A Step Forward for Carbon Removal

One of the most notable updates is that the new draft includes explicit near-term targets for removals, reinforcing that CDR should not be a last-minute fix, but rather an integral part of corporate net-zero strategies. Under the proposed framework, companies must start investing in removals well before their net-zero target year, setting interim milestones to ensure alignment with long-term climate goals. This shift could provide much-needed investment certainty for carbon removal projects and developers, helping to move the industry beyond its current reliance on voluntary early adopters.

Additionally, the revised standard affirms that once a company has reduced its emissions as much as possible, it must neutralise residual emissions with high-durability carbon removal. This is a positive development, as it strengthens the case for scaling durable removal solutions such as biochar and direct air capture (DAC).

Limiting the Scope of Removals: A Missed Opportunity?

Despite these positive steps, the revised draft restricts the use of removals to Scope 1 emissions, at least until companies reach their net-zero target date. Scope 2 and Scope 3 emissions are not currently required to be neutralised with CDR until the long-term phase. For many companies that do not produce their own goods, Scope 3 emissions account for 70-90% of a company’s total emissions.

This decision has sparked debate among climate experts and CDR advocates, highlighting several key concerns: 

1. Without widespread requirements for CDR integration, this dampens the demand for near-term carbon removal credits and presents a challenge to scaling the market in time for net zero. Without widespread investment today, supply wont be ready for the amount required in the future.
2. By limiting near-term CDR requirements to Scope 1, SBTi risks delayed integration of removals from some of the most ambitious corporate net-zero leaders. Many industries with high Scope 1 emissions such as heavy industry and aviation have been slow to adopt SBTi targets, whereas sectors with predominantly Scope 3 emissions (e.g., consumer goods, finance, and tech) have been more proactive. Fewer companies are then incentivised to invest in removals, especially  those with ability to pay. 
3. Omission of Beyond Value Chain Mitigation (BVCM) in SBTi’s required near-term targets could further limit demand. Companies are encouraged to invest in removals and other actions outside their value chain. But, there is no formal recognition of these actions, potentially dulling incentives despite growing interest in BVCM strategies. Stronger guidance on how removals can support Scope 3 abatement in the transition phase could help incentivise greater climate mitigation, drive demand, and accelerate the scale-up of much-needed CDR solutions.

SBTi’s suggestion to direct removals to Scope 1 emissions is founded on the idea that Scope 2 emissions will almost certainly be zero by target years, and Scope 3, at present, is too difficult to estimate at this time and raised concerns over double claiming. Is a Scope 1 requirement the most hopeful case for interim removal targets, or is another path possible? 

The Risk of Delayed Corporate Action on Removals

Strong, consistent demand signals are critical to securing financing and scaling supply for CDR project developers. By postponing mandatory removals for most emissions until the net-zero target date, there is a risk that many projects will struggle to secure the off-takes they need to reach commercial viability. Investors and project developers need clear and sustained demand commitments today—not just in 2040 or 2050.

Furthermore, the current framework may encourage companies to delay engagement with removals altogether as the bulk of companies under SBTi commitments do not have a large Scope 1. As is pointed out in this analysis, while CDR demand will increase among companies that estimate having residual Scope 1 emissions at net-zero, it can potentially hamper the individual efforts within companies without large Scope 1 (which include most companies!).

If companies postpone action on CDR until their net-zero date is near, total demand goes down. Moreover, expected cost reductions for high-durability removals would also be delayed, making it even harder to achieve affordability at scale. This is a major concern given the IPCC’s projections that we will need to scale CDR to several giga-tonnes per year by mid-century to stay within 1.5°C.

Where Do We Go from Here?

SBTi’s revision is still in draft form, and stakeholders now have the opportunity to provide feedback during the public consultation period. While the inclusion of near-term CDR targets is an important step, the framework must strengthen corporate incentives to invest in high-quality removals earlier in their transition pathways to build the necessary infrastructure for long-term scalability.

To ensure that removals play a meaningful role in corporate climate strategies before the net-zero deadline, potential revisions could include allowing (or even requiring) removals for a portion of Scope 3 emissions in the near term, particularly for hard-to-abate sectors. In this scenario, companies with higher ability to pay could help fund scaling for permanent removals that make up their Scope 3, aiding the sectors that are less able to afford Scope 1 reductions. These areas are often where most residual Scope 1 emissions will be remaining at net-zero.  This paper–which is worth reading–discusses just this topic, pointing out how “approximately 90% of emissions originate from companies that generate only 25% of profits, highlighting a disparity in the ability of polluters to pay the cost of their emissions and fund climate solutions, including carbon removal.”

The current proposal from SBTi does not take the above imbalance into account, meaning that it is likely that a large portion of Scope 1 emissions will not be neutralised at the net-zero target date unless incentives urge companies with higher ability to pay to neutralise those emissions. The imbalanc in profit per tonne emitted is displayed in the figure below, highlighting sectors with a high ability to pay across the GHG emission scopes.

Final Thoughts

The revised SBTi draft is a mix of progress and limitations for carbon removal. While it establishes a clearer role for CDR, its restricted application to Scope 1 emissions, and the mere encouragement of CDR within BVCM could slow near-term demand just when the market needs momentum.

Now is the time for corporate sustainability leaders, project developers, and climate experts to weigh in. If we want to see a thriving carbon removal market that supports a robust net-zero transition, we need guidelines that drive—not limit—demand.

What do you think? Does the new SBTi draft go far enough in supporting carbon removal? Should it require earlier adoption for Scope 3 emissions? We’d love to hear from you.