Microsoft invests in carbon removal credits to offset emissions
What's the story
Microsoft has signed a deal to buy 3.6 million metric tons of carbon removal credits from a new bioenergy facility being built by C2X in Louisiana. The plant, slated to open in 2029, will convert forestry waste into methanol for aviation and shipping or as a feedstock for the chemical industry. It will produce over 500,000 metric tons of methanol annually and capture about one million metric tons of carbon dioxide for secure geological storage.
Strategic shift
Microsoft's carbon removal strategy and recent agreements
The purchase is part of a larger trend at Microsoft as it speeds up its acquisition of high-volume carbon removal credits. Over the past year, the tech giant has signed several major deals including a 4.9 million metric ton agreement with Vaulted Deep, a 3.7 million metric ton deal with CO280, and a 7 million metric ton commitment with Chestnut Carbon. These contracts highlight Microsoft's growing urgency to address the environmental impact of its expanding AI data center network.
Emission offset
Renewable energy purchases and carbon removal credits
Renewable and nuclear energy purchases are key to Microsoft's sustainability strategy. However, the company acknowledges that power procurement alone can't offset its long-term environmental footprint. The rise of AI workloads and new data center construction increases the risk of residual fossil fuel use across supply chains and grids. Carbon removal credits are thus becoming a practical tool for covering unavoidable emissions while the wider energy ecosystem continues its transition.
Project model
C2X facility: A model for engineered carbon removal projects
Microsoft's latest move also underscores the growing commercial momentum around engineered carbon removal projects. The C2X facility combines proven industrial processes with carbon capture and storage, providing buyers a clearer line of sight into measurable climate impact. For large tech companies under pressure to meet sustainability targets, these structured and verifiable projects are becoming increasingly appealing.