The Science Based Targets initiative (SBTi) has unveiled the draft version of its Power Sector Net-Zero Standard, providing the first sector-specific guidance to help companies in the power industry align their decarbonization efforts with the global goal of net-zero emissions by 2050.

This draft marks a significant evolution from SBTi’s earlier Quick Start Guide, offering more robust and tailored criteria for power sector entities, including electricity generation, transmission, distribution, storage, trading, and retail. The goal is to ensure that companies in this high-emitting sector take decisive and science-aligned action toward climate neutrality.

One of the cornerstone requirements of the standard is a transparent transition plan for phasing out unabated fossil fuel assets, with detailed five-year interim targets. Companies will no longer be permitted to invest in new unabated fossil fuel infrastructure. In addition, coal-fired power must be phased out by 2030 in OECD countries and by 2040 in non-OECD regions. Oil and gas power generation must follow by 2035 and 2040, respectively.

The standard allows limited use of unabated natural gas plants beyond 2040 only if necessary to maintain grid reliability and not used as baseload generation. Biomass-based facilities must transition to sourcing 100% certified sustainable feedstock by 2030.

Notably, the draft expands its scope to the broader power value chain, addressing upstream and downstream emissions, including those from storage losses, distribution inefficiencies, and Scope 3 emissions from power trading and retail activities.

Recognizing that the power sector is responsible for around 40% of global energy-related emissions, SBTi sees this standard as pivotal in accelerating the global energy transition. Clean electricity has the potential to drive decarbonization across other sectors, amplifying the impact of power sector climate action.

Public consultation on the draft is open from September 2 to November 3, 2025. Feedback from stakeholders will inform revisions ahead of pilot testing and final release.

Source:

https://www.esgtoday.com/sbti-launches-draft-net-zero-standard-for-the-power-sector/