Microsoft’s carbon-removal plans aren’t dead after all

Source: TechCrunch

Microsoft is purchasing 650,000 metric tons of carbon‑removal credits from startup BioCirc, the company said today. As carbon‑removal deals go, it’s not a huge buy, but it’s notable because last month two reports said the tech giant was pausing its carbon‑removal deals. BioCirc confirmed for TechCrunch that the purchase agreement was signed in May, weeks after Microsoft reportedly paused new deals.

Background

• Microsoft is reportedly responsible for more than 90 % of the carbon‑removal credit market, meaning its purchasing decisions alone can determine whether young companies in the space survive.
• The company repeatedly denied that it had paused its carbon‑removal purchases. “Our carbon removal program has not ended,” Melanie Nakagawa, chief sustainability officer at Microsoft, told TechCrunch. “At times we may adjust the pace or volume of our carbon removal procurement as we continue to refine our approach toward sustainability goals.”

Details of the BioCirc Deal

• The new deal generates carbon‑removal credits from five BioCirc biogas projects.
• The biogas plants take biomass waste—frequently from agriculture—and use industrial bioreactors to turn it into methane and carbon dioxide.
• BioCirc captures the carbon dioxide and stores it in an underground reservoir offshore.
• The methane is then burned in a power plant.

Microsoft’s Broader Sustainability Context

• Microsoft’s sustainability goals have been strained by its push into AI. To power its data centers in Texas, the company is working with Chevron and Engine No. 1 to build a natural‑gas power plant that could eventually generate 5 GW of electricity. Emissions from that project alone promise to dwarf the BioCirc deal.
• Internally, employees have debated whether to abandon the goal of matching zero‑emissions electricity on an hourly basis. The company now matches on an annual basis, giving it more flexibility to use natural gas at night but making its clean‑energy claims harder to verify.
• If Microsoft continues to pursue fossil‑fuel power plants, it will need to ramp up its carbon‑removal purchases to meet its 2030 target of becoming carbon‑negative (removing more greenhouse gases than it emits).

Implications for the Carbon‑Removal Industry

• Last year, Microsoft signed several deals worth millions of tons of carbon‑removal credits. The program’s reported pause set off alarm bells throughout the still‑nascent carbon‑removal industry.
• The new deal suggests that Microsoft is recalibrating its carbon‑removal program rather than abandoning it. Whether this holds as AI drives its energy consumption higher will be closely watched by the industry.