The Greenhouse Gas Protocol’s (GHGP) new Land Sector and Removals Standard (LSRS) marks the first carbon accounting framework requiring companies to report emissions from land-based activities, including agriculture and crop-based biofuel production. Biofuels derived from waste oils — used cooking oil, tallow, distiller’s corn oil — are exempt from some reporting requirements, making them clear winners in this scenario.
Source: GHG Protocol Land Sector and Removals Standard (draft); Capstone analysis.
Key Stat: Immediate implementation applies to the roughly 1,538 companies registered under the Science Based Targets initiative’s (SBTi) Forest, Land, and Agriculture (FLAG) framework, of which 328 have already set land-sector targets. Those targets, typically 30%–40% emissions reductions by 2030, must now be validated against LSRS methodologies starting in 2027. A GHGP guidance document is expected in Q2 2026.
What Is Different: The core requirement is traceability. Companies can meet baseline compliance using jurisdictional or global average emissions data, but any firm seeking to claim lower-emissions benefits for specific products, such as low-nitrogen fertilizers or particular biofuel feedstocks, must trace emissions to specific parcels of land and report project-level carbon stock data. That raises data collection and verification costs materially.
Most Contentious Issue: Indirect land-use change (ILUC) — the emissions that result when diverting crops to biofuels pushes food production onto other lands globally. The LSRS classifies crop-based biofuels as high risk and requires companies to quantify ILUC impacts, but stops short of mandating a specific methodology. That gap leaves room for regulatory interpretation and continued industry pushback. The Trump administration, for its part, removed ILUC penalties from the revised 45Z tax credit to support domestic crop producers, while California moved in the opposite direction by tightening LCFS restrictions on crop feedstocks.
