Mass balance is an accounting method that tracks materials
through a supply chain to ensure input quantities match output
quantities in finished products. Consider a hypothetical supply
chain with 500,000 pounds of a commoditized, raw material available
for purchase, to which a supplier adds 500,000 pounds of recycled
content. If the product pool cannot be segregated into recycled and
nonrecycled streams, no buyer of the commodity will be able to say
exactly how much recycled material they are buying. They will know
that in the overall pool, 50 percent of all the content is
recycled, but the particular batch they buy may contain less or
more than 50 percent recycled content.
In the scenario described above, mass balance accounting allows
the buyer to advertise to consumers that they sell products having
50 percent recycled content. The buyer may have to pay more to the
seller to make the claim. Accounting is in place to ensure there is
no double-counting. With respect
