What the New Land Sector and Removals Standard Means for Companies

  • Introduces methodologies for land-use emissions and carbon removals, addressing a key gap in GHG accounting.
  • Imposes stricter requirements for Scope 3, traceability, and carbon removal validation.
  • Relevant for agriculture, food, retail, and consumer goods sectors.
  • Likely to be integrated into ESRS in the future, though not yet required by CSRD.
  • Non-adaptation risks data gaps, non-compliance, and scrutiny of carbon credit integrity.

On 30 January 2026, the Greenhouse Gas Protocol published its Land Sector and Removals (LSR) Standard, the first global standard for corporate accounting of land-sector greenhouse gas (GHG) emissions and removals. Until now, the land sector has been one of the last major blind spots in GHG accounting, despite being a major emissions driver across many value chains. This new standard addresses key gaps in the existing GHG Protocol, which previously lacked robust methodologies for land-use emissions and carbon removals. Effective from 1 January 2027, the standard will apply to entities with significant land-sector activities and entities that choose to report CO2 removals or CO2 capture within their GHG inventory.

What is the scope of the new Land Sector and Removals (LSR) Standard?

The LSR Standard complements the Scope 3 Standard and the original GHG Protocol Corporate Standard. It introduces reporting requirements for various categories of emissions and removals that were previously either unreported or omitted from corporate greenhouse gas inventories. These comprise emissions from land conversion and land-use change; biogenic GHG emissions from land management; production emissions from land management activities; and emissions from biogenic products. The standard also addresses GHG removals achieved through both natural climate solutions and technological methods such as direct air capture. It also covers carbon storage in products, land-use impacts, and land carbon leakage.

What are the three foundational components of the Land Sector and Removals (LSR) Standard?

Three components form the foundation of the LSR Standard's accounting framework:

  • Inventory boundary: Specifies which carbon removals, emission sources, and carbon pools associated with a business's operations, land, other assets, and value chain are included in the GHG inventory.
  • Spatial boundary: Defines the precise land that must be accounted for when calculating emissions, removals, or other metrics under scope 1 or scope 3.
  • Traceability: Guides on assessing an entity’s ability to identify and monitor activities and the associated information across its value chain.

When combined, these components provide entities with guidance on creating their GHG inventories and categorising activities into scope 1 and scope 3 emissions, removals, and other metrics. To further facilitate the implementation of the standard, a Sector and Removals Guidance (LSR Guidance) is scheduled for publication in the second quarter of 2026.

Which sectors are most affected by the Land Sector and Removals (LSR) Standard?

In addition to the nascent carbon removal sector, the LSR Standard applies to the agriculture, food and beverage, retail, and consumer goods sectors. Detailed accounting methodologies that are specific to forestry have not yet been incorporated into the current version. By acknowledging the need for further methodological advancement in forest carbon accounting, the Independent Standards Board substantiated the exclusion of forestry activities from the standard. Guidelines tailored to forestry will be incorporated into upcoming revisions of the standard and will undergo public consultation in 2026.

What does the Land Sector and Removals (LSR) Standard mean for companies covered by the CSRD?

At present, companies subject to the Corporate Sustainability Reporting Directive (CSRD) or reporting under the Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME) are not required to comply with the LSR Standard immediately. The CSRD and the VSME explicitly reference the 2004 version of the GHG Protocol Corporate Standard. Nevertheless, it is anticipated that the LSR Standard will be incorporated by reference as regulatory frameworks evolve, particularly considering its ability to improve the transparency and granularity of corporate GHG reporting.

What three areas demand particular attention to prepare for the Land Sector and Removals (LSR) Standard

In preparation for the expected incorporation of the LSR Standard, three areas deserve particular attention:

  1. companies with significant agricultural supply chains will need to account for land-use change emissions in their Scope 3 inventories with far greater granularity. The traceability requirements mean that verifiable data must back claims of lower-than-average emissions from specific sourcing regions.

  2. any reported carbon removals must meet the LSR Standard’s integrity criteria, including conservativeness and permanence, with full lifecycle accounting and ongoing storage monitoring.

  3. the CSRD's ESRS E1-7 requires a strict separation between gross emissions and carbon credits, a principle the LSR Standard reinforces by prohibiting the netting of removals against emissions totals.

What does the Land Sector and Removals (LSR) Standard mean for carbon credits?

For companies that rely on carbon credits as part of their climate strategy, the combined effect of the LSR Standard and ESRS E1-7 represents a significant tightening of requirements. Under ESRS E1-7, companies must disclose the volume, project type, registry, geographical location, and quality attributes, including additionality and permanence, of any purchased carbon credits. These credits cannot be used to offset emissions in a company’s Scope 1, 2, or 3 inventories, nor can they count towards primary science-based reduction targets. They are permitted only as a complementary measure for residual emissions.

While the LSR Standard does not cover GHG credit certification or verification, it does include requirements to avoid double-counting of GHG credits. The forthcoming EU Carbon Removal Certification Framework (CRCF), expected to set a common quality baseline from 2026, will further clarify these obligations. Companies that cannot demonstrate the integrity of their purchased credits face material greenwashing risks.

What companies should do to comply with the Land Sector and Removals (LSR) Standard?

The LSR Standard takes effect on 1 January 2027, but companies should not wait to take action. The accompanying guidance document, expected in Q2 2026, will provide implementation details, including equations, examples, and case studies. Meanwhile, companies with material land-sector exposure should:

How agradblue supports you

For companies dealing with the growing complexity of sustainability reporting under CSRD or VSME or integrating carbon credits into their climate strategy, our sustainability consultancy translates regulatory requirements into viable solutions. At agradblue, our experts support you in setting up your ESG reporting for the future using pragmatic, efficient processes and suitable data solutions. Together, we define carbon credit strategies tailored to your business model and identify reliable certificates to offset any remaining emissions. This keeps your strategy in line with regulatory requirements and the rising expectations of your stakeholders.

agradblue was founded in 2012 and is one of the leading ESG consultancies in Europe. Together with its sister companies, more than 80 sustainability experts are active in 24 European countries. We help companies to build resilience and strategic competitive advantage through sustainability transformation, a claim that is reflected in the award as number one in the ESG Consultancy category of the Bell Study 2024.

You can find out more about our services on our website or contact us directly at contact@agradblue.com.