After years of consultation, contested drafts, and no small amount of public controversy, the Science-Based Targets Initiative (SBTi), has published version 2 of its Corporate Net Zero Standard.
Amongst the raft of updates are clear frameworks for the role of carbon credits in the near- and long-term.
There’s been criticism that the guidance doesn’t go far enough, fast enough, especially in supporting the scaling of permanent carbon removals this decade.
But it’s a clear ratchet of ambition for both VCMs and corporates - a clear signal that carbon credits are not a reputational liability, but an integral part of a serious climate strategy.
The market needed this clarity
The last few years have been bruising for voluntary carbon markets (VCMs).
High-profile media stories brought into question whether the whole premise of carbon credits was just greenwashing.
SBTi v2 answers that directly.
High-integrity carbon credits are not only permitted under the new Standard, they are required. The framework is built around a clear sequence:
- Reduce everything you can
- Take responsibility for what you genuinely can't yet mitigate
- Eventually neutralise residual emissions
Having a clear framework means companies can engage with the VCM confidently, knowing they're following a path laid out by the same body that sets the bar for corporate climate ambition.
What the Standard requires
The new framework introduces a phased structure that rewards early action while recognising the barriers faced today.
Now to 2035 — Act, invest, and optionally earn recognition
Near-term targets continue to focus on absolute emissions reduction across scopes 1, 2, and 3.
Companies can now earn voluntary recognition under the Ongoing Emissions Responsibility (OER) programme for supporting carbon reductions and removals beyond their own value chain, at an Engaged, Advanced, or Leadership level.
From 2035 — Mandatory carbon removal support begins
Large companies will be required to support eligible carbon removals equal to at least 1% of their ongoing scope 1, 2, and 3 emissions from 2035, rising linearly to 100% by their net-zero target year.
The durability requirements also phase in: a minimum 10% of covered long-lived GHG emissions must be matched with long-lived removals from 2035, increasing to 100% by the net-zero year.
At net zero, residual emissions must be neutralised with eligible carbon removals.
One of the most practically important shifts in v2 is the explicit recognition that companies face real barriers – supply chains, counterparties, and evolving technologies.
The updated Standard is built on a best-efforts framework. Science-based targets need credible implementation plans, and the SBTi increasingly requires transparency about where barriers exist how they are being addressed.
This reframes how companies should think about carbon credits during the transition. VCMs aren’t a substitute for action, but a mechanism for taking responsibility for emissions that remain genuinely difficult to eliminate on a fast timeline.
Thinking long term
Net zero targets require long-term planning, as well as action now. SBTi has always required CDR at net zero, but the new rules provide both a framework and incentive for companies to think about how they will ramp up to that point.
If you're thinking about your long-term strategy, the question isn't whether you'll need CDR. The question is whether the market will have enough of it at the right quality, cost, and permanence profile when you need it.
The companies that invest in scaling CDR today are not just getting ahead of their own compliance requirements. They're helping to create the supply needed to meet their future targets.
Our view
SBTi v2 provides a structured, science-aligned pathway for how companies should engage in VCMs, removing the ambiguity and risk felt before.
The best-positioned companies will be those that start building their carbon credit and removal strategy now, rather than scrambling for compliance later: understanding what high-integrity supply looks like, investing in CDR technologies that will be needed at scale, and getting recognised for that ambition.
CFP Energy helps companies navigate carbon markets, from understanding the regulatory landscape to sourcing high-integrity credits and building long-term procurement strategies.
To understand what SBTi v2 means for your business specifically, get in touch, here.