Microsoft is purchasing 650,000 metric tons of carbon-removal credits from startup BioCirc, the company said today.
As carbon-removal deals go, it’s not a big buy. But this one is notable because last month, two reports said the tech giant was pausing its carbon-removal deals. BioCirc confirmed for TechCrunch that the purchase agreement was signed in May, weeks after Microsoft reportedly paused new deals.
For the carbon-removal industry — and the startups that depend on it — there’s a big difference between a pause and a recalibration. Microsoft is reportedly responsible for more than 90% of the carbon-removal credit market, meaning its purchasing decisions alone can determine whether young companies in the space survive.
Microsoft repeatedly denied that it had paused its carbon-removal purchases. “Our carbon removal program has not ended,” Melanie Nakagawa, chief sustainability officer at Microsoft, told TechCrunch in a statement. “At times we may adjust the pace or volume of our carbon removal procurement as we continue to refine our approach toward sustainability goals.”
The new deal generates carbon-removal credits from five BioCirc biogas projects. The biogas plants take biomass waste — frequently from agriculture — and use industrial bioreactors to turn it into methane and carbon dioxide. BioCirc captures the carbon dioxide and stores it in an underground reservoir offshore. The methane is then burned in a power plant.
Microsoft’s sustainability goals have been strained by the company’s push into AI. To power its data centers in Texas, Microsoft last month said it was working with Chevron and Engine No. 1 to build a natural gas power plant in the state that could eventually generate 5 gigawatts of electricity. Emissions from that project alone promise to dwarf the deal with BioCirc.
Internally, Microsoft employees have also been debating whether to abandon the company’s goal of matching zero-emissions electricity with its energy use on an hourly basis. Today, the company matches on an annual basis. That approach gives Microsoft more flexibility to, say, use more natural gas to power its data centers at night, but it also makes the company’s clean energy claims harder to verify.
If Microsoft continues to pursue fossil fuel pow …