?? Corporate Net-Zero Standard V2: Understanding Environmental Attribute Certificates (EACs)

The Science Based Targets initiative (SBTi) has released the first draft of the Corporate Net-Zero Standard Version 2 (V2) for public consultation. One of the key areas of focus in this update is Environmental Attribute Certificates (EACs), including carbon credits and certificates for energy and commodities.

?? Why This Matters? Companies need clearer guidance on how to use EACs effectively within their climate strategies. SBTi has undertaken extensive research, receiving feedback from 400+ stakeholders and publishing detailed reports on the role of EACs in corporate decarbonization.

This article breaks down:

? What are EACs?

? How they are used in the Net-Zero Standard V2

? Their role in Scope 2 & Scope 3 emissions

? Key proposals and changes in the new draft

?? What are Environmental Attribute Certificates (EACs)?

EACs are instruments that certify the environmental impact of a product, service, or activity. Within the SBTi framework, they are categorized into two main groups:

1?? Carbon Credits ??

Carbon credits represent verified reductions or removals of greenhouse gas (GHG) emissions. They fall into three primary types:

• ? Emissions Avoidance Credits – Issued for activities that prevent emissions before they occur (e.g., renewable energy projects replacing fossil fuels).
• ? Emissions Reduction Credits – Issued for activities that reduce emissions compared to a baseline (e.g., improving energy efficiency).
• ? Carbon Removal Credits – Awarded for projects that capture and store carbon, either biologically (e.g., reforestation) or geologically (e.g., direct air capture).

2?? Energy & Commodity Certificates ?

These EACs provide transparency into the sustainability performance of fuels, electricity, and raw materials:

• ?? Electricity Certificates – Ensure that purchased electricity comes from renewable or zero-carbon sources.
• ? Fuel Certificates – Verify the sustainability credentials of alternative fuels (e.g., Sustainable Aviation Fuel (SAF)).
• ?? Commodity Certificates – Certify the environmental impact of materials like timber, metals, and agricultural products.

?? Key Changes in Net-Zero Standard V2

The new draft reinforces direct emissions reductions as a top priority while also refining how companies can use EACs.

1?? Carbon Credits & Permanent Carbon Removals

The SBTi does not allow offsetting (buying carbon credits instead of reducing emissions internally). However, carbon removals are recognized for neutralizing residual emissions after companies have decarbonized as much as possible.

• ?? Beyond Value Chain Mitigation (BVCM) – Companies are encouraged to invest in climate projects (e.g., high-quality carbon credits) as an additional leadership action, but these investments don’t count toward corporate net-zero targets.
• ?? Neutralization Requirements – Any remaining emissions by 2050 must be neutralized using carbon removal solutions (e.g., afforestation, direct air capture).

2?? Energy & Commodity Certificates in Net-Zero Standard V2

The draft standard proposes specific scenarios where energy and commodity EACs can be used for climate targets.

?? Scope 2 (Electricity Emissions)

• Companies must set both a location-based and a procurement-based target.
• Energy EACs are allowed, but with new quality criteria like spatial and time matching to ensure credibility.
• In regions where zero-carbon electricity isn’t available, companies can temporarily use EACs to source renewable energy from other grids.

?? Scope 3 (Supply Chain & Indirect Emissions)

• Companies can use energy and commodity EACs for Scope 3 emissions only if direct mitigation is impossible.
• For example, businesses can address emissions from business travel using Sustainable Aviation Fuel (SAF) certificates through a book-and-claim system.

?? Why These Changes Matter

?? Ensures transparency – Standardized guidelines prevent greenwashing and ensure accurate reporting.

?? Drives real decarbonization – Companies must prioritize direct emissions reductions before relying on EACs.

?? Encourages high-impact mitigation – Firms investing in beyond-value-chain mitigation are recognized as climate leaders.

?? Your Voice Matters ???

?? Let’s work together to shape a credible, effective, and impactful corporate net-zero framework!

??????????: [email protected] or

??????????????: Sachin Sharma

???????? ?? F?R?E?E? ???????????????????? ????????: https://outlook.office.com/bookwithme/user/f8c76a6f4e12491b82595da2994f9f76%40sgs.com?anonymous

?? What are your thoughts on these updates? Drop your insights in the comments!

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