Mass Balance Claims

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 not 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 to recycling, the buyer/claimant gets credit for purchasing a certain amount of recycled material, although the consumer ultimately may not actually receive a finished product that actually has the claimed amount of recycled content.  

The mass balance concept has been successfully used for decades. It incentivizes recycling by allowing the purchaser to make a claim about recycled content even if the supply chain does not segregate streams. Its use has been applied in many contexts and is endorsed by the FTC Green Guides, which include an example supporting the concept: “A manufacturer labels a paper greeting card ‘50% recycled fiber.’ The manufacturer purchases paper stock from several sources, and the amount of recycled fiber in the stock provided by each source varies. If the 50% figure is based on the annual weighted average of recycled material purchased from the sources after accounting for fiber loss during the papermaking production process, the claim is not deceptive.”  Guides for the Use of Environmental Marketing Claims, 16 C.F.R. Part 260.13 , Example 7. The concept is also supported by iSeal and is incorporated into independent sustainability certification standards. 

The National Advertising Division (NAD) has also recognized the benefits of the mass balance approach. In a recent decision, NAD acknowledged that “using mass balance may even be the more environmentally friendly option since it may reduce unnecessary duplication of production.” Boxed Water is Better® (Boxed Water), Report #7385, NAD/CARU Case Reports (May 2025) (reviewing claims based on mass balance for boxed water). However, NAD did recommend that the advertiser there disclose that mass balance means that the individual product may not have precisely the recycled content claimed. Id.

Economic analysis also supports using the mass balance method, with one recent paper concluding: 'Well-designed mass balance frameworks, combined with technology-open policy and harmonised MRV [Monitoring, Reporting, and Verification], can unlock significant volumes of recycled feedstock and accelerate the chemical industry's transition to a more circular, low-carbon future."  C. Rueger, Krkljuš, I. and Reuber, J., “Chemical recycling: a new toolbox for materials recycling in industry and the application of the mass balance chain-of-custody approach,” Royal Soc. Chem. Sustainability J. (2/10/26) (DOI: 10.1039/d5su00505a).

Unfortunately, some activists and plaintiffs' lawyers are attacking mass balance. They allege that whether the product actually contains the claimed amount of recycled content is material to the consumer who buys a product containing what is claimed to be “recycled material." [This could apply to any commodity, not just to recycled content.]  In other words, a consumer holding a plastic cup claimed to have 90 percent recycled plastic should know whether that cup actually has 90 percent recycled content, or whether that claim is instead based on a weighted average. 

In litigation, plaintiffs have thus far had mixed success. An illustrative complaint is pending in the Northern District of Illinois in which plaintiffs alleged that a label saying the chocolate cookies were made with "100% Sustainably Sourced Cocoa" is false because "[d]efendant uses an accounting method called `mass balance,'" which “allows [d]efendant to mix cocoa beans from [certified] farms with non-certified cocoa beans from other farms … Such allegedly mixed sourcing results in cookies with an ‘uncertain composition.’” (internal cites omitted) The complaint also alleged that the plaintiff would not have bought the cookies if she had known that the cocoa might have come from farms that use child labor. In partially denying the motion to dismiss, the Northern District of Illinois held that the plaintiffs had sufficiently alleged potential deception. Waggener Van Meter v. Mondelez International;, Inc., No. 24-cv-7468 (N.D. Ill. 12/18/2025). Thus, the mass balance issue remains open in that case.   

In other words, the plaintiffs attack the entire concept of mass balance. Unless the cocoa beans are grown on farms 100 percent free of child labor, their theory is that no claims should be made.

Respectfully, consumers and the world would be worse off if the plaintiffs' theory takes hold. The real-world consumer has no ability to determine the percentage of recycled content merely by looking at, drinking from or holding the cup. Similarly, they cannot tell where the cocoa beans used in their chocolate cookie came from. They must rely on the advertiser to tell them. They may buy the cup or cookie, and perhaps even pay more for it, because they feel “good” about choosing a product that supports recycling or a campaign against child labor (which it does). The item performs the same either way. The cookie tastes the same, looks the same and feels the same. Why should it matter to the consumer that the specific item they hold possibly contains somewhat less than the claimed amount of recycled (or certified) content? Tomorrow, they might hold a product exceeding the claimed content.

In a mass balance world, the consumer supports improving the supply chain through their purchase. Conversely, by not buying, funding for improvements quickly dries up. 

Plaintiffs' theory envisions a world in which money falls from the sky and instantly makes everything 100 percent better. Until that magical state occurs, no label statements can be made. Under their proposed policy, any incremental, market-based solutions that rely on mass balance are inherently deceptive. This is bad policy and bad law. 

What should advertisers who currently use mass balance do? We'd suggest that the NAD Boxed Water approach may be more conservative, as it encourages more disclosure. Also, the advertiser should avoid coupling mass balance claims with other sustainability-focused label claims, which can augment a plaintiff's complaint.