Microsoft has taken a significant step towards achieving its ambitious goal of becoming a carbon-negative company by 2030, announcing the purchase of 3.7 million metric tons of carbon removal credits from CO280, a project developer that works with pulp and paper mills. This massive purchase covers 12 years of emissions from CO280's first carbon capture project at a mill on the Gulf Coast, which is expected to start capturing CO2 in 2028.

The deal is a crucial move for Microsoft, which generated 17.1 million metric tons of greenhouse gases in 2023. To reduce its carbon footprint, the tech giant has been investing heavily in renewable power and carbon removal technologies. This purchase is part of its strategy to offset emissions that cannot be eliminated through renewable energy sources.

CO280's project is particularly noteworthy, as it targets the pulp and paper industry, which releases 88 million metric tons of biogenic carbon dioxide annually. The company's innovative approach involves adding carbon capture technology to the paper mill's recovery boiler, which helps recycle chemicals for reuse. This process captures CO2 that would otherwise be released into the atmosphere, effectively removing carbon from the atmosphere through photosynthesis.

The captured carbon dioxide will be transported 40 miles via pipeline to a saline aquifer for storage. The first phase of the project is expected to capture about 40% of the biogenic carbon dioxide released by the mill and 30% of the total CO2, including from fossil fuels used to power the operation. A second phase is planned, which should double these figures.

CO280's business model involves building carbon capture units as joint ventures with paper mills. In return, the mills receive a portion of the carbon credit proceeds, boosting their bottom line. The company sells its credits at around $200 per metric ton, and buyers can claim tax credits under the Inflation Reduction Act, bringing the cost down further.

This is not CO280's first deal; the company previously sold carbon removal credits to Frontier, an advanced market commitment created by Stripe, Google, Shopify, Meta, and others. Microsoft's purchase is a significant milestone, however, and demonstrates the company's commitment to achieving its carbon-negative goal.

The implications of this deal extend beyond Microsoft's sustainability efforts. It highlights the potential of carbon capture technology to reduce emissions in hard-to-abate industries like pulp and paper. As the world transitions to a low-carbon economy, innovative solutions like CO280's will play a critical role in mitigating climate change.

With this purchase, Microsoft is sending a strong signal to the market about the importance of carbon removal and the need for collective action to address the climate crisis. As the tech industry continues to grow and evolve, it is crucial that companies like Microsoft prioritize sustainability and invest in solutions that can help mitigate their environmental impact.