Microsoft Secures Historic Agreement for Soil Carbon Credits
Microsoft has reached an agreement with Indigo Carbon to purchase an unprecedented 2.85 million soil carbon credits associated with regenerative agriculture in the United States, as the technology leader strives to achieve "carbon negative" status by 2030, even amid rising emissions tied to AI.
Although Microsoft - the largest global purchaser of carbon removal credits - did not reveal the expense of the 12-year agreement, an informed individual indicated it aligns with the historical range of $60 to $80 per ton for Indigo Carbon's credits, valuing the contract between $171 million and $228 million.
Regenerative agriculture encompasses various practices like minimizing soil disturbance, employing cover crops, and allowing livestock to graze, which enhance the soil's capacity to absorb climate-warming carbon emissions and hold water.
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Market research company Sylvera reported a rise in demand for these credits last year, highlighted by Microsoft purchasing 2.6 million credits from Agoro Carbon, which had previously recorded the largest transaction.
"It emphasizes the significance of soil carbon removal in corporate climate initiatives, and for Indigo, it strengthens our reputation and leadership in high-integrity carbon credits," states Meredith Reisfield, Indigo's senior director for policy, partnerships, and impact.
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Farmers gain financially as well, obtaining 75 percent of the average weighted credit cost from any specific issuance or crop year, she noted.
Phillip Goodman, Director of Carbon Removal at Microsoft, states that Microsoft is enthusiastic about Indigo's method of regenerative agriculture, which produces quantifiable outcomes via verified credits and compensation for farmers.
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Being carbon negative signifies that Microsoft aims to guarantee it removes more carbon than its global operations produce.
In the voluntary carbon market, projects can receive credits for every ton of carbon dioxide they eliminate from the atmosphere, and companies can purchase these credits to balance out emissions from their operational activities.