The new SBTi net-zero standard just rewrote the rules on carbon removal
Welcome back to Critically Speaking, the Supercritical newsletter for carbon removal buyers.
This edition comes from Dr. Mai Bui, Supercritical's Director of Climate Science & Policy, a member of the SBTi Expert Working Group on Carbon Dioxide Removal. The views expressed here are her own.
I spent the past year on the SBTi Expert Working Group that helped shape Version 2.0 of the Corporate Net-Zero Standard. Now that it is public, I want to be direct about what I think it means.
From 2035, every company setting targets under the new standard will be required to purchase durable carbon removal to address residual CO2 emissions. Policy globally is moving in the same direction, favoring options that store carbon for centuries to millennia. And there is not enough supply for everyone to start buying at the same time.
Most companies I talk to plan to deal with this later. I think that is a strategic mistake, and I want to explain why.
What V2.0 requires
Who it applies to. V2.0 is mandatory for any company setting a new SBTi target from January 2028. Companies with existing validated targets can continue under V1.3 for now, though how long depends on where you are. If you have both near-term and long-term targets validated, your current commitments stand. If you have only near-term targets, you will need to transition once your target timeframe ends. Either way, transition guidance is coming, and I expect it will push everyone toward V2.0 requirements over time.
V2.0 introduces two company categories. Category A, covering large and medium firms in high-income countries, faces the strictest requirements. Everything below applies to Category A.
Before 2035. Three voluntary recognition tiers give companies a framework for taking early responsibility for their ongoing emissions. Contributions during this phase can include reduction, avoidance, or removal.
Tier 1 — Engaged
Requires covering 1% of cumulative ongoing emissions, either by volume or budget. The budget is sized using the company’s own chosen carbon price. SBTi recommends a minimum of $20/tCO2e.
Tier 2 — Advanced
Requires covering 10% of cumulative ongoing emissions, either by volume or budget. SBTi recommends a minimum price of $20/tCO2e. This tier additionally requires addressing 100% of Scope 1 and 2 emissions.
Tier 3 — Leadership
Requires covering 100% of ongoing emissions at a minimum price of $80/tCO2e. Any leftover budget (after funding the volume commitment) goes to further climate action.
From 2035. Carbon removal becomes mandatory. Two requirements kick in, and they compound.
Volume: A company must cover a growing share of its ongoing emissions (its Scope 1, 2, and 3 footprint as it declines along the reduction pathway) with verified carbon removal. This starts at 1% in 2035 and ramps linearly to 100% by the net-zero year.
Durability: A minimum share of that removal must be long-lived, meaning biochar, BECCS, direct air capture, enhanced rock weathering, or mineralization with storage of 200 years or more. This starts at 10% in 2035 and also ramps to 100%, and applies to the ongoing emissions attributable to long-lived GHG emissions (CO2 and N2O).
In practice, those two ramps multiply. In 2042, roughly the midpoint, a company might need to cover about 47% of its ongoing emissions with CDR. Of that, about 55% must be long-lived. By the net-zero year, both ramps hit 100% and converge.
The consultation draft last November had the long-lived share ramping from 17% to 41%. The final standard ramps from 10% to 100%. Total CDR volume is roughly the same, but the mix has shifted dramatically toward durable carbon removal pathways.
Long-lived CDR volume roughly doubles. Short-lived roughly halves.
This shift was deliberate. The standard drives demand towards durable carbon removal, stimulating growth in supply.
One more detail worth flagging: Removals must be verified within the same reporting period as the covered emissions, meaning you cannot bank credits from earlier years or use credits with future delivery dates (i.e., ex ante credits). That makes delivery timelines very tight, so risk management and early supplier engagement are essential.
This is bigger than one standard
The direction of travel is not limited to SBTi.
The EU has adopted its first certification methodologies for permanent carbon removal under the CRCF, covering DACCS, BECCS/BioCCS, and biochar. Early June, Puro.earth and Isometric applied to become authorized certification bodies under EU CRCF. The EU Commission also launched their CDR Buyers Club to aggregate voluntary demand. We will have more clarity on the role of permanent CDR in the EU ETS on 15 July, once the Commission publishes its legislative proposal for the EU ETS.
The UK has confirmed it will integrate durable carbon removals into its ETS by 2029, with a 200-year carbon storage threshold.
The US has preserved its 45Q tax credit at $180/t for direct air capture. Germany has approved a EUR 476M CDR budget through 2033 and expanded its Carbon Contracts for Difference (CfD) to include BECCS, DACCS, and mineralization for the first time. Canada has launched a dedicated government CDR procurement program and plans to invest at least USD $7 million (CAD $10 million) in CDR credits.
SBTi V2.0 is one signal among many. Durable carbon removal is moving from voluntary to compliance-grade across every major jurisdiction. Companies waiting for certainty may find themselves behind.
Why the pre-2035 window matters
This is where I think most companies will make a strategic mistake.
From 2035, every company on V2.0 faces the same requirement on the same schedule, with durable carbon removal ramping to 100% by the net-zero year. That demand is enormous, and supply of high-quality long-lived CDR is slow to scale.
Before 2035, V2.0’s voluntary recognition tiers give companies a contribution budget that can fund reduction, avoidance, or removal. Most companies will default to the cheapest available option, avoidance credits at $5 to $15/t, satisfy the tier requirement in tonnes, and move on.
That is short-sighted. Avoidance credits do not build CDR supply. They do not create the supplier relationships or project pipelines you will need from 2035 onward. And when 2035 arrives, every signatory hits the same supply wall at the same time.
Meanwhile, durable CDR pricing is not heading where many people assume. Biochar, currently the cheapest credible long-lived pathway at volume, sits at roughly $195/t mid-market and is rising, driven by feedstock and labor costs. For DAC, a realistic floor is still well above $400/t. SBTi recommended using an internal carbon price as a tool for sizing a contribution budget during the voluntary phase: $20/tCO2e for Engaged/Advanced and $80/tCO2e for Leadership. But that is not what carbon removal costs.
The companies that will be best positioned when removal becomes mandatory are the ones procuring long-lived CDR now, not in 2034.
My advice to buyers is simple: Buy what you can afford now, with the future in mind.
What to do next
V2.0 is a complicated standard, and the numbers look different for every company. Your removal obligation depends on your base-year emissions, sector-specific decarbonization trajectory, and whether you choose to sit across one of the recognition tiers. Getting from “I’ve read the standard” to “I know what this means for us and what it will cost” is not straightforward.
That is exactly what we help companies do. Our team works with buyers every day on CDR procurement at real market prices and conditions. We know this standard inside out and how to align it with upcoming policy changes. If you want to understand what V2.0 means for your organization specifically, and how to use the pre-2035 window to your advantage, we would welcome that conversation.
We have built the ongoing emissions responsibility calculator so you can model your own situation and see what compliance looks like across all three tiers and through the mandatory phase to 2050. SBTi provides a complementary target-setting tool for reductions across Scopes 1, 2, and 3.
These tools are a great starting point. You can also get in touch with us to discuss your specific situation.
Estimate the cost of your ongoing emissions responsibility using our new calculator.
What’s new at Supercritical?
🎟️ Carbon Removal London 2026 is full. On Monday, 22 June, at IET Savoy Place. Every session is built around a question that doesn’t have an easy answer. If you missed a spot, check the full agenda and join the waitlist: https://eu1.hubs.ly/H0tYDpw0
🎙️ Distributed biochar: the third tier, and where it fits into your portfolio: virtual event, today, at 4 pm BST. Dr. Genevieve Hodgins sits down with Ikarus Janzen of Varaha and Rob Brown of Isometric. We’ll work through where distributed biochar sits alongside your industrial credits, and how to tell a strong distributed project from a weak one. Still time to register: https://eu1.hubs.ly/H0tYDpw0 Can’t make it? Don’t worry, you’re still on the list for the recording.
🤝 Dr. Mai Bui joins the Negative Emissions Platform board: Our Director of Climate Science and Policy, Dr. Mai Bui, was elected to the board of the Negative Emissions Platform for a three-year term. NEP advises European policymakers as carbon removal moves into compliance markets, including how the EU ETS accounts for verified removals. Read more.