Microsoft Buys Soil Carbon Credits in Record Deal to Meet 2030 Net-Zero Targets

In order to acquire a record 2.85 million soil carbon credits linked to regenerative agriculture methods in the US, Microsoft has partnered with Indigo Carbon. The action coincides with the Satya Nadella-led company's goal to become "carbon negative" by 2030. However, recently Microsoft's emissions have increased as a result of AI deployment. According to various media reports, the purchase is anticipated to be worth between $171 million and $228 million, falling within the historical range of $60 to $80 per tonne for Indigo Carbon's credits. How these credits will help Microsoft lets find out.

What is Regenerative Farming and How it Works?

A variety of practices are included in regenerative farming. Reducing tilling, employing cover crops, and allowing livestock to graze are some ways to enhance the soil's capacity. This enhanced soil helps retain water and absorb carbon emissions that harm the climate. According to market data company Sylvera, demand for these credits increased last year, with Microsoft acquiring 2.6 million credits from Agoro Carbon—the previous record holder for the largest sale.

In an interview with Reuters, Meredith Reisfield, senior director for policy, partnerships, and impact at Indigo, stated that it is effectively reinforcing Indigo's standing and leadership in high-integrity carbon credits while also highlighting the significance of soil carbon removal in corporate climate action. According to her, farmers also profit monetarily since they receive 75% of the average weighted cost of a loan from any particular crop year or issuance.

Microsoft’s Plans for Reducing Carbon Footprints

Microsoft intends to ensure that it facilitates more carbon removals than the amount of carbon emitted by its operations worldwide in order to become carbon negative. For every tonne of carbon dioxide that a project removes from the environment, it can earn credits in the voluntary carbon market. Businesses can purchase these credits to offset emissions from their operations.

Indigo works with farmers to construct projects and sell the resulting credits after assisting in identifying locations where emissions can be removed or decreased. Many experts contend that in order to decrease global warming, carbon-removal operations are essential because they offset emissions from fossil fuel-dependent businesses like power generation. Opponents contend that there are more general issues with the measurement and durability of removal credits and claim that removal technology may distract from efforts to reduce emissions.