Last month, Microsoft made a stir when reporting suggested the tech giant paused its carbon credit purchases. That pause appears to have lifted. Last week, the company announced a major deal with Danish company BioCirc. ESG Today reports on the specifics of the deal:
“Under the new agreement, BioCirc will deliver 100,000 carbon removal units (CRUs) to Microsoft per year, generated from the capture and permanent storage of biogenic CO2 from five of BioCirc’s biogas plants, with each CRU representing one metric ton of carbon dioxide that has been durably removed from the atmosphere and permanently stored in secure geologic formations beneath the Danish North Sea through. Initial deliveries under the agreement will begin in the second half of 2026, and continue through 2032.”
Microsoft is a major player in the carbon credits market. Some have estimated that the company is responsible for up to 87% of all carbon removal purchases. The type of project is also interesting. The BioCirc deal relies on carbon capture and sequestration (CCS) rather than nature-based offsetting. Nature-based projects have been plagued by scandals year after year, and recent research suggests that current nature-based credits may be inflated up to ten times their actual value.
Given Microsoft’s outsized influence on the carbon credit market, we could see more companies shift to CCS-based solutions. CCS is not without its flaws. Carbon is a very dangerous gas, and there are public health concerns associated with carbon pipelines and leaks. Scaling CCS to the point that it can be an effective solution to climate change is another challenge, as many CCS projects are proof of concept at best. We’ll see how Microsoft moves forward in the carbon credit market and what impact their decisions have on carbon removals as a whole.
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