In April, the Science Based Targets initiative (SBTi) announced plans to update its guidance on using environmental attribute certificates, including carbon credits, for companies aiming to achieve their climate goals, particularly concerning Scope 3 (indirect) emissions. This anticipated update is expected to relax the current stringent guidelines on the use of offsets. 

Currently, companies adhering to the SBTi’s Net-Zero Standard can only use offsets for 10% of their absolute emissions across all scopes. Many firms have expressed concerns about meeting such significant emissions reductions. The SBTi’s initial statement lacked detailed information, promising full guidance in July. The announcement sparked intense debate and even caused internal rifts within the SBTi. Critics fear that relaxing the guidelines could undermine scientific evidence supporting deep decarbonization. 

Several NGOs, including WWF and Greenpeace, have urged the SBTi not to relax offsetting guidelines. However, six other NGOs recently expressed support for increased use of carbon credits under specific conditions. In a letter to the SBTi, these NGOs emphasized the necessity of using all available tools to accelerate climate progress. They highlighted the potential co-benefits of high-quality nature-based credits for biodiversity and sustainable development, particularly in low-income nations. 

The supporting NGOs include Fauna & Flora (UK-based), and five US-based organizations: WCS, The Nature Conservancy, Conservation International, the Environmental Defense Fund, and the American Forest Foundation. They advocate for the use of high-quality credits, as defined by the Integrity Council for the Voluntary Carbon Market, and stress the importance of direct abatement of operational and value chain emissions. Additionally, they recommend that credits used for Scope 3 emissions should deliver near-term climate benefits, and companies should reduce their reliance on credits over time as technological and capacity improvements are made. 

The letter also urges the SBTi to collaborate closely with the Voluntary Carbon Market Integrity Initiative (VCMI) to define appropriate offset use, following VCMI’s beta guidance on Scope 3 emissions accounting. Furthermore, the NGOs emphasize that businesses should finance environmental attribute certificate schemes without counting the resulting certificates towards their own climate goals, known as beyond value chain mitigation. 

Sources: 

https://www.nature.org/en-us/newsroom/call-for-strengthened-carbon-credit-standards/ 

https://www.edie.net/carbon-credits-ngos-voice-support-for-more-lenient-offsetting-rules-from-the-sbti/