On the Way to Net-Zero: How German companies manage their residual emissions

In order to achieve the goals of the Paris Agreement, global emissions must be reduced as quickly as possible. At the same time, the transition to a net-zero society requires a broader approach that goes beyond emission reductions: building an infrastructure for carbon dioxide removal (CDR) – activities that actively remove CO2 from the atmosphere and durably store it – is essential to neutralise unavoidable residual emissions. Companies can be key actors in financially supporting this transformation. And with an increasing number committing to net-zero targets in recent years, there is a growing demand from companies for such removals in order to address their residual emissions.

The Science Based Targets Initiative (SBTi) offers companies a way to set such a target through its Corporate Net Zero Standard. Against this backdrop, the policy paper "On the way to net-zero? How German SBTi companies address their residual emissions through carbon dioxide removals" by Nicolas Kreibich and Max Erik Schulze-Steinen from the International Climate Policy Research Unit at the Wuppertal Institute, explores how German companies with a SBTi-validated net-zero target plan to neutralise their residual emissions. Using a multi-method approach, their paper combines key SBTi data, qualitative text analysis of corporate documents, and insights from 33 interviews with company representatives. In particular, they highlighted the strategies, opportunities, obstacles and need for political support to facilitate CDR development.

The results draw a heterogeneous picture: companies are at varying stages of developing and implementing CDR strategies, yet share comparable experiences, motivations, desires and approaches to achieving net-zero.The paper concludes with a discussion of these findings and provides policy recommendations for companies, private governance organisations, and policymakers. This includes promoting reliable framework conditions to facilitate the expansion of carbon dioxide removal options, as well as developing clear criteria and standards to guarantee the quality and credibility of CDR measures.

The Carbon Mechanisms Research Policy Paper "On the way to net-zero? How German SBTi companies address their residual emissions through carbon dioxide removals" is available free of charge via the following link.