The role of carbon Credits in the Updated SBTi Corporate Net-Zero Standard (Version 2.0)
Following extensive consultations, the Science Based Targets initiative (SBTi) has revised its Corporate Net-Zero Standard. The standard defines how companies should set and implement science-based net-zero targets.
A key update concerns the treatment of emissions that cannot currently be avoided on the pathway to net zero. The revised standard now provides clear guidance for addressing these ongoing emissions.
Optional recognition program for ongoing emissions
With its new Ongoing Emissions Responsibility (OER) recognition program, the SBTi introducesa formal mechanism to recognize companies that take responsibility for their ongoing emissions. This can be achieved through the use of high-quality carbon credits or by financing other eligible climate actions.
Recognition is granted across three levels — Engaged, Advanced, and Leadership. As companies progress through these levels, both the share of emissions covered and the expected contributions increase.
Importantly, OER is intended to complement emissions reductions within a company’s value chain, not replace them. Participation requires companies to remain on track with their validated climate targets.
Mandatory Use of Carbon Removals from 2035 onwards
From 2035 onwards, large companies and medium-sized companies in high-income countries with SBTi targets will be required to address a defined share of their ongoing emissions through carbon removals. These include activities that actively remove CO₂ from the atmosphere and store it permanently.
The mandatory minimum share starts at 1% of ongoing Scope 1, Scope 2 and Scope 3 emissions in 2035 and gradually increases to 100% by the company’s net-zero target year. At the same time, the proportion of durable, technology-based carbon removal solutions is expected to increase.
Neutralizing Residual Emissions at Net Zero
As already required under the current version of the standard, all remaining residual emissions must be neutralized once a company reaches net zero.
Neutralization must be achieved by supporting verified carbon removal projects and must be demonstrated within the same reporting period.
Conclusion
The update of the SBTi Net-Zero Standard sends a clear signal: carbon credits — particularly those generated by carbon removal projects — are becoming increasingly important components of science-based net-zero strategies.
Until 2035, these measures remain voluntary. After that, they will gradually become mandatory for certain companies. Organizations that begin preparing today will be better positioned to respond to growing demand, potential supply constraints, and rising prices. Climate Austria supports companies in integrating high-quality carbon credits into their long-term climate strategies.
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