The Science Based Targets initiative (SBTi), the leading authority on corporate climate goals, has released new research that suggests carbon credits may not be effective for offsetting value chain emissions. This marks a significant shift from earlier plans, which had proposed a broader role for carbon credits.
The SBTi’s review, based on various third-party studies, finds that many carbon credits fall short of delivering the intended environmental benefits. This revelation suggests that reliance on carbon credits might hinder decarbonization efforts and limit the flow of climate finance.
The report’s findings could significantly impact the carbon offset market, which has been scrutinized for its effectiveness in delivering promised emissions reduction.
SBTi’s New Findings Challenge Carbon Credit Market
Founded in 2015, SBTi’s mission is to establish science-based target setting as a standard for corporate climate action. It provides guidelines and validation for companies aiming to meet net zero targets, initially requiring 90-95% decarbonization by 2050 and neutralizing remaining emissions.
Earlier this year, SBTi proposed revising its Corporate Net-Zero Standard to include carbon credits for managing Scope 3 emissions, which are the most challenging to control and often represent the majority of a company’s emissions. This proposal led to controversy within SBTi, resulting in staff concerns and calls for leadership changes.
The SBTi board later clarified that any changes regarding carbon credits would be evidence-based and that a discussion paper would be published before finalizing the new standard.
Recent research by SBTi indicates that many carbon credits are “ineffective” in achieving meaningful climate impact and could potentially hinder net-zero progress and reduce climate finance. The research acknowledges the limitations of existing studies but calls for more evidence to better assess the effectiveness of carbon credits.
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The SBTi report highlights that 84% of evidence submissions argue against treating carbon credits as interchangeable with other emission reduction methods, deeming it illogical or counterproductive to global mitigation goals.
Around half of the submissions support contribution claims over offsetting or compensation claims. The SBTi received 111 unique evidence pieces, including research studies and white papers, which will inform updates to its Corporate Net-Zero Standard—a framework guiding corporate decarbonization.
SBTi’s Game Plan: Revising Corporate Net-Zero Standard
The report’s findings are expected to reinforce SBTi’s credibility within the industry, according to experts. They praised the review’s focus on the science of carbon credits, suggesting it restores the SBTi’s relevance in guiding corporate climate action amidst significant external pressures.
Sue Jenny Ehr, the interim CEO of SBTi, stressed that the findings should be viewed within the context of the reviewed evidence, without making broad generalizations. Ehr also said that:
“Targets are the first step to decarbonization and it is important that the SBTi conducts a comprehensive process to revise the Standard to help companies take the lead on climate action and drive down emissions.”
Interim CEO Sue Jenny Ehr stressed the importance of a thorough revision process to support effective climate action and emission reductions.
Alberto Carrillo Pineda, SBTi’s Chief Technical Officer, stated that the review aims to provide a nuanced understanding of the carbon credits debate, which has become highly polarized. Pineda further remarked that the standard-setter stresses the importance of prioritizing direct decarbonization for climate action.
The SBTi plans to release a draft of the revised Corporate Net-Zero Standard for public consultation in late 2024.
A Carbon Credit Market Shake-Up: A Call for Rethinking Emissions Strategies
Ideally, a carbon credit represents a ton of carbon dioxide emissions that have been either removed from or prevented from entering the atmosphere, often through projects like reforestation or renewable energy. It’s also called carbon offsets in voluntary carbon markets.
The carbon credit market, estimated by BloombergNEF to potentially expand from $2 billion to $1 trillion with right rules, is driven by the recognition that companies will struggle to achieve the required emissions reductions to meet the 1.5°C target set by the Paris Agreement.

These market instruments can be valuable if used correctly and if they incentivize the right outcomes, according to Pineda.
Efforts are underway to address the risks associated with carbon credit trading. For instance, new US guidelines aim to restore trust in the voluntary carbon market (VCM), with Treasury Secretary Janet Yellen noting its potential as a powerful tool against climate change if properly regulated. The US Commodity Futures Trading Commission is also preparing to finalize its carbon credit guidance by the end of the year.
In conclusion, the SBTi’s report calls for a more stringent evaluation and application of carbon credits. The initiative’s renewed emphasis on science and rigorous standards aims to ensure that carbon credits contribute meaningfully to climate goals and do not undermine broader decarbonization efforts.
The post How Effective Are Carbon Credits in Corporate Net Zero? SBTi Speaks appeared first on Carbon Credits.
Carbon Footprint
The Strategic Case for Nature-Based Carbon Investments
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
Carbon Footprint
How to buy plastic credits, and what to check before you do
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
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Carbon Footprint
EU carbon credit claims after 27 September 2026
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
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