One of the most frequent questions asked of companies declaring net-zero targets is, "What will happen to the greenhouse gases being emitted right now?" While reduction targets point toward future milestones in 2030, 2040, and 2050, emissions continue today. The Corporate Net-Zero Standard V2.0 released by the Science Based Targets initiative (SBTi) on June 11, 2026, attempts to fill this gap with a concept known as 'Ongoing Emissions Responsibility' (OER).
This concept re-establishes the relationship among terms that practitioners have long used interchangeably: 'offset', 'removal', 'neutralization', and 'beyond value chain mitigation' (BVCM). This article provides a definition-focused explanation of what OER requires, what it prohibits, and how it differs from existing concepts.
Clearing Up the Terminology: Ongoing Emissions, Residual Emissions, Offsets, and Removals
Understanding OER requires distinguishing among four terms. First, 'ongoing emissions' refer to emissions still released into the atmosphere across scopes 1, 2, and 3 while a company implements its validated reduction targets. Even if targets are being met, any emissions remaining along the reduction pathway fall under this category. Second, 'residual emissions' represent the final volume that is technically and economically difficult to reduce further when the net-zero target year is reached. While ongoing emissions represent a 'process', residual emissions represent a 'destination'.
Third, 'offsetting' is an accounting and claim method in which external reduction or removal achievements are netted against a company's own emissions to claim emission reductions. Fourth, 'removal' is a type of climate activity that physically captures, absorbs, and stores carbon dioxide from the atmosphere, and is recognized as the sole means to 'neutralize' residual emissions at the net-zero milestone. However, the two concepts are not completely mutually exclusive. Credits used for offsets can also originate from actual reduction or removal activities, and removals are likewise traded through credit issuance and claim systems. Therefore, the most critical practical principle in this standard is not a dichotomy of concepts, but the accounting separation rule that Valued Mitigation Outcomes (VMOs) supported for OER purposes cannot be deducted or credited against a company's inventory emissions or reduction target progress.
OER is the concept of responsibility specifically for these 'ongoing emissions'. In other words, it is an answer to the question, "How do we handle emissions while we are reducing them?" rather than, "Can credits substitute for reduction targets?"
The Three-Stage Structure of the OER Framework
Chapter 6 of the SBTi Standard 2.0 designs OER across three stages. The first is the 'optional recognition program' operating alongside the launch of Version 2.0. The second is the 'post-2035 responsibility requirement' applicable after 2035. The third is the 'residual emissions neutralization requirement' applied at the net-zero target year. The SBTi specified that post-2035 requirements will take effect at a future date, and net-zero requirements apply from the point when scope 1, 2, and 3 emissions reach residual levels.
Notably, even though the first stage is 'optional', it is not entirely elective. The standard requires all companies to indicate their intent to participate in the OER recognition program during the target validation phase (criterion CNZS-C38). Companies choosing not to participate must also publicly disclose that fact, which the SBTi explains is a mechanism to distinguish between participating and non-participating companies and encourage engagement. Market analysis firm Sylvera interprets this non-participation disclosure requirement as an indication that participation could effectively become an expected industry practice. It is worth noting that this is an interpretation by market participants rather than an explicit rule in the original SBTi text.
The Three Tiers of the Optional Recognition Program
The recognition program consists of three tiers—Engaged, Advanced, and Leadership—differentiated by the scope of emissions for which a company takes responsibility. The SBTi stated that the Leadership tier represents the directional goal of fully internalizing climate change costs, and encourages all companies to aspire to this level over time.
According to Sylvera's commentary, the requirements for each tier are as follows. The Engaged tier requires taking responsibility for at least 1% of scope 1, 2, and 3 ongoing emissions through setting a contribution budget or supporting VMOs. The Advanced tier covers 100% of scope 1 and 2 ongoing emissions plus a portion of scope 3, accounting for at least 10% of total scope 1, 2, and 3 ongoing emissions, with a contribution budget benchmark of $20 per ton. The Leadership tier is divided by company size. Category A companies (large enterprises and upper-middle-income country mid-sized enterprises) must establish a contribution budget of $80 per ton for 100% of their scope 1, 2, and 3 ongoing emissions, purchase VMOs equivalent to those emissions using the budget, and allocate any remaining budget to additional climate action. Category B companies (small enterprises and low-income country mid-sized enterprises) need only cover 100% of scope 1 and 2 and a portion of scope 3 encompassing at least 10%, based on the same $80 per ton benchmark.
Here, the 'contribution budget' is a concept close to an internal carbon price voluntarily set by companies. Beyond purchasing VMOs, this budget can be deployed across six categories of climate action: ex-ante reduction financing, low-carbon and zero-carbon R&D, reduction facilitation activities, adaptation and resilience funding, and loss and damage funds. The fact that credit purchasing is not the sole pathway is a design distinct from existing BVCM discussions.
What Qualifies as a 'Valued Mitigation Outcome'?
Under OER, credits are redefined using the term 'VMO'. VMOs refer to ex-post mitigation outcomes that have undergone independent third-party verification, are permanently retired at the time of claim, and are not simultaneously claimed by any other entity. The sources are threefold: emission reductions outside the corporate value chain, carbon sequestration or carbon dioxide removal, and the protection, restoration, and enhancement of natural carbon sinks. Sylvera interprets the explicit inclusion of nature-based solutions as a meaningful shift compared to the cautious stance the SBTi has maintained since controversies arose around the reliability of nature-based credits around 2023.
The standard requires supported activities to simultaneously meet accredited third-party high-reliability standards and SBTi minimum reliability criteria (CNZS-C42). Minimum criteria include documented project-level due diligence by the purchasing company, safeguards protecting human rights, biodiversity, and the rights of indigenous peoples and local communities, prevention of carbon lock-in, transparent reporting on methodologies, performance, and co-benefits, additionality, reversal risk safeguards, and verification by independent accredited bodies. In other words, purchasing credits with an certification label attached is insufficient; companies must keep records showing they independently evaluated the projects.
Accounting Separation and Prohibition of Double Claiming: The Decisive Distinction from Offsetting
The most crucial practical regulation of OER is accounting treatment. The standard requires companies participating in the recognition program to account for supported VMOs separately from their inventories and target progress, thereby preventing double claiming (CNZS-C43). VMOs purchased for OER purposes cannot be deducted from scope 1, 2, and 3 emissions, nor can they be reflected in reduction target achievement rates. Consulting firm Eco-Act interpreted that companies must avoid any implication that climate contributions offset, neutralize, or reduce their own emissions.
Participating companies must report information demonstrating compliance with their chosen tier and undergo independent verification (CNZS-C44). Recognition is determined by reporting verified target progress and contribution implementation performance together at the End-of-cycle Assessment. The structure dictates that companies failing to fulfill reduction targets cannot receive recognition regardless of how much they contribute.
Post-2035: Removal Becomes Mandatory
In the second stage, the nature of OER shifts. The standard stipulates that starting in 2035, Category A companies must support eligible carbon removals equivalent to at least 1% of scope 1, 2, and 3 ongoing emissions, which includes a prescribed, gradually increasing proportion of long-lived removals (CNZS-C45). According to commentaries by Sylvera and Climeworks, this ratio rises linearly to 100% by the net-zero target year, with the share of long-lived removals also increasing from 10% in 2035 to 100% by the net-zero milestone. This industry analysis relies on SBTi explanatory materials, and VMOs used during the voluntary phase cannot be reused toward this mandatory requirement.
However, the SBTi designated this requirement as 'illustrative', stating that prior to its 2035 rollout, the criteria will be re-evaluated in the upcoming revision (Version 3.0) in line with the latest science at that time. Therefore, the 1% figure is more accurately read as a directional signal rather than a finalized obligation.
At the Net-Zero Milestone: Neutralization of Residual Emissions
The third stage applies to all companies following their net-zero target year. The standard requires that at and beyond the net-zero target year, companies reduce scope 1, 2, and 3 emissions to zero or residual levels, and neutralize 100% of remaining residual emissions using eligible carbon removals (CNZS-C46). Residual emissions of long-lived greenhouse gases can only be neutralized using long-lived removals. While neutralization of scope 1 residual emissions must be managed directly by the company, a 'shared responsibility' pathway was opened allowing scope 3 emissions to be shared with value chain partners. Companies must also disclose whether removal credits have received host country authorization and corresponding adjustments, with the SBTi recommending the use of removals whose claims do not overlap with Nationally Determined Contributions (NDCs).
It is worth clarifying a point of frequent confusion. While VMOs in the first stage represent a broad concept encompassing emission reduction credits and nature-based credits, only 'removals' are recognized for neutralization in the third stage. 'Contribution' toward ongoing emissions and 'neutralization' of residual emissions rely on fundamentally different recognized instruments.
How It Differs from Existing BVCM
Prior to Version 2.0, the SBTi encouraged additional corporate climate action under the banner of 'Beyond Value Chain Mitigation' (BVCM). However, BVCM remained at a recommendation level, with unclear scale and recognition mechanisms. Eco-Act explained that Version 2.0 more concretely institutionalized out-of-value-chain climate contributions, previously discussed under BVCM, within the recognition and responsibility framework of OER. The SBTi itself specified in the standard text that it does not intend to supersede existing carbon credit and climate contribution frameworks, but rather aims to establish minimum criteria for recognizing third-party frameworks. The World Business Council for Sustainable Development (WBCSD) summarized that OER originates from the simple observation that emissions continue for years even along ambitious reduction pathways, meaning companies bear a certain responsibility for emissions during the journey as well as at the destination.
Accordingly, OER is more accurately viewed not as broadening the 'allowable scope' of credit usage, but as clarifying the 'place' where credits should reside. They still cannot be used to achieve reduction targets, but companies can earn recognition by contributing transparently through a separate account.
Implications for South Korean Corporate Practice
Domestic companies that have had their SBTi targets validated or are preparing for validation must declare whether they will participate in OER during the target validation phase. Even if a company decides not to participate, it must publicly disclose that decision and the reasons behind it, requiring an internal rationale for "why we are not participating" or "which tier we are choosing." Companies that have already purchased voluntary carbon credits need to review whether those credits satisfy VMO requirements, and whether the practice of expressing credits as emission deductions in sustainability reports conflicts with OER's accounting separation principles.
The design of contribution budgets at $20 to $80 per ton can serve as a reference benchmark for companies operating internal carbon pricing systems. Furthermore, the structure in which long-lived removal ratios step up after 2035 provides a reason to review long-term procurement plans for technology-based removal credits starting now. However, current public documents alone make it difficult to determine whether specific allowances or offset credits under South Korea's Emissions Trading System (K-ETS) satisfy OER's VMO or eligible third-party framework requirements. Since the SBTi has stated it will separately develop criteria and procedures to recognize relevant third-party frameworks, standards, and programs, subsequent recognition procedures and detailed guidance must be monitored.
KBR Insight
The greatest significance of OER lies in shifting the stale debate of "Will we use credits?" to the practical question of "In which account will credits be recorded?" The offsetting debate stalled for over a decade because some companies treated the same credits as reduction performance while others called them additional contributions. The SBTi has now drawn that dividing line firmly through accounting rules.
However, concerns also persist. The approach of requiring public disclosure of non-participation reasons within a program labeled as 'voluntary' can be read as a de facto quasi-obligation, sending strong demand signals to the credit market. If supply-side reliability fails to keep pace, the project-level due diligence requirements emphasized in Version 2.0 will pose a significant burden on corporations. For domestic companies, rather than rushing to select a tier, separating their credit accounting according to OER standards first is a pragmatic initial step.
Implementation Timeline and Remaining Tasks
According to the SBTi, Standard Version 2.0 takes effect on January 31, 2027, with a transition period running from the first quarter of 2027 through the first quarter of 2028. During this period, companies can submit targets based on the existing Version 1.3.1 until January 31, 2028. Detailed operating procedures for the OER recognition program, recognition criteria for third-party frameworks, and final numerical values for post-2035 requirements are all scheduled to be fleshed out in subsequent documents and the Version 3.0 revision. Ongoing emissions responsibility is now established as a concept, but its practical standards are still under construction.