Microsoft in record deal for soil carbon credits as data centres surge

Microsoft has agreed with Indigo Carbon to buy a record 2.85 million soil carbon credits linked to regenerative agriculture in the United States, as the tech giant aims to become "carbon negative" by 2030 despite surging emissions linked to AI, Report informs via Reuters.

While Microsoft - the world's biggest buyer of carbon removal credits - did not disclose the cost of the 12-year tie-up, a person with knowledge of the deal said it falls within the historic range of $60 to $80 a ton for Indigo Carbon's credits, which would value the deal at between $171 million and $228 million.

Regenerative farming covers a range of actions such as reducing tilling, using cover crops and letting livestock graze to improve the ability of the soil to capture climate-damaging carbon emissions and retain water.

Market data firm Sylvera said it had seen an increase in demand for such credits last year, including a deal by Microsoft for 2.6 million credits from Agoro Carbon, which previously held the record for the biggest deal.

"It's bringing the importance of soil carbon removal into corporate climate action, and really for Indigo, solidifying our reputation and leadership on high-integrity carbon credits," Meredith Reisfield, Indigo's senior director for policy, partnerships and impact told Reuters in an interview.

Farmers also benefit financially, receiving 75% of the average weighted cost of a credit from any given issuance or crop year, she added.

"Microsoft is excited by Indigo"s approach to regenerative agriculture that delivers measurable results through verified credits and payments to growers," Phillip Goodman, Director of Carbon Removal at Microsoft, said in a press release.