On November 6, the Science Based Targets Initiative (SBTi) released their revised draft of the Corporate Net-Zero Standard V2. This begins the start of a 30-day consultation with comments due Monday December 8, 2025. The updates to Scope 2 target setting and compliance largely follow proposed GHGP updates, with some important differences and nuances specific to a target-setting body. Use this short explainer to better understand the proposed updates before responding to the survey. 

Important links:

Different Rules for Different Company Types

It is important to understand the SBTi Category A and B company distinctions. This clarifies which companies must meet what standards and when:

Note: Countries are classified using the World Bank economic income categories. Source: SBTi.

Short-term vs Long-term Targets

  • All company types shall set near-term targets.
  • Only Category A companies shall set long-term targets. Category B companies have the option to set long-term targets.
  • 2040 is the net-zero benchmark year for long-term market- and location-based scope 2 targets.
  • Category B companies can set a location-based target with 2050 as the net-zero benchmark year.

Source: SBTi.

Market-based vs Location-based vs Low-Carbon Electricity Targets

  • Long-term targets must be set with a low-carbon electricity target (% of purchased electricity) and optionally can set a market-based or a location-based target in addition.

Source: SBTi.

  • All companies must publicly report their market- and location-based emissions each year.

Scope 2 Target Requirements

  • Specifically, SBTi requires clean electricity purchases to be near, now, and new:
    • Near: Electricity shall be procured within the same grid region as defined by the Climate Group’s 24/7 Carbon-Free Coalition Technical Criteria V1.0 (to be clear, the SBTi standard is not a 24/7 requirement — see next section for more).
    • Now: Hourly matching required starting in 2030.
    • New: Purchases must be made from generating facilities commissioned or re-powered in the past 10 years.
      • By 2035, this shifts to 5 years.

Exemptions, Flexibilities, and Phase-Ins

Exemptions

  • Companies with aggregate annual electricity consumption under 10 GWh within a single region (as defined above) will not need to match on an hourly basis.
  • De minimis sites with annual electricity purchasing of under 100 MWh will also be excluded from hourly matching.
  • The SBTi is seeking feedback on excluding consumption for near-term targets only. They present three options for consideration: 
    1. Exclude consumption in markets where there is neither any eligible low-carbon electricity product available meeting the necessary integrity principles nor any Energy Attribute (EAC) system (emphasis added)1.
    2. Exclude consumption in markets where there is no eligible low-carbon electricity product meeting the necessary integrity principles.
    3. Targets shall cover at least 95% of electricity (blanket 5% exemption for near-term targets).

Flexibilities

  • The GHGP has a number of flexibilities included in their proposed hourly accounting rules (page 28), including the use of profiles and enabling legacy accounting rules for existing contracts.
    • These flexibilities are currently undergoing consultation through GHGP’s process. 

Phase-ins

  • Hourly matching is proposed to phase in on the schedule below – the SBTi is looking for feedback on what the percentage thresholds should be for the phase-in:
    • a. From 2030: at least [50%],
    • b. From 2035: at least [75%],
    • c. From 2040: at least [90%].

EnergyTag will continue to review the proposed standard and provide resources for answering the SBTi survey questions. What did we miss? Reach out to alex@energytag.org to let us know and continue the conversation. 

  1. Integrity principles can be found in Annex E of the draft standard. ↩︎