What is OER (Ongoing Emissions Responsibility)?

Climate targets under the SBTi are aimed at a future target year—often 2040 or 2050. But emissions occur every year along the way. It is precisely this gap that OER is designed to address.

OER is a framework within SBTi v2.0 that governs how companies take responsibility for ongoing emissions while working toward net-zero. It is important to understand that OER is not a way to exclude emissions from climate targets. It is a separate track—and a complement to the reduction targets—that measures ongoing responsibility.

Carbon Credits as a Tool for OER—How Does It Work?

Carbon credits—also known as carbon dioxide credits—are a key tool within the OER framework. A carbon credit represents one verified metric ton of CO₂e that has either been avoided or removed from the atmosphere. Within OER, carbon credits are used in two ways, which we describe below.

The Direct Route: Buy Verified Carbon Credits

Your company can choose to purchase verified carbon credits as a way to address its current emissions. This could involve, for example, removals through nature-based climate solutions (reforestation), from a biochar project, or through a project that protects endangered rainforests (REDD+). The carbon credits must correspond to at least 1% of the company’s current emissions (Scopes 1, 2, and 3) to achieve “Recognized” status .

Carbon credits purchased through this methodology must meet the following requirements: verifiability, additionality (that the climate benefit would not have occurred otherwise), and permanence (that the carbon sequestration is long-term). Recognized standards include Rainbow, Plan Vivo, Verra (VCS), and Gold Standard.

The Carbon Pricing Path: Internal Pricing and Broader Climate Investments

The alternative is to set an internal carbon price of at least 20 USD per metric ton of CO₂e on at least 1% of emissions (Recognized) – or 80 USD per metric ton of CO₂e on 100% of emissions (Leadership). The resulting budget should be invested in climate measures. These could include, for example:

• Verified carbon credits (ex-ante or ex-post credits)
• Research and Innovation in Green Technology
• Climate Adaptation Projects in Vulnerable Regions

At the Leadership level, at least 40% of the budget must be allocated to verified carbon credits. The remaining 60% may be freely allocated to other eligible measures.

Which companies are affected by OER—and when?

SBTi v2.0 divides companies into two categories with different requirements:

Category A – Mandatory OER starting in 2035

Large and medium-sized companies in high-income countries—typically companies with more than 1,000 employees or revenue exceeding 450 million euros. This includes most of the more than 10,000 companies that currently have validated SBTi targets. OER will be mandatory for these companies starting in 2035.

Category B – OER is always optional

Smaller businesses and companies in lower-income countries. OER is voluntary, but offsetting remaining emissions by the net-zero target year applies to all categories.

What will change in 2035? Stricter requirements for carbon credits

Starting in 2035, only removals will count. At that point, credits resulting from emissions avoidance will no longer qualify toward the mandatory OER requirement. This represents a structural shift in the carbon credit market: demand for removal-based credits, such as biochar and reforestation, is expected to increase significantly.

By the net-zero target year, additional requirements will apply: of the removal credits used, at least 41% must come from long-lived solutions—such as biochar. The remaining 59% may come from nature-based, short-lived removals from forestry or agriculture.

Recognized and Leadership – SBTi’s Recognition Levels for OER

Until 2035, OER is voluntary for everyone. However, the SBTi has established a recognition program with public visibility for companies that choose to take action now:

• Recognized: At least 1% of ongoing emissions are offset through the direct approach (verified carbon credits) or the carbon pricing approach (≥ 20 USD/metric ton).
• Leadership: An internal price of ≥ 80 USD/metric ton covers 100% of ongoing emissions. At least 40% of the budget is allocated to verified ex-post carbon credits.

NOTE: In v2.0, all companies must state during validation whether they intend to take responsibility for at least 1% of current emissions. If they choose not to do so, they must provide a reason. OER is already part of the SBTi dialogue.

Three Reasons Not to Wait Until 2035

1. The market for high-quality carbon credits is small—and prices are rising

Demand for removal-based carbon credits is expected to increase dramatically when OER becomes mandatory in 2035. Companies that are building their portfolios of carbon credits and long-term contracts now are securing access to lower prices and limited volumes. This is a competitive advantage with a clear time window.

2. The value of recognition is created now—not in 2035

There is a big difference between having taken on voluntary climate responsibility for five years and just starting when the law requires it. The “Recognized” and “Leadership” levels provide public visibility and strengthen your climate journey in the eyes of customers, investors, and employees if you started early.

3. An OER declaration is already required for SBTi validation

If your company chooses not to take responsibility for ongoing emissions, you must explain why. This sends a message—and it is visible to stakeholders who are reviewing your climate goals.

Summary: OER and Carbon Credits – What You Need to Know

OER is one of the most welcome additions to SBTi v2.0 and fills a real gap in the climate framework: taking responsibility for emissions that occur along the way, not just at the finish line. Carbon credits play a central role—whether as direct investments in climate projects or as a destination for internal pricing budgets.

The framework is clear: levels, time limits, and requirements for verifiability. And it provides a concrete way to demonstrate climate leadership right now. For large companies, the question is no longer whether they should take on this responsibility—but when. Those who get a head start build credibility and secure access to a carbon credit market that everyone knows will become crowded.