Companies with high energy requirements are under increasing regulatory pressure. In future, only statements on greenhouse gas neutrality that are verifiably documented and verifiable will be permitted in the EU - a basic principle that has already been introduced with the EmpCo Directive and will be further specified by the planned Green Claims Directive. The effects will primarily affect large energy and electricity producers, the steel and cement industries and the transportation sector. This is because the manufacturing and operating processes in these sectors release large quantities of greenhouse gases. In addition, some relevant emissions are also generated in upstream processes, such as the mining of iron ore or its transportation for smelting. How can companies prove that they are actually reducing their greenhouse gases and not just offsetting them with compensation measures?

This is precisely where the new ISO 14068-1 standard on greenhouse gas neutrality comes in. It calls for comprehensive GHG quantification and continuous reduction along the entire value chain. At its core is the hierarchical triad: first avoid, then reduce, then compensate. This also involves taking the management system and approach into account.

Among other things, this means that in future companies must first define specific measures to avoid their emissions in a Carbon Neutrality Management Plan (CNMP). This is followed by scientifically based reduction measures. Furthermore, a target year must be set by which emissions must be reduced to a minimum. Progress must be documented, monitored and verified by independent third parties. This binding nature of planning increases traceability for stakeholders and reduces the risk of vague targets. Companies that follow a clear, science-based net zero plan and have started to demonstrably reduce greenhouse gases year on year can then offset their remaining GHG emissions with high-quality carbon credits to achieve greenhouse gas neutrality.

While many net zero strategies previously only focused on direct emissions and those from imported energy (electricity, heat, etc.), the new standard requires a holistic view when quantifying emissions. Accordingly, it takes into account emissions that are generated directly during production and our own activities (direct emissions, also known as Scope 1), purchased energy (imported energy; Scope 2) and upstream and downstream processes (indirect emissions; Scope 3) along the value chain. The third area in particular places high demands on companies, as this is often the largest source of emissions, but also the most difficult to record. For manufacturing companies, verification in accordance with ISO 14068-1 means that external service providers, all raw materials, transport routes and packaging materials also come into focus.

Strategically prepare for compliance

Companies seeking verification of their greenhouse gas neutrality statement in order to confirm conformity with the ISO 14068-1 standard should make strategic preparations for this at an early stage. The requirements relate not only to technical measures, but also to organizational processes and the exchange of information with suppliers and customers. Support is provided by independent service providers such as TÜV Süd with many years of experience in the verification of emissions reports and climate protection projects. Companies receive further support in the form of supplier audits, critical examination of Life Cycle Assessments (LCA) and Carbon Footprint of Products (CFP) as well as the validation and verification of carbon footprints at organizational or product level, also as a systematic approach for product groups. In addition, there is the verification of carbon neutrality claims, as well as other supplementary services for switching to climate-friendly infrastructures and systems.

ISO 14068-1 requires companies to systematically record and reduce their emissions. Those who meet the requirements of the standard can not only optimize their greenhouse gas balance, but also prevent accusations of greenwashing. The comprehensible documentation of reduction and compensation measures as well as external verification strengthen credibility with customers, investors and regulatory authorities. In this way, greenhouse gas neutrality is not just a label, but part of a sustainable corporate strategy.

Climate targets: Where do companies stand today?

Despite growing ambitions, many companies have so far only succeeded in significantly reducing their emissions to a limited extent. Analyses by the New Climate Institute and Carbon Market Watch from 2024 show that The majority of listed companies are aiming to cut around 30% of their greenhouse gases on average by 2030 - too little to keep pace with the 1.5° path of the Paris Climate Agreement.

According to the research findings of the International Panel on Climate Change (IPCC), a reduction of at least 43% is necessary by 2030. However, large industrial companies are increasingly recognizing the problem. BASF, for example, is taking the following measures to reduce emissions along the value chain: conversion to renewable energies, electrification of steam generation and use of waste heat, development of low-emission production processes, alternative raw materials and increased efficiency.

Other big players such as Bayer and Thyssen Krupp are following similar paths by turning to renewable energy supplies and more efficient and lower-emission processes. In addition, ThyssenKrupp uses recycled steel scrap in steel production and hydrogen-based steel production with green electricity in direct reduction plants instead of blast furnaces.