Carbon Accounting
carbon-accounting
Carbon Removal
carbon-removal
6 min. read
Key takeaways
On January 30, 2026, the Greenhouse Gas Protocol (GHG Protocol) released its long-awaited Land Sector and Removals (LSR) Standard v1.0 following a 5-year consultation process. The LSR Standard is set to take effect on January 1, 2027.
The release of the LSR Standard represents a notable development for companies in the food and agriculture sector looking to report on land-based GHG emissions in their annual GHG inventory, as well as companies that plan to report on carbon dioxide removals (both land-based and technological).
The accompanying Land Sector and Removals Guidance, which will provide further direction on operationalizing and implementing the LSR Standard, is expected in Q2 of 2026. However, companies with significant land-based activities may want to begin assessing the impacts of the LSR Standard on their emissions accounting procedures and decarbonization strategies today.
Why the Land Sector and Removals Standard matters now
Emissions from agriculture and land use change account for roughly a quarter of global emissions. Yet, for years, food, fiber, and fuel companies have lacked a clear framework for accounting and reporting on GHG emissions and carbon dioxide removals from land use. This has significantly limited their ability to demonstrate progress toward climate targets within their operations and value chain. The GHG Protocol’s Land Sector and Removals (LSR) Standard, which was released on January 30, 2026, changes that, and in doing so raises a new set of questions.
The LSR Standard provides greater clarity on what is required of companies to transparently track and report against their emissions reduction and removal targets, and opens new pathways to report on supply chain decarbonization interventions. It also represents an important advancement for companies seeking to report on carbon dioxide removals within their emissions inventory, including both land management removals and technological removals with geologic storage.
While the LSR Standard contains notable new requirements compared to the draft released in 2022, companies still face a number of open questions related to implementation and the implications for their decarbonization strategies.
The GHG Protocol’s accompanying Land Sector and Removals Guidance, scheduled for Q2 2026, is expected to offer more practical direction for implementing the LSR Standard. However, companies with significant land-based activities that require sufficient lead time to prepare should consider assessing the impacts today.
Below, we provide an overview of the LSR Standard, key changes from the 2022 draft, and actionable next steps for food, fiber, and fuel companies considering the impacts on their target-setting and emissions reporting.
What is the Land Sector and Removals Standard?
The LSR Standard, taking effect on January 1, 2027, sets requirements and recommendations for corporate GHG accounting that cover emissions and carbon removals from agricultural and land use activities. It builds on existing GHG Protocol standards for corporate carbon accounting. Notably, the LSR Standard does not cover the forestry sector, a key break from the 2022 draft. Forest carbon accounting guidance remains under development and will be the subject of a stakeholder consultation/request for information process expected later in 2026.
Land Sector and Removals Standard vs Land Sector and Removals Guidance
The LSR Standard establishes the core requirements companies must follow, while the accompanying Land Sector and Removals Guidance, expected in Q2 of 2026, will provide more detailed implementation support. In short, the LSR Standard sets the "what" while the Land Sector and Removals Guidance will explain the "how," helping companies put those requirements into practice.
Who should be using the Land Sector and Removals Standard?
The LSR Standard applies to two groups of companies:
Any company with significant¹ land-sector activities within its own operations or value chain (most notably the food, feed, fiber, biofuel, and advanced biomaterials sector).
Any company looking to report on carbon dioxide removals within their scope 1 and scope 3 inventories (including both land management removals or technological removals).
Land management carbon dioxide removals include those from carbon sequestration through farming practices, agroforestry, or silvopastural systems on productive agricultural land. Technological carbon dioxide removals, by contrast, refer to more engineered approaches such as direct air carbon capture and storage (DACCS) or bioenergy carbon capture and storage (BECCS).
What changed from the 2022 draft
Among other provisions, the LSR Standard contains notable breaks from the 2022 draft, including specific changes related to traceability, carbon dioxide removals, leakage, and land use change.
Traceability: A new approach
Under the LSR Standard, companies that account for scope 3 emissions, removals, and other metrics must apply a spatial boundary. This boundary is determined by the level of traceability they can establish to known lands or regions (from least to most granular): global, jurisdictional (e.g., country), sourcing region (e.g., supply shed), land management unit (LMU) (e.g., farm), or harvested area. For more granular spatial boundaries, such as sourcing region and LMU, companies are required to establish physical traceability, which can be demonstrated through various chain of custody models.
Alongside higher integrity chain of custody models such as identity preserved, segregated, and controlled blending, the LSR Standard opens to mass balance as a chain of custody model that can be used to demonstrate physical traceability at the sourcing region-level with appropriate safeguards.
This is notable because mass balance is the most common chain of custody model for large volume agricultural commodities, and physical traceability is required to report removals according to the LSR standard. While challenges for reporting removals at sourcing region spatial boundaries still exist, this change unlocks new opportunities to decarbonize commodities and report removals within non-segregated supply chains through insetting programs.
Carbon dioxide removals: Clarity on spatial boundaries
The draft LSR Standard introduces key principles for companies choosing to report land management carbon dioxide removals, including traceability, data quality, and permanence. Translating those principles into practice remains challenging given the dynamic nature of agricultural supply chains and limited farm-level traceability.
Among other requirements, the LSR Standard maintains that companies electing to report on removals must do so as a separate accounting category from emissions. They must also identify the specific lands where carbon is stored, and conduct ongoing storage monitoring to detect and report on reversals if and when they occur.
The LSR Standard does, however, resolve one of the more consequential open questions left by the 2022 draft: where companies are to draw the spatial boundary for reporting land management carbon dioxide removals. By formalizing and permitting traceability at the sourcing-region level (with appropriate safeguards), it offers a workable middle ground between farm-level precision and the broader supply chain realities that most food and agricultural companies face.
The LSR Standard also opens to using alternative approaches to traceability, such as impact traceability, which allows companies to trace removals back to the LMU through a pathway that is separate from the physical GHG inventory. This is notable as it provides companies with optionality for recognition of farm-level supply chain investments even when physical traceability cannot be established, and inventory recognition is therefore not feasible.
Land use and leakage: Stronger requirements
Finally, the LSR Standard significantly strengthens land use and economic leakage requirements compared to the 2022 draft. While the draft gave companies flexibility to choose among land-tracking metrics, the LSR Standard mandates that all companies report land occupation for both scope 1 and scope 3 in hectares and quantify land carbon leakage whenever “high-risk activities” displace food or feed production. This includes companies developing crop-based biofuels and bio-based feedstocks.
Leakage must be quantified using the Carbon Opportunity Cost, a calculation aimed at capturing how much carbon could have been stored in the absence of land management activities.
What should companies do now?
For entities reporting in accordance with the GHG Protocol’s Corporate Standard and Scope 3 Standard, the new LSR Standard goes into effect on January 1, 2027. However, the GHG Protocol’s Land Sector and Removal Guidance is not set for publication until Q2 2026, leaving many open questions related to implementation amid a short data collection and reporting cycle
In the interim, companies may consider a continuous improvement approach, evolving and improving their internal measurement and reporting mechanisms to enable more granular accounting over time. Companies may also consider running analyses to assess the impact of new requirements on the design and cost of decarbonization strategies, with a specific focus on data collection and monitoring approaches.
Ultimately, while implementation of the LSR Standard may evolve over time, it need not delay action on value chain intervention. Companies that continue investing in supply chain decarbonization are building the data infrastructure, supplier relationships, and operational resilience that yield greater visibility into supply chain risk and drive long-term value, independent of reporting standards.
As the LSR Standard's requirements develop, companies that have already begun assessing their emissions footprint and strengthening supply chain traceability and data quality are likely to be better positioned to align their reporting procedures accordingly.
How Carbon Direct supports value chain decarbonization
Food, fiber, fuel, and forestry companies face some of the most complex decarbonization challenges. Emissions are distributed across landscapes, geographies, and myriad suppliers, while the science of measuring and reducing them is still evolving.
Carbon Direct works alongside companies navigating this complexity, bringing together scientific expertise in supply chain accounting, landscape decarbonization, and MRV with deep knowledge of carbon markets and decarbonization strategy development. We help companies assess corporate supply chains, determine which insetting opportunities are actionable and of consequence, and design roadmaps for making meaningful climate and strategic progress.
¹ The Standard does not define “significant.” However, the GHG Protocol notes that “some GHG programs do specify numerical significance exclusion thresholds (e.g., SBTi requires companies to set a Forest, Land, and Agriculture [FLAG] target if their FLAG-related emissions are 20 percent or more of overall emissions across scope 1, 2, and 3).
