Reduce Carbon Footprints of Aroma Ingredients

BASF SE operates in the chemical sector and supplies aroma ingredients to the fragrance and flavor (F&F) industry. Across the F&F value chain—from chemical producers to fragrance houses and FMCG manufacturers—companies have set ambitious greenhouse gas reduction targets covering both operational emissions (Scope 1 and 2) and supply chain emissions (Scope 3).

Scope 3 targets in the sector typically range from 15% to more than 50% reductions by 2030, making reliable product carbon footprint (PCF) data increasingly important for tracking progress. Companies therefore need accurate PCF data from suppliers and must also share comparable PCF values with their own customers.

According to a 2025 survey by the International Fragrance Association (IFRA) and the International Organization of the Flavor Industry (IOFI), around one third of companies already request PCF data from suppliers, while approximately half intend to implement PCF calculations in the near future.

Location: Europe: Germany, Ludwigshafen and Asia: Malaysia, Kuantan.

BASF has been working on GHG emission reduction for several decades already and thus generates energy for the production of its aroma ingredients portfolio in combined heat and power plants fueled by natural gas and sources raw material from natural gas or oil, while continually improving its production processes. The PCFs of its conventional aroma ingredients are therefore significant lower than the PCF for productions using coal as raw material or for energy generation.

BASF now introduced a portfolio of aroma ingredients with a reduced Product Carbon Footprint (rPCF) to help fragrance and flavor companies reduce Scope 3 emissions associated with sourcing aroma chemicals even further. These ingredients deliver approximately 10–15% lower product carbon footprints per kilogram compared with conventional aroma ingredients and are offered with a limited price premium.

Figure 1:

The rPCF ingredients maintain identical specifications and performance and can therefore be used as drop-in replacements, allowing customers to reduce supply-chain emissions without reformulating fragrances or modifying their production processes.

The initiative builds on the company’s existing production system and supply-chain engagement to lower the carbon footprint of selected high-volume aroma ingredients.

Key components of the initiative

• Product Carbon Footprint calculation In 2022, the company launched a digital tool that calculates the Product Carbon Footprint (PCF) for approximately 45,000 products using annually updated primary production data. The methodology is independently verified by TÜV Rheinland to ensure the credibility and reliability of the calculations.

• Supplier engagement A Supplier CO₂ Management Program was established to encourage suppliers to provide raw materials with lower product carbon footprints. Knowledge sharing on PCF calculation methodologies helps improve the quality and consistency of emissions data for purchased inputs.

• Mass balance production approach The rPCF aroma ingredients are produced using a mass balance approach at integrated production sites in Ludwigshafen (Germany) and Kuantan (Malaysia). A defined share of conventional raw materials or utilities is replaced with reduced PCF alternatives within the production network, and the associated emissions reductions are allocated to the rPCF products. The production process remains unchanged, enabling customers to adopt the ingredients without additional product qualification.

Figure 2:

• Portfolio development The first rPCF product launched was L-Menthol FCC rPCF, accompanied by joint communication with the first customer on the partnership approach to reducing supply-chain emissions. Within two years, the portfolio expanded to seven high-volume aroma ingredients based on customer demand.

To ensure reliable and comparable PCF data across the value chain, PCFs are calculated according to international standards including WBCSD PACT guidance and the Together for Sustainability (TfS) PCF guideline for the chemical sector. The company also uses SiGreen, a digital platform that enables standardized and secure exchange of PCF data between suppliers and customers.

Through supplier training and collaboration with customers, the initiative strengthens transparency and alignment on carbon footprint calculation methodologies across the fragrance and flavor value chain.

Sustainability Impact

Climate

The introduction of reduced Product Carbon Footprint (rPCF) aroma ingredients enables companies in the fragrance and flavor value chain to reduce Scope 3 Category 1 emissions (purchased goods and services) associated with sourcing aroma chemicals.

Key climate impacts include:

• 10–15% reduction in product carbon footprint per kilogram compared with conventional aroma ingredients.

• An absolute emissions reduction of approximately 0.5–2 kg CO₂e per kg of product when switching from conventional to rPCF aroma ingredients.

• For a customer sourcing 1,000 tonnes of aroma ingredients per year, this corresponds to an estimated reduction of about 1,250 tonnes CO₂e annually.

Because aroma ingredients are often produced through multi-step chemical synthesis processes, they typically have higher product carbon footprints than many other organic chemicals. As a result, switching to lower-PCF variants can deliver meaningful emissions reductions within fragrance and flavor supply chains.

Nature

The use of aroma ingredients with a reduced Product Carbon Footprint contributes indirectly to positive outcomes for nature and biodiversity.

By lowering greenhouse gas emissions associated with the production of aroma chemicals, the initiative helps mitigate climate change, which is a key driver of biodiversity loss and ecosystem degradation.

Social

The introduction of rPCF aroma ingredients creates positive social impacts across the fragrance and flavor value chain.

By enabling reduced PCF aroma ingredients to be used in widely consumed products such as detergents, personal care products, and oral care items, the initiative helps brand owners offer products with a reduced climate footprint while maintaining product performance and consumer well-being.

Upstream, the initiative promotes responsible sourcing practices. Suppliers providing raw materials for rPCF products must comply with the company’s Supplier Code of Conduct, which includes requirements on human rights, labor standards, anti-discrimination, and anti-corruption. These standards align with international frameworks such as the United Nations Global Compact and the Responsible Care program by the chemical industry.

Through supplier engagement and training on product carbon footprint calculation methodologies, the initiative also encourages suppliers to implement their own emission reduction initiatives and improve transparency in environmental reporting across the supply chain.

Overall, the initiative strengthens responsible business practices and promotes greater transparency and collaboration across the fragrance and flavor industry.

Business Impact

Benefits

Beyond its sustainability advantages, the rPCF aroma ingredients initiative offers several key business benefits. By providing an affordable solution for reducing Scope 3 emissions—limiting additional costs to 100€/t CO2e abated—BASF enables companies in the F&F value chain to make meaningful progress toward their climate targets without incurring prohibitive expenses. This cost-effective approach not only supports corporate environmental commitments but also enhances brand reputation and competitiveness in a market increasingly driven by consumer demand for sustainable products.

Operationally, the seamless transition from conventional to rPCF products—thanks to their status as true drop-in replacements with identical olfactory performance and specifications—means that customers can adopt these solutions without the need for additional qualification processes or modifications to their existing manufacturing systems. This minimizes disruption, reduces implementation time, and avoids costs typically associated with product requalification or process adaptation.

Furthermore, offering rPCF aroma ingredients strengthens customer relationships by aligning with their sustainability strategies and fostering long-term partnerships,. The initiative also opens up new market opportunities by enabling brand owners to differentiate their products with reduced carbon footprints, thereby attracting environmentally conscious consumers and potentially enabling premium pricing.

The rPCF aroma ingredients initiative provides several business benefits beyond its climate impact.

Cost-effective Scope 3 emissions reductions

• The initiative enables companies in the fragrance and flavor value chain to reduce Scope 3 emissions at a an affordable decarbonization option.

Operational simplicity for customers

• rPCF aroma ingredients are drop-in replacements with identical specifications and olfactory performance. • Customers can adopt these ingredients without reformulating products or modifying manufacturing processes, avoiding additional qualification costs.

Strengthened customer relationships

• Offering lower-carbon aroma ingredients aligns with customers’ sustainability strategies and supports their climate targets. • This helps build long-term partnerships with fragrance houses and consumer goods companies.

Market differentiation opportunities

• The availability of lower-carbon ingredients enables brand owners to offer products with a reduced carbon footprint, supporting sustainability claims and responding to increasing consumer demand for more sustainable products.

Costs

The implementation of BASF's rPCF aroma ingredients initiative, using a mass balance approach at integrated (Verbund) sites, delivers cost efficiency and flexibility for customers seeking to reduce their supply chain (Scope 3) greenhouse gas emissions in an affordable way. The following outlines the typical cost details associated with this initiative:

Investment at BASF

• The mass balance approach enables BASF to scale up production volumes in line with customer demand without necessitating significant upfront investments in new equipment or infrastructure.

Impact on variablecCosts at BASF

• The shift to rPCF aroma ingredients involves a moderate increase in variable costs, primarily due to the sourcing of raw materials or utilities with a reduced PCF.

Cost impact on customers

• Thanks to the drop-in nature of the rPCF products customers don’t have to bear additional costs typically related to requalification or process adaptation. The incremental cost for Scope 3 emission reduction is limited to the increased variable costs at BASF.

Eventual Subsidies Used

• At present, the initiative does not rely on direct subsidies. The actual availability and impact of such subsidies will depend on local and regional policy frameworks.

Relevant Dependencies

• The cost structure is influenced by several dependencies, including the price and availability of low-PCF raw materials and utilities, regional regulatory incentives, and supply chain logistics. Local energy and raw materials sources affect the overall cost and carbon footprint reduction.

In summary, the rPCF aroma ingredients initiative offers a pragmatic and financially accessible pathway for customers to lower their Scope 3 emissions, with limited impact on operating costs, no investment requirements, and scalability driven by customer demand.

Indicative abatement cost

According to sustainability reports from companies in the F&F industries, internal carbon pricing can reach up to 110€/t CO₂. abated.

BASF conducts regular evaluations to identify and implement the GHG reduction measures with the lowest cost, utilizing the marginal abatement cost curve. This approach enables BASF to support customers in achieving substantial Scope 3 emission reductions—generally ranging from -10% to 15%—with only a modest impact on pricing.

Typical business profile

This initiative helps Fragrance & Flavor companies reach their 2030 Scope 3 target, while maintaining competitive costs. It is aimed at organizations with science-based climate goals already working toward their 2030 milestones.

Approach

1. Define Clear Reduction Targets

Establish what constitutes a credible reduction in Product Carbon Footprint (PCF), either in absolute terms (total emissions reduced) or relative terms (percentage reduction compared to a baseline)

2. Apply a Robust PCF Calculation Method

Utilize an industry-accepted and third-party certified method for calculating the PCF. This ensures all reductions are measured and compared fairly, providing transparency and credibility. E.g. WBCSD’s PACT guidance and the Together for Sustainability Guideline

3. Assess Customer Needs and Market Dynamics

Engage with customers to understand their requirements, willingness to pay for products with a reduced PCF, and the potential risks if emission reduction targets are not met. This step aligns development of rPCF products with market demand.

4. Analyze Emission Hotspots

Identify which stages, materials, or processes in your product’s lifecycle contribute most to its carbon footprint. This transparency highlights where efforts should be focused for maximum impact.

5. Collaborate with Suppliers

Work closely with suppliers to identify and implement emission reduction opportunities.

6. Develop a Strategic Supplier Partnership

Establish a joint strategy with suppliers to ensure reliable supply of raw materials and utilities with a reduced PCF.

7. Position and Market Low-Carbon Products

Communicate the abatement cost (the cost per unit of emissions abated) of your reduced-PCF products to customers, ensuring it aligns with their willingness to pay and clearly demonstrates the value proposition.

Stakeholders involved

Project Lead: Sustainability Managers

Required Functions: LCA practitioners, procurement, product management, marketing and communications, production controller, operations, master data

Key parameters to consider

Suppliers of electricity, steam and raw materials & customers with Scope 3 targets

Implementation and operations tips

Initiative maturity: The rPCF aroma ingredients initiative combines established industry standards with innovative elements, including collaboration via the Together for Sustainability (TfS) group, PCF calculation methodology, and digital tools like Siemens’ SiGreen. NGO involvement and science-based targets highlight a progressive approach in the chemical sector.

Implementation timeline: Concept development took about one year; each subsequent product launch has a six-month lead time, reflecting a structured, scalable rollout process.

Mass balance implementation requires:

• Traceability systems for supply chain accuracy

• Standardized methodologies for consistent mass balance calculations

• Digital infrastructure to handle data and audits

• Third-party certification for credibility

• Staff training for effective system management

Challenges integrating simulation tools include data quality issues, and initial investments.

Solutions involve needs assessment, selection of scalable IT tools, thorough data validation, targeted user training, and dedicated support.

Third-party certification is resource-intensive, needing ongoing documentation and audits. Overcoming this requires regional coordinators, early engagement with certifiers, and IT solutions for documentation and compliance tracking.

Additional tips: Conduct regular internal audits, share best practices, and leverage certifications to strengthen brand reputation and stakeholder trust. Tailored training programs help engage multicultural teams and bridge knowledge gaps on sustainability standards.