SBTi V2: anticipating the 2035 Removal Mandate for a corporate portfolio

V2.0 is the first successor to the 2021 Corporate Net-Zero Standard. 1.5 °C-aligned targets, scope 1+2+3 perimeter, net-zero by 2050 at the latest: that frame does not change. What changes is the role of carbon credits.

Two new mechanisms in V2:

• The Ongoing Emissions Responsibility (OER), a voluntary three-tier recognition open from 2027. The formalised successor to what the drafts called BVCM.
• The Removal Mandate, mandatory for Category A companies (large corporates above SBTi's emissions or revenue thresholds). It requires covering with removal credits a growing share of scope 1+2+3 emissions from 2035, on a linear ramp to 100% by the corporate net-zero year, at the latest 2050.

OER is how a company tells its climate story. The Mandate is what a company holds in its portfolio.

OER has three recognition tiers, in ascending order:

• Engaged: at least 1% of ongoing scope 1+2+3 emissions covered (C40.3, p. 68).
• Advanced: 100% of scope 1+2, topped up with scope 3 to reach at least 10% of the total; USD 20 per tCO2e reference contribution budget (C40.4, p. 68).
• Leadership: 100% of everything, contribution budget of at least USD 80 per tCO2e (C40.5, p. 69). Footnote 71 states this is a benchmark set at the lower end of a range of estimates, and footnote 70 that these benchmarks do not prescribe market prices.

All three tiers accept Verified Mitigation Outcomes which, per the glossary definition (p. 92), derive from one or more of three sources: emissions reductions from sources outside the company's value chain, carbon sequestration or carbon dioxide removal, or the protection, restoration and enhancement of natural carbon sinks. The filter is broad.

OER does not reduce the reported inventory: voluntary contribution is accounted for separately, never netted against scopes 1, 2 or 3.

The Removal Mandate is narrower. Removals only, avoidance credits explicitly excluded. Linear ramp from 1% in 2035 to 100% by the net-zero year. And inside it, a second constraint whose base is worth reading closely: criterion C45.3 (p. 76) first requires quantifying the share of covered emissions attributable to long-lived GHGs, a category that includes CO2 but also N2O. Criterion C45.4 (p. 76) then requires at least 10% of that share to be matched by long-lived removals from 2035, on a linear ramp to 100% by the net-zero year. Criterion C45.5 (p. 76) states that for the remaining covered emissions, short-lived, long-lived or a combination all qualify.

Long-lived, in SBTi's sense, means storage capable of retaining carbon for centuries to millennia; short-lived, decades to centuries. Those are the only definitions given: the standard names no technology at all, neither direct air capture, nor mineralisation, nor biochar, nor soil carbon. Classifying an activity therefore follows from its retention time. A Call for Evidence is announced in footnote 75 (p. 76) on whether shorter-lived removals can neutralise long-lived GHGs through contractual, financial or stewardship mechanisms; no timeline is given.

This long-lived / short-lived distinction is the pivot point for any portfolio dominated today by nature-based. Carbon sequestered in agricultural soil under Gold Standard SOC 402.3, Verra VM0042 or CRCF-agriculture methodologies holds for several decades with a collective buffer around 20% and 20 to 40 years of post-programme monitoring. That places it in the short-lived removal category in SBTi's sense.

Eligible for OER at all three tiers without restriction. Eligible for the Removal Mandate across the whole share not subject to the durability requirement: all covered emissions attributable to short-lived GHGs, plus the remaining 90% of the long-lived GHG share in 2035, that last fraction shrinking each year as the long-lived requirement rises towards 100%.

SBTi names no private standard in the text. The credit just has to clear the Verified Mitigation Outcome filter: ex-post quantification, assurance by an independent accredited third party, documented project- or programme-level additionality, reversal safeguards, and recording in a transparent and traceable system ensuring the outcome is allocated only once (criterion C42.2, p. 73). Gold Standard SOC 402.3 clears it without discussion, so does Verra VM0042 v2.2. ISO 14064-2 cohorts depend more on the registry actually used at retirement, to check case by case with the seller.

Concretely, European soil carbon does not become obsolete. It stays eligible in the portfolio. But it will not, on its own, cover the full obligation at net-zero year.

Take a European company with a net scope 1+2+3 of 10 MtCO2e per year after already-committed reductions. An SBTi-validated net-zero for 2040. It currently buys around 500 kt per year of carbon credits, a nature-based mix with a few technical removals sprinkled in.

By 2035, the SBTi ramp requires covering 1% of scope 1+2+3 with removals, so 100 kt per year. Criterion C45.3 then requires quantifying the share of those covered emissions attributable to long-lived GHGs, a category covering CO2, N2O and some halogenated compounds. Assume that share is 85% for this company, so 85 kt: criterion C45.4 then requires at least 10% of those 85 kt, so 8.5 kt, to be matched by long-lived removals. The remaining 91.5 kt can be short-lived, long-lived or a mix (C45.5). The 85% assumption is illustrative: the real proportion depends on each company's emissions profile, and an agri-food player with a high methane weighting will have a materially smaller long-lived share.

By 2040, net-zero year: 100% of net residual emissions. Say 3 MtCO2e per year after the reductions committed between 2035 and 2040. The durability ramp reaches 100% then, but only on the share attributable to long-lived GHGs: at 85%, that means 2,550 kt of long-lived removals, against 8.5 kt five years earlier. A 300-fold increase in the technical-removal pipeline over five years. The remaining 450 kt, attributable to short-lived GHGs, can still be covered by short-lived removals.

A buyer waiting until 2035 to structure its first DAC or mineralisation offtakes will have missed the window. Technical projects run 5 to 8 years of development lead time, a global annual capacity far below projected demand, and prices that rise with scarcity. The decision is made now, not in ten years.

The same buyer can, in parallel, keep leaning on soil credits for the short-lived share, right up to net-zero year. They stay OER-eligible until 2035, then Mandate-eligible on a declining share. Their use value does not disappear. Their role changes: from the primary carbon asset to the short-lived floor of the target portfolio.

Two distinct tracks, opened in parallel not sequentially.

Workstream 1: consolidate the European short-lived removal base. Soil carbon under Gold Standard SOC 402.3, Verra reforestation, a few agricultural biochar niches. A stable pillar, eligible for the entire short-lived Mandate share. Agronomic and biodiversity co-benefits. CRCF alignment. Clean ESRS E1-7 narrative. The catch: do not overpay for short-lived hoping it will cover long-lived later. It will not.

Workstream 2: build the long-lived pipeline. From 2026 already, sign multi-year offtakes on DAC with geological storage, mineralisation via enhanced weathering or basalt, potentially biochar with geological storage if its retention time places it in the long-lived category, the standard naming no technology and reasoning only in duration. Volumes available in 2026 stay thin, hundreds of kt per year globally, but developers are gradually opening tranches for 2028-2032 delivery. That is where the competitive positioning plays out. A 2026-2027 ticket locks in 2030-2040 deliveries on terms that will not be 2035 terms.

V2 makes credit procurement more strategic. On the contracts you sign today for 2028-2035 delivery (multi-year offtakes or spot buys), three points are worth writing plainly into the paperwork.

SBTi eligibility. Explicit statement of the intended classification (long-lived or short-lived), warranty that the delivered credit qualifies as a Verified Mitigation Outcome under V2, renegotiation clause if SBTi later tightens the criteria. Without that, a credit that looks eligible in 2026 can turn disqualified in 2035, with no recourse.

Retirement traceability. Criterion C42.2 (p. 73) requires ex-post quantification, assurance by an independent accredited third party, and recording in a transparent and traceable system ensuring the outcome is allocated only once. The standard names no registry and no private standard: what it requires is traceability, not a list. In practice, the target registry should be named at signature, and a credit whose retirement cannot be verifiably traced exposes the buyer.

Sharing scope 3 coverage. Criterion C45.6 (p. 77) allows a company to share coverage of its scope 3 emissions with value chain partners reporting the same emissions, on two conditions: at least one party clearly assumes coverage, and a written agreement describes how coverage is allocated. For a structure involving several entities over the same agricultural perimeter, this belongs in the ERPA rather than being discovered at reporting time.

Additionality and reversal safeguards. The Mandate implicitly tightens the criteria. Documented baseline, no business-as-usual, structured buffer pool, contractually defined monitoring. On soil carbon, these are in place with any serious developer. On biochar or DAC, it is producer by producer and belongs in the due-diligence file.

Soil carbon is not devalued. The standard opens OER to removals “whether removals are long-lived or not” (section A.9, p. 10), and criterion C45.5 (p. 76) accepts short-lived removals across the whole share not subject to the durability requirement. Worth noting: the term “nature-based” appears nowhere in the text, which reasons purely in retention time. A portfolio dominated today by European soil carbon does not need dismantling, it needs completing. A pivot to 100% technical tomorrow is not required by the text.

The post-2035 requirement is presented as illustrative. Section 6.5 (p. 76) carries an explicit disclaimer: it "sets the intention" for companies to gradually take responsibility from 2035 onwards, and its criteria "will be reviewed in the next major revision of the Corporate Net-Zero Standard (Version 3)" to reflect the best available science at the time. The trajectory is a firm signal on direction, not a settled text on parameters.

The 2035 Mandate does not apply to every company. It applies to Category A companies, set by SBTi's emissions or revenue thresholds. An SME, a mid-cap or a Category B company keeps broader flexibility. If you are unsure of your status, get it confirmed by your SBTi Target Validation Team before sizing your portfolio.

OER does not let you net credits against scopes. Criterion C43.1 (p. 74) states it without ambiguity: verified mitigation outcomes supported under OER “shall not be counted toward target scope 1, scope 2, or scope 3 implementation and shall not be netted from the GHG inventory”. A marketing team presenting an OER purchase as an emissions reduction would be in direct violation of the SBTi text, and in the red zone with the European ECGT directive once it applies in September 2026.

In short, on soil carbon: V2 clarifies its role in a net-zero strategy, it does not question it. The text sets, at the same time, a horizon (2035, 2040, 2050) that makes parallel work on long-lived indispensable. It is a reframing, not a break.