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Definition

Sectoral Decarbonization Approach

The Sectoral Decarbonization Approach turns a climate pathway for a defined industry into a company target for greenhouse gas emissions per physical unit of output.

What is the Sectoral Decarbonization Approach?

The Sectoral Decarbonization Approach (SDA) is a Science Based Targets initiative (SBTi) method for an activity with an approved industry pathway. It states emissions per output, such as grams of carbon dioxide equivalent (gCO2e) per tonne-kilometre. SBTi names the qualifying activity, boundary and unit.

Why does the Sectoral Decarbonization Approach matter to you?

A customer checking your science-based target may ask for the sector method, tool version, base year, emissions boundary, output and target projection. An industry code alone does not make every emissions source eligible. Keep the completed tool and its source data.

How does the Sectoral Decarbonization Approach work?

Keep the emissions in your inventory, but isolate the eligible activity for the tool. The SBTi tool compares its base intensity with the sector curve and returns a target-year intensity. Multiply that figure by target-year output to calculate total emissions. Criterion C7 requires the latest approved method and tool.

What mistakes should you avoid?

  • Selecting SDA from the company sector instead of the covered activity.
  • Changing the output unit or emissions boundary between the inventory and tool.
  • Giving an intensity percentage without the base data, projection and tool file.

Is SDA the same as the Absolute Contraction Approach?

No. SDA sets emissions per physical unit against an industry curve. Absolute contraction applies a reduction to total tCO2e without adjusting the target for production growth.

Can a food and beverage processor use SDA?

Only for an eligible activity. A food processor setting SBTi targets must assess its land-related emissions under Forest, Land and Agriculture (FLAG), which offers sector and commodity pathways. Processing food does not make its remaining energy and industry emissions eligible for SDA. Contracted road freight can use the legacy transport SDA for Scope 3 on a well-to-wheel basis.

Example

Suppose a food and beverage processor in the Philippines hires carriers to move ingredients and finished goods by heavy freight truck. For 2024, its contracted road freight covers 80,000,000 tonne-kilometres and produces 12,000 tCO2e on a well-to-wheel basis: 2,000 tCO2e from fuel supply and 10,000 tCO2e from vehicle use. One tonne-kilometre means moving one tonne for one kilometre. The base intensity is 12,000 tCO2e x 1,000,000 g/tCO2e / 80,000,000 tonne-kilometres = 150 gCO2e per tonne-kilometre.

The processor enters those figures, a 2032 target year and projected 2032 activity of 100,000,000 tonne-kilometres into the SBTi Sectoral Decarbonization Approach Transport Tool version 1.1.2, released 1 May 2026. The tool's well-below 2°C heavy-freight-truck pathway, labelled B2DS, gives a target intensity of 100.726749 gCO2e per tonne-kilometre. The corresponding 2032 emissions are 100.726749 x 100,000,000 / 1,000,000 = 10,072.6749 tCO2e. That is 1 - (10,072.6749 / 12,000) = 16.061% below the base-year total despite 25% more freight activity. No emission factor is used.

Where it comes up

SBTi subcontracted land transport WB2C pathway and well-to-wheel boundaryCorporate Near-Term Criteria V5.3.1, Table 4, printed page 23 (checked 2026-08-20)Official sourceSBTi Scope 3 transport SDA well-to-wheel, tonne-kilometre and activity-projection criteriaLand Transport Guidance V1.1, Land Transport C1-C4, printed page 8 (checked 2026-08-20)Official source

Related terms

Science-Based Targets

A science-based target states how quickly a company will cut greenhouse gas emissions in line with a climate pathway accepted by the Science Based Targets initiative (SBTi), using a defined boundary, base year and target year.

Absolute contraction approach

The Absolute Contraction Approach sets a target-year emissions ceiling by applying an SBTi linear reduction rate to a company's base-year emissions, regardless of changes in production or revenue.

Emissions intensity

Emissions intensity divides a defined greenhouse gas total by a matching unit of revenue, production, floor area, energy, or another activity so you can track emissions relative to business output.

Scope 3 Emissions

Scope 3 emissions are the indirect greenhouse gas emissions from goods, services, transport, product use, investments, and other upstream and downstream activities outside your company's Scope 1 and Scope 2 boundary.

Decarbonization

Decarbonization is the planned reduction of greenhouse gas emissions from a company’s operations and value chain through measurable changes in how it uses energy, fuel, materials and suppliers.

Sources

Last verified 2026-08-20

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Sectoral Decarbonization Approach Definition | Keslio