Aroma’s Carbon Footprint: The Fragrance Industry's Path to Net-Zero Emissions

The fragrance industry is increasingly committed to sustainability, asCordula Mock-Knoblauch, Head of Sustainability Accelerator, BASFCourtesy of BASF demonstrated by the 151 signatories to the IFRA-IOFI sustainability charter. A key indicator of these sustainability efforts is the EcoVadis score: Since 2020, fragrance and flavor (F&F) companies undergoing the assessment have consistently ranked among the top 5%. 

Among the various sustainability topics, reducing greenhouse gas (GHG) emissions is considered the most critical and urgent by F&F companies. This article will explore the strategies available for reducing these emissions, the importance of adhering to industry-aligned accounting rules, and the role of the mass balance methodology.

GHG Emissions and Reduction Options in the Fragrance Industry Value Chain

To effectively reduce GHG emissions, it is crucial to understand their origins. Over 95% of the GHG emissions associated with cosmetic fragrance composition can be attributed to the raw materials and production processes necessary to create aroma ingredients; less than 5% arise from compounding at fragrance houses. Therefore, significant GHG emission reductions can primarily be achieved in the upstream value chain during raw material production and fragrance ingredient manufacturing.

Sources of GHG emissions along the flavor & fragrance value chain and reduction options.Coutesy of BASF

Publicly available studies indicate a wide range in the Product Carbon Footprint (PCF) of fragrance ingredients. To enhance transparency, BASF has developed a 6-level color and letter scale that classifies aroma ingredients by their PCF. The scale starts from a green A range with a PCF up to 15 kg CO₂e/kg, which is estimated to be the average PCF of a fragrance mixture for cosmetics to date, and it leads up to a red F range with a PCF above 500 kg CO₂e/kg. 

Examples of aroma ingredients falling into different PCF ranges (publicly available data)Courtesy of BASF

Aroma ingredients are specialized chemicals that require numerous productionThiago Siqueira Caixeta, Sustainability Accelerator Manager, BASFCourtesy of BASF steps from primary raw materials, such as coal, naphtha, gas or turpentine. The process often involves steps in the double digits, including separation of side-streams and purification. Optimizing these processes to increase yield and reduce energy consumption is the preferred approach for emission reduction, as it aligns with lowering variable costs for energy and raw materials. However, prior to realizing these benefits, significant investments in research and development, as well as plant modifications, are required. 

As industrial processes mature, the potential for further process improvements diminishes. Companies thus focus on how the required energy is produced. With growing availability of renewable electricity, companies are investing in wind or photovoltaic parks, signing respective Power Purchase Agreements (PPAs) or purchasing Renewable Electricity Certificates (RECs). However, most of the energy consumed in chemical processes is heat provided in the form of steam. 

Decarbonizing steam can be achieved by shifting from fossil to biomass fuels for the boilers or via investment into heat pumps and e-boilers. This process, however, is more costly than decarbonizing electricity and comes with lead times of several years, as the investments into the new equipment must be planned and realized.

Finally, a substantial share of the PCF of a fragrance ingredient stems from the raw materials sourced for its manufacturing. Engaging with raw material suppliers to encourage them to shift to renewable electricity and decarbonize their steam demand is an important first step. Ultimately, however, it is necessary to change the primary feedstock sources to produce fragrances with a PCF towards zero. Coal as primary raw material comes with the highest GHG emissions, and a shift to naphtha and natural gas leads to significant reductions. The final target is to use “renewable carbon²”, which comprises biomass, recycled feedstock and captured GHG².

The PCF reduction associated to the calculation procedure of mass balance products can be assured by a third party.Courtesy of BASF

Importance of Industry-Aligned Carbon Accounting Rules

Implementing reduction measures is crucial, but equally important is the adoption of industry-aligned PCF calculation rules that allows chemical companies to compare PCF data from various suppliers of primary raw materials and intermediates. F&F houses will increasingly consider the PCFs of fragrance ingredients when making their purchasing decisions. 

Fortunately, the "Product Carbon Footprint Guideline for the Chemical Industry" by TfS (Together for Sustainability) for the chemical industry provide a standard that fits the industries’ specific needs and complies with the relevant International Organization for Standardization (ISO) norms and the cross-industry guidance of the Partnership for Action on Carbon Transparency. The adoption of this guideline in the F&F industry is progressing rapidly, as evidenced by the majority of F&F companies using this standard when sharing PCFs of their products with customers.

Role of the Mass Balance Approach 

The mass balance approach is key for enabling a seamless transition to low-emission products. Under this approach, certified alternative feedstocks with a reduced PCF or utilities with reduced emissions are mixed with fossil feedstocks in existing production systems. The amount of deployed reduced emission feedstock or utilities is tracked in a booking system and virtually attributed to selected products, resulting in a reduced carbon footprint of that particular end product.

A key advantage of this approach is that it leverages existing, highly-efficient production assets, allowing manufacturers to use their current infrastructure without the need for significant new investments. The scalability of the approach to meet growing market demand further enhances its appeal, accelerating implementation, lowering technical risks and limiting increases in production costs. Importantly, products with a reduced PCF produced via the mass balance approach are "drop-in" solutions, offering identical product quality and performance compared to conventional products. This enables F&F houses to seamlessly incorporate them into their production processes.

Levers for reducing the greenhouse gas emissions of an aroma ingredient: electricity, steam and raw materials.Courtesy of BASF

Value Chain Collaboration to Foster the Adoption of Fragrances with a Reduced Product Carbon Footprint 

BASF and Givaudan provide an example of a successful collaboration between an ingredient manufacturer and a flavor and fragrance house, enabling consumer goods companies to bring products with a reduced PCF to the market. By deploying the measures described above and making use of the mass balance approach, BASF has developed a portfolio of aroma ingredients with a reduced product carbon footprint (rPCF). The PCF reduction for these offers is 10-15% compared to the conventional products. The selection of the products for the rPCF portfolio has been supported by feedback from Givaudan. 

By utilizing BASF’s rPCF products, Givaudan can continue offering innovative fragrance compositions with an exceptional olfactory performance to clients – including a lower product carbon footprint. This is all part of Givaudan’s ongoing journey to address its Scope 3 emissions – 88% of which come from purchased goods and services – and particularly supports its efforts around the sustainable procurement of ingredients where the company continues to accelerate progress. 

Both companies are dedicated to expanding their portfolio of offers with a reduced PCF and to further drive the CO₂ emission reduction to eventually achieve net-zero emissions. 

Footnotes

1. CO₂e: Carbon dioxide equivalent
2. Definition of renewable carbon by Renewable Carbon Initiative