The Science Based Targets Initiative (SBTi) has published a draft version of the Corporate Net-Zero Standard V2—a long-awaited revision of its original Corporate Net-Zero Standard, aiming to provide companies with guidance and tools for setting science-based net-zero targets.
Published on March 18, 2025, the Corporate Net-Zero Standard V2 is now open for public consultation, accepting feedback until Sunday, June 1st, 2025.
This announcement brings a momentous development for the carbon removal sector, as the Corporate Net-Zero Standard V2 also provides options for companies to incorporate carbon dioxide removal (CDR) into their net zero strategies.
Reaction to draft SBTi standard
Initial reactions from the CDR industry were mixed.
While many welcomed the recognition carbon removal will likely have among corporates and the potential demand for credits, others were cautious.
CDR and climate policy expert Robert Höglund expressed concerns by saying: “The just-published draft SBTi Net Zero standard is unlikely to significantly increase demand for CDR.”
“The standard includes a lot of positive developments, including a proposed requirement to set near and long-term targets for CDR together with a scale-up pathway. But unfortunately only for Scope 1 emissions. This is problematic due to:
– SBTi companies’ main need for removals will not be their own scope 1 emissions but neutralising supply chain emissions from companies that haven’t covered them themselves.
– Scope 1 emissions are very unevenly distributed. Most large Scope 1 emitters don’t have SBTi targets, and typically have less financial flexibility to scale CDR early.
– A Scope-1 only requirement, means few companies are likely to buy CDR, and net zero fulfilments would be jeopardised.”
The new draft of the Standard does ineed set a distinction between scope 1 and scope 2 carbon emissions, reflecting the unique decarbonization challenges in each of these categories. It also proposes a commitment to move to low-carbon electricity no later than 2040.
When it comes to tackling scope 3 emissions, a commonly cited decarbonization sore spot by many businesses, the draft standard suggests more flexibility, proposing options to set targets for green procurement and revenue generation instead of an emissions reductions target.
By focusing on aligning net-zero goals with direct suppliers and/or providers from emissions-intensive sectors, SBTi says its draft aims to concentrate action on the most emission-heavy activities and those where companies have the highest influence.
In regard to carbon dioxide removal, the draft proposes scaling opportunities and a mobilized climate finance beyond the direct decarbonization requirement in order to meet emissions’ reduction targets.
Multiple pathways to integrating carbon removal
Specifically, it suggests three options for integrating removals into corporate climate targets to proactively address residual emissions.
As Ben Rubin*, executive director of the Carbon Business Council, explains in an email to members of the organization, Options 1 and 2 refer to setting separate removal targets.
“This approach builds upon the neutralization concept introduced in Version 1.0 of the SBTi Corporate Net-Zero Standard. In this approach, companies set abatement targets to achieve a level of reduction derived from 1.5°C-aligned pathways (e.g., >90% reduction between the base year and the net-zero year).”
Relevant: SBTi Revising Its Guidance On Carbon Removal
He adds, “Companies would then set separate removals targets to address the residual emissions remaining at the net-zero year (e.g., <10% residual emissions). These targets progressively increase the volume of removals over time at a rate consistent with reaching 100% of residual emissions being matched by a corresponding level of removals at the net-zero target year.”
On the matter of including carbon removal targets, the draft version proposes two options for consideration.
In Option 1, companies are required to set near- and long-term removal targets, in addition to abatement targets, in order to tackle any projected residual emissions in the net-zero target year.
In Option 2, companies that have already done so are recognized for their effort.
Ben Rubin states, “The Standard includes several additional provisions for carbon removal, including a proposal that removals are delivered through solutions that meet a minimum durability threshold. This durability threshold can be fixed (like-for-like/nuanced approach) or can gradually increase over time (gradual transition/aggregated approach). “
Read more: SBTi Releases Technical Publications As Part Of Corporate Net-Zero Standard Revision
Carbon markets reaction
Beyond carbon removal, the draft Corporate Net-Zero Standard V2 also introduces a requirement on tracking and communicating progress against targets in an effort to strengthen accountability and give acclaim to companies leading in decarbonization.
Additionally, it proposes simplified requirements for medium-sized companies in developing markets and SMEs that would match the capabilities and resources of these businesses, helping catalyze global voluntary corporate climate action.
Commenting on the release, Margaret Kim, CEO of Gold Standard, stated: “Gold Standard welcomes the consultation on SBTi’s Corporate Net Zero Standard 2.0, its continued commitment to credible corporate climate action, the introduction of transition plans and progress disclosure, and increased recognition that new tools are needed to meet ambitious targets.”
“We welcome SBTi’s focus on ongoing emissions and beyond value chain mitigation, as Gold Standard has long championed companies taking responsibility for all their emissions—Scopes 1, 2, and 3 – using carbon credits and other investments. Gold Standard remains committed to linking ambition to action, through market mechanisms that deliver verified impact for both people and the planet.”
With the release of the new draft, the SBTi has stated that a comprehensive transition pathway will be created to enable a smooth transition for the companies that have already adopted the existing Corporate Net-Zero Standard (V1.2) and Near-Term Criteria (V5.2).
*Ben Rubin is also the publisher of the Carbon Herald.
