade balance indicates that more domestic natural resources are exported than natural resources of other countries are imported.
In 2007, Estonian direct material flow was 70% bigger than in 2000. This increase occurred mainly due to the substantial increase of domestic extraction of construction minerals and consequent increase of stock (buildings and civil engineering account for the main share of the increased stock). Another considerable factor that increased material flow was the increase in domestic extraction of oil shale (increase of production of electricity) and consequent increase of air emissions.
In 2000–2007 Estonian economy was depending mainly on domestic raw material supply although the share of imported raw materials was slightly increasing. Estonian domestic extraction was one of the biggest in the EU-27. Especially high (the highest among EU-27 countries) was domestic extraction of fossil fuels, the indicator of which exceeds the average of EU-27 by 4–5 times and was constantly increasing. Oil shale made up more than 90% of domestic extraction of fossil fuels.
The emissions to air were the biggest material output flows and were also the most increased flow during
2000–2007. Most of air emissions originated from electricity production based on oil shale burning.
In 2000–2007, Estonian physical trade balance changed from deficit in 2000 to surplus in 2007. This occurred mainly due to the decrease of exports of raw materials from forestry. Comparison of physical and monetary trade shows that Estonia imports the commodities of higher monetary value and exports the commodities of lower monetary value. Nevertheless the difference between values per ton of exported and imported material was decreasing.
Estonian resource productivity was one of the lowest among EU-27 Member States in 2000–2007. The trend of resource productivity of EU-27 average was slightly increasing; at the same time Estonian resource productivity decreased. The main reason for the decrease of Estonian resource productivity was the substantial increase of oil shale excavation on the one hand and very low resource productivity of fossil fuels on the other hand.
Links
Statistical database
Articles:
Economy-wide material flow account of Estonia. Quarterly bulletin of Statistics Estonia, 4/2010
Economy Wide Material Flow Accounts of Estonia
Methodological manuals:
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-34-00-536/EN/KS-34-00-536-EN.PDF
http://epp.eurostat.ec.europa.eu/portal/page/portal/environmental_accounts/documents/Eurostat%20MFA%20compilation%20guide%20for%202009%20reporting.pdf
http://www.oecd.org/dataoecd/55/12/40464014.pdf
Project reports:
Economy Wide Material Flow Account
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