Microsoft Secures 3M Forest Carbon Credits With EFM

Microsoft last week signed a historic deal with forest investment and management company EFM to purchase up to 3 million nature-based carbon removal credits. The deal is part of Microsoft's larger effort to be carbon negative by 2030. The multi-part agreement consists of a long-term offtake for up to 700,000 credits through 2035 from a 68,000-acre site located on Washington State's Olympic Peninsula. Traditionally utilized for industrial logging, the property will shift to climate-resilient forest management strategies under EFM's FSC-certified approach.

Besides the purchase of the carbon credits, Microsoft's Climate Innovation Fund (CIF) has made its first US forestry investment by investing in EFM Fund IV, which seeks to raise $300 million for forest management projects in the country. The investment gives Microsoft access to another 2.3 million high-quality carbon credits in the future, continuing to further its climate objectives.

Bettina von Hagen, EFM CEO, underlined the importance of Microsoft's support, which she described as a milestone move in speeding up high-quality improved forest management initiatives. She underscored that the transaction is an excellent precedent for the carbon market and highlights natural forests as an expandable solution to climate change in the United States.

Brian Marrs, Microsoft's Senior Director of Energy & Carbon Removal, also shared similar sentiments, observing that the firm appreciates the crucial role played by nature-based solutions, like climate-smart forest management, in helping the firm meet its carbon-negative goal. He further said he is proud to work on such a meaningful project for Washington State, which is close to Microsoft headquarters.

EFM Fund IV's approach extends beyond conventional timber returns, incorporating carbon credits, conservation easements, and sustainable wood products. The fund focuses largely on Western U.S. forest properties, planning national expansion where climate-resilient practices can provide competitive returns for investors and positive community benefits.

The collaboration is also a significant leap forward for the growth and scalability of Improved Forest Management (IFM) initiatives, which have picked up popularity as a carbon capture route. IFM methods, which involve lengthened tree rotation, selective logging, and reduced-impact logging, aim to maximize carbon storage while at the same time increasing biodiversity, enhancing water quality, and increasing economic resilience in the local area.

The partnership of Microsoft and EFM brings to the forest carbon solutions a novel method by employing dynamic baselines and conservative harvesting modeling. The steps guarantee that the credits accumulated from these initiatives have high integrity and reflect with precision the forest management practices' carbon benefits.

By backing quality forest management practices, Microsoft and EFM are assisting in establishing a new benchmark for scalable, impactful forest carbon solutions in the United States. The agreement is an important milestone in the expanding carbon credit market, with the potential to spur the large-scale adoption of sustainable forest management practices that make a significant contribution toward global climate objectives.

Microsoft's involvement also underscores the growing role of companies in solving climate change with nature-based solutions. By entering into an agreement with EFM, a forestry management leader, Microsoft is guaranteeing that its purchases of carbon credits are attached to effective projects with the ability to scale at a national level. The agreement also sets a model for other companies that seek to invest in carbon removal efforts that provide environmental and economic benefits.

With the world still struggling with the impacts of climate change, collaborations such as Microsoft and EFM show what can be achieved by collaborations between the private sector and environmental groups. Such collaborations not only aid in the battle against climate change but also assist in building a more sustainable and resilient world for the people of the U.S. The success of this collaboration has the potential to open the door to future such initiatives, promoting increased investment in forest-based carbon removal and speeding up the global fight against climate change.

Overall, the transaction is an important milestone toward large-scale nature-based carbon removal solutions in the U.S. and represents a new standard for corporate engagement with climate-smart forestland management. Through investment in projects aimed at carbon sequestration, biodiversity, and local economic resilience, Microsoft and EFM are facilitating a more sustainable economy and environment.