Microsoft and B.C. startup ink massive carbon removal deal targeting pulp and paper mills

Microsoft and CO280, a Vancouver, B.C.-based startup, today announced a 12-year deal to capture and store the carbon that’s emitted from a U.S. pulp and paper mill. The tech company will pay for the removal of 3.685 million metric tons of carbon, marking one of the largest deals of its kind.

Microsoft set a goal of becoming carbon negative by 2030, but its emissions keep rising, driven by the growing use of artificial intelligence and tools such as ChatGPT. AI requires energy-intensive computing and the construction of data centers, increasing the Redmond, Wash.-based company’s carbon impacts.

“The CO280 strategy of adding carbon removal to existing paper mills is an efficient way to quickly scale carbon removal and bolster investment and jobs into timberland communities across the United States,” said Brian Marrs, Microsoft’s senior director of energy and carbon removal, in a statement.

SLB Capturi will provide the technology for retrofitting an existing pulp and paper mill to catch the carbon dioxide that is released from a boiler stack. The captured carbon will be disposed of in a permanent geological storage.

The companies did not disclose how much Microsoft will pay for the carbon removal, or the location of the mill.

CO280, which develops large-scale carbon removal deals, has more than 10 projects in the works and expects to complete half of those by 2030.

“The agreement with Microsoft is a significant milestone for CO280 and the [carbon dioxide removal] market,” said Jonathan Rhone, co-founder and CEO of CO280, in a statement.

Microsoft is a leader in carbon removal, both in purchasing removal credits and in establishing marketplaces and removal standards.

Last year, the company was responsible for purchasing 80% of high-durability carbon dioxide removal credits worldwide, totaling 5 million metric tons, according to a report by Seattle-based Carbon Direct.

Those carbon offtake deals include U.S. agreements with Ebb Carbon to remove up to 350,000 metric tons of carbon from seawater off of Washington’s Olympic Peninsula, and a deal with a subsidiary of Occidental Petroleum to dispose of 500,000 metric tons of carbon dioxide at a site in Texas.

Internationally, Microsoft signed agreements in 2024 with companies in Norway and Denmark to removal a total of 4.3 million metric tons of carbon.

Microsoft teamed up with Carbon Direct last week to announce new science-based criteria for verifying impactful marine carbon dioxide removal.