Microsoft has committed to restoring parts of Brazil’s Amazon and Atlantic forests through a carbon credits deal with Re.green, a Brazilian start-up focused on land restoration. The agreement, spanning 25 years, involves Microsoft purchasing 3.5 million carbon credits, representing one of the largest nature-based carbon removal projects globally.
Re.green acquires degraded farming and cattle lands in Brazil, restoring them by planting native tree species. These projects are financed through carbon credits and timber sales. While neither company disclosed the financial value of the deal, market estimates suggest it could be worth approximately $200 million.
This move reflects a growing trend among tech giants like Microsoft, Google, and Amazon to invest in nature-based solutions as they face increasing greenhouse gas emissions linked to the rapid expansion of data centres. The surge in demand for generative AI has escalated energy usage, complicating tech companies’ efforts to meet their climate pledges.
Despite these challenges, US-based tech companies remain leading buyers of carbon credits tied to nature restoration. Thiago Picolo, CEO of Re.green, highlighted their significant role and said, “US tech firms are at the forefront of buying credits for nature restoration, although they are not the only ones engaging in such efforts.”
In 2023, Microsoft reported a carbon footprint of over 17 million tonnes of CO₂, a 40% increase compared to 2020. The company aims to become carbon negative by 2030 by reducing emissions and investing in carbon removal credits.
Microsoft has been a major supporter of technological carbon storage solutions, signing a deal last year with Occidental Petroleum to purchase 500,000 credits from projects that store CO₂ underground. While these tech-based removals are considered more durable than nature-based solutions, they are costly and have been slow to scale.
Nature-based carbon credits, such as those tied to forest restoration, are generally more affordable than tech-based alternatives. According to Pachama, a climate tech start-up, such credits ranged from $20 to $82 per tonne in 2023, with prices expected to rise. Microsoft has made similar commitments in the past, including purchasing 3 million credits from Re.green in May 2023 and 8 million credits from BTG Pactual Timberland Investment Group last year. Industry sources suggest Microsoft has been paying over $50 per tonne for high-quality nature-based credits, setting a benchmark for other buyers.
