Microsoft inks carbon removal deal from pulp and paper project

Microsoft has signed an agreement to buy carbon removals from a carbon capture project at a US pulp and paper mill.

The deal signed with carbon removal developer CO280 will see Microsoft purchase 3.685 million tonnes of carbon removal credits over 12 years – one of the largest engineered carbon dioxide removal (CDR) agreements to date.

The project involves retrofitting existing pulp and paper mills to capture biogenic CO2 from boiler stack emissions, and storing it geologically. CO280’s partner SLB Capturi will provide the capture technology. Vancouver-based CO280 is developing more than 10 such projects, with five high-priority projects poised to deliver credits by 2030.

In the US alone, pulp and paper mills emit 88 million tonnes of biogenic CO2 per year – and retrofitting mills with carbon capture and storage is considered a low-cost, low-risk opportunity. 

Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft, said: “Microsoft is pleased to announce this deal with the team at CO280, which has proven how to combine innovative engineering with strong commercial development towards creating affordable and scalable carbon removal solutions. The CO280 strategy of adding carbon removal to existing paper mills is an efficient way to quickly scale carbon removal and bolster investment and jobs into timberland communities across the United States.”

Microsoft’s carbon credit strategy

The tech giant is aiming to be “carbon negative” by 2030 – and with a growing carbon footprint driven largely by its AI expansion, Microsoft is investing heavily in carbon removals of all types. 

At the end of 2024, for example, the company entered an agreement with Mexican startup Toroto to purchase 234,000 rainforest carbon credits. 

Microsoft is also part of the Symbiosis Coalition with Google, Meta and Salesforce, aiming to develop 20 million tonnes of carbon credits from nature-based projects by 2030.

And about a year ago, Microsoft also signed a 10-year deal with Stockholm Exergi to remove 3.33 million tonnes of CO2 from the atmosphere using bio-energy with carbon capture and storage (BECCS).

“The agreement with Microsoft is a significant milestone for CO280 and the CDR market,” added Jonathan Rhone, co-founder and CEO of CO280 about this week’s deal. “CO280 is committed to delivering the highest quality, permanent carbon dioxide removal while supporting the economic and environmental health of the communities we serve. We’re incredibly grateful to Microsoft for their collaboration, leadership, and commitment to CDR excellence.”