Microsoft Signs the World's Biggest Carbon Removal Contract in Louisiana

Microsoft has announced the signing of an agreement for what it describes as the world's largest permanent carbon removal project, as per Reuters. The deal includes the removal of 6.75 million metric tons of carbon dioxide over the course of 15 years using a bioenergy with carbon capture and storage (BECCS) plant developed by AtmosClear, a Fidelis New Energy subsidiary based in Texas.

The project will be located at the Port of Greater Baton Rouge in Louisiana and will employ organic waste such as sugarcane bagasse and forest trimmings to produce bioenergy while capturing and sequestering the resulting carbon emissions underground.

Carbon Goals and Emissions Challenges

The effort is part of Microsoft's commitment to go carbon negative by 2030. In 2023, Microsoft's overall greenhouse gas emissions reached 17.2 million metric tons, an increase of 29.1% compared with 2020, mainly caused by growing power requirements of artificial intelligence technologies.

Federal Tax Credits and Political Uncertainty

The carbon capture part of the deal will take advantage of the 45Q federal tax credit, which provides for $85 per ton of sequestered carbon.However, the future of such climate incentives is uncertain, with the Trump administration proposing rollbacks of key decarbonization policies enacted under President Joe Biden.

Reuters reports that the project will bring over $800 million in investment to the region and create approximately 75 permanent jobs and 600 construction jobs. It could also revitalize local forestry employment affected by recent mill closures, according to Fidelis.

Also read: Terradot Collaborates with Microsoft to Boost Carbon Removal through Enhanced Rock Weathering

Support from State Leaders

Microsoft's Senior Director of Energy and Carbon Brian Marrs pointed to the local agricultural community's impact from the deal and added that it strengthens Louisiana's role as a leader in carbon management technologies.

Meanwhile, Louisiana state officials are actively lobbying federal agencies and lawmakers to preserve support for climate projects, including the proposed Direct Air Capture (DAC) hub in Calcasieu Parish and the continuation of the 45Q tax incentive.

The BECCS plant is to be built starting in 2026 and operational by 2029, a major milestone in the contribution of the tech sector to climate action, subject to the sustainability of supportive federal climate policies.