Science Based Targets initiative SBTi has launched an ambitious update of sector standards for the industries that most emit, including oil and gas, chemicals, and power. These industries make up a large portion of emissions and are a step that could help to reduce the world’s temperature to the critical level of 1.5°C.
The new standards by SBTi will provide clear, science-based pathways to help businesses ensure that their operations are net-zero aligned. This speaks to the urgent need of focusing on sectors that may be most impactful in terms of decarbonization and allowing them to have the toolkit needed to lead the way in the global energy transition.
A Landmark Move for Oil and Gas
SBTi sets its focus on the oil and gas industry responsible for 85% of all global CO2 emissions. It is the very first time when the initiative specified in details a decarbonization standard for the specific sector. The new standard focuses on guiding companies along transformation towards changing business models, acquisition of sustainable financing as well as energy transition that must be achieved without posing operational instability threats.
SBTi has outlined clear and specific milestones for this program and has already established the Terms of Reference. The draft standard will be put up for public consultation in early 2025, which will then be followed by a 45-day extended consultation to ensure diverse and rigorous stakeholder input. The iterative process underlines how SBTi is committed to a consensus-driven approach.
Decarbonizing the Chemicals Sector
The chemicals sector is among the largest industrial emitters worldwide and supports key industries, including agriculture, construction, and healthcare. It also forms an integral part of 95% of manufactured products, thus underlining its importance to the global economy.
To mitigate the sector’s environmental impact, SBTi has put forward the Chemicals Sector Criteria, now open to pilot testing and public consultation. Stakeholders are encouraged to give feedback by January 10, 2025, so that the finalized standard will be both workable and impactful. The standardized criteria will be available for public consumption by Q3 2025, an essential step in reducing emissions for the sector while keeping on its contributions.
Powering Down Emissions
Power continues to be the largest emitter of CO2 globally and has become a difficult challenge, as the increased demand for electricity exacerbates the issue. The upcoming SBTi Power Sector Standard will provide companies with an effective structure to minimize the impact of their activities on the environment. The first draft of the standard is anticipated to be published in Q2 2025 with the assistance of expert advisory groups to create outcomes that are ambitious and yet actionable.
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Apart from the three sectors mentioned above, SBTi is working on standards for the automotive and apparel industries, at the same time updating its Corporate Net-Zero Standard. These are efforts aimed at streamlining a harmonized framework that will make the setting of targets easier for business across all sectors.
Although timelines for these initiatives remain tentative, reflecting the complexity of stakeholder engagement and consensus building, they mark a major step forward in global efforts to decarbonize. Equipping high-emitting industries with science-based pathways, SBTi is enabling businesses to be central players in combating climate change and speeding up the transition to a sustainable future.