GHG Protocol’s Land Sector and Removals Standard: What’s New and What it Means for Your Business

Introduction to the GHG Protocol LSRS

On January 30, 2026, the GHG Protocol released the long-awaited Land Sector and Removals Standard (LSRS) – the first global standard providing companies with detailed guidance and accounting requirements for measuring land emissions and CO₂ removals.

This Standard closes long-standing gaps in corporate accounting, standardizing how companies account for land use change, land management emissions, and carbon removals, and promoting standardised reporting. It replaces the 2022 draft guidance and becomes effective on 1st January 2027.

Developed by the GHG Protocol (WRI & WBCSD) with input from more than 300 businesses, NGOs, and governments, the LSRS now sits alongside the Protocol’s core inventory standards and brings much needed consistency to how land impacts are reported.

What Companies Need To Know About the LSRS

The LSRS represents a major shift in how companies measure and report land-related emissions. Key implications include:

• The Land Sector and Removals Standard raises the bar. The new Standard fundamentally changes how companies must measure land sector emissions and removals – most existing GHG inventories will need updating.
• Data expectations have jumped. Companies will need more granular, supplier specific, and geographically precise data than ever before. Most companies aren’t set up for this today.
• Your supply chain becomes your biggest risk – and opportunity. A greater level of supplier engagement, governance, and traceability will be essential across agricultural and natural resource value chains.
• Reduction and removal claims now need hard evidence. Companies must prove the “Right to Report,” apply consistent allocation methods, and monitor reversals – or risk losing credibility.
• Forestry changes are still coming. With major updates ahead, companies that build flexible systems now will save significant cost and disruption later.
• Early action pays off. Preparing for these changes now will reduce compliance risk, protect brand credibility, and stay ahead of customer, investor, and regulatory expectations.
• This is the moment to act. LSRS is complex, data heavy, and supply chain intensive – and you don’t need to tackle it alone.

Key Changes in the Land Sector and Removals Standard

Expanded Scope 1 and Scope 3 Reporting

The new Standard expands Scope 1 and 3 reporting requirements, increasing both the data companies must collect and the level of detail that suppliers will need to provide for land‑related activities. Companies can still calculate their inventories and set targets without full traceability by using global emissions factors, but this is only a starting point. The more granular the data collected and the stronger the safeguards a company can demonstrate, the more confidently it can report land‑sector emission reductions and removals toward its targets.

Traceability Requirements:

• Allowable Chain of Custody Models: The Standard introduces “mass balance” chain of custody, allowing proportional allocation of impacts without full physical traceability to the farm — as long as reductions and removals are only allocated once.
• Boundary Setting: Adjacent non-productive lands may now be included in a company’s boundary specifically for land management unit (LMU) level accounting if the Standard’s criteria are met.  
• Impact Traceability: A new optional metric, allowing companies to claim interventions that cannot be physically traced through the supply chain, but these must be reported separately from the physical inventory.

Land Use Change Reporting

• Optional Jurisdictional LUC: If a company knows the sourcing area but cannot track to the farm level, they may calculate direct LUC (dLUC) for all relevant production units in that area and allocate proportionally. This helps companies to make progress towards targets and incentivizes reducing LUC at the sourcing region level. sLUC (national or global averages) may still be used only if more granular traceability is lacking.
• Mandatory Land Occupation and Land Carbon Leakage: All companies must now report scope 1 and 3 land occupations (in hectares), as well as land carbon leakage for high-risk activities that reduce or divert food/feed production.

Allocation, Claiming, and Impact Accounting

• Allocation: Companies must use the same allocation method for emissions and removals, reflecting causal links between outputs and emissions.
• Right to Report: New documentation requirements help reporting entities to mitigate the risk of double counting.
• Inventory vs Project Accounting: Both approaches are allowed to estimate GHG impacts of actions, but intervention accounting must be reported separately from the physical inventory. 

Removals Accounting

• Gross Reporting: Removals must be reported separately from emissions. Companies cannot simply report a “net” figure in the main inventory categories.
• Reversals: Companies must monitor removals in perpetuity (companies may define their own monitoring period based on the nature of the project). If monitoring is stopped, then full reversals must be reported.
• Buffer Pools: The introduction of a “reserve approach” as an optional safeguard for target tracking, where companies can create a buffer pool to mitigate reversals risk. However, a buffer pool does not replace the requirement for ongoing monitoring to report removals in the inventory. Buffer pool credits must be used within 5 years, occur within the same sourcing region, and be a similar form of carbon storage (e.g. soil carbon).
• Spatial Boundary: Land management removals may now be traceable to the sourcing region, though there are several safeguards that need to be met. For example, companies must establish physical traceability to the first point of aggregation or multiple first points of aggregation or processing facilities that have overlapping sourcing areas.

Product Carbon Storage

• Separation from Physical Inventory: Reporting biogenic/TCDR-based product carbon storage is optional and must remain separate from the physical inventory and from targets.

Biofuel CO₂ Emissions

• Biogenic Product Emissions Accounting:
  New guidance now defines when non-food, non-feed biogenic CO₂ emissions can be reported outside of the physical inventory – which has important implications for calculating scope 1 and 3 emissions of biofuels. Companies may now only report biogenic product CO₂ emissions from combustion and decomposition outside of the physical GHG inventory if the following conditions are met:
• All life cycle GHG emissions are accounted for in Scope 3 category 1 (companies purchasing biomaterials to sell bioenergy) or category 3 (companies purchasing bioenergy feedstocks for biofuel consumption), the country of origin is known, and land occupation and land carbon leakage are reported.
• Otherwise, biogenic product emissions must be reported as “Land Emissions” within the physical inventory. Biogenic CH₄ and N₂O emissions will continue to be calculated in the physical inventory, under “land emissions.”
  

Forest Carbon Accounting

• Forest carbon accounting was notably not included in this version of the LSRS. Tree crops (e.g., oil palm, rubber, orchards) are included, but broader forestry rules will follow. The GHGP states that the Independent Standards Board needs further time to develop the methodology for this sector, and this will be included in future versions of the Standard. A request for information is expected in 2026, with updates unlikely before 2027.

Q&A:

When do these changes take effect?

Changes will take effect on January 1^st 2027, meaning that 2026 GHG inventories should comply with the new standard. Companies are strongly advised to conduct a gap assessment in 2026 to prepare their data systems.

Is the Land Sector and Removals Standard final?

Yes, this standard is no longer in draft form. However, an accompanying guidance document, with further information on implementing the Standard with examples, equations, and case studies, will be published in Q2 of 2026.

The standard may be amended and updated as discussions continue. For example, a separate workstream within the GHG Protocol is currently undergoing to discuss “Actions and Markets Instruments,” including how book-and-claim and related mechanisms might be used in inventory accounting. In addition, forest carbon accounting will be covered in further iterations.

Which companies need to comply?

Any company with land sector activities in their operations or value chain, including owning or controlling land, and purchasing or selling products produced on agricultural land. The standard is also relevant to companies that are seeking to report on carbon removals, or CO₂ captured or stored in geologic reservoirs.

The GHG Protocol states that companies must comply if land sector emissions are “significant,” but does not define threshold. They instead point to other programs like SBTi’s FLAG criteria as a practical benchmark; 20% of Scope 1-3 emissions.

If I am using secondary emissions factors and do not report supplier specific emissions or removals, what will change for my FLAG inventory?

The changes are significant but will be less material for companies with less granular data. Even with secondary data, companies must now report land occupation in hectares, assess land carbon leakage, and further break down aggregated secondary factors to separately report “land use change” emissions from “land management.”

What does this mean for SBTi targets?

The LSRS requires separate targets for emissions and removals, but notes that target setting programs may choose to allow accounting categories to be added or netted within a target boundary. Therefore, SBTi’s current allowance of combined removals and mitigation targets may change, and we foresee commodity and region-specific removals potentially factored into SBTs as well. While SBTi’s FLAG guidance is aligning with this, strict adherence to the Standard requires this separation regardless of past flexibility.

New companies that are in FLAG-designated sectors or have significant FLAG emissions (greater than 20% of total Scope 1-3 emissions) will still need to set FLAG targets at the time of SBTi submission. The recent proposed changes to SBTi FLAG guidance indicate that instead of a requirement to set targets within six months of the final LSRS, companies with current SBTs with significant FLAG emissions will need to set FLAG targets when their five-year review period comes up.

If companies have not calculated a FLAG inventory, it is recommended to use the updated guidance to undergo calculations. If companies are submitting FLAG targets for validation in 2026 with an inventory not in compliance with the LSRS, they should be transparent in your reporting methodologies and limitations.

What should forestry-related companies do?

Until an updated LSR Standard that incorporates forest carbon accounting is released, companies reporting forest carbon impacts should align as much as possible with the current guidance and be transparent about additional methods they use. GHG Protocol have stated additional stakeholder input and field testing are needed, so companies should expect the updated Standard to take significant time.

How SE Advisory Services Can Help

The Challenge: The LSRS turns carbon accounting into a massive data and reporting exercise, moving toward supplier-specific information that most companies do not currently possess and requiring complex disaggregation of emissions, removals, and land use metrics.

Our Experience: SE Advisory brings together the technical emissions accounting, operational strategy (supply chain engagement), and carbon removal project development expertise required to support you in meeting these new regulations.

We can support you with:

• LSRS Gap Analysis: Assessing your current inventory against the new disaggregation and reporting requirements.
• Data Strategy: Identifying data gaps for land occupation, leakage, and 20-year LUC assessment.
• Supply Chain Engagement: Setting up the governance structures needed for traceability.

If you’d like to discuss how these changes might affect your organization’s climate strategy or need support navigating the implications of the Land Sector and Removals Standard, our SE Advisory Services team is here to help.