Microsoft Secures 1.5M Tonnes of Carbon Credits in India

Microsoft has made a major move in its climate plan by acquiring 1.5 million tonnes of verified carbon removal credits from the Panna afforestation project in India. The project, the company's largest carbon removal commitment in the Asia-Pacific (APAC) region, demonstrates increasing corporate investment in high-quality nature-based carbon removals.

Spanning 20,000 hectares in Madhya Pradesh, the Panna afforestation project is designed to remove a total of three million tonnes of CO₂ over 30 years. Beyond its carbon sequestration benefits, the project is set to provide extensive economic and environmental advantages to local communities. The deal is a result of collaboration between Climate Impact Partners, Terra Natural Capital, and Microsoft. Whereas Terra Natural Capital provides long-term capital, Climate Impact Partners leads project development and enforces strict global carbon standards.

One of the main features of the Panna afforestation project is its massive tree-planting program. The project will plant as many as 11.6 million indigenous trees on community and farmer-owned land, with more than 1.2 million trees already planted in 100 communities. These activities extend beyond the removal of carbon through the encouragement of sustainable farming, biodiversity, and water preservation. Local farmers will benefit from the sharing of revenue from carbon credits as well as income derived from fruit and medicinal crops. Climate-smart agricultural training is part of the initiative, which supports farmers in enhancing crop resistance and long-term productivity. Furthermore, investment in water conservation structures, including ponds, borewells, and drip irrigation systems, will provide sustainable development of planted trees.

The project also focuses on the restoration of biodiversity within the area. Through the introduction of indigenous tree species, it will promote a healthier environment, inviting butterflies and birdlife onto once-degraded lands. Sheri Hickok, CEO at Climate Impact Partners, highlighted the role of the project in pushing corporate climate action. She emphasized Microsoft's climate leadership and complimented the company's backing of high-quality, large-scale carbon removal projects. In her view, Panna is an example of how businesses can fund large-scale carbon removal while also serving local communities and the ecosystem.

Microsoft has been consistently growing its investment in nature-based solutions to drive its path toward carbon negativity. Brian Marrs, Microsoft's Senior Director of Energy Markets, confirmed Microsoft's ongoing focus on quality carbon removal programs by saying the Panna project was an important addition to Microsoft's overall sustainability portfolio. He made it clear that the partnership with Climate Impact Partners would secure successful planting of millions of trees, carbon removal from the atmosphere, creation of employment, and monetary benefits to surrounding communities.

One of the largest hurdles of scaling carbon removal projects is arranging long-term capital. The Panna project benefits from Terra Natural Capital, the investment of which is bridging this essential shortfall. Erica Vertefeuille, Managing Director at Terra Natural Capital, stressed the significance of financial innovation for unlocking large-scale climate action. She emphasized ensuring stable project funding to scale up the carbon removal market and enable corporations to realize their climate ambition.

Verifying the integrity of carbon removal projects is another priority area. The Panna afforestation project is audited under Verra's Afforestation, Reforestation, and Revegetation Methodology (VM0047) and adheres to the Core Carbon Principles of the Integrity Council for the Voluntary Carbon Market (ICVCM). It has an A rating from BeZero and is also anticipated to get verified under the Climate, Community, and Biodiversity Standard, further verifying its environmental and social impacts.

Microsoft's pledge to buying 1.5 million tonnes of Panna carbon credits signals corporate faith in mega-sized nature-based carbon removals. This action paves the way for future forest investment in afforestation efforts, showing private capital, corporate climate ambition, and new financing structures can spur long-term carbon sequestration, resilience in the environment, and sustainable community growth.