Microsoft Expands Carbon Removal Deal With Stockholm Exergi

In one of its strongest moves yet demonstrating its leadership for the climate, Microsoft has significantly doubled its carbon removal contract with Swedish energy utility Stockholm Exergi. The deal doubles up the overall volume of carbon dioxide (CO₂) to be captured and locked away permanently at 5.08 million tons over a period of ten years—up from the initial 3.3 million tons. This agreement is being touted as the world’s largest in terms of annual carbon dioxide removal (CDR) deliveries and marks a significant step in Microsoft’s strategy to become carbon negative by 2030.

The core of the agreement revolves around Stockholm Exergi’s cutting-edge Bioenergy with Carbon Capture and Storage (BECCS) facility, which is currently under construction near Värtaverket in central Stockholm. The $1.3 billion facility will come online by 2028 and is expected to capture as much as 800,000 tons of biogenic CO₂ each year. For context, this amount surpasses all emissions from road transport in Stockholm for the same period, emphasizing the facility's possible climate contribution.

Biogenic CO₂, as opposed to fossil-derived emissions, is produced from natural, renewable sources such as biomass. After being captured, this CO₂ will be temporarily stored first before being piped to storage under the North Sea. The project is enabled by the Northern Lights project—a joint carbon transport and storage undertaking by energy titans Equinor ASA, Shell Plc, and TotalEnergies SE. The project offers an essential cross-border infrastructure that makes it possible to transport CO₂ captured in Sweden and store it safely offshore in Norway.

Stockholm Exergi welcomed the expanded deal as a record in the voluntary carbon market. "The agreement is the world's largest, measured in terms of annual deliveries," the company said. CEO Anders Egelrud added, "Microsoft's decision to extend its contract with us is a testament to strong confidence in our bio-CCS project and our capability to deliver permanent, sustainable negative emissions.". It is also an unequivocal indication that corporations with ambitious climate goals in the voluntary market are still concentrating on addressing climate change and on developing the industry for negative emissions.

For Microsoft, the move is one of a larger set of investments in carbon dioxide removal technologies and climate-friendly solutions. In the last month alone, the technology giant has inked a number of significant deals with CDR industry companies, including Carba (biochar), Living Carbon (reforestation), AtmosClear, Fidelis, and CO280. The latter, a significant 3.685 million-ton deal, targets decarbonizing the U.S. pulp and paper industry using advanced carbon removal methods.

All these initiatives are part of Microsoft's broader environmental plan, which not only sets a goal of net-zero emissions but aims to actually take more carbon out of the atmosphere than Microsoft puts into it. This goal, first revealed in 2020, puts Microsoft at the vanguard of corporate climate leadership and reinforces its status as a leader in pioneering high-durability carbon removal markets.

Carbon removal durability is the timeframe over which CO₂ is maintained out of the atmosphere. The BECCS method by Stockholm Exergi is rated highly durable because CO₂ is stored permanently in geology and therefore will remain stored safely for hundreds, potentially even thousands, of years. That is as opposed to certain nature-based solutions like planting trees that can be reversed through wildfire, insects, or land-use activities.

Additionally, the Stockholm plant is anticipated to bring benefits above carbon removal. By coupling BECCS with a pre-existing district heating power plant utilizing biomass, the project not only eliminates emissions but also delivers clean, renewable heat to a thousand homes in Stockholm. This co-benefit demonstrates the viability of integrating climate solutions into urban systems, serving as a model for other cities and energy companies globally.

As the world struggles with warming temperatures and spiking emissions, demands for scalable, long-term carbon removal solutions are rising increasingly. With this expanded agreement, Microsoft is indicating that it's committed to spurring that shift—both through investment in next-generation technologies and through assistance in building the infrastructure and market standards that will support long-term climate resilience.

In doing this, the company is not just investing in its own future sustainability but is also driving innovation and capacity building throughout the entire carbon removal industry. As Stockholm Exergi gets ready to open its BECCS facility, everyone's eyes will be on how projects of this magnitude in CDR can make tangible climate action a reality and serve as a template for future joint ventures between green technology developers and private companies.