SBTi 2.0: Market-Based Tools, Supply Chain Decarbonisation and Carbon Removals

c2twsun July 17, 2026 0 Comments

The draft SBTi Corporate Net-Zero Standard Version 2.0 signals an important shift: companies are still expected to prioritise real emissions reductions, but SBTi is becoming more practical about how companies can use market-based tools, supply chain mechanisms and carbon removals to support credible net-zero implementation.

The key message is clear: market-based tools can support climate targets, but they cannot become a shortcut to avoid reducing Scope 1, Scope 2 and Scope 3 emissions.

1. Direct decarbonisation remains the priority

SBTi 2.0 continues to put direct decarbonisation first. Companies should reduce emissions within their own operations and value chains wherever possible.

This includes energy efficiency, fuel switching, electrification, renewable electricity procurement, low-carbon materials, product redesign, logistics optimisation and supplier engagement.

For companies, this means that climate strategy cannot rely mainly on certificates, carbon credits or external projects. These tools may help, but they do not replace the need to cut actual emissions.

2. More flexibility for shared systems and supply chains

One of the most practical changes in SBTi 2.0 is that it recognises the complexity of real-world supply chains.

Many companies operate in shared systems, such as electricity grids, transport networks, commodity pools, agricultural sourcing regions or raw material supply chains. In these systems, it may be difficult to prove that a specific low-carbon unit physically flows to a specific buyer.

SBTi 2.0 therefore gives more room for tools such as energy attribute certificates, power purchase agreements, mass balance models and book-and-claim systems, provided they meet strict quality and accounting requirements.

This is important for sectors where traceability is difficult, but collective market demand can still drive decarbonisation.

3. Market-based tools need strong governance

Tools such as RECs, green certificates, PPAs, book-and-claim certificates and mass balance claims can help companies implement their targets. However, they also create new risks.

Companies need to check:

whether the certificate or claim is unique;
whether it has been retired or cancelled properly;
whether there is a risk of double counting;
whether the environmental attribute clearly belongs to the company;
whether the project or product is independently verified;
whether the claim is aligned with the company’s GHG inventory;
whether the public statement is accurate and not misleading.

This means climate claims must be managed with the same discipline as financial reporting or legal disclosures.

4. Carbon removals become more important

SBTi 2.0 also strengthens the role of carbon removals.

Under the proposed framework, companies would still need to reduce emissions deeply before reaching net zero. At the net-zero target year, any remaining residual emissions would need to be neutralised with eligible carbon removals.

The draft also introduces the idea of Ongoing Emissions Responsibility, or OER. This means companies may be expected, or encouraged, to support carbon removals or other climate contributions for emissions that continue during the transition period.

For large companies, this could become increasingly important from 2035 onwards. They may need to support eligible removals equivalent to a portion of their ongoing Scope 1, Scope 2 and Scope 3 emissions.

5. Carbon removals are not all the same

Companies should not treat all carbon credits or removals as equal.

Key questions include:

Is it a real removal or only an avoided emission?
How long is the carbon stored?
Is there a risk of reversal?
Is the project independently verified?
Who owns the claim?
Has the credit been retired?
Is a corresponding adjustment required?
Can it be used for net-zero neutralisation, or only as a broader climate contribution?

Long-term emissions, especially fossil CO₂ emissions, should generally be matched with durable removals. This creates a need for stronger procurement, risk assessment and contract management.

6. The biggest risk is unclear claims

The more tools companies use, the more important it becomes to communicate carefully.

Companies should avoid over-simple claims such as “carbon neutral”, “zero carbon”, “fully offset” or “net zero” unless the accounting basis is clear and defensible.

Safer statements may include:

“We procure renewable electricity certificates to support our Scope 2 target.”
“We support supplier decarbonisation projects within our value chain.”
“We invest in eligible carbon removals in addition to our emissions reduction efforts.”
“These contributions are reported separately and are not used to offset our Scope 1, 2 or 3 emissions.”

Conclusion

SBTi 2.0 gives companies more tools, but also raises expectations for evidence, governance and disclosure.

The future of net zero will not be judged only by ambitious targets. It will be judged by whether companies can prove what they did, how emissions were reduced, which tools were used, who owns the claims and whether the public statements are accurate.

In short, credible net zero is not just about ambition. It is about implementation, traceability and proof.

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