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Microsoft Enters Landmark Agreement with Heirloom for One of the Largest Carbon Removal Deals

ESGMicrosoft Enters Landmark Agreement with Heirloom for One of the Largest Carbon Removal Deals

Microsoft has signed a significant multi-year agreement with Heirloom, a Direct Air Capture (DAC) technology company, for the removal of up to 315,000 metric tons of CO2, making it one of the largest carbon removal deals to date. DAC technology extracts CO2 directly from the atmosphere and can be used as a raw material or permanently stored. The Intergovernmental Panel on Climate Change (IPCC) has identified carbon dioxide removal methods, including DAC, as crucial for limiting global warming to 1.5°C.

Heirloom, in collaboration with partners Battelle and Climeworks, is developing Project Cypress in Louisiana, expected to capture over 1 million metric tons of CO2 annually for permanent underground storage, significantly larger than any existing DAC facility.

This agreement with Microsoft provides a funding mechanism for Heirloom’s DAC development, utilizing a bankable mechanism that funds the project with future project cash flows, similar to large-scale infrastructure development agreements.

Microsoft’s commitment to carbon removal is evident in this and other recent agreements. The company aims to become carbon negative by 2030 and remove all its historical emissions by 2050. In addition to its investment in Heirloom, Microsoft has entered into DAC-based agreements with CarbonCapture and Climeworks, as well as an ocean-based carbon removal agreement with Running Tide. They also recently announced a deal with Ørsted to capture and store biogenic carbon emissions generated at a wood chip-fired power station in Denmark.

This initiative aligns with Microsoft’s support for rapid carbon removal to meet the goals of the Paris Agreement and its broader commitment to addressing climate change.

By FCCT Editorial Team

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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