What Happened
Microsoft has signed a long-term carbon removal agreement with Brazilian reforestation startup Re.green, marking its second deal with the company in the past year. Under the new 25-year contract, Microsoft will purchase 3.5 million carbon credits.
Why It’s Important
- Long-Term Commitment: The agreement solidifies Microsoft’s investment in carbon removal and aligns with its goal of achieving carbon negativity by 2030.
- Significant Market Value: While the exact value was not disclosed, market estimates suggest the deal could be worth around $200 million.
- Ecological Impact: The funding will help restore more than 16,000 hectares of degraded pastureland across Brazil, supporting biodiversity and carbon sequestration.
Key Details
- Restoration Scope: The project will include planting at least 10.7 million native seedlings in Maranhão and Bahia, regions critical to Brazil’s ecological recovery.
- Business Model: Re.green finances its projects by selling carbon credits and producing certified native hardwood to promote sustainable land use.
- Microsoft’s Broader Climate Strategy: The tech giant has pursued numerous carbon offset deals in 2024, incorporating technologies such as direct air capture, biomass sequestration, and enhanced rock weathering.
Challenges and Criticism
Despite its sustainability initiatives, Microsoft faced accusations of greenwashing in 2024. Non-profit As You Sow criticized the company for promoting its climate leadership while maintaining close ties with fossil fuel companies. The group claimed Microsoft targets the fossil fuel sector as a key growth opportunity for artificial intelligence (AI), machine learning, and cloud computing services.
Market Outlook
The carbon credit market is expected to grow as corporations invest in offsets to meet sustainability targets. Microsoft’s continued engagement in long-term carbon removal projects signals a strategic commitment to environmental responsibility, despite scrutiny over its broader business practices.
