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LUHUA: The emission reduction challenges and solutions in the supply chain of the chemical industry

As a core supplier to a Fortune Global 500 chemical enterprise, Luhua Hongjin actively responds to the 'TfS' initiative in the chemical industry. Leveraging Carbon Newture's comprehensive carbon neutral solution, the company rapidly completed carbon footprint calculations for multiple core chemical products.

Chemical Industry

Zibo Luhua Hongjin New Materials Group

Zibo Luhua Hongjin New Materials Group

Luhua Hongjin is a high-tech company specializing in the research, development, production, and sales of polymer new materials, dedicated to the comprehensive processing and utilization of by-products of ethylene cracking, namely, C5 and C9.

After years of development, the company has formed a relatively complete industrial chain layout for the comprehensive utilization of C5 and C9 resources. It has five production bases located in Zibo, Shandong, Wuhan, Hubei, Tianjin, Liaoning Panjin, and Gulei, Fujian. The company's products are widely used in downstream products such as adhesives, rubber additives, rubber products, road marking paint, ink, coatings, as well as in terminal applications such as sanitary products, medical materials, packaging materials, and automotive interior materials.

With industry-leading comprehensive competitiveness, the company has established long-term and stable cooperative relationships with major upstream suppliers, including Qilu Petrochemical, Maoming Petrochemical, Wuhan Petrochemical under Sinopec, and high-quality customers downstream such as Hankel, Michelin, Fuller, Bostik, Giti Tire, and zcrubber.

Business pain points

  • Carbon Neutral Goals of downstream customers: Among the customers that Luhua Hongjin supplies, many are involved in the TfS sustainability initiative. One of these customers, a Fortune Global 500 company, has set carbon neutral goals. They commit to reducing the carbon footprint in their production process by 65% by 2025 (baseline year 2010) and promise to achieve 100% responsible procurement in collaboration with partners, conducting business responsibly at every stage of the supply chain. As a result, the group requires its suppliers to undergo the TfS sustainable procurement audit, and companies that do not pass the audit will no longer be able to continue as their suppliers.


  • Mission to promote collaborative carbon reduction for midstream companies: Due to the complexity of the chemical industry chain and chemical products, there are still many challenges in promoting overall green and low-carbon development in the industry. As a midstream company, Luhua Hongjin supplies products to downstream companies and also needs to procure raw materials from upstream enterprises for production. Therefore, it is necessary not only to provide downstream customers with carbon footprint information for the supplied products but also to clarify its own carbon emissions. This helps to define its carbon reduction responsibilities in the supply chain and play a crucial role in assisting other industries in emission reduction through its own emission reduction efforts.

  • Lack of upstream data: To conduct product carbon footprint calculations, upstream purchasing companies need to provide relevant data and parameters. However, some upstream companies lack complete, detailed, third-party-recognized, and publicly available supporting data, impacting the reliability of the product's carbon footprint results.

Integrated solution

Although the chemical industry has a long production chain, with a wide variety of products and a complex supply chain network, products remain the core units within the industry/ supply chain. Simplifying complexity, the approach begins at the product level. By conducting product carbon footprint calculations, the goal is to bridge the carbon data information gap across the industry chain, enhance the transparency of 'Scope 3' greenhouse gas emissions for upstream and downstream enterprises, and ultimately achieve emission reduction throughout the entire chemical industry. 

Through the product carbon footprint calculation and certification services provided by Carbon Newture, and utilizing the Carbon Newture digital carbon management platform, Luhua Hongjin has completed the carbon footprint calculation for over ten core products ('cradle-to-gate', including the raw material production and acquisition stage and the product processing and production stage). Additionally, certification for the carbon footprint has been obtained for some of these products. By submitting compliant carbon footprint data to downstream customers, Luhua Hongjin has further improved its sustainable development performance.

cradle-to-gate boundary

Highlights of the solution

  • Compliance: The calculation and reporting of the product carbon footprint are based on the international and chemical industry-recognized standards, including ISO 14067:2018 "Greenhouse gases — Carbon footprint of products — Requirements and guidelines for quantification," TfS_PCF_guidelines_2022 "The Product Carbon Footprint Guideline for the Chemical Industry", and ISO 14044:2006 "Environmental management — Life cycle assessment — Requirements and guidelines".

  • Reliability: In the process of collecting data needed for calculating the product carbon footprint, when some upstream companies were unable to provide relevant data for the supplied raw materials, Carbon Newture's expert team assisted Luhua Hongjin in thorough research to obtain credible substitute data, ensuring the reliability of the calculation results.

  • Efficiency: After Luhua Hongjin completed all submissions, Carbon Newture utilized the digital carbon management platform to complete the carbon footprint calculation for over ten products within two weeks. This streamlined process helped Luhua Hongjin establish compliance data for downstream customer supply chain carbon emissions.

  • Security: In terms of carbon emission data traceability and verification, Carbon Newture employs a decentralized and tamper-proof blockchain technology. This not only assists upstream companies in meeting downstream group customers' compliance requirements for carbon emission data but also ensures the confidentiality of suppliers' original production and chemical formula data.

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