Dive Brief:
- Microsoft is purchasing 1.5 million tonnes of carbon credits from Climate Impact Partners through a project that will plant new forests in India, the carbon credit project developer announced Thursday.
- Climate Impact Partners announced the purchase as part of a deal with carbon market financier Terra Natural Capital, who will finance the afforestation project. Microsoft’s purchase will be completed over a 30-year period and represents half of the expected carbon removal credits that will be produced by the project.
- The Panna Afforestation Project is expected to produce a total of 3 million tonnes of carbon removal credits. The deal also becomes Microsoft’s first carbon removal project in India and its largest in the Asia-Pacific region, according to the March 6 release.
Dive Insight:
Climate Impact Partners is moving forward with the Panna afforestation project following financing and purchase commitments made by Terra Natural and Microsoft, respectively, as well as three years of piloting and due diligence, the company said. The company will create new forests and tree cover by planting mango and guava trees, teak and other furniture hardware trees, and trees with medicinal qualities like neem.
The project will result in more than 11.5 million trees native to the area being planted across 20,000 hectares of land — an area larger than Washington, D.C., according to Thursday’s release. The afforestation project “exemplifies how companies can help scale large-scale carbon removal infrastructure,” Climate Impact Partners CEO Sheri Hickok said in the release.
“By securing a long-term supply of high-quality carbon credits, this model empowers companies like Microsoft to meet their ambitious climate targets, drive growth in the carbon removal market, and bring benefits to communities most impacted by climate change,” Hickok said.
Climate Impact Partners — which specializes in developing and managing carbon credit portfolios — said that participating farmers will receive shares of carbon credit sales, as well as income from the sale of the fruit and medicinal produce that planted trees generate. The Panna project will also create training programs for “climate-smart agricultural techniques” and has created large-scale water infrastructure that will capture and conserve water.
Panna’s focus on planting native species will also improve the area’s biodiversity by attracting species of butterflies and birds “back to currently degraded lands,” the release said. Terra Natural Capital Managing Director Erica Vertefeuille noted in the release that accessing project financing “is a critical need for the carbon removal market to scale,” and the overall deal “reflects the power of collaboration between trusted project developers, corporate demand, and innovative finance to unlock climate impact.”
Microsoft Senior Director of Energy Markets Brian Marrs said the project will form “an important part” of its growing carbon removal portfolio. The tech giant has a goal to be carbon-negative by 2030, and the company announced carbon removal deals around the world last year, including in Sweden and Kenya, that will utilize a variety of removal technologies including ocean-based removals and processes that mimic the ocean, a U.S. based afforestation project and soil-based agricultural technology.
“At Microsoft, we believe that high-quality, nature-based solutions are vital to addressing climate change,” Marrs said in Thursday’s release. “The collaboration … helps to ensure that millions more trees are planted, more carbon is removed from the atmosphere, more jobs are created, and more finance flows back to local communities.”
Microsoft’s investment in carbon removal credits in India comes after Google purchased 100,000 tonnes of biochar credits from Gujarat, India-based Varaha in January. This purchase, which Varaha’s CEO said at the time represented Google’s “first large-scale carbon offtake in India,” will deliver carbon credits to the tech giant through 2030.
