SBTI Corporate Net Zero Standard
Position paper · June 2025
Executive Summary
With over 7000 companies setting climate targets, the Science-Based Targets Initiative (SBTi) is a critical player in driving corporate climate action. Target setting is underpinned by the Corporate Net-Zero Standard (CNZS) which provides standards and guidance for companies to meet their net-zero targets.
In March, the SBTi launched a public consultation on its CNZS 2.0, which includes major developments including how to incentivise carbon dioxide removals (CDR) well before the net-zero year. Below, we explore why these changes matter and what steps are needed to spur corporate engagement in accelerating the permanent CDR sector.
Challenge of scaling up the CDR sector
In addition to steep emissions reductions, CDR is critical for companies and countries to meet net-zero. This involves a spectrum of methods that store CO₂ from decades to millennia.
Despite its critical role, the CDR sector remains a nascent sector but will need to grow to up to 10 gigatonnes a year in less than 25 years. This represents a more than 4,000-fold increase from current levels. Immediate action and targeted incentives are crucial to enable this transformation.
Most companies aligned with the SBTi will face residual emissions that cannot be fully eliminated through reductions alone. As a result, they will need to purchase carbon removal credits. Since residual emissions typically make up around 10% of a company’s total emissions, depending on the company’s activities and sector, a phased and strategic ramp-up is essential to ensure that future demand is met with sufficient CDR supply.
Interim targets
The SBTi’s CNZS 2.0 introduces several approaches to address residual emissions, but only Option 1 offers a viable pathway to meet the expected demand for CDR. This option proposes that SBTi-aligned companies set interim targets for purchasing CDR in five-year increments starting in 2030 and continuing until their net-zero year. However, the impact of this option hinges on how it is implemented.
To effectively drive the necessary scale-up and support companies in building a robust CDR portfolio, these interim targets must be framed as annual purchase requirements, rather than cumulative targets. Annual targets create clearer market signals, provide consistent demand, and ensure a steady ramp-up aligned with net-zero timelines.
Furthermore, since CNZS 2.0 currently limits Option 1 to only Scope 1 emissions, which often represent only a fraction of a company’s total carbon footprint, it is critical to apply the like-for-like principle. This means that only permanent CDR should be used to neutralise fossil-based emissions, while temporary CDR may be acceptable for biogenic emissions (such as those from agriculture). This distinction ensures environmental integrity and aligns carbon removal strategies with the nature of the emissions being addressed.
To further accelerate action on Scope 3 emissions, which typically make up the majority of a company’s carbon footprint, we also recommend that the SBTi include an explicit provision encouraging companies to apply a Scope 3-specific glidepath for addressing their residual Scope 3 emissions. Such guidance would provide companies with a structured, science-aligned pathway to scale permanent CDR over time, reinforcing the critical role of Scope 3 decarbonisation in meeting global climate goals.
Ultimately, these measures not only support the integrity of net-zero claims but also provide SBTi companies with a clearer roadmap and stronger incentives to invest early in the CDR solutions they will inevitably rely on, creating long-term value and resilience in their climate strategies.
Beyond Value Chain Mitigation
In addition to interim targets, other incentives will be needed to drive the level of investment or scale-up needed to make permanent, high-quality carbon removal technologies widely available. That’s why creating strong incentives for companies to go beyond minimum requirements is essential.
One promising approach is Beyond Value Chain Mitigation (BVCM), which encourages companies to support climate solutions outside their immediate operations. BVCM offers a valuable opportunity to accelerate the use of permanent CDR but for it to be effective, the SBTi must provide clear guidance on what kind of “additional recognition” companies will receive for going above and beyond their Scope 1, 2, and 3 obligations.
This recognition could take the form of a separate certification or public claim for companies that invest in permanent CDR beyond their required targets. This kind of visible, meaningful acknowledgment would give companies a strong reason to act early and ambitiously.
For SBTi companies, this is a win-win: it allows them to demonstrate climate leadership, enhance their sustainability credentials, and build a future-proof climate strategy. At the same time, it helps direct much-needed finance toward scaling up CDR technologies, ensuring there’s a reliable supply to meet future demand.
About NEP
The Negative Emissions Platform (NEP) is a partnership of international organisations focused on durable carbon removals. Our members are primarily technology companies, but also include project developers, investors, carbon marketplaces, and buyers of carbon removals. We provide a forum in which diverse like-minded organisations actively collaborate to improve political and public recognition of carbon removals.