July 15, 2022
Global tech giant Microsoft has announced it has signed a 10-year carbon removal offtake agreement with Swiss direct air capture firm Climeworks that will see it fund the removal of 10,000 tonnes of CO2 emissions from the atmosphere. The new long term agreement, announced yesterday, will see Climeworks become Microsoft's first long-term carbon removal supplier, and a key enabler of the tech company's mission to reach 'negative' emissions by 2030 and compensate for all the company's historical operational emissions by mid-century by 2050. Climeworks, which operates a small-scale DAC system in Iceland, said the deal with Microsoft is one of the largest DAC agreements signed to date, noting that long-term agreements would be critical to providing it with the capital to accelerate the deployment of carbon removal plants. The firm's pioneering Orca plant removes CO2 from the air and then stores under the Icelandic bedrock, by reacting the captured gas with rock to enable permanent sequestration. The company recently announced it had broken ground on its second plant - dubbed Mammoth - as it works to deliver "multi-megaton capacity by 2030". "Long-term commitments like this multi-year agreement are crucial for scaling the DAC industry because the guaranteed demand catalyses financing of our infrastructure and consequently accelerates the development of the required ecosystem for scaling DAC," said Christoph Gebald, chief executive and co-founder of Climeworks. The deal is the second carbon removal contract inked between the two companies, coming nearly a year after Microsoft included Climeworks in its ever first carbon renewal portfolio. Lucas Joppa, Microsoft's chief environmental officer, said the multi-year offtake agreement marked an "important step in [Microsoft's] journey towards realising the 'net' in net zero". "Our experience in purchasing renewable energy shows that long-term agreements can provide an essential foundation for society's race to scale new decarbonisation technologies," Joppa added. "Paired with Microsoft's Climate Innovation Fund investment in Climeworks' direct air capture plant, this agreement with Climeworks can help kickstart the commercial and technical progress in a nascent but crucial industry to achieve IPCC targets." Microsoft is the latest in a string of global companies to have signed offset agreements with Climeworks. Its other clients include global jewellery house Swarovski, which previously agreed a five-year CO2 removal deal with Climeworks, insurer Swiss Re, financial services company Square Inc, and online grocer Ocado. The Intergovernmental Panel on Climate Change (IPCC) has calculated that three to 12 billion tonnes of CO2 needs to be removed from the air annually every year by 2050 in order to limit global warming to 1.5C. Direct air capture and storage is expected to contribute a significant part of this emissions elimination drive, with a potential of removing up to 310 billion tons of CO2 by 2100, according to the IPCC.