Microsoft has signed a carbon capture agreement to drive decarbonisation across its operations, with the software giant turning to woody biomass to meet its targets.
The software giant is heavily committed to net zero, pledging to be carbon-neutral by 2030. By 2050, it will remove all carbon emitted since its founding in 1975.
It is Microsoft’s latest investment in carbon capture as part of its $1 billion Climate Innovation Fund and follows investments in CarbonCapture, ClimateWoeks, Running Tide and Heirloom.
The agreement will see Carbon Streaming – an online platform connecting companies with carbon credits – investing in a new biochar facility in Waverly, Virginia.
It involves the construction of a biochar production facility that will provide 10,000 tonnes of carbon credits towards Microsoft’s net-zero target.
It is hosted by Wood Fuel Developers, a company that produces EasyPellet pallets and is being constructed by Restoration Bioproducts. Once operational, the new facility will remove more than 262,000 tonnes of CO2 emissions over its 25-year project life.
According to Microsoft, Carbon Streaming was instrumental in bringing the deal together with its “capacity to provide project-level finance is an important part of scaling this industry, and it ensures we can focus on procuring carbon removal from high-quality projects,” Brian Marrs, Senior Director for Energy and Carbon said.
Carbon Streaming has a unique financial agreement providing capital to project developers to accelerate the projects.
“This also benefits corporations using carbon credits as part of their climate strategies,” said Oliver Forster, Vice President of Sales for Carbon Streaming.
“Corporations can commit to purchasing the verified removal upon issuance rather than providing upfront capital to climate projects.”
It comes as Microsoft announced earlier this month that it will purchase 315,000 metric tons of carbon removal from climate tech startup Heirloom Carbon, one of the biggest deals of its kind to date.
The agreement could be worth $200 million, according to The Wall Street Journal, which first reported the news.
San Francisco-based Heirloom harnesses a geologic approach to catching and holding carbon dioxide.
Limestone naturally binds to carbon, but Heirloom’s technology dramatically speeds up the process, cutting it from years to days.
The startup operates the only U.S. facility permanently capturing carbon.
Microsoft previously invested in Heirloom through its $1 billion Climate Innovation Fund. The new deal represents a financially empowering “bankable agreement,” said Heirloom CEO Shashank Samala.
“Bankable agreements of this magnitude enable Heirloom to raise project finance for our rapid scale-up, fueling exponential growth like what we’ve seen in the renewable energy industry,” Mr Samala said.
Microsoft made its first long-term carbon removal purchase in 2022 when it signed a deal with Climeworks to remove 10,000 tons of carbon.
Climeworks launched the world’s first commercial-scale carbon removal facility in Iceland. The Swiss company pulls carbon dioxide out of the air and pumps it underground, permanently binding to basaltic rock formations.