An Overview of the Land Sector and Removals Standard

Introduction

The Land Sector and Removals (LSR) Standard is the first Greenhouse Gas Protocol global standard meant to help companies account for emissions from agriculture and land use. It is also the first standard to provide a robust framework on how to account for CO₂ removals. It officially goes into effect on January 1, 2027. Due to continuing debate on the issue of forest carbon accounting, that topic is excluded in the current edition of the Land Sector and Removals Standard.

The LSR Standard was developed over 5 years through the collaborative efforts of the Greenhouse Gas Protocol (GHGP), the World Resources Institute, and the Independent Standards Board. Feedback from companies, governments, academia, and civil society was also implemented throughout the creation of the standard. ¹

The release of the LSR Standard impacts companies that are already using or plan to use the GHGP voluntary framework and have significant land sector activities in their operations or value chain. Additionally, this standard affects companies that elect to report their carbon removals with their GHG inventory. Companies using other frameworks, like the ESRS or ISSB standards, are not required to use the LSR Standard, but may find it to be a useful reference. ²

Overview of the Standard

The LSR Standard builds upon and supplements parts of the GHGP’s Corporate Standard and Scope 3 Standard, with a specific focus on land use and carbon removal activities. A primary focus of the standard is to ensure principles such as accuracy, consistency, and transparency in annual, entity-level GHG inventory accounting. ³

In general, the LSR Standard provides a principles-based framework for companies to measure and report emissions and removals within their GHG inventories. The standard can be understood in four main parts: (1) overarching accounting principles to set one’s GHG inventory boundary, (2) core requirements for different accounting categories within the inventory, (3) guidance on how the inventory can be used for strategic decision-making and target tracking, and (4) the related reporting and disclosure requirements.

Another major emphasis of the standard is placed in the principles of permanence and conservativeness regarding carbon removals requiring ongoing monitoring and mandatory reporting of reversals. The standard also introduces stricter expectations around data integrity and traceability, including the use of primary empirical data, disaggregated reporting, and land-based tracking metrics such as land occupation and carbon leakage.

Key Updates to the Final LSR Standard

The GHGP previously released a draft of the LSR Standard in 2022. The official released standard had a few notable changes including the following:

Land Use Changes: An optional jurisdictional direct land use change (dLUC) approach has been added as a possible calculation method. This approach allows companies unable to trace their sources back to a farm level to allocate emissions proportionately to relevant production units. Converting to the dLUC approach from the statistical land use change (sLUC) approach is viewed as a change in methodology and requires re-baselining. ⁴^,⁵

Carbon Leakage: Companies are required to quantify and separately disclose land carbon leakage for high-risk activities that reduce or divert food/feed production. The company should use the carbon opportunity cost metric to quantify the carbon leakage. Additionally, carbon leakage caused by changes in agricultural practices must be reported, unless the changes made are to improve the long-term sustainability of food production. ⁶

Carbon Removals: The LSR Standard includes guidance for two types of CO₂ removals based on storage type: land management and geological storage. Accounting for removals involves using a stock-change accounting method. The standard also specifies allocation requirements for removals in order to avoid double counting and over-allocation. It places great importance on the permanence principle requiring companies to monitor their removals indefinitely and report a full reversal if the company stops monitoring a carbon pool. Additionally, carbon stock sampling must be repeated at least every 5 years. Also, all removal claims must be supported by primary data. ⁷

The standard also introduces an optional reserve approach to help companies account for annual losses on stored carbon and create a “buffer pool” as a safeguard for target tracking. If a company chooses to use this approach there are several requirements and limits in place, including:

A 5-year time limit for the “buffer pool” credits to be used
Geographic limits for the carbon sourcing
Storage limits to ensure similar carbon forms are used in the reversal.

Physical GHG inventory and reversals must be reported separately. The company must report a reserve accounting policy if it elects to use the reserve approach. In this policy, carbon removals can be taken from the “buffer pool” each year to counterbalance reversals of removals from prior years, but only if the reserve account balance remains above zero. ⁸

Product Carbon Storage: In the LSR Standard, product carbon storage is not reported as a removal or an emission within the physical GHG inventory. Reporting is optional and must remain separate from the GHG inventory. Additionally, the standard provides more specific requirements for waste carbon storage accounting.

Traceability: The LSR Standard allows adjacent non-productive lands to be included in its Scope 3 spatial land boundary if standard criteria are met. Additionally, the standard introduces a mass-balanced approach as a way to demonstrate physical traceability. This supports commodities that are mixed across processing stages such as cocoa and helps to ensure reductions and removals are only counted once. ⁹ However, there are a number of circumstances in which the mass-balanced approach is prohibited, such as when no reconciliation period has been defined or mixing occurs across multiple countries or sourcing regions.

Impact traceability, an optional alternative approach to traceability, is also introduced. Impact traceability deals with the company’s ability to identify and keep track of GHG emissions or removals impacts of projects in their value chain, including upstream and downstream processes and products. ¹⁰ These impacts must be reported separately from physical inventory. ¹¹

Biofuel CO₂ Emissions: The standard resolves Open Question #1 in the 2022 draft by introducing a two-scenario reporting framework that determines if biofuel CO₂ emissions are reported within or outside of a company’s physical GHG inventory. Biofuel emissions can now only be reported outside of physical inventory if the following criteria are met:

All life cycle GHG emissions are accounted for in Scope 3 category 1 or category
2. The country of origin is known.
Land carbon leakage and land occupation associated with the product or process are reported. ¹²

If the criteria are not met, the biofuel CO₂ emissions must be reported as “land emissions” and be included in physical GHG inventory.

Assurance and Reporting Requirements

When it comes to assurance, the LSR Standard requires companies to disclose whether third-party assurance occurred, what level of assurance was obtained, the qualifications of the assurance provider, and the opinion issued. If the GHG report does not receive third-party assurance, the company must disclose and explain why the assurance was not performed. ¹³ While third party assurance is not required by the LSR Standard, it is highly recommended that at a minimum, a limited level of assurance is obtained. It is also possible that the company might be required to receive third-party assurance by other regulations or GHG programs the company complies with.

To be in compliance with the LSR Standard, a company is required to publicly disclose its GHG inventory along with any information specified in the reporting requirements. This includes required disaggregated reporting by accounting category and subcategory. If a company elects to report carbon removals in GHG inventory, removals must be reported separately from emissions. Additionally, if emissions of a chosen category are in the 0 to 20th percentile of total GHG emissions and disaggregated data is unavailable, a company may report using aggregated data, provided the company discloses and justifies this approach. Finally, if a company chooses to report an aggregated value, additional accounting categories, enumerated in Requirement 32, must be included in the aggregated value. This “total emissions” value and the physical GHG inventory value will then be reported separately. ¹⁴

Land Sector and Removals Guidance

To aid companies as they prepare for implementation in 2027, the GHGP released an accompanying Land Sector and Removals Guidance document on June 30, 2026. This document contains calculation guidance, implementation examples, and case studies. ¹⁵

Possible Market Effects

While effects will vary globally, as sustainability continues to shift toward more structured accounting principles and assurance requirements, the demand for high-quality land data will likely increase. Because the LSR Standard requires emissions and removals to be traced back to clearly defined land areas, suppliers who are able to provide more detailed sourcing information will likely gain an advantage. ¹⁶

Additionally, to meet the traceability requirements of the standard, companies will likely need to incorporate more long-term, stable supplier relationships in their procurement strategies to reach the data quality requirements. This would be a significant change from low-cost, flexible global sourcing strategies. It is also possible that financial institutions and environmental investors will utilize the LSR Standard as a screening tool to direct investment toward companies who meet certain sustainability criteria. ¹⁷

Conclusion

The Land Sector and Removals Standard reflects a continuing shift toward the use of auditable accounting standards in sustainability reporting and the need for substantive documentation to support emissions and removals claims. Although the standard introduces added complexity and reporting obligations, it also provides greater consistency and credibility in land-sector accounting. As sustainability reporting continues to evolve, the LSR Standard will likely become an important reference point for how organizations demonstrate accountability for both emissions and carbon removals.