The carbon dioxide removal (CDR) industry has raised a strong red flag. As per reports, a new open letter, signed by 55 buyers and stakeholders across the permanent carbon removals value chain, calls on the Science Based Targets initiative (SBTi) to revise key parts of its draft Corporate Net-Zero Standard Version 2.0. The signatories warn that if the current language remains unchanged, it could slow or even prevent companies from reaching true net-zero.
This joint action, led by the Nordic Carbon Removal Association, follows SBTi’s decision to open a second public consultation on November 6. The consultation runs until December 12. As a result, companies, experts, and climate groups now have a short window to shape the final version of the world’s most influential private-sector net-zero framework.
CDR Stakeholders Say Draft Rules Create Uncertainty
The CDR industry believes the draft standard sends the wrong signal. They warn that the current wording creates confusion about whether permanent carbon removals can count toward neutralizing residual emissions. Without clarity, companies may struggle to finish their net-zero journey.
- The concern centers on two parts of the draft: the rules on double counting and corresponding adjustments, and the additionality language in Annex E.
According to the signatories, these sections ignore the realities of permanent removal projects. Many projects rely on public funding. Many also fall under national climate targets. If SBTi does not allow companies to use removals that also appear in national inventories, corporate investment could collapse.
This uncertainty makes it harder for companies to plan ahead. It also raises costs. In some cases, it could make net-zero impossible. Therefore, the signees urge SBTi to revise the language and give companies confidence that high-quality removals remain valid tools for neutralization.
Permanent Removals Need Space to Grow
The letter argues that SBTi’s draft does not accurately reflect the challenges of scaling permanent removals. Today, only a few projects have reached the Final Investment Decision (FID) stage. Most needed is heavy government support. Private buyers often commit early to help these projects advance. However, these buyers will hesitate if SBTi casts doubt on future eligibility.
Climate scientists, including Johan Rockström, have stressed that the world must scale permanent CDR rapidly to stay on track for 1.5°C. Yet this scale-up depends on strong public-private partnerships. These partnerships often use co-funding models and a dual-ledger system that allows both companies and nations to count climate outcomes. This model already works for emission reductions. The CDR community argues it must also apply to removals.
Some critics worry that corporate involvement might weaken national ambition. The open letter rejects this concern for permanent removals. These removals are expensive and complex. When companies invest, they actually raise ambition.
Their involvement brings more projects, more learning, and more durable tonnes. It also frees governments to direct public funds to other climate needs. Therefore, the CDR sector believes co-funding strengthens, not weakens, climate action.
SBTi Tries to Improve Clarity—But Falls Short on Removals
SBTi designed the updated draft to improve clarity and credibility. It asks companies to link near-term actions to long-term climate goals. It also expects companies to publish transition plans and maintain separate targets for Scope 1 and Scope 2 emissions. Moreover, SBTi aims to give companies more flexibility by recognizing that sectors and regions face different challenges. The draft introduces a recognition mechanism for early action on ongoing emissions. It also sets stronger expectations for transparency.
However, the CDR community argues that these improvements lose impact if the draft restricts permanent removals. Companies need clear rules. They also need confidence that investments in high-durability removals will help them meet net-zero targets. If SBTi creates barriers, companies may fall short even after making major decarbonization efforts.
Additionally, the open letter urges SBTi to acknowledge the importance of dual-ledger accounting. Allowing both nations and companies to count the same climate outcomes would boost demand and support faster growth. It would also create a stable market signal for investors. Without this flexibility, the permanent CDR sector could stall just as it begins to scale.
David Kennedy, Chief Executive Officer at the Science Based Targets initiative, said:
“Businesses are driving global decarbonization, and will be key to achieving our climate objectives. Taking science-based action both reduces emissions and manages transition risks, maintaining competitiveness and offering growth opportunities in a carbon-constrained world. By contributing to our public consultation stakeholders can help shape the future of corporate climate action and ensure the Standard helps companies to turn ambition into action, and action into impact.”
What Comes Next for the Net-Zero Framework
The next steps will shape how thousands of companies plan their climate pathways. SBTi’s final standard will influence how businesses cut emissions, choose climate tools, and invest in removals. If SBTi responds to the concerns raised, the permanent removals industry could grow faster. Companies would also gain more confidence in the tools they need to balance unavoidable emissions.
But if SBTi keeps the restrictive language, many firms may face shrinking options for meeting net-zero. This could slow climate progress at a critical time.
Both sides agree on a key reality: emissions reductions alone are not enough. Permanent carbon removals must play a role. The question now is how to build a standard that protects scientific credibility while still supporting the growth of essential climate technologies.
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