Microsoft’s Financial Success

Microsoft’s 2030 Carbon Negative Goal

Microsoft has set an ambitious goal to become carbon negative by 2030, meaning the company aims to remove more carbon dioxide from the atmosphere than it emits. By 2050, Microsoft plans to offset all carbon dioxide emissions since its inception in 1975. Achieving this involves significant innovation and collaboration, particularly in the face of complex emission challenges.

Since setting its sustainability targets 4 years ago, Microsoft has been at the forefront of efforts to address climate change. Thousands of other companies have also committed to achieving net zero emissions, driven by advancements in technologies such as AI, which enhance measurement, datacenter efficiency, and energy transmission. 

Amid financial success, the key environmental challenge of reducing Scope 1, 2, and 3 emissions remains substantial. 

In FY23, Microsoft’s total emissions rose by 29.1% compared to the 2020 baseline. This increase is attributed to ongoing investments in technology and infrastructure to support future innovations. 

Chart from Microsoft 2024 Environmental Sustainability Report

Notably, Scope 3 emissions account for more than 96% of Microsoft’s total emissions. These emissions primarily come from two upstream categories: Purchased Goods and Services (Category 1) and Capital Goods (Category 2), as well as one downstream category: Use of Sold Products (Category 11).

Chart from Microsoft 2024 Environmental Sustainability Report

Although Microsoft has reduced Scope 1 and 2 emissions by 6% since 2020 through efforts such as clean energy procurement and green tariff programs, Scope 3 emissions remain the biggest challenge. Addressing these requires extensive collaboration across industries. 

SEE MORE: Google, Meta, Microsoft, and Salesforce Launch “Symbiosis”, Pledging for 20M Tons of Nature-Based CDR Credits

What’s Microsoft Doing About Its Increasing Carbon Footprint?

Microsoft’s goal of becoming carbon-negative is deeply connected to global decarbonization efforts. Essential to this goal is supporting the development of carbon-free electricity infrastructure through procurement and investment. Recognizing the scale of this challenge, Microsoft has adopted a pioneering approach by investing in carbon-free electricity to enhance the grids where it operates. 

The company is also working to diversify and expand the supply of impactful renewable energy and improve access for all.

Scaling Up Clean Energy

Microsoft’s partnership objectives are to meet its own operational needs, accelerate the development of technologies for its customers and partners, and significantly increase the global sustainability market. 

By 2023, Microsoft had expanded its renewable energy portfolio to over 19.8 gigawatts (GW) across 21 countries. 

New power purchase agreements (PPAs) were signed with AES in Brazil, Constellation Energy in Virginia, Powerex in Washington, Contact Energy in New Zealand, and Lightsource bp in Poland. 

Notably, Microsoft became the first major commercial entity to use Powerex’s 24×7 Clean Load Service for a datacenter in Washington. This service matches Microsoft’s hourly datacenter energy demand with direct deliveries of carbon-free hydro, solar, and wind power year-round, supporting the company’s 100/100/0 goal. 

Datacenter Efficiency

Microsoft is optimizing datacenter efficiency using Power Usage Effectiveness (PUE) with a current design rating of 1.12, aiming for even lower values. Transitioning servers to low-power states reduced energy use by up to 25%, cutting Scope 2 emissions. 

The company also enhances resource utilization by minimizing peak power needs and improving server density, leading to a 7% reduction in datacenter power infrastructure. Additionally, server utilization improvements resulted in a 1.5% reduction in hardware needs for Azure, significantly reducing embodied carbon.

Fleet Electrification

Microsoft is advancing its fleet electrification efforts across global campuses, aiming to eliminate reliance on fuel-burning vehicles. To achieve a 100% electric fleet by 2030, Microsoft is building an Electric Vehicle Fleet Facility at its Redmond headquarters. This facility, currently in the design phase, will support the electric fleet by providing housing, charging, and maintenance services. 

Boosting Carbon Dioxide Removal (CDR) Solutions

To address its unavoidable emissions, particularly Scope 3, Microsoft is committed to advancing carbon removal technologies. 

In FY23, the company accelerated procurement across various CDR pathways, leveraging a long-term agreement framework to enhance the impact of large-scale projects. These multi-year agreements are designed to help projects secure external financing and ensure the purchase of additional, durable, measurable, and net-negative carbon credits. 

Microsoft’s goal is to build a portfolio of over 5 million metric tons per year starting in 2030, while also exploring novel solutions such as enhanced rock weathering.

In FY23, Microsoft bought 5.015 million metric tons of carbon removal to support its carbon neutral and negative targets.

Chart from Microsoft 2024 Environmental Sustainability Report

Microsoft contracted 5,015,019 metric tons of carbon removal to be retired over the next 15 years. By December 2023, contracts are expected to contribute 875,000 metric tons towards the 2030 target of over 5 million metric tons. Notable projects signed in 2023 include:

Reforestation in the Amazon
Landmark bioenergy with carbon capture and storage (BECCS) in partnership with Orsted 

Additionally, Microsoft expanded its renewable energy portfolio to over 19.8 gigawatts, reinforcing its commitment to sustainable energy infrastructure.

And just last month, Microsoft signed two separate CDR deals. One is with BTG Pactual Timberland Investment Group for 8 million carbon removal credits, the biggest CDR transaction on record. The other agreement is with Indigo Ag for 40,000 agricultural soil carbon credits, also the biggest-ever purchase of an individual buyer from the ag company.

READ MORE: Microsoft Strikes 2 Record-Breaking Carbon Credit Deals

With record earnings and significant investments in carbon emission reductions, Microsoft continues to lead in both innovation and sustainability, setting a benchmark for the industry.

The post Microsoft Reported Q2 Record Earnings, How About Its Carbon Negative Goals? appeared first on Carbon Credits.

ASX has launched three Environmental Futures contracts, marking a significant development for carbon and renewable energy markets in Australia and New Zealand. These new contracts enable participants to price and hedge emissions reduction risk as the economy transitions to a lower carbon footprint. These contracts are the first carbon futures contracts to debut in Australia and New Zealand. 

Fee-Free Launch Boosts Carbon Market Liquidity

To foster growth, ASX is offering a temporary fee waiver on all Environmental Futures transactions to build liquidity and encourage early engagement from diverse market participants.

The three futures contracts available for trading on the ASX 24 Market include the following physically delivered:

Large Generation Certificate (LGC) Futures, 
Australian Carbon Credit Unit (ACCU) Futures, and 
New Zealand Unit (NZU) Futures. 

These contracts aim to provide a liquid, transparent forward pricing curve on an annual basis for up to five years. Registered participants can make or take delivery of underlying Certificates or Units at settlement. These instruments can then be surrendered to the government to offset emissions or meet compliance obligations. 

Each contract is standardized, with each equaling 1,000 underlying LGCs, ACCUs, or NZUs.

ASX designed its suite of Environmental Futures to meet the growing demand for liquid and transparent carbon credit and renewables trading markets. There has been significant interest in these products from a diverse customer base, including the energy sector, carbon project developers, compliance entities, financial institutions, trade houses, and corporates.

Future-Proofing Australia’s Carbon Market

Daniel Sinclair, ASX Head of Commodities, emphasized the importance of derivatives markets as Australia transitions from a voluntary to compliance carbon market, aligning with other global jurisdictions. 

“The  transition to clean energy, by definition, is uncertain, and ASX-hosted Environmental Futures will be a key  instrument in managing risk and supporting the net zero targets of organisations and policymakers.” 

RELATED STORY: Australia to Merge Compliance and Voluntary Carbon Markets?

Australia’s carbon market is set for significant growth and is poised to become one of the world’s largest producers of carbon credits. Carbon credits, or offsets, represent quantities of abated emissions that fund renewable energy projects and decarbonization efforts. Companies can purchase these credits instead of directly reducing their emissions.

Recent data from the Clean Energy Regulator indicates that about 51% of all ACCUs are now in the registry accounts of safeguard or safeguard-related entities, a volume that could benefit from moving onto the exchange.

Chart from Clean Energy Regulator website

At the end of Q1 2024, the Australian National Registry of Emissions Units (ANREU) reported holdings of 38.6 million ACCUs. This marks an increase of 2.4 million ACCUs over the quarter. In Q1 2024, ANREU issued 3.8 million ACCUs, signaling a strong start towards an anticipated record issuance of at least 20 million ACCUs for the year.

Chart from Clean Energy Regulator website

For the same period, the number of Safeguard (excluding Safeguard-related) accounts holding ACCUs increased by 11, reaching a total of 54. ACCUs held in these accounts rose to 12 million, an increase of 4.6 million over the quarter.

The volume held by Safeguard entities is likely higher, as other accounts, such as intermediaries and project proponents, may hold ACCUs on their behalf.

Catalyzing Climate Action and Carbon Market Innovation

Established in 2016, Australia’s Safeguard Mechanism requires regulated emitters to either adopt cleaner technologies or buy carbon credits to offset their emissions. This policy allows pollution caps to tighten over time, giving companies a window to adjust their operations to meet emission reduction targets. Additionally, it enables firms to offset emissions by purchasing credits from other polluters with surplus credits.

Back in 2022, Australia’s climate policy advisory has recommended establishing a fully transparent national carbon market. This development could facilitate global carbon trade and potentially merge voluntary and compliance markets.

The federal government has committed to reducing carbon emissions by 43% below 2005 levels by 2030. This new target underscores a stronger commitment to climate action, which could drive significant changes in regulatory and market landscapes.

ASX’s Environmental Futures becomes a key element to that climate commitment. It is also part of a broader ecosystem of current and planned futures and options contracts across electricity, gas, and environmental markets. The new contracts will support Australia and New Zealand’s net zero efforts and clean energy transition.

Environmental Futures could attract new market participants due to their liquidity, enhanced price discovery, and reduced credit risk through central clearing. These futures will provide a standardized price around which liquidity can concentrate, which is particularly important in supporting the ACCU market where certain methods and co-benefits are valued differently.

READ MORE: Carbon Credit Futures (How Does It Work)

The introduction of these futures contracts underscores ASX’s commitment to supporting the net zero ambitions of businesses and policymakers by providing the necessary tools to manage emissions reduction risks effectively.

The post ASX Debuts Environmental Futures Contracts for Carbon Markets appeared first on Carbon Credits.

Bursa Carbon Exchange (BCX), a 100% owned subsidiary of Bursa Malaysia, debuted the Malaysian carbon credits auction on July 25. It is BCX’s first offering of Malaysia Nature-based Carbon Credits Plus (MNC+) from its Kuamut Rainforest Conservation Project. This is indeed a huge achievement for Malaysia as it features domestic carbon credits.

Bursa Malaysia Drives Carbon Credits Market with Kuamut Project

Bursa Malaysia is proactive in engaging with stakeholders, carbon experts, and local developers to boost the carbon credit market in Malaysia.

Notably, in March 2024, the Kuamut project achieved its first Verified Carbon Units (VCUs) under Verra’s Verified Carbon Standard (VCS), cutting annual emissions nearly by 800,000 tCO2e.

It also provides significant climate, community, and biodiversity benefits, earning Gold Level status for Climate under the Climate, Community, and Biodiversity (CCB) Standards. Furthermore, it has accolades from BeZero Carbon for being one of the most advanced forest management projects.

Leading news agencies revealed that units and organizations committed to reducing their environmental impact had joined the auction. Essentially, they focused on offsetting tough GHG emissions through carbon credits. The auction for the forest protection and regeneration project was cleared at RM50 per contract.

Bursa Malaysia CEO Datuk Muhamad Umar Swift has emphasized,

“It has been a long wait for Malaysia to finally witness the auction of the country’s first domestically produced quality carbon credits. A critical step to accelerate the development of domestic carbon projects is to adopt some form of compliance carbon market.”

He has critically assessed the situation, pointing out that the voluntary renewable energy certificates (RECs) market took five years to expand. Given the complexities of implementing carbon projects, especially nature-based ones, he believes Malaysia’s voluntary carbon market will need ongoing improvements to reach its full potential.

Kuamut Project: The Ultimate Carbon Sink

Earlier in May, Bursa Malaysia released a press statement glorifying the geography, ecology, and biodiversity of the Kuamut Project. Located in Sabah’s Tongod and Kinabatangan districts of Malaysian Borneo, it protects and preserves 83,381 hectares of tropical forest.

It is a public-private partnership between the Sabah Forestry Department, Rakyat Berjaya Sdn Bhd, Yayasan Sabah, and Permian Malaysia. Describing further, the project also receives operational support from PACOS Trust and the Southeast Asia Rainforest Research Partnership (SEARRP).

The Kuamut Project is hugely significant for the South Asian nation and is handled by Permian Malaysia, the leading environmental & ecological services for businesses headquartered in London. The project addresses the climate crisis by preventing emissions from deforestation and forest degradation. Safeguarding the forest ensures that carbon remains stored in the biomass. Moreover, as the forest regenerates, it will strengthen its function as a carbon sink.

Bursa Malaysia through this conservation project also aims to improve the livelihood of the locals by creating ample sustainable economic opportunities. They are equally responsible for preserving the rich biodiversity, flora and fauna of the forest.

Image: The Kuamut Forest Conservation Project

source: Permian Global

Permian Global: In a Mission to Secure Tropical Forests

Permian Global operates across Brazil, Colombia, Indonesia, Malaysia, and Peru. It uses private-sector carbon finance to protect, and regenerate threatened tropical forests. The company halts deforestation, prevents species loss, and empowers local communities through large-scale projects in collaboration with locals.

By generating verified carbon units, these projects help corporations meet their climate goals. They believe that protecting forests keeps biomass carbon locked in vegetation, thereby mitigating climate change. Furthermore, local involvement ensures sustainable economic alternatives are carried out in those specific regions.

Most importantly, tropical forests, rich in biodiversity, benefit from these projects, which also include species research and monitoring.

Stephen Rumsey, founder and Chairman of Permian Global said,

“We are incredibly grateful to Bursa Malaysia for their vision and leadership in developing the Carbon Exchange and especially for their support of the Kuamut Project.”

He further added,

“Climate action requires system-wide transformation. This means the rapid development of high-integrity, high-impact actions on the ground, like the Kuamut Project, but it also means building the financial infrastructure that drives investment in these vital activities. BCX is an enormously important piece in the climate puzzle.”

FURTHER READING: Singapore’s CRX Partners with Malaysian University for Carbon Projects

The post Bursa Malaysia Debuts Malaysia’s First Nature-Based Carbon Credits appeared first on Carbon Credits.

Copper prices fell below $9,000 a ton for the first time since early April due to a global stock market selloff and rising pessimism about demand in China and elsewhere. The industrial metal has dropped by about 20% since its mid-May record high, driven by concerns over increasing inventories and weak conditions in the Chinese spot market.

What Causes the Market Downturn?

Copper is hailed as the economic bellwether because it rises and falls in tandem with industrial production. The metal is also popular as “Doctor Copper”, a slang word for copper’s price to foresee the economy’s overall health.

As seen below, copper price at London Metal Exchange (LME) has been dropping since it hit record high in May.

The falling copper prices is further worsened by a significant selloff in global technology stocks and doubts about the growth of the artificial intelligence industry. The AI industry had previously boosted copper prices due to anticipated surges in data center use and power infrastructure.

Gong Ming, an analyst at Jinrui Futures Co., noted that global growth concerns could drive copper prices lower, although prices might find support around $8,900 due to potential supply risks. Copper dropped 2.2% to $8,900 a ton and was trading at $9,010 at the time of writing. Nearly all metals were lower on the LME, with tin declining 2.6% and zinc losing 1.5%.

Iron ore also declined by 0.9% to trade below $100 a ton in Singapore, with signs of robust supply continuing. According to Liz Gao, a senior iron ore analyst at CRU, weak steel demand and negative steel margins in China are causing mills to reduce production and avoid building raw material stocks.

Despite recent rate cuts by China’s central bank to revive the economy, copper price continued to fall. It marks the worst weekly slump in almost two years, as a modest rate cut in China failed to alleviate concerns about demand in the world’s largest commodities consumer. 

SEE MORE: Copper and the Need to Meet the World’s Rewiring Demand for Energy Transition

China’s Copper Exports Hit Record High

The red metal dropped for the 6th consecutive day despite China’s efforts to support its economy through unexpected interest-rate cuts. The lack of short-term stimulus from a recent major Communist Party meeting added to investor disappointment.

Ewa Manthey, commodities strategist at ING Bank NV, noted:

“We expect copper and other industrial metals to decline further in the near term. That trend would reflect “a softer demand outlook in China.

China’s refined copper exports reached a record high in June, driven by weak domestic demand, prompting smelters to seek overseas markets. Exports more than doubled to 157,751 tons from May, surpassing the previous all-time high of 102,000 tons set in 2012, according to customs data.

Asia’s largest economy experienced its slowest growth in five quarters in the three months through June. This leads to a 14% drop in global copper prices since mid-May. 

The surge in exports is also reflected in the increased copper inventories at LME warehouses, which have more than doubled since mid-May, reaching their highest levels since September 2021. This increase is largely due to the lack of domestic demand. 

Benchmark Minerals Intelligence believes that despite spot treatment and refining charges (TC/RCs) at record lows, Chinese smelters are maintaining strong output. Benchmark estimates most smelters in China are loss-making, despite improved by-product credits. 

Interestingly, copper prices peaking in May increases scrap copper supply by 20% year-on-year. Most incremental supply went to Chinese smelters, boosting refined copper production. 

Copper Demand for Clean Energy is Positive

With prices now below the $9,000 threshold, scrap merchants are less willing to supply, and inventories are low. As scrap supply fades in Q3, raw material supply will tighten. Benchmark projects a refined copper production growth rate of 2.3% in H2.

Moreover, though China’s refined copper supply was strong in Q2, consumption growth was weak. High copper prices led to reduced restocking and plant utilization, causing a counter-seasonal stock-build and record exports in May. 

Despite short-term pressures, end-use demand indicators are positive: electric vehicle sales are up 32%, and solar installations and grid investments increased 29% and 22%, respectively. 

READ MORE: The World Needs 194 New Large Copper Mines to Reach Net Zero

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