The Science Based Targets initiative (SBTi) announced the launch of the pilot phase for its new draft Power Sector Net-Zero Standard, inviting companies to test the proposed standard aimed at enabling companies across the power sector to set near- and long-term goals aligned with achieving net zero by 2050.

The SBTi released the draft standard in September 2025, set to replace its current “Quick Start Guide for Electric Utilities” with a new standard covering an expanded scope and a broader set of activities and emission sources across the sector’s value chain, for companies involved in power generation, transmission and distribution, and electricity storage, trade and retail.

The SBTi was founded in 2015 with the goal to establish science-based environmental target setting as a standard corporate practice. The organizations’ key functions include defining and promoting best practice in emissions reductions and net-zero targets in line with climate science, providing technical assistance to companies who set science-based targets, and providing companies with independent assessment and validation of their emissions reduction targets. To date, nearly 12,000 companies have set science-based emissions reduction targets with the SBTi, or made commitments to do so.

The organization published its  flagship cross-sector Corporate Net-Zero Standard in 2021, and is currently in the process of developing an update to the standard, Corporate Net-Zero Standard V2. The new proposed standard was developed in alignment with the SBTi’s draft Net-Zero Standard V2, while also introducing new methodologies and requirements specific to power sector companies.

One of the key new criteria in the draft standard is a requirement for power sector companies to “publicly disclose a plan to transition away from unabated fossil fuel power generation,” which includes “interim actions to decarbonise, phase-out or retrofit unabated fossil fuel assets, with maximum 5-years milestones up to the net-zero year.” The proposed standard also requires companies to cease investing in new unabated fossil fuel capacity.

The new pilot follows the conclusion of an initial consultation on the draft power sector standard. According to the SBTi, key objectives of the pilot test include ensuring that the new standard and target setting tool are robust, clear and practical, identifying challenges for implementing the standard, informing the development of the final draft of the standard, and testing the feasibility of validating companies against the standard and the clarity of the requirements.

The SBTi said that it is inviting companies across power generation, transmission and distribution, storage, trading, and retail to take part in the new pilot, with applications to participate open until January 16, 2026. Feedback from the consultation and pilot will be used to develop the next draft of the standard

The SBTi said:

“Electricity underpins day to day life and the global economy—from powering homes and industry to enabling digital technologies and innovation. Yet, energy is currently responsible for more than 75% of total global greenhouse gas emissions. As renewable energy deployment accelerates and decarbonization becomes increasingly urgent, the power sector is central to the global transition to net-zero. Establishing a robust, science-based standard is essential for ensuring this transition is both credible and effective.”