Microsoft to Acquire 10,000 Credits From Biochar Startup Bio-Logical — OPIS

Microsoft has inked a deal to acquire 10,000 carbon removal credits from Bio-Logical Carbon, a Kenya-headquartered biochar project developer, the latter company announced Tuesday.

The credits, each of which represents one metric ton of carbon dioxide removed from the atmosphere, will be delivered through 2025, Bio-Logical said.

"We are extremely happy to announce the first biochar carbon removal deal Microsoft has made in Africa. This deal will act as a catalyst, scaling our environmental and social impact in the region," said Bio-Logical Co-Founder Phil Hunter in a statement.

Biochar is produced by combusting organic material in a low-oxygen environment. The resulting material stores carbon that would otherwise be released back into the atmosphere as the material decomposes.

Bio-Logical said it generates a circular economy by collecting agricultural waste, generating biochar, mixing it with fertilizer and distributing it back to local farmers. Their carbon-rich fertilizer can help regenerate degraded soil.

The company said it plans to scale its facility to process over 30,000 mt of agricultural waste per year. It aims to remove and store 1 million mt of CO2 per year by 2030.

The credits will be issued to Microsoft via puro.earth, Bio-Logical said. While the company has not registered on puro.earth's Accelerate platform, other biochar developers list their credits in a range of €90.00/mt ($97.61/mt) to €500/mt ($542.27/mt). The removal credit platform assessed its Carbon Dioxide Removal Credit Biochar Price Index at $149.46/mt in January.

"Biochar is a durable carbon removal solution that can be widely deployed across mature and emerging markets--a win for climate, agriculture, and rural livelihoods. We are pleased to collaborate with Bio-Logical as they scale this impactful solution in Africa," said Microsoft Senior Director of Energy and Carbon Removal Brian Marrs in a statement.

Biochar credits are valued significantly higher than other nature-based carbon removal credits. OPIS calculated the average Afforestation, Reforestation and Revegetation V24 price assessment at $18.768/mt on Monday. The average Blue Carbon V24 price assessment was calculated at $33.51/mt.

Microsoft has pledged to become carbon negative by 2030. In a whitepaper published last June, it said it plans to develop a carbon removal portfolio encompassing 5 million mt per year by its target date.

Besides the deal with Bio-Logical, Microsoft has signed offtake agreements this year with soil carbon developer Grassroots Carbon, agroforestry developer Catona and carbon capture developer Neustark.

In its Fiscal Year 2022 carbon removal portfolio, which is the latest data available, Microsoft purchased 1.5 million credits. Of this total, 1.3 million were derived from forestry projects, while 200,000 came from sustainable agriculture initiatives. The remainder was made up of biochar, blue carbon, bio-oil and CO2 utilization credits, according to the portfolio document.

Microsoft publishes its removal credit procurement strategy on its website and invites developers to submit proposals.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Henry Kronk, hkronk@opisnt.com; Editing by Jeremy Rakes, jrakes@opisnet.com and Michael Kelly, mkelly@opisnet.com

(END) Dow Jones Newswires

February 27, 2024 16:03 ET (21:03 GMT)

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