SBTi updates plans for three sectoral standards - oil and gas, chemicals and power

To tackle emissions in high-impact industries and align with its Corporate Net-Zero Standard, the SBTi is updating its terms of reference for three sector projects: oil and gas, chemicals and power.

These updates are essential to inform robust, practical and clear criteria, with input from external stakeholders shaping their development. By prioritizing sectors with the greatest potential to drive decarbonization, the SBTi aims to equip businesses in high-emitting industries with science-aligned net-zero pathways.

What’s new in the updated plans?

Oil and gas

Fossil fuel combustion and industrial processes account for 85% of global CO2 emissions and 64% of total greenhouse gas emissions. The oil and gas industry desperately needs a blueprint to decarbonize if humanity is to stop the most catastrophic impacts of climate change. SBTi’s Oil and Gas Standard will demonstrate how companies in this industry can decarbonize their business models, retain and attract financing and lead the energy transition.

The updated Terms of Reference for SBTi’s Oil and Gas Standard outlines key milestones in this development, which will be the first of its kind. The next major step is the release of a draft for public consultation early 2025, providing stakeholders with an opportunity to help shape the Standard. Expert input is especially vital for complex, high-impact sectors like oil and gas, where diverse perspectives help establish the minimum criteria for 1.5°C-aligned science-based targets.

A second public consultation, extended to 45 days in line with SBTi’s procedures will follow to inform rigorous stakeholder engagement and robust outcomes.

Chemicals

Nearly all (95% of) manufactured products rely on the chemicals sector. As such, it is the third highest industrial emitter worldwide, contributing to almost every sector of the global economy, including health care, agriculture, construction and renewable energy systems. It is also key to the plastics value chain.

The SBTi is developing Chemicals Sector Criteria to help decarbonize this sector. The project is currently undergoing a second round of public consultation and calling for chemicals sector companies to pilot the criteria. Submissions for both the consultation and the pilot testing are open until January 10th

The next major milestone for this criteria, as detailed in the updated Terms of Reference, is now expected to be the release of the final Chemicals Criteria in Q3 2025.

Power

The power sector is the largest source of CO₂ emissions globally. Global electricity demand is forecast to grow by around 4% in 2024, up from 2.5% in 2023.

The updated Power Sector Standard Terms of Reference details the project plan. The next major milestone will be the release of the first public consultation draft in Q2 2025.

Each of these projects are being supported by expert advisory groups made up of representatives from business, civil society and academia. These groups meet regularly to provide specialised guidance and help ensure the final resources are both practical and ambitious. The participants in these groups can be found on the relevant sector page.

In addition to these sector projects, SBTi is also developing a Financial Institutions Net-Zero Standard and sector standards for automotive and apparel. The latest information can be found in our technical work program.

At the same time, the SBTi is updating its Corporate Net-Zero Standard and is focused on ensuring interoperability between its resources, so they can easily be used together to enable a smooth target-setting process for businesses.

Please note that all timelines are tentative and may be subject to adjustments. Changes can occur due to a variety of factors, including but not limited to stakeholder feedback, consensus building processes and operational constraints.

The SBTi is committed to having a collaborative, transparent and inclusive development process across its standards and criteria - expertise and feedback is vital to inform our work. Opportunities to get involved will be shared on our website, newsletter and social media platforms (LinkedIn and X).