Net Zero refers to a state of equilibrium between global yearly emissions and total yearly emissions captured and stored long term. According to the IPCC, this state of equilibrium must be reached between 2050 and 2070 to maintain global warming between 1.5°C and 2°C on average.
🌍 Net Zero can be applied to any geographical state sufficiently large to have different carbon capture and storage capacities. The EU, France, Switzerland, Germany, Canada, China, India, and the US have all declared they aimed to reach carbon neutrality somewhere between 2030 and 2070.
Due to the term's popularity, it has become prevalent for companies to claim they have reached net zero or to state they are on a net zero trajectory, meaning they have balanced their emissions with carbon removals.
1. Issues with net zero claims and trajectories
These claims are however quite controversial :
GHG Accounting Issues
GHG accounting is flawed, with companies often manipulating emissions reporting perimeters and methodologies. Even without manipulation, GHG calculations are uncertain and can differ significantly from actual emissions. Some experts believe that GHG accounting may never be accurate enough for credible net-zero claims.
Carbon Removal Controversies
Carbon removal methods vary, with many companies relying on avoided emissions projects (e.g., financing clean cooking technology) or carbon capture for industrial use, rather than permanent carbon storage. These approaches don’t build long-term carbon storage capacity, which the IPCC sees as crucial for climate stabilization. Additionally, voluntary carbon markets, used by companies to offset emissions, are plagued by transparency issues, inconsistent standards, and recent scandals over inflated capture estimates.
Uncertainty in Carbon Capture and Storage (CCS): Industrial carbon capture remains experimental, with low capture rates and risks of leakage, making companies’ reliance on it for net-zero claims a high-stakes gamble. Nature-based solutions also face risks as ecosystems are increasingly vulnerable to climate change.
Carbon Budget Sharing
Limited CCS capacity means companies offsetting more than 5-10% of their emissions could be seen as monopolizing resources meant for hard-to-abate sectors (e.g., steel). This monopolization hinders meaningful emissions reductions, especially for companies whose emissions are easier to cut. Moreover, developed economies’ net-zero claims are criticized for potentially undermining CCS capacity needed for smaller or developing-nation businesses, which may benefit more from this resource.
Carbon Neutrality Is Not the End Goal
Carbon neutrality alone won’t repair environmental damage; it only stabilizes carbon levels. True sustainability requires ongoing reductions, ecosystem restoration, regenerative practices, and resilient societies capable of adapting to future changes.
2. The SBTi framework’s take on net zero claims
Even with all the above issues, net zero is still a powerful buzzword. In this context, SBTi tried to design a standard for scientific corporate net zero claims.
This graphic from the SBTi framework outlines a three-step approach for setting Net Zero science-based targets:
Near-term SBTs: Set 5-10 year emission reduction targets aligned with the 1.5°C pathway to ensure significant progress early on.
Long-term SBTs: Aim to reduce emissions to a residual level compatible with 1.5°C scenarios by 2050.
Neutralization of Residual Emissions: For any remaining emissions post-2050, companies should invest in permanent carbon removal solutions. This step emphasizes the need for near-term investments in scalable carbon removal solutions and encourages companies to disclose their progress and milestones to ensure commitment integrity.
The framework focuses on both emission reduction within the value chain and permanent removals to achieve the 1.5°C-aligned emissions pathway.
3. Greenly's position
Our stance on "Net Zero" emphasizes caution in how companies frame their climate ambitions. Greenly advises against claiming to have "achieved" net zero, as, at best, your company can contribute to global net zero through your efforts of emission reductions and carbon capture and storage capacities. With this in mind, “net-zero trajectory” or “net-zero goals” can be considered abusive (assuming net zero refers to the company level), we would recommend “(global) net-zero compatible”.
We encourage transparency, recommending companies avoid presenting emissions reductions, avoidance, and capture in ways that imply direct balancing. While companies can communicate their goals and progress, they should remain factual, acknowledge uncertainties, and clearly outline future steps.
Regarding the SBTi framework, Greenly supports it as a tool for corporate emissions reductions but points out limitations. Greenly calls for broader democratic debate on carbon allocation and the carbon capture and storage (CCS) budget, highlighting the need for shared accountability.