November 2025
Giving companies the means to achieve their net-zero emissions targets through permanent carbon elimination
The undersigned companies and organizations are united in their commitment to contribute responsibly and effectively to achieving global climate goals. We strongly urge theScience Based Targets Initiative (SBTi) ensure that the future net-zero-emissions standard encourages - rather than restricts - the ability of companies and nations to integrate carbon elimination into their net-zero-emissions goals.
To this end, we are calling for targeted amendments to the draft standard so that it enables, or at least does not hinder, the efforts of companies and nations to co-finance disposal projects, and to use climate accounting based on a more accurate dual-register approach [1]. The eliminations generated by the Nationally Determined Contributions (NDC) or compliance mechanisms should be eligible to be used for neutralization claims by the company, within the framework of the Ongoing Emission Responsibility and corporate net zero emissions targets. Such mechanisms would enable both nations and companies to account for climate results in their respective and separate climate target systems, accelerating the growth of sustainable carbon elimination solutions essential to achieving net zero emissions - globally and for SBTi members and other companies.
Removing uncertainty about the eligibility of permanent carbon removals for neutralization claims
On November 6, SBTi published the second consultation draft for its future Net-Zero version 2.0 Enterprise Standard.
Without prejudice to individual consultation responses on a wider range of issues arising from the draft, the undersigned companies and organizations have united to emphasize the critical importance of amending the current draft wording regarding:
- the double counting and corresponding adjustmentsas defined in the main document, point CNZS-C29.6, and
- l'additionalityas defined in Appendix E Illustrative integrity principles for net-zero target-year neutralization, point 1.3.
With the current wording, SBTi would create uncertainty about the eligibility of carbon removal for neutralization claims, thereby making the achievement of net-zero by its members and nations prohibitively expensive, if not impossible for the former. Ultimately, the current wording will not support the climate action required - on the contrary, it will impede progress and prove detrimental to the climate.
Adopting a broader vision: Ensuring that the ramp-up of Permanent Carbon Elimination (PCE) is possible within the broader SBTi framework.
The current wording does not adequately take into account the specific circumstances of permanent carbon elimination. Moving the industry from permanent disposal to the gigatonne levels required is one of the most difficult aspects of achieving net-zero and limiting the temperature rise to 1.5°C above pre-industrial levels. Building a new industry is difficult, with learning and efficiency gains only materializing over generations of projects. The number of companies that have achieved Final Investment Decisions (FID) remains limited, mainly due to the lack of clarity and incentives for EDC, and many IDFs rely on government assistance which assumes that eliminations will also be accounted for under NDCs.
Rapid growth in permanent phase-out projects is needed to ensure that ongoing emissions reductions can eventually be supplemented by cost-effective permanent phase-outs to offset hard-to-reduce emissions. This need was recently highlighted by Johan Rockström in connection with COP30, where he notes that a "massive scaling up of EDC" is required [2].
There is a broad consensus that the required scale-up will be virtually impossible to achieve without extensive public-private partnerships in the ramp-up and capacity-building phases of the EDC industry. To achieve scale, these partnerships are based on co-financing and a dual-register accounting approach where host nations aggregate the mitigation results of companies on their territories, in the same way as emission reductions are processed.
Co-financing, leveraging government assistance to attract corporate purchases, can only work if, on the one hand, taxpayers' money can contribute to national climate targets and, on the other, companies can meet climate targets and make neutralization claims based on their purchases. This reflects the way co-financing for emission reduction projects works.
Raising ambitions by authorizing co-financing for permanent EDCs
The argument, sometimes put forward in the context of Article 6, that corporate action could lower government ambition may be valid for low-cost credits, but does not apply to high-cost permanent removals. On the contrary, the co-financing/dual registry approach favors higher ambitions for permanent phase-outs, enabling more companies to reach IDF, making more projects, more tons and more learning possible. It also has the potential to free up public funds for other mitigation activities.
Consequently, the concern about lowering ambitions due to the historical experience of low-cost "traditional carbon credits" with often more ambiguous climate effects, should not be used as a model when developing a framework for the use of permanent carbon removals in corporate claims.
For permanent disposals, the co-financing/dual-register approach is almost the default. additional since it combines private and public funds to support underfunded projects that would not otherwise have seen the light of day. None of the recent IDFs in major permanent disposal projects would have taken place without this approach. For example, Sweden, Norway, Denmark, the UK and Switzerland all adopt this structure. This is also the case for the EU framework on carbon removal and carbon agriculture (CRCF).
Based on the polluter pays principleAt the same time, it's important to recognize that, at the point of net-zero, corporate and national accounts should have the same permanent eliminations to offset emissions that are difficult to reduce. Thus, the limitation of CNZS-C29.6 even seems difficult to reconcile with the notion of net-zero.
Mandatory use of eliminations to be reflected in the net-zero statement for companies
Mandatory removals will be part of many countries' NDCs. If a company is required to purchase eliminations to offset its emissions, these eliminations must be eligible to be used for SBTi targets as well. Otherwise, in such circumstances, SBTi companies would have to purchase two tonnes of disposals for each tonne to be offset in order to achieve net-zero.
While support for and investment in the Global South are extremely important objectives, as is closing the gap between countries' pledged commitments and the actual need for climate mitigation, these objectives should be pursued through appropriate instruments or incentives. Modifying a fundamental economy-wide dual-register framework to meet these objectives - such as introducing requirements where joint public and private financing is considered differently depending on geography, or requiring a corresponding adjustment for permanent eliminations used by companies for neutralization claims - will create inconsistencies and undermine the effectiveness of the system. Other important objectives (e.g. closing the ambition gap and channelling funds to the Global South) should be addressed by other means.
Modification of SBTi's Net Zero standard to enable companies to achieve their net zero emissions targets
Accounting for an NDC on behalf of a company is not double counting. In this context, and in order to ensure the widest possible support for SBTi NZ V2.0, the following amendments (in red in the original) are requested:
C29.6. Double counting : Disposals used for neutralization must not be simultaneously claimed by another company for compliance or voluntary purposes. The activity can be declared under the Ongoing Emission Responsibility scheme as well as for neutralization.
On page 96 of the draft, we find a good wording to ensure the additionality of voluntary projects and purchases. We therefore propose the following amendments to ensure that the definition of additionality is compatible with the above proposal and correctly indicates the purpose of the corresponding adjustment:
1.3. Additionality : The result would not have happened without the intervention. This usually means showing that the activities are not already financially viable, legally mandated or fully funded under existing policies. Neutralization activities can be aligned with, or contribute to, a host country's Nationally Determined Contribution (NDC), provided there is credible evidence that the company's voluntary support is additional and that, forITMO (Internationally Transferred Mitigation Outcomes)it can be demonstrated that corresponding adjustmentsemissions, in accordance with Article 6 of the Paris Agreement, have been applied by the host country to avoid double counting between nations.
In conclusion
We ask :
- A revision of paragraph C29.6 to reflect that a company can make a neutralization claim based on a certificate of permanent carbon removal if it is not simultaneously claimed by another company for compliance or voluntary purposes, while ensuring that removal is included in no more than one NDC [3].
- An amendment to the definition of Additionality in point 1.3 to allow neutralization activities to contribute to a host country's NDC provided that there is evidence of additionality for voluntary applications and that corresponding adjustments have been applied when ITMO transactions are involved.
We are committed to working with the SBTi secretariat to help its members achieve their climate ambitions by using permanent carbon removal as a complement to emissions reductions, while protecting environmental integrity. We encourage all EDC business and value chain players to include this letter and its contents in their submissions.
Yours sincerely,
Footnotes
[1] The dual-register approach involves treating national climate accounting and company climate accounting as two separate systems, where the national register aggregates company-level mitigation results by default, whether emissions or removals. In a voluntary application of phase-outs, this implies that a host country can account for phase-outs on its territory, while the phase-out certificate can be sold to a company domiciled either in the country or in another nation, as long as that nation does not account for the phase-out in its national accounts. [2] [Link to Johan Rockström's LinkedIn publication] [3] [Link to Oxford working paper]
