The Science Based Targets initiative (SBTi) recently released a draft update of its Corporate Net-Zero Standard (Version 2.0), introducing new frameworks for carbon credits, Scope 3 action, and commodity market instruments. These changes inform how companies across the food and agriculture value chain can invest in climate solutions especially in high-impact categories like rice methane reduction.
Below, we break down what the draft means for our key partners: corporations with SBTi goals, food & ag companies, mills and processors, and rice farmers.
All Companies with SBTi Goals: Clear guidance on the use of carbon credits
SBTi introduced the Ongoing Emissions Responsibility (OER) framework, which provides a structured way for companies to purchase high-quality carbon credits while they work to reduce their operational emissions down to zero over time.
This is an optional pathway until 2035, at which point SBTi-aligned companies will be required to take responsibility for these ongoing emissions.
Companies can participate in two optional tiers of recognition. Recognized status means the company is taking responsibility for a low threshold (1%) of ongoing emissions while Leadership status signifies that the company is mitigating, at minimum, 40% of their ongoing emissions.
Although this framework creates a more credible, market-supported role for carbon credits under SBTi, credits cannot be used to net down a company’s overall GHG inventory and do not count towards scope 3 reductions. Carbon credits are strictly for mitigating ongoing emissions on the road to net zero.
AgriCapture’s Rice Methane Reduction Projects are a high quality and high impact choice for mitigating ongoing emissions.
Food & Agriculture Companies: Guidelines for commodity-based environmental certificates
The V2 draft introduces four levels for Scope 3 interventions and clarifies where different market-based instruments fit, which is especially important for companies with agricultural supply chains. The following intervention levels are now defined: Activity, Counterparty, Activity Pool, & Sector.
Environmental Attribute Certificates (EACs) can now support Scope 3 volume alignment at the activity pool (ie the supply shed) and sector levels.
To qualify under SBTi, EACs must:
- Come from the same activity pool and, ideally, the same region as the physical commodity.
- Be issued and canceled within 24 months.
- Meet an emissions intensity benchmark (FLAG benchmarks for rice are still under development.)
Carbon credits cannot be counted toward Scope 3 outcomes, and EACs are a separate tool even though both represent similar emissions benefits.
The creation of EACs provides a clear pathway for food and ag companies to support regenerative rice production within their supply shed and advance their scope 3 strategies under SBTi.
By working with AgriCapture, companies can source low-carbon rice at the activity level or use our platform to verify and track EACs to the activity-pool or sector level. Learn more about AgriCapture’s platform here.
Rice Mills & Agricultural Processing Partners: New opportunities to meet market expectations and demand
Mills and processors sit at an important point between farmers and downstream buyers. Under the V2 draft, they benefit from two major opportunities:
- OER carbon credit pathway: Methane-reduction carbon credits from rice projects can be sold to SBTi-aligned companies taking responsibility for their ongoing emissions.
- EAC supply pathway: Demand for farm-level Environmental Attribute Certificates tied to methane-reducing practices is expected to increase significantly as food companies pursue Scope 3 alignment.
Mills also play a key role in maintaining supply chain transparency, ensuring that farm-level impacts can be linked to the rice supply, which is now a core expectation in SBTi guidance.
As EAC demand grows, mills and co-ops will need strong data, traceability, and verification systems to support buyers’ reporting requirements. At the same time, rising interest in OER expands opportunities for mill and co-op farmer networks to participate in high-integrity carbon markets.
While both EACs and carbon credits for OER commitments cannot be generated from the same acre, AgriCapture can help mills identify the highest-value pathway for their operations.
Partner with AgriCapture to prepare for both pathways under SBTi. Read more about our supply chain solutions here.
Farmers: Increased demand for regenerative rice production
SBTi’s updated draft is good news for farmers. With stronger protocols, clear guardrails, and defined use cases for investing in environmental outcomes on the farm, demand for both carbon credits and commodity EACs is expected to rise, driving more finance to the farm.
Companies have two ways to support regenerative rice farming:
- Purchasing carbon credits for their OER
- Investing in commodity EACs for their Scope 3 goals
Both mechanisms reward farmers for implementing methane reducing practices while instilling confidence and long-term viability in the market.
With two market options outlined in the SBTi update, AgriCapture is committed to finding and achieving the highest-value market opportunity for rice farmers. Learn more about our programs for farmers now.
