Microsoft just made a major commitment to sucking carbon from the sky. The company signed a 10-year deal with Swiss direct air-capture company Climeworks as part of its carbon dioxide removal portfolio.
Over the course of the next decade, Climeworks will remove 10,000 tons of carbon dioxide from the atmosphere on behalf of the technology giant. It’s the most significant and long-term agreement Microsoft has made with a CDR supplier.
“Long-term commitments like this multi-year agreement are crucial for scaling the [direct air capture] industry because the guaranteed demand catalyzes financing of our infrastructure and consequently accelerates the development of the required ecosystem for scaling DAC," Climeworks co-founder and co-CEO Christoph Gebald said in a press release announcing the deal.
The companies did not disclose how much Microsoft — which is an investor in Climeworks — spent on the deal. In January 2021, Microsoft made a smaller purchase of Climeworks carbon removal services as a part of its broader portfolio to pull carbon out of the air.
In 2020, Microsoft committed to reaching carbon negativity by 2030 as part of its climate plan. To do that, it aims to cut its emissions each year this decade while also ramping up CDR purchases. It aims to remove millions of tons of carbon dioxide each year this decade. By 2050, the company plans to remove all carbon emitted since its founding in the 1970s. While the Climeworks deal is significant, it still only represents a fraction of what Microsoft's ultimate vision is for pulling carbon from the sky. (The company also saw emissions rise in 2021, reflecting the challenges it faces in not putting carbon in the atmosphere in the first place.)
Tech companies have increasingly been investing in CDR and trying to create a market for the nascent industry. The Microsoft deal comes just a few months after the company joined Alphabet and Salesforce in committing $500 million to carbon removal purchases by 2030. Earlier this year, Alphabet, McKinsey, Meta, Shopify and Stripe created a $925 million advance market commitment to accelerate the development of carbon removal technologies. That commitment, dubbed Frontier, recently made its first purchase.
These technologies are a “necessary element” for reducing the risks of climate change, according to the Intergovernmental Panel on Climate Change’s recent report. Ultimately, the world could need to remove billions of tons of carbon each year to limit global warming to relatively safe levels. How many billions will depend on how fast we cut emissions in the first place, though.