Microsoft’s $800M Carbon Removal Deal Sets Record in Climate Fight
Microsoft has taken a major step in its efforts to reduce its impact on the environment. The tech company recently signed the biggest-ever deal to remove carbon dioxide (CO2) from the atmosphere. This agreement is part of Microsoft’s plan to become carbon negative by 2030, which means it wants to remove more CO2 from the air than it releases.
The deal is with a company called Fidelis, through its portfolio company AtmosClear. Over the next 15 years, Microsoft will pay AtmosClear to permanently remove 6.75 million metric tons of CO2 using a special type of technology called BECCS.
Burning Plants, Burying Carbon: How BECCS Works
BECCS stands for “bioenergy with carbon capture and storage.” It’s a method that produces clean energy while also capturing and storing carbon emissions. Here’s how it works:
First, biomass (like sugarcane waste or wood trimmings) is burned to create energy. As the biomass burns, it releases CO2, but instead of letting that CO2 escape into the atmosphere, it is captured and stored deep underground or turned into low-carbon fuels. This process not only creates energy but also removes CO2 from the air because the plants used as biomass absorb CO2 as they grow.
In this case, AtmosClear will build a BECCS facility at the Port of Greater Baton Rouge in Louisiana. The plant will begin construction in 2026 and is expected to start operations in 2029. It will use sustainable materials like sugarcane leftovers and forest trimmings to produce energy while removing about 680,000 metric tons of CO2 each year.
What Makes the Microsoft-AtmosClear Deal Unique?
This new deal with AtmosClear stands out because of its size and focus on permanent carbon removal. BECCS is different from temporary methods, like planting trees.
Trees can be lost to fire or disease. In contrast, BECCS captures and stores carbon. This process keeps carbon out of the atmosphere for hundreds or even thousands of years.
Experts say that engineered carbon removal solutions like BECCS are essential for the long term. While natural methods like reforestation are helpful, they may not be enough on their own to meet global targets.
About 2 million tons of CO2 are captured yearly from biogenic sources, but less than half is stored permanently. Most capture happens at bioethanol plants due to lower costs.
The largest BECCS project, Illinois Industrial CCS, began storing CO2 underground in 2018. Red Trail and Blue Flint plants followed in 2022 and 2023. Other small plants in the U.S. and Europe sell captured CO2 for greenhouse use or enhanced oil recovery instead of permanent storage.
BECCS now accounts for 74% of Microsoft’s carbon removal portfolio after two major agreements. The other one was with CO280, a carbon removal company targeting the pulp and paper industry. Their deal involves removing about 3.7 million tons of CO2.
A Huge Bet in Clean Energy and Carbon Removal
Microsoft’s carbon removal deal is worth an estimated $800 million. The project is expected to create 600 construction jobs and 75 permanent jobs in the region. It will also support forestry management jobs that were lost when older wood mills shut down.
This investment will not only help reduce carbon emissions but also bring economic benefits to the local community. As Daniel J. Shapiro, the CEO of Fidelis, said, the project is proof that clean energy can help both the environment and the economy. He further said:
“This contract with Microsoft marks a transformative moment for the high-quality, engineered carbon removal market…We are proud to build infrastructure in Baton Rouge, a place many of us at Fidelis have called home, that not only removes carbon from the atmosphere but also provides economic opportunity for Louisiana.”
Carbon removal is becoming more important as companies and governments try to meet climate goals. While reducing emissions is crucial, scientists say that we also need to remove existing CO2 from the atmosphere to avoid the worst effects of climate change.
Technologies like BECCS and direct air capture or DAC (which pulls CO2 directly from the air) can play a key role in reaching global net-zero targets.
Microsoft is one of many companies investing in carbon removal. The company has already signed several other agreements to remove CO2. In April 2025 alone, Microsoft committed to over 10 million metric tons of carbon removal through different deals. The company is the biggest buyer of carbon removal (CDR) credits in 2024.
Carbon Removal Goes Mainstream
The carbon removal industry is still young, but it’s growing fast. Right now, it’s valued at about $2 billion globally. Experts believe it could grow to $50 billion by 2030 and more than $250 billion by 2035. And BECCS is one of the carbon removal technologies estimated to grow significantly in 2050 as part of the net-zero strategy.
This growth is being driven by strong demand from large companies like Microsoft, Stripe, and Shopify, which have made public pledges to reduce or remove their emissions. Government policies and financial incentives are also helping to expand the industry.
For example, the U.S. offers a federal tax credit called 45Q, which gives money to companies for every ton of carbon they capture and store. These kinds of policies help make carbon removal projects more affordable and attractive.
Microsoft’s Climate Goals: From Carbon Footprints to Climate Leadership
Microsoft has made one of the most ambitious climate pledges in the tech industry. In 2020, the company promised to be carbon negative by 2030. This means it wants to remove more CO2 from the atmosphere than it emits across its entire business—including data centers, offices, and supply chains.
The company also plans to remove all the carbon it has emitted since its founding in 1975 by the year 2050. To reach these goals, Microsoft is using a mix of clean energy, efficiency improvements, and carbon removal projects.
However, Microsoft’s emissions have recently increased, mainly due to the growth of artificial intelligence (AI) and cloud computing, which require a lot of energy. Between 2020 and 2023, Microsoft’s emissions rose by about 29%. The company says it is still on track to meet its climate goals but acknowledges that more action is needed.
Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft, remarked, noting that:
“High-quality, durable carbon removal solutions from experienced developers like Fidelis are vital for Microsoft in progressing its goal to become Carbon Negative by 2030.”
What This Means for the Future of Clean Tech
Microsoft’s partnership with Fidelis and AtmosClear is a major milestone for carbon removal. It shows that large companies are willing to invest in new technologies to address climate change.
As more companies commit to net-zero and carbon-negative targets, the demand for carbon removal will keep rising. This could help lower costs, improve technology, and create new job opportunities in clean energy.
The post Microsoft’s $800M Carbon Removal Deal Sets Record in Climate Fight appeared first on Carbon Credits.
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