Microsoft ramps up climate commitments with a major bet on carbon removal credits

Microsoft has agreed to purchase 3.6 million metric tonnes of carbon removal credits from a new bioenergy plant being developed in Louisiana by C2X. The facility is expected to come online in 2029 and will convert forestry waste into methanol that can serve as a cleaner fuel option for aviation and shipping or act as a feedstock for the chemical industry. The plant is projected to manufacture more than 500,000 metric tonnes of methanol annually once operational. As part of the process, it will also capture roughly 1 million metric tonnes of carbon dioxide and store it in secure geological formations. The scale of carbon capture involved positions it as one of the more significant bioenergy initiatives in the region.

This purchase reflects a broader pattern within Microsoft as the company accelerates its acquisition of high-volume carbon removal credits. Over the past year, it has signed several landmark agreements, including a 4.9 million metric tonne arrangement with Vaulted Deep, a 3.7 million metric tonne deal with CO280, and a 7 million metric tonne commitment involving Chestnut Carbon. These contracts demonstrate the rising urgency inside the company as it confronts the environmental cost of its expanding data centre network. The surge in global demand for cloud infrastructure and artificial intelligence processing has pushed electricity consumption and associated emissions higher, complicating Microsoft’s pledge to remove more carbon than it emits by the end of this decade.

Renewable and nuclear energy purchases remain an important component of Microsoft’s sustainability strategy, but the company recognises that power procurement alone cannot balance its long-term environmental footprint. The growth of AI workloads and new data centre construction increases the likelihood of residual fossil fuel use across supply chains and grids. Carbon removal credits are therefore becoming a practical lever for covering unavoidable emissions while the wider energy ecosystem continues its transition.

Microsoft’s latest move also highlights the growing commercial momentum around engineered carbon removal projects. The C2X facility integrates proven industrial processes with carbon capture and storage, offering buyers a clearer line of sight into measurable climate impact. For large technology companies that face intense scrutiny over sustainability targets, these structured and verifiable projects are becoming increasingly attractive.