GHG Protocol Update: Land Sector and Removals Guidance Now Available

Crystal McGee

Principal Consultant

North America

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Jenny Shadrick

Senior Consultant

United Kingdom

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Leila Macadam

Principal Consultant I

Australia

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George Taylor

Consultant

United Kingdom

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Table of Contents

• What is the LSR Guidance?
• How should organisations use the guidance?
• What opportunities does the LSR Standard offer?
• What are the commercial implications of the LSR Standard?
• How Anthesis can help

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On the 30 June 2026, the GHG Protocol released the Land Sector and Removals Guidance (LSR Guidance). A companion to the Land Sector and Removals Standard (LSR Standard), the LSR Guidance supports interpretation and operationalisation of the LSR Standard’s requirements ahead of its effective date of 1 January 2027.

Together, these documents equip organisations to prepare land sector GHG inventories with consistency, transparency, and credibility.

What is the LSR Guidance?

The LSR Standard and accompanying Guidance provide the first comprehensive accounting and reporting framework for the greenhouse gas (GHG) emissions and carbon dioxide (CO₂) removals associated with land-sector activities.

The LSR Standard is relevant to companies with agricultural, forestry, food, fibre, and other land-dependent value chains and serves as a supplement to the GHG Protocol Corporate Standard and Scope 3 Standard. It provides requirements for GHG accounting categories such as land management, land use change, biogenic products, and CO₂ removals that were not fully addressed by existing GHG Protocol Standards. The LSR Guidance supports the implementation of the LSR Standard by providing detailed methodologies, worked examples, calculation guidance, and case studies.

The LSR Standard and LSR Guidance also play an important role in target setting. The SBTi Corporate Net-Zero Standard Version 2.0 requires companies with forest, land, and agriculture (FLAG) emissions to account for and report these emissions in line with the LSR Standard.

The LSR Standard is effective from 1 January, 2027 meaning that 2028 GHG inventories using 2027 emissions data need to comply with the LSR Standard. Where companies are required to recalculate their base year GHG inventory for years prior to 2027, they should also apply the LSR Standard.

How should organisations use the LSR Guidance?

The LSR Guidance mirrors the LSR Standard’s 20 chapters of accounting and reporting requirements and provides the practical “how-to” support needed to implement them effectively.

When developing and reporting their corporate greenhouse gas inventory, organisations should reference the LSR Guidance to:

• Interpret the LSR Standard’s requirements with confidence.
• Find practical guidance on land-sector emissions and carbon removals accounting and reporting approaches.
• Navigate complex accounting scenarios with accuracy and consistency by leveraging the LSR Guidance’s worked examples and calculation guidance.
• Learn from real-world applications through the 10 corporate case studies demonstrating how organisations have addressed common challenges.

By using both documents in tandem, organisations can enhance the quality, transparency, credibility, and comparability of their land-sector emissions and carbon removals reporting.

What opportunities does the LSR Standard offer?

Credible corporate carbon removal claims – the reward for good carbon accounting

The LSR Standard and LSR Guidance together make the first GHG Protocol standard to set requirements for credible corporate claims to carbon removals (i.e., net carbon sequestration) within Scope 1 or Scope 3 inventories.

Critically, accounting for carbon removals is still optional and serves as the incentive for companies that can adopt credible carbon accounting practices in line with the protocols laid out in the LSR Standard.

Given the integrity debates in the carbon market, a key question is: What level of MRV is required for inventory claims of net carbon removals?

The Standard and Guidance sets out requirements including:

• Periodic empirical data collection from the actual carbon stock or sink that contains the claimed carbon removals (i.e., Tier 3 measurement and modelling). Digital MRV must be accompanied with physical ground-truthing every 5 years.
• Quantitative uncertainty estimates to accompany reported removals (e.g. confidence intervals). For example, a mean sequestration rate is 50 tC/ha with a 95% confidence interval (alpha) of 45-55 tC/ha.
• Ongoing monitoring to ensure carbon remains stored as of the reporting date.

In addition to MRV, carbon removals accounting must ensure:

• Permanence: Only carbon locked in carbon pools (i.e. fixed storage such as trees and soil) counts as a removal.
• Conservativeness: When accounting for changes in land-based carbon stocks, err on the side of caution and allow a buffer to accommodate for uncertainty and uncontrollable incidents that may impact the area (e.g., forest fires).

It is Important to note that the current version of the Standard enables reporting of agricultural carbon sequestration but not forest carbon sequestration, since key questions of natural versus corporate impact on forests are still under debate.

Flexibility and efficiency

Inventory-based accounting can offer flexibility around monitoring and assurance to reduce the cost per tCO2e of emission reduction or carbon removal reported compared to purchase of carbon credits. For example, monitoring spend can be tailored according to the reporter’s appetite for uncertainty while still meeting the requirements of the LSR Standard.

The level of assurance can also be tailored to the reporter’s risk appetite and level of trust in value chain partners. Depending on context, this can allow a greater proportion of spend to be directed on the ground.

The process of preparing a land sector inventory across Scopes 1 and 3 demands improvement of supply chain geographic traceability data. However, ESG efficiencies can be found since this also underpins identification of nature-related dependencies and impacts and/or modern slavery risks. 

Resilient and nature-positive supply chains

Land-based GHG interventions to reduce emissions or sequester carbon can simultaneously offer nature outcomes and climate resilience. Such investment can strengthen the raw material supply chains that an organisation depends on.  Particularly for activities of insufficient scale to be targeted for carbon credit methodology development, recognising their GHG benefits via an inventory accounting approach can offer a way to attract new investment.

Equally, many companies are already funding initiatives that improve soil health, restore ecosystems, increase farm productivity, strengthen supplier resilience, or deliver biodiversity outcomes.  These may have been implemented for commercial, sustainability, or risk-management reasons. The new LSR Standard provides a framework for measuring and communicating the value-add of these existing investment in terms of greenhouse gas benefits. This may help to incentivise the capital allocation necessary for land sector carbon sequestration at-scale.

What are the commercial implications of the LSR Standard?

By establishing a standardised approach to measuring, accounting and reporting land-sector emissions and carbon removals, the LSR Standard and LSR Guidance fill a critical gap in corporate GHG accounting.

Inventory-based accounting may offer a new opportunity for those companies currently relying on carbon credits to make land-based abatement claims. In contrast to a carbon credit, which requires significant assurance to enable transfer from one entity to another, an inventory approach does not involve claim transfers but rather enables claims within the scopes. For example, a farmer reports an emission reduction in their Scope 1, while an agricultural product buyer downstream in the value chain can report the same reduction in their Scope 3.  If this improves the commercial viability of GHG benefit reporting for activities not current encompassed by existing mechanisms such as the carbon market, investment in a more diverse set of interventions and partnerships could be enabled.

For those companies investing in Scope 3 insetting programs to claim land-based abatement, clarity regarding alignment with the LSR Standard and Guidance should be pursued.  Under the new requirements, reporting of carbon removals on an organisation’s Scope 3 physical inventory are limited to those with physical traceability to either the level of a Land Management Unit (e.g. a field or farm boundary) or the sourcing region, with additional safeguards. Further, they must meet measurement and ongoing storage requirements. If a program is only able to provide physical traceability to the sourcing region, they must account for emissions and removals representative to the whole area. Even if impact can be traced to a specific farm (through enrolled farms in a regenerative agriculture program), carbon removals must be reported outside of the physical GHG inventory unless physical traceability can be demonstrated through an eligible mass balance chain of custody approach. Companies may therefore find that existing investments in carbon removals will not necessarily reduce their physical inventories as expected without program or sourcing modifications.

While inability to report reductions on the physical inventory may be disappointing for some, the GHG Protocol’s latest update notes support for a broader shift towards multi-ledger accounting to help organisations transparently report the multiple ways they are investing in decarbonisation outcomes. This includes potential delineation of physical versus market-based accounting in Scope 3. The SBTi is also moving in this direction with its activity pool approach under the Corporate Net-Zero Standard V2.0. However, the SBTi has yet to clarify how it will work in practice.

How Anthesis can help

With the new LSR Standard in force as part of the GHG Protocol from 1 Jan 2027, requirements for land sector emissions accounting will change the goalpost for some corporates. For companies with Science-based Targets, the new LSR Standard and LSR Guidance bring long-awaited clarity for how to account and set FLAG emission targets. For others, land-based emissions will be an entirely new consideration. 

Companies are recommended to consider the implications of the LSR Standard for their current emission reduction targets and strategies:

• Do they meet the new requirements?
• Does investment across initiatives need to be rebalanced to stay on track?
• Could land sector GHG accounting open up new ways to meet your targets?
• How can you operationalise land sector GHG removals through program design or investment?

For many organisations, implementation will require new approaches to emissions quantification, carbon removals accounting, data collection, supplier engagement, and reporting. At the same time, the Standard creates an opportunity to strengthen the credibility of climate claims, improve visibility of land-sector impacts across value chains, and better align climate and nature strategies.

Anthesis supports organisations at every stage of this journey. Our experts help businesses interpret and apply the requirements of the LSR Standard, assess the implications for existing GHG inventories and climate targets, identify and quantify land-sector emissions and removals, and develop practical implementation roadmaps. We also support organisations navigating SBTi FLAG requirements, establishing robust data collection and supplier engagement programmes, evaluating carbon removals opportunities, and integrating land-sector accounting into broader net zero, nature, and supply chain strategies.