Traceability under the LSRS: what changed and what it means

The Land Sector and Removals Standard (LSRS), published in January 2026, establishes a dedicated standard within the GHG Protocol for land-sector emissions and removals. This introduces traceability requirements, demanding that claims used in Scope 3 physical inventory must be backed by physical traceability at the same level. To use sourcing region-, farm-, or field-level emission factors, companies must demonstrate this traceability.
The standard allows for four chain of custody models: identity preservation, segregation, controlled blending, and certain forms of mass balance. Mass balance is presented as a workable middle ground for agricultural supply chains, allowing specified characteristics to be attributed through a mixed system by reconciling physical volumes while preserving the principle of physical connectivity. This approach mitigates the practical difficulties encountered with strict segregation or controlled blending in commodity systems.
Despite offering a means to incorporate upstream outcomes, the implementation remains uncertain regarding the practical requirements for demonstrating traceability, such as the necessary documentation and system controls across supply chains. The article suggests that while mass balance is an improvement, the challenge lies in developing an implementation path that balances rigor with the practical realities of large-scale agricultural supply chains, which currently lack the infrastructure for end-to-end control.

* The LSRS establishes a dedicated GHGP standard for land-sector emissions and removals.
* Traceability rules determine when upstream outcomes can be included in a company’s Scope 3 physical inventory.
* To use sourcing region-, farm-, or field-level emission factors, physical traceability at that same level is required.
* Companies must demonstrate physical traceability to use granular emission factors.
* Four chain of custody models are recognized: identity preservation, segregation, controlled blending, and mass balance.
* Identity preservation and segregation require physical separation of goods.
* Controlled blending requires proportional attribution across all outputs of a mixed system.
* Mass balance allows specified characteristics to be attributed through a mixed system by reconciling physical supply and volumes.
* Mass balance attributes low-carbon outcomes to a purchase, provided total volumes are reconciled across the system.
* The standard points to traceability systems like certification programs or audited internal systems but does not detail practical requirements.

The evolution from strict physical separation models to mass balance reflects an attempt to bridge the gap between accounting rigor and operational reality within complex agricultural supply chains. The central tension is between preserving accountability for upstream investments (the goal of tracing) and accommodating the practical necessities of commodity aggregation and processing, which inherently involve mixing. Mass balance appears to be a necessary concession, acknowledging physical connectivity without imposing infeasible control demands on actors who are not structured for end-to-end traceability.
This points toward a critical tension in climate action: whether policy should mandate perfect, physically verifiable tracing or permit credible accounting methods that capture the *impact* of upstream interventions even where physical separation is impractical. The ambiguity surrounding implementation suggests a potential system drift where the pursuit of compliance (strict traceability) risks paralyzing meaningful investment when practical alternatives exist (mass balance).
The broader implication is that future framework development must focus on outcomes rather than solely on imposing logistical burdens. If systems like multi-statement reporting frameworks continue to develop alongside physical tracing requirements, the incentive structure shifts: companies should be incentivized to design robust programs now, knowing that some impacts may need to reside outside the strictly defined physical inventory, thereby decoupling necessary climate investment from potential traceability paralysis. The unanswered question remains how to operationalize this balance without sacrificing the integrity of tracking upstream impact or discouraging necessary supply chain decarbonization efforts.