Chestnut Carbon has inked a 15-year offtake agreement to provide Microsoft with nature-based carbon removal credits generated from an afforestation project in the U.S., the CO2 removals specialist announced last week.
The company, which specializes in generating carbon removals credits from trees planted on land previously farmed or under other usage, said the deal with Microsoft would see it remove 362,000 metric tons of CO2 from the atmosphere via the first phase of its Mississippi Alluvial Valley forest restoration project; it will remove up to 2.7 million tonnes across the 15-year lifetime of the contract.
Chestnut Carbon claims the afforestation project is the largest to date to secure certification from independent carbon credit verification firm Gold Standard, while the firm is also exploring the potential to increase its capacity to 500,000 acres capable of removing a total of 100 millions metric tons of carbon dioxide from the atmosphere.
Founded last year by private investment firm Kimmeridge Energy Management Company, Chestnut Carbon said the agreement confirmed Microsoft as its first client.
Ben Dell, CEO of Chestnut and managing partner of Kimmeridge, said the firm was actively building out its platform to meet growing demand, and signalled he expected further carbon removal offtake clients to be announced in the near future.
“We’re pleased to be working with Microsoft on its commendable journey to offset emissions through high-quality nature-based solutions,” he said. “When launching Chestnut in 2022, we were guided by a strong belief that these solutions are the most attractive, scalable and cost-effective means for sustainability-minded organizations.”
The deal is expected to see Microsoft start to receive verified carbon credits from the restoration project within three years, support the U.S. tech giant’s stretching climate ambitions to become a carbon negative business by 2030, before by 2050 removing the equivalent of all the CO2 the company has emitted since it was founded in 1975.
It is just the latest carbon removals deal inked by Microsoft over the past year. The company also acquired 2.76 million carbon removals credits from Danish energy giant Ørsted in May, in addition to inking a deal to purchase about 5,000 metric tons of CO2 removals credits from U.K.-based enhanced rock weathering specialist UNDO a month prior. The tech giant is also thought to have struck carbon removals deals comprising more than 1.4 million metric tons of CO2 in 2022.
“Microsoft’s 15-year purchase agreement with Chestnut Carbon for afforestation-based carbon removal credits is a positive step towards Microsoft’s carbon negative goals,” said Brian Marrs, senior director of energy and carbon removal at Microsoft. “We are excited to collaborate with Chestnut and its Sustainable Restoration Project for high-quality, nature-based solutions located in the United States.”
The announcement comes amid rapidly growing interest in the emerging carbon removals market, with direct air capture technology developer Climeworks just last week striking a 15-year deal with Boston Consulting Group hailed as the largest of its kind. As well as confirming the purchase of 80,000 metric tons of carbon dioxide removal credits, the agreement will see BCG provide consulting services to Climeworks.
