Microsoft's Carbon Removal Deals: 850,000 Tons Annually via BECCS and Forestry

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In a strategic push to accelerate its climate commitments, Microsoft unveiled a suite of carbon removal agreements in July 2025 that will lock away 850,000 tons of carbon dioxide annually—equivalent to taking 185,000 gasoline-powered cars off the road each year—through a hybrid approach combining bioenergy with carbon capture and storage (BECCS) and large-scale afforestation. The announcement builds on the tech giant’s 2023 progress, where it removed 1.2 million tons of CO₂, and reinforces its goals to become carbon-negative by 2030 and erase all historical emissions (dating to 1975) by 2050. “The climate crisis doesn’t wait for perfect solutions—we need to scale both tech-driven and nature-based removal now,” said Brian Marrs, Microsoft’s senior director of energy & carbon removal, noting the deals represent a 40% increase in the company’s annual removal capacity.

Central to this initiative is a landmark 10-year partnership with Stockholm Exergi, finalized in March 2025, focused on upgrading the Värtaverket power plant in Stockholm to run on BECCS. Slated to start capturing carbon in 2028, the facility will burn sustainably sourced biomass—primarily forestry residues like bark and sawdust from Sweden’s certified forests—to generate electricity and district heating for 250,000 households. A new amine-based capture system will trap 90% of the resulting CO₂, which will then be compressed and transported via pipeline to the Åre Salt Mine, 200 kilometers away, for permanent storage in porous sandstone formations 1,800 meters underground. This single project will contribute 333,000 tons of annual carbon removal, with Microsoft covering 70% of the plant’s 280 million United States dollar upgrade costs through its climate fund.

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Complementing the BECCS push is Microsoft’s largest afforestation project to date, a collaboration with Climate Impact Partners launched in early 2025 across India’s Madhya Pradesh state. Spanning 20,000 hectares of degraded community-owned land—an area roughly the size of 28,000 football fields—the initiative aims to plant 11.6 million native trees (including neem, sal, and teak) by 2030, with 1.2 million already established by June 2025. Beyond sequestering 50,000 tons of CO₂ annually, the project trains 3,200 local farmers in agroforestry techniques, boosting crop yields by 25% through shade cover and soil enrichment. It also includes a groundwater recharge program, with 500 check dams built to capture monsoon rain, improving water access for 12,000 households. All benefits are verified under Verra’s Climate, Community & Biodiversity Standard, which requires third-party audits of both carbon and social impacts.

These projects are funded by Microsoft’s 600 million United States dollar Climate Innovation Fund, with 45% allocated to technological solutions like BECCS and 35% to nature-based projects. The remaining 20% supports early-stage startups, including a recent 15 million United States dollar investment in Exomad Green, a French firm developing biochar-based soil amendments that sequester carbon for decades. Rigorous verification is baked into every deal: the Indian afforestation project holds an “A” rating from Bezero Carbon, which assesses long-term carbon permanence, while the Värtaverket plant will use CarbonFuture’s blockchain-powered monitoring system to track CO₂ from capture to storage, ensuring data transparency.

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Challenges persist, however. The BECCS facility won’t reach full capacity until 2029, and afforestation’s carbon benefits take 15–20 years to peak. Cost remains a barrier too: BECCS currently costs 120–180 United States dollars per ton of CO₂ removed, compared to 30–50 United States dollars for afforestation. Microsoft is addressing this by co-funding R&D with Exergi to cut BECCS costs by 30% by 2032. “Our 850,000-ton target is a stepping stone, not a finish line,” Marrs emphasized. For the tech industry, these deals set a template for turning vague climate pledges into measurable action—proving that collaboration between corporations, governments, and local communities can drive the scale of change needed.

WriterTommy