Mass Balance & Bookkeeping: Tracing Sustainable Products from Mixed Feedstocks

Did you know that more than 80% of a product’s environmental impact is determined during its design? This means the choices made at the very start—from materials to production methods—set the course for a product’s sustainability long before it reaches the market. Across industries like chemicals, renewable fuels, organic food, and homecare, companies are facing growing pressure to design responsibly and prove that their products meet strict sustainability standards.

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Tracking these choices through complex supply chains is no small task. That’s where mass balance and digital bookkeeping come in. By matching certified inputs with certified outputs, these systems make it possible to claim recycled, circular, or low-carbon content—even when materials are mixed or transformed. From renewable fuels adhering to ISCC PLUS or REDcert2 standards, to organic ingredients verified under USDA’s Organic Certification or EU Organic labels, and homecare products certified by Ecocert or Cradle to Cradle, mass balance provides a transparent, auditable chain of custody that builds trust and credibility.

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This ebook explores how mass balance and bookkeeping are reshaping the way industries trace sustainable products from mixed feedstocks, turning early design choices into verified, environmentally responsible outcomes.

Current Challenges to Sustainable Industrial Practices

Industries face numerous challenges while trying to become sustainable. Complex value chains (intricately linked to 95% of all manufactured goods), environmental effects, and growing needs for sustainable products create major obstacles. Companies must guide themselves through changing regulations, market pressures, and tech advances to work effectively.

Scope 3 Emissions: Managing and reducing emissions across the entire value chain is difficult due to the industry's involvement in almost all product lifecycles.
Supply Chain Visibility: Achieving transparency and traceability throughout the supply chain is challenging but essential for sustainability efforts.
Regional Shifts: Adapting to changing sources of supply and demand, such as the growth in Southeast Asia and parts of Africa, requires careful supply chain management. Players need to review their global footprint and investment strategies to balance regionally diverse effects and capture underlying growth momentum in the US, while focusing on resilience and cost effectiveness in Europe.
Clean Energy Access: Transitioning to sustainable energy sources is a major hurdle. To meet net-zero emissions targets, global installed renewable energy capacity needs to triple to 11,008 GW by 2030.
Financial Constraints: Balancing sustainability investments with financial performance is challenging. For example, 44% of chemical companies reported a decline in "green capex" in 2023 and 2024, with 36% projected to see a decline in 2025.
Market Demand: Companies struggle to build viable business cases for investments in research, development, and assets for renewable and sustainable products without price premiums or demand shifts. Innovation must deliver both superior performance and eco-friendly characteristics, such as lower carbon intensity, circularity, or non-toxicity.
Regulatory Compliance: Varying regulations across different countries and regions require flexible and adaptable sustainability strategies. Companies must navigate changing policies, such as Europe's Corporate Sustainability Reporting Directive (CSRD), the Carbon Border Adjustment Mechanism (CBAM) and Renewable Energy Directive III (RED III).

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Understanding Chain of Custody

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Supply chain visibility presents unique challenges across industries. Companies find it hard to track and verify sustainable feedstock amounts in their products. Modern products combine complex materials that are tough to identify and trace. To address these challenges, various Chain of Custody (CoC) models have emerged, providing a framework for documenting and tracking raw materials, processed materials, and finished products from their origin to the end consumer.

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CoC systems help businesses verify sustainability claims, maintain supply chain transparency, and ensure compliance with legal and regulatory standards. In complex, multi-party supply chains, a robust chain of custody reduces the risk of tampering, contamination, or loss, while enhancing credibility and trust with stakeholders, customers, and regulatory authorities.

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Beyond compliance, CoC enables quality assurance, improves operational efficiency, and offers a competitive advantage by demonstrating commitment to ethical and sustainable practices.

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Chain of Custody Models

Different CoC models are designed to meet diverse operational and sustainability needs:

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Identity Preservation: This model ensures that certified products maintain their unique identity from production to the final point of transformation or labeling by keeping certified materials separate from others. Every step is meticulously documented, preserving integrity and distinctive qualities. Industries like organic food and specialty chemicals often rely on identity preservation to guarantee authenticity.

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Segregation: Segregation keeps certified products separate from non-certified ones throughout the supply chain, allowing mixing only from other certified sources. This prevents cross-contamination while maintaining material integrity. Segregation is common in pharmaceuticals, and other sectors where quality and compliance are critical.

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Mass Balance: Mass balance is particularly well-suited to industries where full physical segregation is difficult or costly, such as renewable fuels, chemicals, bio-based products, cosmetics, green steel, organic food, and homecare. In this approach, certified and non-certified materials can be physically mixed, while quantities are carefully monitored to ensure that the volume of certified input corresponds to the certified output. It can be applied at the batch, site, or group level, depending on where mixing occurs.

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Unlike segregated systems, which require major investments in production, storage, and transport, mass balance enables sustainability traceability without altering existing operations. By tracking the specific properties of goods without physical separation, this method builds trust across the value chain, supports regulatory compliance, and advances the transition toward a circular and bio-based economy.

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Book & Claim: Book & claim separates the physical product from sustainability claims. Certified and non-certified materials flow freely, but sustainability certificates or credits are tracked independently. This allows companies to meet sustainability goals even when sourcing certified materials is challenging.

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To learn more, read our blog “Ensuring transparency and trust in manufacturing: the importance of chain of custody.”

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Bookkeeping in Chain of Custody

At the core of the mass balance approach is bookkeeping, the operational system that enables traceability:

Mass balance defines the principle: tracking and attributing sustainability claims to products.
Bookkeeping is the method: digital or operational systems (including blockchain platforms) that record inputs, outputs, sustainability credits, and transfers among supply chain actors.

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Bookkeeping ensures that all materials and sustainability credits are accurately recorded, preventing claims from exceeding verified quantities. It also underpins the book & claim model by maintaining independent records of sustainability credits and their ownership. In practice, this allows companies across industries to track and verify sustainable materials efficiently, strengthening supply chain transparency and credibility without major operational disruption.

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Business Application in the Chemical Industry

The chemical industry, crucial to modern life, plays a vital role in advancing carbon-neutral targets and circular society solutions. The mass balance approach, widely used in chemical recycling, food and extends to sustainable fuels and various industrial applications across the supply chain.

Mass balance frameworks, aligned with standardized models like ISCC, simplify of sustainable material percentages, enhance transparency, and foster trust among stakeholders. This approach encourages the use of recycled or renewable feedstocks and streamlines accounting processes.

Digital mass balance systems bring big chemical business advantages beyond better operations. Chemical manufacturers can enter premium markets, especially those with strict environmental rules. Companies can also charge premium prices for eco-friendly products, which helps cover setup costs while meeting market needs for verified sustainable options.

Companies that use digital mass balance solutions spend less on regulatory compliance. They benefit from:

Easier ESG reporting systems
Automatic sustainability declarations
Better carbon accounting procedures
Lower compliance management costs

Key Benefits of Digitalizing Mass Balance

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Digitalizing Mass Balance: A Game-Changer for Sustainability

Digital technologies are transforming how industries handle data collection, management, and sharing. Manual data entry and spreadsheets are prone to errors and often fail to provide real-time updates. For complex supply chains—whether in chemicals, renewable fuels, cosmetics, green aluminum or steel—these outdated methods struggle to track sustainability attributes accurately across products and processes.

Blockchain and advanced digital systems bring significant advantages to mass balance across industries. They allow companies to track sustainable materials more precisely, reconcile volumes efficiently, and maintain product quality without altering existing operations. Automated tracking reduces errors, provides live insights into performance, and ensures supply chain transparency at every stage.

Automated tracking through advanced Chain of Custody (COC) systems tracks sustainable materials movement in inventory more accurately and compare volumes faster and provides direct product traceability. This approach gives a full picture at every step and enables better sustainability decisions. Digital platforms also remove double-spending risks by monitoring materials inventory carefully and checking each sustainability credit's authenticity and usage. It also help maintain product quality and use infrastructure better and provide live performance insights.

For additional security and data reliability, mass balance information can be integrated with blockchain technology, which creates an unchangeable database where unauthorized changes become clear to everyone in the network right away. This feature protects sustainability records stored on the blockchain ledger.

Implementing Mass Balance with MARCO TRACK & TRACE:

MARCO Track & Trace is a leading platform helping companies across sectors optimize mass balance. Using advanced digital solutions, it tracks sustainability credits, circular and bio-based materials, and carbon emissions from source to product, setting a high standard for supply chain transparency and accountability.

The platform tracks products automatically through an advanced Chain of Custody (COC) system. It monitors credit movement in inventory systems and shows where credits come from at the product level. Manufacturers can now control their sustainability initiatives better.

MARCO Track & Trace goes beyond simple tracking by carefully monitoring credits to prevent double-spending. Each sustainability credit goes through thorough verification to show a company's dedication to environmental care. The platform's reporting tools encourage accountability and help create positive changes in the industry.

The system offers more than traditional mass balancing with:

Automated ESG credit record-keeping
Digital product passport creation
Sustainability declaration management
Certification handling

Real-World Success Stories with MARCO Track & Trace

SABIC's Circular Feedstock Experience

As a chemicals industry leader, SABIC has become the first in its sector to achieve batch-level traceability from waste to packaging for its TRUCIRCLE products using MARCO Track & Trace; it supports end-to-end digital traceability of circular feedstock in customer products. SABIC's TRUCIRCLE™ portfolio is a major milestone in circular economy adoption. Their work with Plastic Energy and Intraplás shows how mass balance certification builds profitable partnerships in circular economy markets:

Lower operational costs through simplified processes
Better data integration with value chain partners
Faster tracking of material flows
Greater credibility through transparent coverage

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SABIC's Circular Feedstock Digital Ecosystem with MARCO Track & Trace

Digital traceability ecosystems powered by our blockchain-based technology helped SABIC maintain its position as a global leader in environmentally responsible chemicals.

MOEVE: Ensuring Transparency in Sustainable Cleaning Products

Committed to sustainability, Moeve leads in developing cleaner energy solutions, biodegradable products, and eco-friendly technologies. It is also the world's largest LAB producer.

MOEVE provides batch-level traceability and automates Mass Balance processes for sustainable chemicals through MARCO Track & Trace.

Moeve uses mass balance to track sustainability credits and ensure environmental standards, linking raw materials and product output.

These examples demonstrate how using mass balance methods along with advanced digital tools can lead to profitable ways to achieve sustainability in the chemical industry. This shows that by investing in eco-friendly practices, a company can meet its environmental responsibilities and gain significant business benefits by enhancing efficiency and standing out in the market.

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Certification Schemes: An Overview

As the regulatory landscape evolves, various certification schemes have emerged to help businesses demonstrate compliance and make credible sustainability claims. Many of these schemes incorporate mass balance principles, recognising their value in tracking sustainable materials through complex supply chains.

Let's explore some of them:

ISCC (International Sustainability & Carbon Certification) ISCC is a globally recognised certification system that covers various sectors, including agriculture, food, feed, and bioenergy. Key Features of ISCC: Comprehensive Scope: Covers the entire supply chain from raw material production to the end consumer. Flexible Application: Offers certification for different types of bio-based and circular materials. Robust Traceability: Utilises mass balance, segregation, and identity preserved chain of custody models. Mass Balance in ISCC: Allows for the mixing of certified and non-certified materials while maintaining traceability. Enables companies to make claims about the sustainable content of their products based on the proportion of certified inputs. Supports the gradual transition towards more sustainable production methods. REDcert REDcert is a certification scheme primarily focused on the biofuel and bioliquid sectors, with a strong emphasis on compliance with EU renewable energy directives. REDcert's Approach: EU-Focused: Designed to meet the requirements of European renewable energy legislation. Sustainability Criteria: Incorporates strict sustainability criteria for biomass production. Chain of Custody: Utilises mass balance as a key traceability mechanism. Mass Balance Implementation in REDcert: Facilitates the tracking of sustainable biofuels and bioliquids through complex production and distribution systems. Allows for the allocation of sustainability characteristics to specific quantities of fuel or material. Supports compliance with RED II and RED III requirements for renewable energy in transport. Better Biomass Better Biomass is a certification scheme focused on the sustainability of biomass and bioenergy production. Distinctive Elements of Better Biomass: Holistic Approach: Considers environmental, social, and economic aspects of sustainability. Adaptability: Applicable to various types of biomass and bioenergy products. Transparency: Emphasises clear communication of sustainability information along the supply chain. Mass Balance in Better Biomass: Enables the tracking of sustainable biomass through various processing and conversion stages. Supports claims related to the renewable content of energy and materials derived from biomass. Facilitates compliance with sustainability reporting requirements in the bioenergy sector. Rainforest Alliance Certification While primarily known for its work in agriculture and forestry, the Rainforest Alliance certification also incorporates mass balance principles in certain contexts. Rainforest Alliance's Unique Features: Ecosystem Focus: Strong emphasis on biodiversity conservation and ecosystem health. Social Responsibility: Incorporates criteria related to workers' rights and community relations. Continuous Improvement: Encourages ongoing enhancement of sustainable practices. Mass Balance Application in Rainforest Alliance: Used primarily in the cocoa and palm oil sectors to support traceability of certified materials. Allows companies to make claims about the use of certified ingredients even when physical segregation is challenging. Supports the gradual increase in demand for sustainably produced agricultural commodities.

Certification Schemes: An Overview

By utilizing MARCO Track & Trace, businesses can showcase compliance with regulatory requirements and enhance communication of their sustainability initiatives to stakeholders. Through our solution, deploying a mass balance approach, businesses can adhere to these certification schemes.

Sustainability Declaration Management with MARCO Track & Trace

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Conclusion: Mass Balance & Sustainability

As we've explored in this ebook, mass balance and bookkeeping go beyond regulatory compliance, offering a pathway to a more sustainable, transparent, and circular global economy. Accurately tracking the use of sustainable and certified materials across complex supply chains is vital amid challenges like climate change, resource depletion, and social inequality.

Embracing mass balance enables businesses across industries to comply with regulations, enhance sustainability performance, build consumer trust, and strengthen brand reputation. At the same time, it supports broader circular economy initiatives and fosters a more resilient supply chain.

Digital transformation is at the heart of achieving these sustainability goals. Modern platforms overcome the limitations of manual tracking, provide real-time visibility, and ensure precise monitoring of sustainability credits. They streamline certification processes, prevent errors such as double-spending, and unlock opportunities for companies to differentiate themselves in premium markets.

Success stories from industries leveraging digital mass balance systems illustrate how operational efficiency and environmental stewardship can go hand in hand. Sabic and Moeve show that organizations can maintain profitability while setting new standards for transparency, accountability, and sustainability across global supply chains.

For companies interested in optimizing mass balance and implementing robust bookkeeping systems, a demo of Finboot’s MARCO Track & Trace platform can provide actionable insights: https://www.finboot.com/pricing.

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