SBTi is not validating fossil fuel company targets and paused its oil and gas standard in April 2025. Who is excluded, who is not, and what to do meanwhile.
A question we hear from Gulf energy companies is which SBTi sector guidance they should use. The honest answer is that, for an oil and gas producer, the SBTi route is closed for now. SBTi is not accepting target commitments or validations from fossil fuel companies, and it has paused the standard that would have let them in.
Who cannot commit
SBTi’s exclusion is broad, and it does not depend on how much of the business is oil and gas. Companies with any level of direct involvement in exploration, extraction, mining or production of oil, natural gas, coal or other fossil fuels cannot commit, irrespective of the share of revenue those activities generate.
SBTi’s own list of examples includes:
- integrated oil and gas companies, and integrated gas companies
- exploration and production companies
- refining and marketing companies
- oil products distributors, and gas distributors and retailers
- traditional oil and gas service companies
Distributors, retailers and service companies are also named in the exceptions below, so for them the revenue split decides. For a national oil company, an integrated group or an upstream producer, the exclusion applies.
Who can
SBTi sets out exceptions, and in the Gulf they matter because many energy groups are made up of very different businesses:
- Companies earning less than 50% of revenue from the sale, transmission and distribution of fossil fuels, or from providing equipment or services to fossil fuel companies
- Companies earning less than 5% of revenue from fossil fuel extraction assets
- Electric utilities that mine coal for their own power generation
- Subsidiaries of fossil fuel companies that are not themselves fossil fuel companies, assessed case by case
The subsidiary route is the one to look at carefully. A power, water, petrochemicals or services business inside a hydrocarbon group may be able to set validated targets even though the parent cannot. Whether it qualifies depends on what the subsidiary itself does, and SBTi decides case by case.
Why there is no oil and gas standard
SBTi had been developing an Oil and Gas Standard. In April 2025 it paused that work to concentrate on the Corporate Net-Zero Standard and the Financial Institutions Net-Zero Standard, and it says re-scoping will start in 2027.
In February 2026 SBTi published a research report, Pathways and Metrics for the Net-Zero Transition in the Oil and Gas Sector, based on the preceding two years of work. SBTi calls it informative and non-normative. It is worth reading to see where SBTi’s thinking was heading, especially on Scope 3 from sold products, but it is not a standard and it does not open a route to validation.
What to do meanwhile
A closed SBTi route does not mean an empty target-setting page. Investors, lenders and customers still want to see a credible plan, and there are recognised ways to give them one:
- Set your own targets and state the method openly. Scope 1 and 2, methane intensity, flaring. Say what pathway the targets are benchmarked against and why, rather than implying an endorsement that does not exist.
- Report methane under OGMP 2.0. It is the recognised framework for oil and gas methane, and for anything exported to the EU it now links to the EU Methane Regulation. See OGMP 2.0 Level 5 and EU import equivalence.
- Disclose a transition plan under IFRS S2 if you have one. IFRS S2 does not require a plan, but if one exists its targets and assumptions must be disclosed. See IFRS S2 does not require you to have a transition plan.
- Check which subsidiaries can use SBTi. Validated targets for eligible parts of the group are better than none.
- Watch for the 2027 re-scoping. If SBTi reopens an oil and gas route, the companies with a measured baseline will be ready first.
Why this article exists
Our earlier article, Which SBTi sector guidance applies to you?, was written on 29 August 2026 from the SBTi documents we held. It said oil and gas companies fall back on the general corporate route. They cannot, because SBTi is not accepting commitments from the sector. It also said there was no guidance for aviation, chemicals or apparel, which is wrong: SBTi publishes aviation guidance (August 2021, with an interim 1.5°C pathway from February 2023), chemicals pathways and criteria (December 2025) and apparel and footwear guidance (2018). The earlier article carries a note pointing here.
How ESGweise helps
We help energy companies set targets they can defend without a validation stamp, measure methane to OGMP 2.0, and work out which parts of a group can use SBTi. See our carbon and ESG strategy services and our oil and gas practice.
To work through your group’s options, talk to us.
Related guides
Frequently asked questions
Can an oil and gas company get SBTi-validated targets?
Not at present. SBTi has paused all commitments and validations of targets from the fossil fuel sector. Companies with any level of direct involvement in exploration, extraction, mining or production of oil, natural gas, coal or other fossil fuels cannot commit, irrespective of the share of revenue those activities generate. That includes integrated oil and gas companies, exploration and production companies, and refining and marketing companies.
Is there SBTi sector guidance for oil and gas?
No. SBTi was developing an Oil and Gas Standard but paused that work in April 2025 to concentrate on the Corporate Net-Zero Standard and the Financial Institutions Net-Zero Standard. SBTi says re-scoping will start in 2027. In February 2026 it published a research report, Pathways and Metrics for the Net-Zero Transition in the Oil and Gas Sector, which SBTi describes as informative and non-normative.
Which energy-related companies can still set SBTi targets?
SBTi lists exceptions: companies that derive less than 50% of revenue from the sale, transmission and distribution of fossil fuels, or from providing equipment or services to fossil fuel companies; companies with less than 5% of revenue from fossil fuel extraction assets; electric utilities that mine coal for their own power generation; and subsidiaries of fossil fuel companies that are not themselves fossil fuel companies, assessed case by case.
What can an oil and gas company do instead of SBTi validation?
Set and disclose its own targets with the method stated openly, report methane under OGMP 2.0, and disclose its transition plan under IFRS S2 if it has one. IFRS S2 does not require a transition plan, but where one exists its targets and assumptions must be disclosed. None of these substitutes for SBTi validation, but together they give investors and lenders something credible to assess while the SBTi route is closed.