Microsoft Carbon Removal Deal: Paper Mill Partnership

Microsoft's Significant Carbon Removal Credit Purchase

On Friday, Microsoft revealed its acquisition of 3.7 million metric tons of carbon removal credits from CO280, a developer specializing in projects centered around pulp and paper mills.

This substantial purchase is designed to offset emissions spanning 12 years from CO280’s initial carbon capture installation, located at a facility on the Gulf Coast.

Project Timeline and Microsoft’s Carbon Negative Goal

CO280 anticipates the commencement of CO₂ capture operations at the facility in 2028.

Microsoft’s investment is a key component in its strategy to achieve carbon negativity by 2030 – a commitment to remove more carbon from the environment than its operations generate.

However, realizing this ambition presents a considerable challenge, given the company’s 17.1 million metric tons of greenhouse gas emissions recorded in 2023.

Strategies for Emission Reduction

To reduce its carbon footprint, Microsoft is actively procuring substantial volumes of renewable energy.

Furthermore, the company is establishing agreements focused on removing carbon dioxide directly from the atmosphere, effectively offsetting emissions that cannot be eliminated through renewable sources.

CO280’s Expansion and Industry Insight

The Microsoft project represents the inaugural undertaking of a dozen currently in development by CO280, as exclusively disclosed to TechCrunch by co-founder and CEO Jonathan Rhone.

Rhone, leveraging his prior experience in power plant sales to the pulp and paper sector, identified carbon capture as a logical extension for the industry.

He noted that the integration of carbon capture technology appeared to be an overlooked opportunity.

The pulp and paper industry is responsible for releasing approximately 100 million metric tons of biogenic carbon dioxide annually.

Technology and Process Details

CO280 is collaborating with SLB Capturi, a joint venture between SLB (formerly Schlumberger) and Aker Carbon Capture, to construct the carbon capture facility.

The technology employed is based on the well-established amine process and will be integrated with a large paper mill’s recovery boiler.

This boiler plays a crucial role in recycling chemicals for reuse, while also releasing carbon previously stored within the wood.

Carbon Removal Through Photosynthesis

Typically, this wood-derived carbon would be released into the atmosphere.

However, by capturing CO₂ at this stage, the paper mill will effectively contribute to carbon removal through the natural process of photosynthesis.

As Rhone explained, “The trees do all the heavy lifting by capturing CO₂ from the atmosphere.”

CO₂ Storage and Project Phases

The captured carbon dioxide will be transported via a 40-mile pipeline to a saline aquifer designated for CO₂ storage.

The initial phase of the project is projected to capture around 40% of the biogenic carbon dioxide emitted by the mill and 30% of the total CO₂, including that from fossil fuels used in operations.

CO280 is planning a second phase intended to double these capture rates.

Financial Model and Benefits for Paper Mills

Rhone stated that the carbon capture units will be developed as joint ventures with the paper mills.

In exchange, the mills will receive a share of the revenue generated from the sale of carbon credits, enhancing their profitability.

CO280 currently sells its credits at approximately $200 per metric ton, with potential buyers also eligible for tax credits under the Inflation Reduction Act, further reducing the overall cost.

Previous Carbon Credit Sales

CO280 has previously supplied carbon removal credits to Frontier, an advanced market commitment established by Stripe, Google, Shopify, Meta, and other organizations.