After the goal, the product(s) and the system have been decided on, the functional unit needs to be defined. The functional unit corresponds with a reference flow to which all other modelled flows of the system are related (Cherubini et al. 2009). This is why the functional unit needs to be quantitative. The functional unit provides a reference to which the input and output process data are normalised, and the basis on which the final results are presented. Generally four types of functional units can be found in the bioenergy-LCA literature (Cherubini and Str0mman 2011):

1 Input related — the functional unit is the unit of input biomass, measured in either mass or energy. With this type of functional unit, results are independent of conversion processes and types of end-products. This unit can be selected by referring to studies that aim at comparing the best uses for a given biomass feedstock.

2 Output unit related — here the functional unit is the unit of output, e. g., units of heat or power produced, or kilometres of transportation provided. This type of functional unit is usually selected by referring to studies aimed at comparing the provision of a given service using different feedstocks.

3 Unit of agricultural land — this functional unit refers, for instance, to hectare of land used to produce the biomass feedstock. This unit should be the first parameter to take into account when biomass is produced from dedicated bioenergy crops.

4 Time — results of the assessment are reported on a time basis. This type of functional unit is used in studies characterised by multiple final products, since it allows the avoidance of an allocation step.

Typical functional units in a bioenergy context are emissions/sequestrations per unit of energy produced, emissions/sequestrations per unit of land required.