SBTi’s new net-zero standard asks one question before any target is set: are you Category A or Category B? The answer decides whether scope 3 targets, third-party assurance, a published transition plan and, from 2035, carbon removals are requirements or options for your company.
The test looks simple, but the details decide many borderline cases. Group structures, the country of your parent company and a two-year average can all move a company from one category to the other.
The short answer. You are SBTi Category A if you have net turnover of EUR 450 million or more or at least 1,000 full-time employees. With an ultimate parent in a high-income country such as the Netherlands, you are also Category A with 10,000 tCO2e or more in scope 1 and 2, or when two of three are true: balance sheet at least EUR 25 million, turnover at least EUR 50 million, at least 250 employees. Otherwise you are Category B.
The thresholds
The standard sets out the test in Table 2:
Where the ultimate parent is incorporated | Category A if at least one of these is true | Otherwise |
|---|---|---|
Any country | Net turnover at least EUR 450 million, or at least 1,000 full-time employees | See next row |
High-income country | Scope 1 and 2 emissions at least 10,000 tCO2e, or two of three: balance sheet at least EUR 25 million, net turnover at least EUR 50 million, at least 250 full-time employees | Category B |
Other countries | Only the first row applies | Category B |
The two-of-three size test uses the same thresholds the EU Accounting Directive uses to define a large company, so most companies that count as large under EU accounting rules land in Category A.
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How SBTi applies the test
These rules decide most borderline cases:
Group figures. If your company is part of a group, turnover, headcount, balance sheet and emissions are assessed on consolidated figures for the whole group, even if you set targets for one subsidiary.
The parent’s country. Geography is the jurisdiction where the ultimate parent company is incorporated, classified with the World Bank income groups. For fiscal year 2027, high income means a gross national income per person above USD 14,375. All EU member states in the euro area count as high income, as do the US and the UK.
Two-year average. Thresholds use the average of your two most recent financial statements or annual reports.
Full-time equivalents. Headcount is the annual average number of employees, adjusted to full-time hours.
Euros. If you report in another currency, convert the reported figures to euros.
Physical emissions. The 10,000 tCO2e test uses your physical greenhouse gas inventory for scope 1 and 2.
Fixed for the cycle. Your category is determined when you register with SBTi, reconfirmed at target validation and then applies for the five-year target cycle. You redetermine it when you set new targets.
Four examples
Company | Key figures | Category | Why |
|---|---|---|---|
Dutch manufacturer | 300 FTE, EUR 40 million turnover, EUR 30 million balance sheet | A | Two of three size criteria (FTE and balance sheet) in a high-income country |
Dutch services firm | 180 FTE, EUR 60 million turnover, EUR 15 million balance sheet, 900 tCO2e scope 1 and 2 | B | Only one of three size criteria, and emissions below 10,000 tCO2e |
Dutch subsidiary of a German group | 80 FTE locally, group has 2,500 FTE | A | Group figures count: the group exceeds 1,000 FTE |
Company whose parent is incorporated in Brazil | 600 FTE, EUR 100 million turnover | B | Brazil is not a high-income country, so only the EUR 450 million and 1,000 FTE test applies |
The examples are illustrative. The subsidiary case catches many companies out: a small local entity of a large group is Category A because the group is.
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What changes if you are Category A
Category A companies face a set of requirements that are optional or recommended for Category B:
Requirement | Category A | Category B |
|---|---|---|
Scope 3 in the greenhouse gas inventory | Required | Optional |
Separate near-term scope 3 targets for significant categories (5% or more of scope 3) | Required | Optional |
Third-party assurance of the target base year inventory (at least limited assurance) | Required | Strongly encouraged |
Published transition plan, within 15 months of target validation | Required | Optional (a transition plan is needed by all companies) |
Assurance of progress data at the end of each cycle | Required | Recommended |
Electricity consumption projections, and scope 2 targets if electricity use grows more than 20% a year | Required | Optional |
Carbon removals from 2035: 1% of ongoing emissions, rising linearly to 100% at the net-zero year | Required | Optional |
Neutralising residual emissions with removals at the net-zero year | Required with a net-zero target | Required with a net-zero target |
The removal requirement has the largest financial consequences over time. Our article on SBTi carbon removal requirements shows how the volumes grow from 2035, and why they peak before the net-zero year.
If you are Category B
Category B means a lighter set of minimum requirements. SBTi strongly encourages Category B companies to go beyond them, and there are practical reasons to do so:
Customers ask anyway. Large customers who are Category A need scope 3 data and targets from their suppliers. A Category B supplier with a scope 3 inventory and assured figures is easier to buy from.
Assurance builds trust. SBTi recommends assurance for Category B companies; it also makes your figures usable in your customers’ reporting.
Recognition is open. The voluntary Ongoing Emissions Responsibility programme is open to Category B, with an adjusted Leadership level that covers scope 1 and 2 plus part of scope 3.
Removals can follow the same path. Category B companies can voluntarily follow the 2035 removal ramp, which keeps them aligned if they grow into Category A in a later cycle. SBTi also recommends buying carbon removals voluntarily if targets are not met, reported separately from target progress.
Tip from Bernard de Wit, Co-founder of Regreener: “For many companies, the category question comes down to the group they sit in. We regularly speak with Dutch subsidiaries of fifty or a hundred people who assumed they were Category B, until someone looked at the group’s headcount. Check the consolidated figures before you plan anything else.”
When to check
SBTi expects to open its validation portal for V2.0 submissions in the first quarter of 2027. Until 31 January 2028 companies can still submit targets under version 1.3.1 or 2.0; after that V2.0 is mandatory. If you plan to submit in 2027, your category determines how much work the submission is, so check it before you start. Our overview of the SBTi Net-Zero Standard V2 covers the rest of the standard and the transition window.
Check your category
Regreener’s free SBTi V2 calculator applies the test for you: enter your turnover, headcount, balance sheet, scope 1 and 2 emissions and country, and check whether you are SBTi Category A or B, with the removals you would need from 2035 and an indicative cost. It uses the World Bank high-income list for fiscal year 2027.
For the carbon credit side of your SBTi plan, from volumes per year to which removals to secure early, see how many carbon credits your company needs, or talk to a Climate Strategist.
