SBTi Releases Draft Rules on Carbon Credits in Net-Zero Standard V2

The Science Based Targets initiative published the first draft of its updated Corporate Net-Zero Standard Version 2 for public consultation in March 2025, with environmental attribute certificates among the most contested provisions. The draft proposes clearer rules on when companies may use carbon credits and energy certificates to substantiate emissions reductions.

The draft V2 standard distinguishes between two broad categories of environmental attribute certificates: carbon credits covering avoidance, reduction and removal activities, and energy and commodity certificates covering renewable electricity, fuels and materials such as timber and agricultural goods. The SBTi received over 400 responses to a 2023 open call for evidence on certificate effectiveness. Based on that evidence, the draft proposes that offsetting remains prohibited, meaning companies cannot purchase carbon credits from outside their value chain to meet emission reduction targets.

The draft introduces the concept of indirect mitigation, permitting use of energy and commodity certificates when companies cannot trace an emissions source or face insurmountable barriers to direct action. This provision is time-limited and subject to strict quality criteria to be refined through consultation. For scope 2, the draft requires companies to set both location-based and procurement-based targets, and introduces spatial and temporal matching requirements for energy attribute certificates to improve their environmental integrity.

For scope 3, the draft allows indirect mitigation as a temporary measure when traceability is absent, with an expectation that companies improve over time. An example cited is the use of Sustainable Aviation Fuel certificates under a book-and-claim model for business travel emissions. Beyond value chain mitigation, such as purchasing high-quality carbon credits, receives formal recognition in V2 as a leadership activity that does not count toward abatement targets. The public consultation was open until 1 June 2025, and the SBTi plans to run expert working groups and pilot testing before finalising the standard.

Key figure — Over 400 responses to the 2023 open call for evidence on EAC effectiveness