The CXF Quantification Methodology

Version 1.0-draft · August 2026 · CarbonXFuture Markets, Inc., Fort Lauderdale, Florida · Status: internal methodology, pending independent expert opinion

1. Scope, status and governing principle

This module defines how CarbonXFuture Markets, Inc. ("CXF") quantifies the greenhouse-gas outcome of two platform contracts: CXF-CO (collection of used lubricating oil under a demonstrated uncontrolled-combustion baseline) and CXF-RR (re-refining of used lubricating oil into base oil). It is drafted for consistency with ISO 14064-2 and the GHG Protocol for Project Accounting, and is structured so that a third-party verifier could apply it.

Governing principle (source hierarchy). US EPA published factors govern every parameter that increases credited reductions. Where EPA publishes no factor, values are taken from published, critically reviewed LCA literature at the end of the published range that minimizes the credit, with full citation. Non-EPA sources therefore only ever enter on the debit side or at credit-reducing ends of ranges. This rule is what guarantees the absence of internal contradictions.

2. Summary of quantification outcomes

Note on direction of change. CXF-CO falls from 10.8 because the prior factor credited gross combustion emissions with no baseline-uncertainty deduction and no debit for the fate of the collected oil. CXF-RR lands near the prior interim 0.63, but on a different and defensible basis: the inactive ACR combustion-swap framing is replaced by product displacement (§5).

3. Canonical parameter set

Every number used anywhere in CXF materials must trace to this table. The three previously co-existing baseline figures (10.21–10.69 EPA band, 10.8 interim factor, 11.16 energy-basis derivation) are hereby reconciled: 10.21 is canonical; 10.8 and 11.16 are withdrawn (§9).

4. CXF-CO — Collection under a demonstrated uncontrolled-combustion baseline Active

4.1 Baseline definition and eligibility

CXF-CO credits exactly one counterfactual: the collected volume would otherwise have been burned without providing a useful energy service (disposal burning, open burning). Two other fates that were previously conflated into the collection factor are excluded:

• Energy-service burning (e.g., shop space heaters, industrial burners): the heat is real and would be replaced by another fuel. Under EPA factors the plausible replacement fuels (distillate No. 2 at 10.21 kg CO₂/gal-equivalent; residual No. 6 higher) emit as much as or more than used oil per unit of heat, so the net avoidance is approximately zero or negative. Credit: 0.
• Improper disposal / dumping: dumped oil does not convert to CO₂ on any crediting-relevant timescale that can be defended with field data; its damages are toxicity and water contamination, not greenhouse gas. Credit: 0 GHG credits. CXF may develop a separate non-GHG stewardship instrument for this pathway; it must never be denominated in tCO₂.

Eligibility conditions (all required):

• E1 — Baseline demonstration: documentary evidence that the specific source or source region practiced non-energy disposal burning (enforcement records, dated photographic/site evidence, or a desk-accepted regional fate survey), refreshed at least every 2 years.
• E2 — Energy-service test: an affirmative showing that the baseline burning provided no bought-fuel-displacing heat. If the test fails or is inconclusive, the volume is reclassified to the energy-service case and earns 0.
• E3 — Fate requirement: weighbridge-ticketed delivery of the collected volume to a re-refining facility (manifest chain). Volumes delivered to the fuel market earn 0 (the combustion is relocated, not avoided).
• E4 — One-volume-one-contract: a volume claiming CXF-CO cannot also claim CXF-RR, and vice versa (registry-enforced by serial).

4.2 Quantification

• V = eligible volume (1,000 US gal units); EF_UO = 10.21 tCO₂/1,000 gal (EPA, CO₂-only — CH₄ and N₂O are deliberately not credited: conservative).
• BUD = baseline-uncertainty deduction, default 0.20. Rationale: baseline demonstration rests on surveys and attestations, not metered data; a 20% haircut is retained until the independent expert rules on evidence-class-specific values.
• PE_tr = collection transport debit, default 0.15 tCO₂e/1,000 gal. Derivation: 3,785 L × 0.87 kg/L = 3.63 short tons; 360 km round trip ≈ 224 mi; 3.63 × 224 × 0.186 kg/ton-mile ≈ 0.15 t. The default embeds roughly 1.8× the 100 km haul the ifeu LCAs show to be typical; measured logistics data may replace it.
• PE_proc = processing debit for the collected oil's destination, default CI_rr × M_rr = 0.8 kg CO₂e/kg × 2,058 kg = 1.65 tCO₂e/1,000 gal. The displacement benefit of the resulting base oil is NOT added back (it belongs to CXF-RR and would breach E4).

4.3 Default factor — worked example, 1,000 US gal

Honest expectation note. In the mainland US, most collected oil already flows to the fuel market or re-refining; demonstrated disposal-burning baselines are rare. CXF-CO is therefore expected to be a small-volume, high-integrity contract domestically, with most eligible volumes arising in markets where open burning is documented.

5. CXF-RR — Re-refining as displacement of virgin base-oil production Active

5.1 Why the ACR combustion-swap framing is abandoned

The prior interim factor (0.63 tCO₂e/1,000 gal before project emissions) was the strict result of the ACR 2019 framing: avoided combustion of used oil (20 kgC/GJ) minus replacement-fuel leakage (18.867 kgC/GJ). That framing has three defects: (i) the ACR methodology is inactive and ineligible for new listings; (ii) its margin is a thin difference of two large, uncertain numbers and approaches zero or negative once project emissions are deducted; (iii) restated on EPA factors, the same swap yields ≈0.9 tCO₂/1,000 gal with an unverifiable replacement-fuel mix, and 0 if the replacement is distillate alone. The climate benefit of re-refining that survives scrutiny in every reviewed LCA (ifeu/GEIR 2018 and 2022, API/ERM 2017, ENVIRON 2014, ClimeCo 2025) is instead the displacement of virgin base-oil production. CXF-RR is therefore re-founded on displacement. The combustion-swap term and its symmetric leakage debit are both excluded; since the EPA-restated swap margin is non-negative, excluding the pair forgoes credit and is conservative.

5.2 Quantification

• ρ = 0.87 kg/L; Y = 0.625 (EPA yield); → M_rr = 2,058 kg per 1,000 gal of feedstock.
• CI_v = 1.2 kg CO₂e/kg fixed (credit-minimizing end of published range 1.2–1.9; may only be raised by the independent expert, never by CXF).
• Tier 1 (default): CI_rr = 0.8 kg CO₂e/kg from published gate-to-gate LCA of the largest North American re-refiner. Available to any member immediately.
• Tier 2 (measured): CI_rr = [Σ electricity × eGRID subregion rate + Σ fuels × EPA Hub factors + purchased hydrogen and process inputs] ÷ M_rr, from 12 months of utility bills and purchase records, desk-audited annually. Floor: Tier 2 CI_rr may not be set below 0.42 kg CO₂e/kg (the best ISO 14067 critically-reviewed cradle-to-gate value published for the sector) without third-party verification of the facility's own LCA.
• PE_tr = 0.15 tCO₂e/1,000 gal feedstock transport debit (same derivation as §4.2).
• UD = uncertainty deduction, 0.10 (parameters are literature defaults, not measured; halves to 0.05 for Tier 2 volumes with verified data).
• HBP additionality guard: for facilities with ≥1 year of operating history, only production above the highest annual base-oil output of the preceding 3 years is creditable. Business-as-usual output of an existing re-refiner is not additional and earns 0. New facilities credit full output. This is stricter than the ACR rule and is intentional.

5.3 Default factors — worked example, 1,000 US gal

6. Leakage

CXF-CO: the eligible baseline is burning without energy service, so no replacement fuel is purchased in the project scenario; market leakage is nil by construction of E2. Diverting oil from the fuel market is handled by E3 paying 0, not by a leakage discount. CXF-RR: feedstock bidding-away from the fuel market and the corresponding replacement-fuel purchase is the symmetric pair of the excluded combustion-swap credit; both are excluded together (§5.1), which is conservative because the EPA-restated pair nets positive. Activity-shifting leakage (a member re-labeling existing flows) is controlled by the HBP guard and the registry serial rule.

7. Uncertainty, conservativeness and materiality

• Credits are CO₂-only on the credit side; debits are full CO₂e (AR5 GWPs). This asymmetry is deliberate and conservative.
• Every range-valued parameter is fixed at its credit-minimizing end (CI_v = 1.2 low; CI_rr = 0.8 high; ρ = 0.87 low; Y = 62.5% low).
• Explicit deductions: BUD 20% (CO), UD 10%/5% (RR). No separate buffer pool is maintained: there is no reversal risk (no carbon storage), and conservativeness is carried in the deductions. If the independent expert prefers a buffer architecture, CXF will adopt it.
• Materiality: any single omitted source >5% of a contract's ER must be quantified or the factor withdrawn. Rounding is always downward to 2 significant figures.

8. CXF-FC (full chain) — not offered Withdrawn

A full-chain instrument would credit collection and re-refining of the same physical volume in one contract while CXF-CO and CXF-RR exist for the same nodes, and the CO factor already debits the processing at destination while the RR factor already embeds collected feedstock. Any FC factor would therefore either double count or reduce to the sum of contracts it duplicates. Recommendation adopted: CXF-FC is not offered. This section exists so that the decision and its reason are public.

9. Reconciliation of previously published figures

• 10.21–10.69 kg CO₂/gal (EPA band): 10.21 is Used Oil (0.138 mmBtu/gal × 74.00 kg/mmBtu); 10.69 is Lubricants (0.144 × 74.27). CXF quantifies used oil, so 10.21 is canonical; citing the pair as a band for one substance was a category error.
• 11.16 tCO₂e/1,000 gal (energy-basis derivation): 0.0402 GJ/L × 20 kgC/GJ × 44/12. Two flaws: it combines a net-calorific-value carbon content with figures used as if gross, and 0.0402 GJ/L silently assumes density 1.0 kg/L (IPCC 40.2 MJ/kg × 1.0), overstating per-gallon energy by ≈11–15% against real density 0.87–0.90. Decomposition: 11.16 = 10.21 × (NCV/HHV carbon-intensity mismatch ≈ +4.5%) × (heat-content mismatch ≈ +4.5%). Withdrawn.
• 10.8 tCO₂e/1,000 gal (prior CXF-CO): sat above its own cited EPA band and carried no deductions. Withdrawn and replaced by 6.3 under §4.
• 0.63 tCO₂e/1,000 gal (prior CXF-RR): numerically close to the new 0.60 Tier 1 default, but derived from the inactive ACR combustion swap. Superseded in basis, not merely in value.

10. Monitoring and evidence

11. Claim exclusivity

No volume credited under CXF may simultaneously support any other carbon claim: no LCFS/RFS or similar regulated-program pathway, no registry credit, and no product-level marketing claim by the re-refiner that monetizes the same reduction (e.g., a low-carbon base-oil claim sold to blenders). Members attest annually; breach voids the serials. Already-issued credits affected by any future factor reduction follow the registry's retroactivity rule: recalculation at the corrected factor with cancellation of the difference — the same standard CXF applied to itself in August 2026.

12. Literature basis

Primary sources verified at document level during preparation (August 2026): EPA GHG Emission Factors Hub 2025 and 40 CFR Part 98 Tables C-1/C-2; EPA eGRID (2023 data); EPA AP-42 §1.11 Waste Oil Combustion; EPA Managing, Reusing, and Recycling Used Oil; 2006 IPCC Guidelines Vol. 2 Ch. 1 (Tables 1.2–1.4); ACR Methodology for Re-Refining Used Lubricating Oils v1.0 (Feb 2019, inactive); ifeu/GEIR LCA of Waste Oil Regeneration (2018 corrected; 2022 update); ERM for API, Life Cycle Assessment of Used Oil Management (2017); US DOE Used Oil Management and Beneficial Reuse Options, Report to Congress (2020); US DOE Used Oil Re-refining Study (2006); Grice et al., ACS Sustainable Chem. Eng. (2013/14, abstract-verified); Safety-Kleen/Ramboll KLEEN+ LCA (2021/22, company disclosure); Crystal Clean/ClimeCo ISO 14067 LCA (2025, company disclosure); Boughton & Horvath, Environ. Sci. Technol. 38(2) 2004 (abstract-verified); Kuczenski et al., Resour. Conserv. Recycl. 93 (2014). Where only abstracts or company disclosures were accessible, the values taken were placed on the credit-minimizing side and are flagged for the independent expert.

13. Version and governance

v1.0-draft, August 2026, authored by the CXF methodology desk. This document supersedes the previously published §A.1–A.2b interim factors on this page. Changes require: (i) a written derivation, (ii) desk sign-off, (iii) publication of the change log. The pending independent expert engagement (Tasks 1–5 of the August 2026 brief) reviews this module; its opinion is published unedited, favorable or not.

Module B — New collection infrastructure Concept stage

Separately from Module Q, CXF maintains a concept note for crediting the establishment or expansion of collection infrastructure (collection points, containers, logistics for independent garages, fleets and marinas) in areas with documented below-average collection rates. No Module B factor is published and no Module B credits are offered. Any greenhouse-gas treatment of avoided dumping under Module B is subordinated to §4.1 of this module: dumping earns 0 GHG credits, so any Module B instrument for that pathway would be a non-GHG stewardship instrument, never denominated in tCO₂.