Why SBTi’s revised Net-Zero Standard risks undermining permanent carbon removals

The revised draft of the updated SBTi Corporate Net-Zero Standard (CNZS 2.0) introduces important concepts, notably a framework to recognise companies that take early action to address their ongoing emissions with removals. Yet in its current form, it fails to provide the clear and timely demand signal that permanent carbon removal solutions urgently require, putting the credibility and feasibility of net zero itself at risk. A multi-gigatonne permanent CDR infrastructure cannot be built overnight; it depends on early, predictable, and durable demand to mobilise capital and enable project development.

Below we summarise NEP’s key concerns around the revised draft standard.

Co-claiming restrictions threaten the scale-up of permanent CDR

A central concern is the draft’s language on co-claiming, particularly paragraph C29.6, which would prevent individual carbon removals from being counted both toward corporate targets and toward Nationally Determined Contributions (NDCs). This puts the emergence of a viable permanent CDR industry at serious risk.

Many permanent CDR projects rely on blended finance structures that combine public support with private corporate demand to reach Final Investment Decisions. Preventing co-claiming would undermine these co-funding models, especially in the early stages when capital costs and technology risks are highest.

The restriction would also stifle corporate demand at precisely the moment when early market signals are most needed. By weakening confidence in long-term revenue streams, it would slow deployment and delay or prevent the build-out of the very solutions needed to meet both corporate net-zero commitments and national climate objectives.

 Durability rules are not science-aligned

The draft’s proposed durability requirement at the net-zero target year raises serious concerns. The illustrative guidance indicates that companies must neutralise 100% of residual emissions across Scopes 1–3, of which at least 41% must be neutralised using permanent removals, while 59% may be neutralised using short-term removals.

Fixing the permanence requirement at 41% is not aligned with climate science. NEP strongly supports a science-aligned, like-for-like framework, in which fossil emissions are neutralised with durable removals — a principle increasingly recognised in scientific and policy discussions. Allowing a majority of residual emissions to be neutralised with short-term removals at net zero risks undermining the environmental integrity of corporate net-zero claims.

The mandate to address ongoing emissions comes too late

NEP welcomes the recognition that companies have responsibility for ongoing emissions, and the intention to require Category A companies to address these emissions with removals from 2035. However, delaying this requirement until 2035 is too late to support the scale-up of permanent CDR and fails to create the near-term demand signals needed for investment and deployment. Scaling permanent CDR must begin now if it is to reach the levels required for global net zero.

The voluntary recognition framework risks lowering ambition

The draft introduces two voluntary tiers for companies that take early action: “Recognised” and “Leadership.” While rewarding early movers is welcome, the gap between the two tiers is too wide.

The Recognised tier appears easy to reach, while the Leadership tier sets a bar that very few companies are likely to meet. This risks encouraging most companies to settle for the lower tier, reducing overall ambition and suppressing demand for removals below the level needed to build a viable permanent CDR industry. Making the Leadership tier more attainable would create a stronger incentive to act earlier and more meaningfully.

Taken together, these issues mean that, in its current form, the revised Corporate Net-Zero Standard risks constraining demand for permanent carbon removals, discouraging the investment needed for scale-up, and slowing the deployment of durable CDR solutions on which credible net-zero pathways depend.

To ensure that the final standard supports both climate integrity and the rapid scale-up of permanent carbon removal, NEP urges SBTi to:

• Allow pragmatic co-claiming arrangements so that permanent CDR projects can combine revenues from voluntary carbon markets and public support mechanisms.

• Strengthen durability requirements at net zero by explicitly integrating a science-aligned, like-for-like framework.

• Accelerate demand signals for removals by bringing forward expectations on addressing ongoing emissions, rather than waiting until 2035.

• Strengthen incentives for early action by ensuring the voluntary recognition framework drives higher ambition and wider participation in durable removals.

NEP has submitted these positions in our formal response to the SBTi consultation and published a detailed reaction paper in December 2025, which is available here.