A groundbreaking step in corporate sustainability targets: In the spring of 2025, the Science Based Targets initiative (SBTi) published a draft version of the new edition of its Net-Zero Standards. Carbon dioxide removal (CDR) is now required for companies to neutralize their residual emissions.
The SBTi is widely recognized as the gold standard for corporate climate targets, acting as a de facto policymaker toward credible decarbonization pathways in the absence of widespread and aligned government regulation (which is still in the process of being shaped by each country). Membership to the SBTi has more than doubled in the last year, with over 10,000 companies having either set science-based climate targets and strategies or committed to do so – which is indicative of rising corporate movement to strategically reduce and remove greenhouse gases (GHGs) from the atmosphere.
Why a new version of the net-zero standards?
A 2024 survey by edie.net found that only 30% of businesses feel that current guidance is sufficient to help them reach net-zero. That’s where the Science Based Targets initiative comes in, aiming at providing companies with a science-based framework to align their decarbonization efforts with global climate goals of limiting temperature rise to well below 2°C, ideally 1.5°C, above pre-industrial levels. These targets are based on peer-reviewed climate models and reports from the Intergovernmental Panel on Climate Change (IPCC).
In March 2025, the SBTi published a long-awaited draft version of its updated Corporate Net-Zero Standard. 2025 will see the draft standard go through expert working group and public consultations as well as pilot testing. And in 2026, SBTi will implement the guidelines for the 10,000+ companies committed to science-based climate goals.
Scaling up CDR to unlock net-zero pathway
Meanwhile, carbon removal is scaling rapidly – cdr.fyi reports that CDR credit sales jumped from 5.8m tons in March 2024 to nearly 13m tons a year later. In any other market, more than 100% year-on-year growth would be fantastic. However, there's a huge gap between supply and demand. The IPCC estimates that by 2050, around 10 gigatonnes of annual removals will be needed to meet the Paris Agreement goals. As of 2024, around 2 gigatonnes of CDR are already being delivered, though the vast majority comes from nature-based solutions, while durable methods currently account for only about 0.1% of annual CO2 removals.
To bridge this gap, SBTi is strengthening its stance on integrating durable CDR into corporate net-zero strategies.
CDR is a critical piece of the puzzle to achieve net-zero emissions by mid-century, and net-negative emissions thereafter. Every company, every country will have residual emissions that are hard or impossible to reduce (also known as ‘hard-to-abate’) – and which will thus have to be neutralized to reach zero emissions. Removals are also there to tackle historic emissions to bring global temperatures back down and help contain any overshoot.
The updated SBTi Standard underlines the necessity for businesses to take immediate action in their sustainability endeavors, both to reduce their emissions to the max and neutralize their residual and historic emissions via carbon removal.
3 changes you need to know about on neutralizing residual emissions
1) Reducing & removing
Up until now, companies have been guided to focus on reducing emissions. This guidance of course remains, but the revised SBTi standard now gives a framework of how to address hard-to-abate emissions during a company’s transition to net-zero. Both reduction and removal efforts have to be progressively ramped up in the next years. The current draft text proposes alternative options to proactively address residual emissions between now and the net-zero target year, targeting, for the moment, in particular scope 1 emissions. These options will be finalized during the consultation process in 2025.
Take-away #1: Businesses need to neutralize hard-to-abate emissions at net zero point and should start investing in carbon removal now to be able to ramp up in time on their path to long-term decarbonization.
2) Durability matters
The SBTi now emphasizes the importance of durable CDR solutions alongside shorter-lived methods. While both play a role in climate action, durable solutions are critical to ensure a long-term net zero status.
According to the like-for-like principle, residual emissions deriving from persistent greenhouse gases must be counterbalanced with permanent removals, ensuring an equivalent long-term carbon storage. The SBTi also outlines another approach: that companies adopt a gradual shift from less to more durable carbon removal solutions.
Examples of durable CDR include surface/product mineralization, geological storage, and biochar – methods that lock away CO₂ for thousands of years. Neustark’s approach, for instance, permanently stores CO₂ in mineral waste like demolition concrete via carbonation. The risk of reversal is negligible, binding CO₂ permanently.
Take-away #2: Businesses will need to incorporate a mix of removal methods, while prioritizing durable solutions like surface and subsurface CO₂ storage.
3) Steady ramp-up of high-quality carbon removal
All emissions have to be reduced and residual ones neutralized at net-zero. Companies are now also explicitly encouraged to address the impact of ongoing emissions and support mitigation outside their value chain, for example via direct financing of mitigation projects or via high-integrity carbon credit purchases such as permanent CDR. This is called beyond value chain mitigation, or BVCM.
The SBTi also underscores the importance of transparency and credibility in reduction and removal efforts, and newly recommends that businesses should work with only carbon removal technologies that adhere to high-integrity quality and sustainability criteria.
Take-away #3: If businesses are planning to meet SBTi-aligned net-zero targets in the late 2020s and beyond, the time to act is now: supply to high-quality, durable CDR is limited, and early movers will secure the highest-quality projects at the best prices.
How to stay ahead of the curve
With increasing compliance needs, demand for carbon removal will soon outstrip supply. A recent market analysis by CUR8 estimates that by 2030, demand for carbon removal could reach 300 megatonnes per year.
The same report shows that if even 20% of total demand (60 megatonnes) is for durable removals, a supply shortfall is expected, leading to a potential price increase of 50–70%. Even as costs for high-durability methods decrease, scarcity premiums could drive up spot prices, potentially pushing the average cost of durable CDR credits to $600/t by 2030. Acting early not only ensures compliance with the SBTi and positions companies as leaders in the transition to a net-zero economy, but also warrants good long-term financial planning.