The Science Based Targets initiative (SBTi) has unveiled the draft of its Power Sector Net-Zero Standard, a framework to guide companies in the power sector towards achieving net-zero emissions by 2050. This encompasses entities involved in power generation, transmission and distribution, as well as electricity storage, trade, and retail.
A significant aspect of the proposed standard is the stipulation for companies to devise a strategy to phase out unabated fossil fuel capacity and halt investments in such assets. Founded in 2015, the SBTi aims to embed science-based environmental target setting as a standard corporate practice. It provides guidance and independent assessment for companies setting emissions reduction targets, as outlined in its [Corporate Net-Zero Standard](https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf) launched in 2021.
The draft standard is part of SBTi’s broader initiative to develop sector-specific standards, covering industries like forestry, aviation, construction, chemicals, cement, and automotive. Recently, SBTi released the [Financial Institutions Net-Zero Standard](https://sciencebasedtargets.org/resources/files/FINZ-Standard.pdf), providing criteria for banks and investors to set net-zero aligned targets.
The new draft comes as the power sector, a major source of global greenhouse gas emissions, faces both risks and opportunities from the net-zero transition. According to SBTi, the sector’s role in enabling decarbonisation across industries positions it for growth in a carbon-constrained future.
Aligned with the SBTi’s draft Net-Zero Standard V2, the proposed standard introduces methodologies specific to the power sector. Key criteria include a mandatory public disclosure plan for transitioning from unabated fossil fuel power generation, with interim actions and five-year milestones up to the net-zero target year. Investment in new unabated fossil fuel capacity must cease.
The standard outlines criteria for the phase-out of fossil fuels, with coal assets to be retired in OECD countries by 2030 and non-OECD countries by 2040, and oil and natural gas assets by 2035 and 2040, respectively. Companies must also end new investments in unabated natural gas assets in non-OECD countries by 2030.
Exemptions are proposed for unabated natural gas assets used as non-baseload capacity, which may be retained until 2050 if needed for system flexibility or reliability. The standard also requires companies using biomass for power generation to source 100% from certified sustainable sources by 2030, with potential recognition of third-party certification schemes.
The release coincides with increasing scrutiny of the SBTi in the U.S., including an investigation by Florida Attorney General James Uthmeier into potential antitrust violations. Additionally, 23 U.S. State Attorneys General have requested information from the SBTi, highlighting concerns over its financial sector standard and its impact on fossil fuel financing.
The SBTi has opened a public consultation for feedback on the draft power sector standard, running until November 3, 2025. [Access the draft standard and consultation here](https://sciencebasedtargets.org/news/stakeholder-input-invited-on-the-sbtis-power-sector-net-zero-standard).
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