The GHG Protocol is the dominant framework for corporate greenhouse gas accounting globally. In 2023, 97% of S&P 500 companies disclosing to CDP used its standards. The protocol's new Land Sector and Removals Standard (LSR), published in January 2026 and effective January 1, 2027, introduces the first comprehensive guidance specifically designed for land-sector emissions and carbon removals at the corporate reporting level. Companies with significant land sector emissions are required to use it.
The standard covers not only direct land-use change but also what it terms "land carbon leakage," the corporate reporting equivalent of indirect land use change. It also addresses biogenic product emissions, carbon removals from forest and soil management, and technological removals such as bioenergy with carbon capture and storage. A companion guidance document is expected in the second quarter of 2026.
How the GHG Protocol Carbon Opportunity Cost Methodology Works and Why Industry Groups Are Concerned
The most contested element of the standard is the carbon opportunity cost methodology, which is used to calculate land carbon leakage for non-food, non-feed biomass applications. The approach assumes a one-to-one replacement of diverted agricultural production with conversion of native ecosystems elsewhere, regardless of the specific crop, region, or actual market dynamics involved. It uses annualized average carbon stock loss values from native ecosystem conversion as the basis for that calculation.
Industry experts, including those who participated in the standard's technical working group, have raised concerns that this approach systematically overestimates indirect emissions. A workbook published by the World Resources Institute (WRI) using the methodology assigns carbon opportunity cost penalties to common biofuel feedstocks that, in many cases, exceed the full life cycle carbon intensity of the fossil fuels being replaced.
Soybean oil biodiesel, for example, can show a carbon intensity roughly two to three times higher than petroleum diesel when indirect land-use change and carbon opportunity cost are included in the analysis. The WRI notes that soybean biodiesel’s carbon opportunity cost is estimated at about 36.6 kgCO2e per gallon—similar to some of EPA’s higher-end land-use change models—and that EPA modeling has found soybean-based biofuel emissions can be approximately three times those of fossil diesel on the high end.
Claims around beef tallow are more nuanced. Some analyses have found that if tallow is treated as a truly waste-derived feedstock with no competing market demand, its carbon intensity can be significantly lower than fossil diesel. However, when market displacement effects are included—particularly the replacement of tallow in animal feed and industrial uses with higher-emission alternatives such as palm oil—some studies suggest the effective emissions profile can rise substantially.
What the Forest Carbon Accounting Gap Means for Forestry and Wood Products Companies
The LSR Standard's Volume 1 does not include forest carbon accounting. The issue proved too contested during development, with two competing methodological approaches — the managed land proxy used in Intergovernmental Panel on Climate Change (IPCC) national inventories, and an activity-based counterfactual approach — failing to reach consensus in the standards board review. A request for information on forest carbon accounting is expected later in 2026, with the goal of reaching a methodology that can be incorporated in future guidance. For forestry companies, wood pellet producers, and others with significant forest-based biomass supply chains, this leaves a material reporting gap at the standard's effective date.
Reporting Implications for Corporate Bioenergy and Sustainable Aviation Fuel Programs
The standard applies to any company owning or controlling significant land area, any company supplying significant quantities of products to agricultural producers, and any company producing products that involve biogenic carbon. Sustainable aviation fuel (SAF) programs, bioethanol and biodiesel producers, companies using agricultural residues, and companies with supply chains that touch crop land are all within scope. The requirement to aggregate land carbon leakage with inventory emissions when reporting total biomass supply chain emissions means the carbon opportunity cost figures will appear alongside core inventory data in corporate disclosures.
Companies in jurisdictions where the IFRS S2 sustainability disclosure framework has been adopted into law, including Australia, face a legal requirement to use the GHG Protocol standard, leaving limited flexibility. Other jurisdictions, including the European Union under the CSRD, retain some ability to use the equivalent ISO 14064 standard instead. ISO and the GHG Protocol have announced a collaboration to harmonize their standards at the organization, product, and project levels, though that process is still early stage and will take several years to produce final documents.
