This factsheet is an extract from BloombergNEF's New Climate Rules Pave Way for a Carbon Removals Crunch. To access this report, please contact sales.bnef@bloomberg.net.

The Science Based Targets initiative’s latest standard is unlikely to generate significant demand for carbon removals over the next decade. That will make it hard to get new removal projects off the ground in the near term, resulting in a major supply crunch come 2035 when some SBTi participants will be required to purchase these credits.

Under the latest standard, large corporates and emissions-intensive medium-sized companies in high-income markets must buy eligible carbon removals amounting to 1% of their ongoing emissions from 2035. This percentage rises linearly to reach 100% by the company’s net-zero target year or by 2050 – whichever comes first.

Additionally, all companies must neutralize any residual emissions from their net-zero target year onward using carbon removals. These credits include long-lived carbon removals that store carbon for 100-1,000 years, such as biochar, bioenergy with carbon capture and storage, and direct air capture, as well as short-lived carbon removals, including nature-based solutions that sequester carbon for several decades to 100 years.

To ensure sufficient eligible supply of carbon removals, companies need to start signing offtake agreements – deals to buy credits and receive them at a later date – immediately.

However, of the 7,392 corporates and financial institutions that have committed or set a near-term target, only 40 companies have signed offtake agreements to secure carbon removals in the next few years, according to BloombergNEF’s Carbon Removals Purchasing Database.

Despite evident growth and interest, the current carbon removal market is still reliant on future offtakes with the promise to scale at a later date. Yet under the new SBTi standard, carbon removals will only count toward climate targets if they have already occurred. That means that projects will need to scale up quickly to meet likely demand.

Some 61 million metric tons of carbon removals were contracted in 2025, 2.5 times 2024 levels, with deliveries expected from 2030 onwards. In comparison, 287 SBTi members – identified by BNEF to have at least €450 million ($516 million) in revenue for the calendar year of 2025 – are estimated to add demand for 257 million carbon removals between 2035 and 2036 to fulfill their requirements.