Tech giant Microsoft has signed a carbon removal contract with Stockholm Exergi to deliver permanent carbon removals from bio-energy with carbon capture and storage.
Referred to as the “world’s largest permanent removal deal” to date, the agreement aims to deliver 3.33 million tonnes of permanent carbon removals for the computing giant by installing a carbon capture unit on the Swedish energy firm’s existing biomass plants.
In theory, biomass power plants burning wood pellets and forestry scraps (forest biomass) create a closed carbon loop. Replanted trees absorb the carbon dioxide released when the wood is burned, offsetting emissions.
Stockholm Exergi’s partnership with Microsoft aims to push this concept further. By installing new technology at the plant, they hope to capture most of the carbon emissions before they enter the atmosphere.
Construction of the carbon capture unit is expected to begin in 2025. Once complete, the plant is projected to capture up to 800,000 tonnes of CO₂ annually – equivalent to the yearly emissions of roughly 130,000 UK homes.
Deliveries of carbon removal certificates to Microsoft are anticipated to start in 2028 and last for ten years. But whilst the recent agreement with Microsoft represents a significant step forward, final approval for the project hinges on securing additional funding.
“The agreement with Microsoft is a huge step forward for our BECCS project, Stockholm Exergi as a company, and the climate,” said Anders Egelrud, CEO of Stockholm Exergi. “It is the strongest possible recognition of the significance, quality, and sustainability of our project and takes us an important step closer to a final investment decision in Q4 2024.”
The energy provider intends to explore additional sources of funding, such as seeking further state aid and exploring additional private carbon removal agreements.
Anticipating concerns, Stockholm Exergi says the biomass feedstock for the project will “continue to be safeguarded” to ensure sustainable management of forests, protection of sensitive areas, stable carbon stocks, and to ensure that feedstock is not sourced from wood that would otherwise be used for long-lived wood products.
The partnership marks another milestone for Microsoft in meeting its goal of capturing more planet-heating carbon dioxide than it produces as a company by 2030 and then removing as much CO2 from the atmosphere as it has ever emitted since its founding by 2050.
In January 2024, Microsoft and Qcells, a solar energy company, entered into an eight-year agreement. This partnership involves Qcells supplying 12 gigawatts (GW) of solar panels and related services, including engineering, procurement, and construction (EPC).
Additionally, Microsoft recently launched a new data and AI solution at their AI for Sustainability event. The offering is designed to assist organisations in translating their goals into concrete actions and forms part of Microsoft’s broader Cloud for Sustainability platform.
