Takeaways

• CDR companies say SBTi’s draft net-zero standard could restrict the use of permanent removals and make corporate net-zero targets harder to achieve.
• Industry groups warn that unclear rules around double-counting, additionality, and dual-ledger accounting could collapse investment in permanent CDR.
• Stakeholders urge SBTi to revise its draft to ensure high-durability carbon removals remain a viable tool for reaching true net-zero.

The CDR industry is pushing back against key elements of the SBTi draft Corporate Net-Zero Standard Version 2.0, warning that the current language could make true net-zero “impossible” for many companies. In a new open letter, 55 buyers and stakeholders across the permanent carbon removals supply chain have urged the Science Based Targets initiative to revise its proposed rules before finalizing the net-zero standard.

The letter, coordinated by the Nordic Carbon Removal Association, comes as SBTi conducts a second public consultation, open until December 12. With the world’s most influential private-sector climate framework under review, companies and climate groups say this is a critical moment for shaping future corporate climate action.

Draft Rules Create Market Uncertainty

Signatories argue that the draft creates major uncertainty around whether permanent carbon removals can be used to neutralize residual emissions. The concern focuses on rules linked to double-counting, corresponding adjustments, and additionality requirements in Annex E.

Many carbon removal projects rely on public funding and are already included in national climate inventories. CDR companies say that if SBTi requires strict separation between corporate and national accounting, corporate investment could decline sharply. Without investment, they warn, long-term removals may struggle to scale, making net-zero targets harder to reach.

Stakeholders caution that unclear eligibility rules raise costs, complicate planning, and, in some cases, could prevent companies from completing their net-zero pathways.

Read More: Closing the Climate Gap: How the SBTi Revision Impacts Corporate Net-Zero Plans

Permanent Removals Need Room to Expand

The open letter stresses that permanent removals are still in an early phase, with only a handful of projects having reached the Final Investment Decision stage. Most depend heavily on public-private partnerships and early commitments from corporate buyers.

CDR groups say the SBTi draft does not reflect these realities. They argue that co-funding models and dual-ledger accounting, which allow both companies and nations to count climate outcomes, are essential for scaling the sector. This approach already works for emission reductions, and CDR advocates say it must also apply to removals.

Critics of corporate involvement fear it may weaken national ambition, but the signatories push back. They argue that permanent removals are costly and complex, and corporate investment strengthens climate action by bringing more projects online and accelerating long-term innovation.

SBTi’s Revisions Still Leave Gaps

SBTi says its updated draft aims to improve clarity, strengthen transparency, and better connect near-term actions with long-term climate goals. It introduces more flexible pathways, sector-specific expectations, and stricter rules for transition plans.

However, the CDR community warns that these improvements lose impact if permanent removals face restrictions. Unless SBTi adjusts its guidance, companies may find themselves short of the tools needed to balance unavoidable emissions.

Also Read: SIG's Net-Zero Path Approved by SBTi

What Comes Next

SBTi’s final decision will shape how thousands of companies chart their climate pathways. If the standard recognizes the critical role of permanent CDR, the sector could expand rapidly. But if restrictive language remains, companies may face limited options, and global climate progress could slow.

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Source: CARBON CREDITS.com