Net zero emissions

Simply explained, "net zero emissions" refers to the state where global greenhouse gas (GHG) emissions from human activities are in balance with the emissions that are removed from the atmosphere. To understand net zero emissions, the natural carbon cycle and anthropogenic GHG emissions must also be understood. 

The carbon cycle describes the exchange of carbon-containing chemical compounds between the atmosphere, hydrosphere, biosphere, and lithosphere. The four systems store and release these gases, which include carbon dioxide (CO₂) and methane (CH₄). For example, plants absorb large amounts of carbon in the form of CO₂ from the atmosphere, but the biosphere also releases carbon in the form of CH₄ through the nutrient cycle between plants and animals. 

GHG emissions caused by humans, known as anthropogenic GHGs, are produced, for example, when fossil fuels such as coal and oil are burned. This releases more CO₂ into the atmosphere than can be absorbed by natural carbon sinks. The cycle is thus thrown out of balance, and more and more GHGs accumulate in the atmosphere, fueling climate change. 

The situation is urgent, as the global carbon concentration has increased by more than 30% since 1958. To bring the cycle back into balance, we need to reduce our net emissions to zero.  

Achieving net zero emissions: Why is it important?

To limit the effects of climate change, the carbon cycle must be brought back into balance, and quickly. If we pass tipping points such as the permanent melting of the Greenland ice sheet, some of the effects of the climate crisis will be irreversible. The consequences of climate change will therefore become more drastic if we do not act quickly and consistently. 

This is addressed in the Paris Agreement, which aims to limit global warming to 2 °C compared to pre-industrial levels, or ideally to 1.5 °C. The Intergovernmental Panel on Climate Change (IPCC) report from 2023 shows that this can only be achieved with a significant and rapid reduction in carbon emissions: without drastic emission reductions, we will miss the Paris Agreement target by the early 2030s. 

Net zero emissions by 2050

To achieve the goals of the Paris Agreement, we must reduce global emissions by 45% by 2030 and to net zero by 2050. This requires two steps: 

1. Reduce emissions

Companies must significantly reduce their own emissions, by avoiding, reducing, or eliminating sources of GHG emissions within their value chain. Examples include reducing energy consumption, switching to renewable energy, and reducing the use of chemical fertilisers. In practice, this can be a major challenge, especially in certain industries. Energy, agriculture, manufacturing, transport, and construction are just a few examples of sectors that are responsible for a large amount of emissions. For a transition to a net zero economy, each of these sectors must change, for example through energy-efficient construction, investment in renewable energy, or an accelerated transition to alternative modes of transport.

2. Neutralise unabated emissions

It is not possible to operate a business without emissions, even if companies manage to significantly reduce their carbon emissions. To achieve net zero emissions, companies must take further measures to remove carbon from the atmosphere and store it permanently within or outside the value chain. One example of a technology that we can use to remove emissions from the atmosphere is Direct Air Capture (DAC). This allows carbon to be filtered directly from the air. In addition, moors and forests serve as important natural carbon sinks.  

Net zero emissions for companies

Companies can reduce their net emissions to zero by reducing their emissions as far as possible and neutralising any that remain unabated. But what reduction measures should be taken? And what amount of unabated emissions is still acceptable afterwards? The Corporate Net Zero Standard of the Science-Based Targets initiative (SBTi) was established to assess whether companies are achieving net zero emissions based on science. 

The SBTi's guidance follows the recommendations of the IPCC. On this basis, the Corporate Net Zero Standard covers a company's entire value chain, i.e. scope 1, scope 2, and scope 3 emissions. Companies can set themselves a net zero target with the SBTi. In doing so, the company makes a public commitment to this target and interested parties can transparently track progress towards net zero emissions on the SBTi website.  

According to the SBTi, companies must fulfil three requirements to achieve net zero emissions:  

• Set a short-term reduction target (5–10 years)
• Reduce absolute emissions in scopes 1–3 by more than 90% by 2050 at the latest
• Neutralise residual emissions by removing carbon from the atmosphere

In addition, the SBTi recommends financing climate projects to avoid carbon emissions around the world. In this way, companies emphasise their efforts to achieve net zero emissions by 2050. 

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