What the SBTi's Corporate Net-Zero Standard V2 means for your carbon credit strategy

On 11 June 2026, the

Science Based Targets initiative (SBTi)

published the final Corporate Net-Zero Standard Version 2.0 - the biggest redesign of their flagship corporate climate framework since 2021. The standard takes effect on 1st February 2027, with target validation opening under the new rules from Q1 2027.

The central question that has hung over the carbon markets for two years is now answered:

carbon credits do have a formal place in SBTi-aligned climate strategies

. For companies with SBTi-validated targets, the update brings new expectations for how and when carbon credits should be used on the path to net zero.

The

Corporate Net-Zero Standard V2.0

is the Science Based Targets initiative's flagship framework for corporate climate target setting. It defines how companies set, validate, and report science-based net-zero targets.

The update does three things:

This is the first time SBTi has given carbon credits a defined, structured place across the full journey to net zero:

Companies that take responsibility for ongoing emissions before the 2035 mandatory deadline can earn formal Engaged, Advanced or Leadership status under the OER programme.

Participation must be declared when targets are validated. That decision, including any explanation for opting out, is then published on the ,

SBTi Dashboard

making it visible to investors, customers and regulators.

Classification

is based on size and geography. 

Category A are companies with annual turnover above €50 million in high-income countries and above €450 million in lower-income countries. They face the strictest obligations:

Category B companies, mostly SMEsmall and medium-sized enterprises (SMEs) in all markets with turnover below €50 million, as well as companies in lower-income countries with turnover below €450 million. They face lighter obligations, though their emissions data will be requested by Category A customers up the value chain.

What every company must set are

near-term five-year targets

:

Setting long-term net-zero targets is a company's choice, not a requirement. This gives companies more flexibility in how they structure their climate commitments while maintaining the rigour of near-term accountability.

Companies must report scope 1 and 2 emissions annually, with a full scope 1-3 report submitted to SBTi at the end of each five-year cycle. 

Under V2.0, companies are expected to demonstrate ongoing progress, with their climate actions visible year after year.

Companies can now set targets using multiple pathways:

Like before, carbon credits cannot be used to meet scope 1, 2 or 3 emissions reduction targets, and emissions reductions remain the foundation of credible climate action. 

The SBTi continues to emphasise that carbon credits should complement decarbonisation efforts, not replace them. 

Companies also have time to prepare for the transition, with Version 1.3.1 remaining available for new target submissions until 31 January 2028.

The

Ongoing Emissions Responsibility framework

formalises carbon credit procurement as a named, publicly visible part of corporate climate strategy for the first time.

The framework recognises three levels, each measured against cumulative scope 1, 2, and 3 emissions across the five-year target cycle.

Cover at least 1% of total ongoing scope 1-3 emissions. Companies can do this either tonne-for-tonne with retired, independently verified credits, or by applying a contribution budget at a recommended minimum of $20 per tonne directed toward eligible climate action.

Cover 100% of scope 1 and 2 emissions, and at least 10% of total ongoing scope 1-3 emissions. The same instrument options apply: retired credits tonne-for-tonne, or a $20/tonne contribution budget across the covered volume.

Cover 100% of all ongoing scope 1-3 emissions with a contribution budget of at least $80 per tonne, and retire verified credits for the full covered volume. SBTi describes Leadership as the full internalisation of the cost of climate change.

The $80 per tonne figure has attracted attention since the release of SBTi's draft standard. However, it is not a market price, compliance requirement or minimum carbon credit price.

Instead, $80 per tonne is the defined contribution budget for the Leadership tier within SBTi's proposed OER framework. Companies pursuing the Engaged tier work towards a recommended budget of $20 per tonne.

The financial impact depends on a company's emissions footprint.

At the Leadership tier:

At the Engaged tier:

From 2035, the Ongoing Emissions Reduction programme stops being voluntary for Category A companies. Large companies headquartered in high-income countries will be required to purchase carbon removal credits.

The obligation phases in over time:

Companies also have less time than they may think: SBTi's five-year review cycle means many businesses will transition to V2.0 before 2035, making the next target cycle, not 2035 itself, the point at which planning needs to begin.

Here are the four things that matter most before the new rules take effect.

In V2.0, nature-based solutions remain eligible and materially important, and their role evolves over time.

Under the voluntary OER recognition programme (20270-2035), nature-based reduction, avoidance and removal credits all qualify. This includes projects that protect, manage or restore ecosystems.

The standard explicitly recognises nature-based solutions for both their climate impact and their wider social and environmental benefits.

After 2035, the mandatory OER requirement shifts to removals only, with durable removals gradually increasing over time.

Nature-based removals account for up to 90% of the removals requirement in 2035, with their share gradually declining as durable, long-lived removals are phased in.

SBTi's supplementary guidance is clear that nature-based solutions and engineered removals are intended to be complementary. The standard encourages a diversified portfolio that combines nature-based projects with emerging carbon removal technologies.

Carbon credits used under OER must:

Credits that do not meet these requirements are ineligible.

Earthly helps businesses identify and support high-integrity nature-based projects, making it easier to build a carbon portfolio that aligns with OER quality standards.

Earthly's

Keystone 3.0 framework

assesses every project across 160+ data points before it reaches a buyer. Over 90% do not achieve our quality standards. The assessment covers:

The rigorous assessment of project integrity provided by Keystone 3.0 helps buyers invest in high-quality nature projects with confidence while reducing procurement risk.

Projects on our marketplace are always verified the latest industry standards, including:

Projects also align, where relevant, with biodiversity frameworks including the DEFRA Biodiversity Net Gain Metric and SBTN. All credits are ex-post, independently audited, and permanently retired at the point of claim - meeting V2.0's quality.

Earthly's

VBC projects

deliver verified biodiversity outcomes alongside carbon removal. 

For companies pursuing OER recognition at the Advanced or Leadership tier, biodiversity co-benefits demonstrate that credit purchases are contributing to nature-positive outcomes, not just meeting a tonnage threshold. 

Each project delivers:

Removal credit supply is currently limited, estimated at

5 to 10 million tonnes

per year against a voluntary market of around 180 million tonnes. As the 2035 mandatory requirement approaches, that gap will narrow and prices will rise. Earthly's

Future Carbon Sourcing

service allows companies to:

For companies planning their OER portfolio over a five to ten year plan, future sourcing or early-stage project origination supports ongoing supply chain mitigation.

For companies working toward a specific OER recognition tier, the

marketplace

is where portfolio-level planning becomes actual procurement. Credits available include:

To support transparent reporting and stakeholder communication, Earthly also provides

impact reporting and visualisation tools

that help businesses track, measure, and demonstrate the outcomes of their climate and nature investments.

Browse

Earthly's marketplace

to explore verified carbon and biodiversity credit projects, or

speak to the Earthly team

to build a procurement strategy mapped to your OER tier and net-zero timeline.

Can carbon credits now count toward my SBTi scope 1, 2, or 3 targets?

No, carbon credits cannot replace emissions reductions needed to meet Scope 1, 2, or 3 targets. The SBTi Net-Zero Standard V2.0 prioritises reducing emissions within a company's value chain, while introducing a greater role for carbon removals in addressing residual emissions on the path to net zero.

Does my existing SBTi target still apply?

Yes, existing near-term targets remain valid until the end of their target timeframe or the mandatory five-year review date, whichever comes sooner.

Is participation in the OER programme mandatory?

The recognition programme itself is voluntary until 2035 for Category A companies. But at target validation, every company must state publicly whether it is participating. Opting out requires a written explanation to SBTi, published on the SBTi Dashboard.

Are nature-based credits still eligible under V2.0?

Yes, high-quality nature-based carbon removal projects are an important way for companies to address residual emissions under the draft Net-Zero Standard V2.0, provided they meet V2.0's quality criteria.