Will the Science-Based Target Initiative’s Net Zero Criteria Squash Corporate Ambition to Reduce Emissions?

In the absence of federal action to limit greenhouse gases over the last four years, thousands of corporations, cities, regions, organizations, investors, and countries have made net zero, carbon neutral, and climate neutral pledges. Bluesource applauds these efforts while at the same time recognizing that there is a pressing need to define what qualifies for these activities.  A slew of standards (Climate Neutral Certified, PAS 2060, Amazon’s Climate Pledge, Institutional Investors Group on Climate Change, and Climate Neutral Protocol to name a few) have popped up, but the Science-Based Targets Initiative (SBTi), backed by the World Resources Institute, is aiming to emerge as the premier and most widely-accepted standard.

The SBTi Net Zero criteria are currently in draft form and deviate significantly from the existing SBTi guidance (used by companies to meet greenhouse gas reduction targets that are consistent with a 1.5-degree Celsius warming scenario worldwide) in that they allow for certain removal-based activities commoditized as offsets to qualify. To meet the ambitious net zero emission mark, SBTi has recognized that internal reductions only won’t suffice. However, the limitations they put on what qualifies as a removal activity are so restrictive that there will be a dearth of credits available to meet the market need, and many of the proposed neutralization activities are not scalable.

Currently, the SBTi net zero initiative has 375 companies signed on, but the UN’s Climate Ambition Alliance: Net Zero 2050 shows 1660 companies, 569 organizations, and 85 investors that have made net zero pledges as of March 12, 2021.[1] Therefore, SBTi has not yet garnered the full support of those eligible to sign on. It is in the interest of both the net zero participants and the public to have just one, consistent standard for net zero. However, given how restrictive the draft SBTi rules are in only accepting removals, there is a danger in the multitude of standards persisting and the public recognition of what net zero claims mean being obfuscated or confused.

The removals activities that currently qualify under the draft SBTi criteria involve a host of experimental/demonstration phase technologies like direct air capture, enhanced weathering (by crushing rocks to have atmospheric carbon dioxide react with the crushed rock to lock carbon in a solid-state in carbonate rock), blue carbon, and carbon capture and sequestration only from bioenergy. The only scalable solution permitted by SBTi that has significant volume now is forestry. But, even forestry projects won’t supply enough removals to meet even a portion of the total 1660 companies’ targets. Just to look at the emissions of one of the large corporate entities that has a net zero goal, Amazon had a total of 51 million metric tons of carbon dioxide emissions in 2019.[2] A portion of these reductions can certainly be made internally by sourcing renewable energy, implementing energy efficiency upgrades, economizing transportation and logistics, etc. . . but a large fraction will be residual emissions that cannot be economically reduced in-house and will need to be neutralized with approved removal activities. In 2019, the combined total of forestry and land-use offsets that transacted was 36.7 million metric tons.[3][4] And, if SBTi does not allows standing carbon to count as removals, the total neutralization credits from this sector could be a small portion of the overall issued forestry credits as only reforestation, afforestation, and growth in standing trees would count. This focus on growth credits could incentivize harvesting of timber now to then earn credits while it regrows, creating the opposite effect intended as carbon would be released immediately. Just a few corporates like Amazon could wipe out the entire global supply of qualifying removal offsets. More projects will certainly be created by the net zero corporate demand, but whether these types of projects alone can scale to meet the demand is questionable.

SBTi’s current net zero guidelines leave out a large portion of the potential reductions from offsets which can be derived from avoided emissions from projects like landfill gas capture and destruction, industrial gas mitigation, use of more efficient cookstoves, energy efficiency measures, and any other action taken now to reduce emissions that would otherwise be emitted. These activities play a key role in reducing emissions from sectors that have highly-potent greenhouse gases like methane, hydrofluorocarbons, and sulfur hexafluoride that account for 20% of global warming have significant near-term impacts on the climate. The removal activities proposed by SBTi only cover carbon dioxide emissions.

Given the scale of the reduction activities that will be necessary interested net zero parties, all actions will be necessary and the world desperately needs a transparent, consistent standard for these net zero targets. If these entities are not given an economically feasible and reasonable way to meet reductions that does not cause overly burdensome reporting requirements, then they may re-neg on pledges will not commit to the SBTi net zero target. Furthermore, an adequate supply of qualifying reduction credits is necessary.  As the net zero movement gains even more traction, SBTi should not limit participation to only a small number of neutralization activities when meaningful greenhouse gas reductions from avoided emission activities can provide significant climate benefit under the current iteration of the SBTi net zero criteria.