Zefiro Methane has announced the completion of its first-ever sale of carbon offsets. This is a major milestone in its mission to reduce methane emissions from abandoned oil and gas wells.
The offsets came from the American Carbon Registry’s (ACR) orphan well method. This is the first time such credits have entered the carbon market.
A project in Custer County, Oklahoma, generated the credits when Zefiro successfully sealed a deep abandoned gas well. The remediation took out almost 5,000 feet of casing. It also cut down CO₂ equivalent emissions by 92,956 metric tonnes.
This first batch of ACR-issued carbon credits is sold to Mercuria Energy America. It is the U.S. arm of a major global energy and commodities company.
Methane is a powerful greenhouse gas, trapping heat up to 80 times more effectively than carbon dioxide over a 20-year period. Addressing leaks from orphan wells is one of the fastest ways to cut harmful emissions.
This first sale confirms Zefiro’s ability to turn environmental challenges into tradable climate assets. It also highlights the growing importance of high-quality carbon credits in meeting global emissions reduction goals.
Zefiro’s Chief Executive Officer, Catherine Flax, remarked:
“The successful issuance and delivery of Zefiro’s very first carbon credits is a landmark development not just for us as a company, but also for the voluntary carbon markets as a category in which new standards are being set. With this Methodology that allows carbon offsets to be generated directly from the remediation of orphaned oil/gas wells, there is now a clear and straightforward blueprint in which the voluntary carbon markets can be leveraged as a funding source for leaking wells to be plugged without needing to rely on taxpayer resources…”
The Scale of the Orphan Well Problem
The U.S. is home to an estimated 4 million abandoned or orphaned oil and gas wells, spread across at least 26 states. Many of these wells continue to leak methane into the atmosphere, posing both environmental and health risks. Methane contributes not only to climate change but also to poor air quality that can affect local communities.
Plugging and sealing wells is expensive and technically complex. Some wells are over a hundred years old. Often, there are missing ownership records. This means no company is legally responsible for cleanup.
The challenge is huge. Thus, the U.S. federal government set aside $4.7 billion through the Bipartisan Infrastructure Law. This money will help states tackle orphan wells. Even so, private sector involvement is needed to scale solutions.
This is where Zefiro Methane comes in. The company creates carbon offset credits from verified well closures. This helps provide extra funding to address the issue. Companies and institutions can now invest in projects that reduce their emissions while also benefiting the community.
Transitioning from the scale of the problem to how Zefiro builds trust, the next section explains the company’s focus on credibility in the carbon markets.
Building Trust and Credibility in Carbon Markets
A key part of Zefiro’s progress has been establishing credibility with recognized registries and independent auditors. In April 2024, Zefiro registered its first project. This was with the American Carbon Registry, a respected carbon offset standard with a long history. This ensured its credits met rigorous criteria for transparency, permanence, and environmental integrity.
The company has also partnered with TÜV SÜD, an international certification body, to provide validation and verification of its projects. This third-party oversight ensures that the credits represent real and measurable emissions reductions.
This credibility matters. In voluntary carbon markets, not all credits are created equal. Buyers increasingly demand proof that projects are scientifically sound and environmentally effective.
With credibility established, Zefiro has begun to scale its operations, moving from single projects to broader national initiatives.
Scaling Up Methane Solutions
Zefiro has grown rapidly in recent years to support its methane reduction efforts. The company acquired Plants & Goodwin, a well-plugging expert from Pennsylvania. This adds decades of experience and boosts its technical skills.
The company also became a publicly traded company on the Cboe Canada exchange, giving it greater visibility and access to capital.
Beyond remediation, Zefiro has entered the methane monitoring market. In 2025, it got its first contract from the EPA’s Methane Emissions Reduction Program. This program is backed by funding from the Inflation Reduction Act. This expansion allows Zefiro not only to plug wells but also to track and verify emissions reductions in real time.
Together, these moves show Zefiro’s ambition to become a leader in the methane abatement space. The sale of offsets marks the shift from early-stage development to active participation in both remediation and carbon markets.
To understand why these actions matter, it is important to look at the role of methane abatement in the fight against climate change.
Why Cutting Methane Packs a Punch
Methane plays an outsized role in global warming. Here’s why:
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Methane contributes about 30% of today’s global warming, according to the Intergovernmental Panel on Climate Change (IPCC).
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It has a much shorter lifespan than CO₂ in the atmosphere—around 12 years—but its heat-trapping power is far stronger.
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Cutting methane emissions can deliver fast climate benefits compared to CO₂ reductions.
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The International Energy Agency (IEA) estimates that reducing methane from fossil fuel operations could prevent up to 0.1°C of warming by mid-century. These reductions are considered among the lowest-cost and most effective strategies to slow climate change.
Zefiro’s work directly targets this opportunity. The company seals wells that would leak methane for years. This helps reduce emissions in a clear and effective way.
The added benefit of generating carbon credits creates financial incentives for investors and buyers to support these projects. As methane abatement gains momentum, carbon offset market trends show why Zefiro Methane’s timing is significant.
Carbon Credit Market Momentum: The New Frontier
Methane abatement offsets are appealing. They tackle a strong greenhouse gas and provide clear benefits. These include land restoration and better public health.
Analysts project that the global carbon market could reach $100 billion by 2030, with methane-related credits playing a growing role. In 2024, over 4 million tons of methane credits were retired, as shown below.
For Zefiro, this trend offers a clear growth pathway. The company positions itself as a trusted supplier of verified methane offsets. This helps meet voluntary demand from businesses and prepares for future compliance needs as governments tighten climate rules.
The Global Methane Initiative (GMI) estimates that methane emissions caused by humans will grow by 2030. With the strong demand ahead, the implications of Zefiro’s first sale go beyond one project.
What This Means for Climate and Markets
Zefiro’s first-ever carbon offset sale is more than a corporate milestone—it signals a new chapter for carbon markets. It shows that orphan well remediation can become a real business. It can be funded by both public money and private capital that wants to make a climate impact.
For communities, these projects reduce methane leaks, improve local air quality, and eliminate safety risks from abandoned wells. For carbon markets, they introduce a new category of offsets backed by rigorous standards and verification. And for investors, they offer an emerging opportunity in the fast-growing carbon economy.
As climate policies advance and the need for credible carbon removals grows, Zefiro’s early success positions it as a key player. The challenge now is scaling from one project in Oklahoma to addressing millions of orphan wells across the U.S.
The post Zefiro Methane’s First Carbon Offset Sale: Turning Orphan Wells Into Climate Assets appeared first on Carbon Credits.
Key takeaways
- SBTi is the default reference point for corporate climate action: 51% of Fortune Global 500 companies now hold net-zero targets, up from 8% in 2020, and over 11,000 organizations worldwide have SBTi-validated targets.
- Net Zero Standard V2 redefines climate leadership as reducing emissions and mitigating ongoing emissions, not reduction alone.
- The new standard adds flexibility through five-year cycles, a “best efforts” standard, and an Asset Transition Method for companies whose path to net-zero doesn’t fit a straight-line trajectory.
- Voluntary carbon credits are formally recognized for the first time, with reduction and removal credits accepted from 2027, and removals required from 2035.
- Companies with 2030 targets keep using V1 for their current cycle and move to V2 in 2028; companies without targets can start using V2 on February 1, 2027.
Why every business needs to understand the SBTi Net-Zero Standard revision
The Science Based Targets initiative (SBTi) has become the default reference point for credible corporate climate action. Net-zero targets are now held by 51% of Fortune Global 500 (FG500) companies, up dramatically from just 8% in 2020, and more than 11,000 organizations worldwide have set SBTi-validated targets.
However, SBTi’s influence extends well beyond the companies formally participating in the program. Every business in the value chain of an SBTi participant will have to reduce its own carbon emissions, and businesses that aren’t SBTi participants themselves still look to the program for guidance on climate action.
In short, SBTi gives every business a credible blueprint for climate action, and companies that follow its principles can pursue climate action with confidence, whether or not they’re formally part of the program.
How will the Net Zero Standard revision affect business climate action?
SBTi participation is expected to grow. Despite strong target-setting participation among the F500, only 17% of companies use the SBTi Net Zero Standard V1 beyond target setting, largely because its rules have been seen as too rigid to apply in practice. Much of the Net Zero Standard revision has focused on creating more flexibility to enable higher participation. Medium and small businesses will also increasingly feel pressure for climate action, since SBTi mandates that its participants reduce carbon emissions across their value chains.
Net Zero Standard V2 also redefines climate leadership: leading climate action now means reducing emissions and mitigating ongoing emissions. Reducing your own emissions while ignoring the emissions you continue to release along the way is no longer considered leadership. Supporting voluntary carbon projects with high-integrity carbon credits is now backed by the leading authority on corporate climate action.
What lessons shaped the Net Zero Standard V2 revision?
The revision reflects a few learnings about what actually drives climate progress, and how SBTi built those lessons into the new standard.
| Net Zero Standard V1 Learnings | Net Zero Standard V2 Implementation |
|---|---|
| Making real short-term progress is more important and more difficult than making big long-term promises | Focus on short-term climate progress |
| Every company has a different path to net zero that doesn’t always fit generalized net-zero rules | Create asset transition plans based on each company’s unique asset lifecycles and capital planning |
| We need to mitigate our ongoing emissions to keep global carbon emissions in check | Reduce global carbon emissions by financing voluntary carbon projects with high-integrity carbon credits |
What are the key changes between the old and new Net Zero Standard?
Both versions of the standard are grounded in net-zero by 2050. However, the old standard treated climate leadership as simply reducing emissions, expected a long-term commitment to net zero, based emission reduction targets on generalized net-zero goals, revoked status from companies that fell behind on targets, and ignored voluntary carbon projects entirely.
The new standard treats climate leadership as reducing emissions and mitigating ongoing emissions. It shifts the focus to short-term progress through five-year cycles, and it bases emission reduction targets on both the net-zero goal and a company’s own asset decarbonization plan. A new Asset Transition Method lets companies set decarbonization targets through asset plans with committed, verifiable steps; an ambitious but achievable path based on a company’s starting point, financial resources, and technology, with multiple pathways to reflect the unique opportunities and constraints of different industries and companies.
Crucially, the new standard moves to a “best efforts” basis that creates real flexibility on progress against targets. Businesses that miss their targets can keep their status if they’ve used “every lever” within their control, and minimum progress rules will be set out in the SBTi Assurance Manual.
Finally, the new standard formally uses voluntary carbon projects to mitigate ongoing emissions. From 2027 through 2034, this mitigation is recognized, and both carbon reduction and removal credits are accepted. From 2035 forward, mitigation with carbon removal credits becomes required, with durability matching between the removal and the emission it offsets.
| Old Net Zero Standard | New Net Zero Standard |
|---|---|
| Grounded in net-zero by 2050 | Grounded in net-zero by 2050 |
| Climate leadership is reducing emissions | Climate leadership is reducing emissions and mitigating ongoing emissions |
| Make a long-term commitment to net-zero | Focus on short-term progress in 5-year cycles |
| Emission reduction targets are based on net-zero goal |
|
| Businesses who fall behind targets lose status |
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| Ignores voluntary carbon projects |
|
When does the new Net Zero Standard take effect?
Companies with existing 2030 targets should continue using the old Net Zero Standard for their current cycle, and start using the new Net Zero Standard in 2028 to set targets for the next cycle (2030–2035).
Companies that don’t yet have targets can use the new Net Zero Standard starting February 1, 2027.
What are SBTi’s Category A and Category B companies?
The new Net Zero Standard splits companies into two categories, with different requirements attached to each.
Category A covers large companies from all countries and medium-sized companies from high-income countries. A company from any country qualifies if it meets at least one of: net turnover of €450 million or more, or 1,000 or more full-time employees. A company from a high-income country qualifies if its Scope 1 and 2 emissions are 10,000 tCO2e or more, or if it meets at least two of: balance sheet of €25 million or more, net turnover of €50 million or more, or 250 or more full-time employees.
Category B covers small companies from all countries and medium-sized companies from lower-income countries.
How do Scope 1 targets work under Net Zero Standard V2?
Scope 1 targets aim to transition companies to net-zero direct emissions by 2050 or sooner, and companies can choose from three approaches.
- Absolute emissions reduction follows a straight-line emissions trajectory from the target base year to the net-zero year.
- Emissions intensity reduction lets companies follow sector-specific pathways designed to reflect the reduction opportunities available in sectors like steel, cement, or chemicals.
- Asset transition is designed for companies whose capital stock turnover doesn’t follow a linear or sector pathway. These companies design a transition plan to operate existing assets efficiently and replace them with low-carbon assets, using predetermined milestones.
How do Scope 2 targets work under Net Zero Standard V2?
Scope 2 targets address emissions from purchased electricity through three pathways:
- Reducing electricity consumption,
- Reducing grid consumption by installing onsite or direct-line offsite clean energy generation, and
- Cleaning up the regional grid using market-based tools like PPAs, RECs, and GOs that drive clean energy development.
V2 introduces a dual Scope 2 framework requiring two separate targets, with an overall goal of 100% low-carbon electricity by 2040.
The location-based target addresses the carbon intensity of a company’s physical power use, and requires companies to show that their grid consumption is falling and/or that their physical grid use is getting cleaner; in other words, that their market-based solutions are actually making the grid cleaner.
The market-based (or zero-carbon electricity) target tracks a company’s use of low-carbon power generation contracts and Energy Attribute Certificates. It requires geographical matching of these certificates with electricity consumption based on deliverability regions (grid regions); annual matching is allowed, though hourly matching is encouraged. Category A companies with large electricity loads must report the percentage of their Scope 2 electricity consumption matched with low-carbon attributes on an hourly basis, and there’s an optional recognition framework for companies that meet hourly matching thresholds.
How do Scope 3 targets work under Net Zero Standard V2?
Scope 3 targets share the same 2050-or-sooner net-zero goal, but companies set near-term targets only for material emissions sources in their value chain and areas where they have real influence. Long-term Scope 3 targets are generally not required.
Limited, justified exclusions are allowed for near-term targets, including categories that individually account for less than 5% of total Scope 3 emissions, and activities where a company lacks practical influence, like leased assets it doesn’t operationally control, or the processing of sold products. Optional exclusions are also available in specific categories.
Companies can choose from three approaches to near-term Scope 3 targets:
- An overarching emissions reduction target, which follows a linear contraction of emissions from the base year to residual emissions of 10% or less by 2050 or sooner;
- An overarching supplier/customer alignment target, benchmarked against a growing share of tier 1 suppliers and customers reaching net-zero by 2050 or sooner; or
- A category- or activity-specific target, tailored for companies with concentrated emissions in particular Scope 3 categories or high-emitting activities.
What is “ongoing emissions mitigation” under the new SBTi standard?
This is one of the most significant additions in Net Zero Standard V2. Accelerated climate contributions are needed to help the world achieve climate objectives, limit temperature overshoot, mitigate transition risks, and support the scale-up of climate solutions, and V2 formally recognizes that. Ongoing emissions mitigation runs as a parallel track to companies also reducing their own emissions.
The framework is initially voluntary, with recognition available at three contribution levels to encourage early action.
- Engaged companies address more than 1% of total Scope 1, 2, and 3 emissions.
- Advanced companies address more than 10% of total Scope 1, 2, and 3 emissions, including 100% of Scope 1 and 2 emissions.
- Leadership companies address 100% of total Scope 1, 2, and 3 emissions with a contribution budget of $80/tCO2e.
Carbon credits used for this purpose have to meet certain quality standards. They must be ex-post (issued after the mitigation has actually occurred), independently third-party-assured, emissions reductions or removals, measured in tCO2e, that occur within five years prior to the reporting year. They must be sourced from outside the company’s own value chain. Further minimum criteria will be set to align with high-integrity frameworks, with additional details on the recognition program expected in the second half of 2026.
Starting in 2035, carbon removals become mandatory for Category A companies. From that point, the carbon removal coverage requirement rises linearly from 1% of Scope 1–3 emissions to 100% by a company’s net-zero year. Within that, 10% of long-lived GHG emissions must specifically be covered by durable removals, also rising linearly to 100% by the net-zero year.
How must companies neutralize residual emissions?
At a company’s net-zero target year and thereafter, it must reduce its Scope 1, 2, and 3 emissions to zero or to residual levels, and neutralize all residual emissions using eligible carbon removals. Those removals have to meet two conditions: they must occur within the same reporting period as the residual emissions they’re neutralizing, and long-lived GHGs must be neutralized with long-lived removals, matching the durability of the removal to the atmospheric lifetime of the emission being addressed.
What is the SBTi implementation hierarchy?
Net Zero Standard V2 also lays out how companies should prioritize their actions for credible target delivery, in three tiers.
- Direct actions, at the activity level, are actions that reduce emissions at the source within a company’s own operations and value chain; things like efficiency improvements, fuel switching, and engaging suppliers and customers to reduce their emissions.
- Actions within shared systems, or activity pools that reduce the emissions of shared systems like electricity or gas grids. This includes market instruments that convey low-carbon attributes, such as PPAs, RECs, and GOs, all of which must meet minimum integrity criteria that SBTi will elaborate on in future guidance.
- Sector-level actions relate to the same type of activity occurring in a relevant geography or system, in a way that meaningfully reduces the emissions a company is responsible for.
How Terrapass helps businesses meet the new SBTi standard
As the rules around carbon credits become more rigorous, the quality of the credits behind them matters more than ever. Terrapass has expanded our global network of carbon projects: more project types, locations, prices, ICVCM CCPs, and UN SDGs, spanning super-pollutant destruction, nature-based solutions, and durable removals. We offer Green-e® Climate Certification and we only source from third-party-verified projects on ICVCM-Eligible registries.
We also help clients with impact beyond carbon: EACs, RECs, and GOs including Green-e® Certified credits that support leading renewable energy projects; water credits that support water restoration projects; and custom environmental product needs like RNG and SAF. Wherever your organization is on its sustainability journey, we help clients around the world address climate risk, advance their environmental and social goals, and get the most out of their sustainability budgets.
FAQ: SBTi Net-Zero Standard revision
What is the SBTi Net-Zero Standard?
It’s the framework the Science Based Targets initiative publishes for companies that want validated, credible net-zero targets tied to limiting global warming.
What is changing in the SBTi Net Zero Standard V2 revision?
The biggest changes are more flexibility (five-year cycles and a “best efforts” standard), a new Asset Transition Method for companies whose emissions don’t follow a straight-line path, and formal recognition of voluntary carbon credits for mitigating ongoing emissions.
When do companies need to switch to the new SBTi standard?
If your company already has 2030 targets, you keep using V1 for your current cycle and move to V2 in 2028. If you don’t have targets yet, you can start using V2 as of February 1, 2027.
Can companies use carbon credits to meet SBTi targets?
They can. Under V2, high-integrity carbon reduction and removal credits count toward mitigating ongoing emissions from 2027 through 2034. Starting in 2035, only removal credits count, and they need to be durability-matched to the emissions they offset.
What’s the difference between Category A and Category B companies under SBTi?
Category A is large companies everywhere plus medium-sized companies in high-income countries, based on thresholds like revenue, headcount, or emissions. Category B is small companies everywhere and medium-sized companies in lower-income countries.
What happens if a company misses its SBTi target?
Under the old standard, falling behind could cost a company its SBTi status. Under V2’s “best efforts” approach, a company can hold onto its status as long as it’s used every lever within its control, with minimum progress rules coming in the SBTi Assurance Manual.
Sources: This post is based on Terrapass’s internal analysis of the SBTi Corporate Net-Zero Standard V2.0. Facts and figures were checked against SBTi’s official V2.0 announcement, SBTi’s Corporate Net-Zero Standard V2.0 — Chapter 6: Ongoing Emissions Responsibility, Trellis’s coverage of the standard, Trellis’s reporting on Ongoing Emissions Recognition costs, Sylvera’s analysis of what comes next, Anthesis Group’s Fortune 500 net-zero commitments research, and Climate Impact Partners’ seventh annual FG500 analysis, as reported by CarbonUnits.com.
The post SBTi Net-Zero Standard V2: What the Revision Means for Every Business appeared first on Terrapass.
For most businesses, the emissions that matter most sit outside their own walls. Scope 3 emissions, everything generated across your value chain, from the suppliers who make your inputs to the customers who use your products, typically make up the majority of a company’s total carbon footprint. Under the Corporate Sustainability Reporting Directive (CSRD), those value-chain emissions now have to be measured and disclosed with a rigour that spend-based estimates alone struggle to satisfy. This guide sets out how to improve Scope 3 data accuracy for CSRD: the calculation methods open to you, how to move from estimates to verified supplier data, and how to govern that data so it holds up to audit.
A carbon credit is a commitment that extends well into the future. The tonne of CO₂ compensated for today from a nature-based carbon project must remain out of the atmosphere for good, which means the forest behind the credit has to remain standing long after the transaction is complete. For any buyer, this raises a defining question: What ensures that the forest endures?
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