The Science Based Targets Initiative (SBTi) has released the second draft of its Corporate Net-Zero Standard V2.0 for public consultation. This update, published in November 2025, proposes significant changes to how companies will manage climate action. If adopted, it will reshape how companies approach taking responsibility for ongoing emissions, carbon finance, and climate claims.

Here is CEEZER’s breakdown of this new framework and the critical changes buyers need to be aware of.

Goodbye BVCM, hello responsibility 

The term "beyond value chain mitigation" (BVCM) is being phased out in the SBTi lexicon and is replaced by "ongoing emission responsibility." This change formalizes and elevates the role of external mitigation actions (like purchasing carbon credits) on the path to net zero.

Although this action remains voluntary for most companies until 2035, the new standard introduces a built-in transparency mechanism. Companies are now mandated to disclose whether they plan to take responsibility for their ongoing emissions. If they choose not to, they must provide a public explanation for their rationale. Conversely, companies taking responsibility are required to report annually on their methods, including the rationale for their chosen carbon price and specific details on the volume and type of carbon credits purchased.

This is a powerful psychological nudge. By forcing companies to make an active and public decision, SBTi may prompt many to opt in rather than deferring the choice.

Voluntary, then mandatory

The new standard sets a clear timeline for action:

• Voluntary (until 2035): For the next decade, taking responsibility for ongoing emissions is optional. To incentivize early action, the SBTi is introducing two "tiers" of recognition: “Recognized” and “Leadership.” This allows early movers to gain official recognition for their climate finance efforts.
• Mandatory (post-2035): From 2035, taking responsibility for a portion of ongoing emissions will become mandatory for Category A companies (defined as large- and medium-sized companies in high-income countries). This requirement will start at a set percentage (to be finalized) and rise linearly to 100 percent by the company's net-zero year. This is not mandatory for Category B (smaller) companies.

Driving investment: “Leadership” and “Recognized” 

Perhaps the most significant new mechanism to incentivize taking responsibility for ongoing emissions and driving investment into the carbon markets is the optional recognition program, including the “Recognized” and “Leadership” tiers. 

To achieve the “Leadership” status, a company must: 

• Apply a carbon price: Set an internal carbon price of at least $80 USD per tonne for 100 percent of its ongoing Scope 1, 2, and 3 emissions to determine a total financial budget.
• Meet the 40 percent floor: Spend a minimum of 40 percent of that calculated budget on ex-post mitigation outcomes—in other words, verified carbon credits.

This establishes a clear minimum floor for credit purchasing for companies seeking the highest level of recognition. The remaining 60 percent of the budget can be used more flexibly, including for ex-ante mitigation funding (e.g., forward-financing removal projects), R&D for low-carbon tech, or adaptation and resilience funding.

By comparison, to achieve the “Recognized” status introduced in the draft, a company must either: 

• Apply a carbon price: Set an internal carbon price (without a floor) to cover at least one percent of its ongoing Scope 1, 2, and 3 emissions to determine a budget to support climate action. 

or

• Support ex-post mitigation: Support ex-post mitigation outcomes - meaning verified carbon credits, equal to at least one percent of its ongoing Scope 1, 2, and 3 emissions. 

Compared to the “Leadership” tier, the “Recognized” status provides more flexibility for companies and also has a deliberately low threshold to ensure feasibility and accessibility for companies across sectors. The focus of this recognition program is to encourage companies to take responsibility for ongoing emissions through direct investments.

While the new tiers create powerful incentives for action on the path to net zero, the V2 draft also brings new clarity to the final destination: neutralization itself.

Neutralization: Focusing on long-lived solutions 

The draft makes a crucial distinction between ongoing responsibility (what you do before net zero) and neutralization (what you do at net zero). To claim it has reached its net-zero target, a company must neutralize all its residual emissions. 

The V2 draft specifies the technology mix for this neutralization, based on IPCC pathways:

• 41 percent of neutralization must be met using long-lived removals. These are high-permanence solutions like direct air capture (DAC), biochar, and enhanced mineralization.
• The remaining 59 percent can be met with short-lived removals (such as nature-based removals) or additional long-lived removals.

This mandate validates the essential role of a diversified portfolio, blending mature nature-based solutions with nascent technological removals to build a robust, future-proof net-zero claim. Indeed, according to the SBTi guidance on the incentivization of both nature-based removals and CDR, published at the same time as the V2 draft, nature-based solutions and engineered carbon removals together form a complementary approach to climate action, weakening the narrative pitting nature-based solutions against engineered carbon removal. 

No more double claiming?

The SBTi V2 draft tackles one of the market's most complex issues: double claiming. It proposes that removals used for neutralization shall not be simultaneously claimed for a country's Nationally Determined Contribution (NDC). This provision would render EU CRCF credits ineligible, as they count toward the EU's NDC, and the same applies to state-supported BECCS projects in Denmark and Sweden. This is contentious. It directly conflicts with the 3.67 MtCO2e Ørsted-Microsoft deal, where Carbon Direct and Microsoft argue for “functional dual accounting”: Denmark claims the removal for its NDC, and Microsoft claims it for corporate accounting. This debate is set to intensify.

If this requirement stays in the final version, Corresponding Adjustments (CAs) under Article 6 of the Paris Agreement would become critical for the voluntary carbon market. To make a neutralization claim, a company must prove the host country applied a CA, ensuring the removal is not double claimed against a national target. This mandate elevates CAs from a niche concern for compliance markets (like CORSIA) to a mainstream requirement for high-integrity corporate claims, pressuring host countries to operationalize their Article 6 frameworks. 

Bottomline: A clear roadmap for carbon procurement

This proposed standard represents a fundamental reframing of corporate climate action. The breakthrough here is the shift in guidance: companies are no longer told to "decarbonize first, compensate later," but instead to "do both, now.” This strongly incentivizes companies to build a sophisticated, long-term carbon credit procurement strategy. The 96-page V2 draft makes it clear there is a critical role for both nature-based and novel tech removals, but on a clear, multi-stage timeline.

Companies must now plan for three distinct horizons:

1. Now (voluntary): Build a high-quality portfolio to gain "Recognized" or "Leadership" status (meeting the 40% floor).
2. Post-2035 (mandatory for Category A): Fulfill a mandatory, rising requirement for neutralizing ongoing emissions.
3. At net-zero (mandatory for all): Secure the specific 41% long-lived and 59% short-lived removal mix to neutralize residual emissions.

CEEZER supports companies in building diverse, quality-focused portfolios to be perfectly positioned for every stage of this transition, from meeting the voluntary 40% floor today to securing the 41% long-lived neutralization mandate for their net-zero target ahead of time.

What’s on the horizon

Until December 12, the SBTi is seeking feedback through the consultation survey on its V2 draft, itself based on insights from expert working groups, research, and the first public consultation, which CEEZER participated in. The final standard is expected to be published for companies to use in mid to late 2026. In the meantime, the existing Corporate Net-Zero Standard (V1.3) remains the active version for setting new targets until December 2027 and will remain active for companies with existing SBTi-approved targets. From January 2028, all companies setting new targets will be required to use the new Standard V2.0. 

In parallel, the standards landscape continues to evolve. The International Organization for Standardization (ISO) is working on ISO 14060 (Net Zero Aligned Organizations). That draft is expected to go to global public consultation in early 2026 and is expected to further diversify the standards environment, with additional credibility of government-backed standards bodies.

The long consultation process of the SBTi may result in some companies delaying target validation until V2 is finalized. This, however, is a mistake. The new SBTi draft standard already makes absolutely clear the increasing focus on taking responsibility for ongoing emissions for Category A companies on a voluntary basis until 2035, with a comprehensive approach combining long-lived removals through engineered carbon removals and short-lived nature-based removals. Only companies taking action now can be sure to be ready for when these standards come into force, anticipating new regulatory shifts by proactively preparing their diversified removals procurement. 

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If you'd like to discuss the impact of the new SBTi Corporate Net-Zero Standard on your business and climate strategy, please reach out.