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Microsoft Kicks Off 2026 With Flurry of Large-Scale Carbon Removal Purchase Deals – ESG Today
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Microsoft Kicks Off 2026 With Flurry of Large-Scale Carbon Removal Purchase Deals
Mark Segal
January 15, 2026
Microsoft announced 2 new multi-year carbon credit purchase deals, representing nearly 3 million tonnes of carbon removal, with the new agreements expanding the tech giant’s already substantial lead as the largest corporate purchaser of carbon removal.
The new agreements follow another deal announced on Wednesday by Microsoft to purchase 2 million tonnes of Afforestation, Reforestation, and Revegetation (ARR) carbon removal credits through a framework agreement with Rubicon Carbon, bringing the company’s purchases to 5 million tonnes in just the first weeks of 2026.
Under one of the new deals, Microsoft has agreed to purchase 2.85 million soil carbon removal credits from sustainable agriculture and biological solutions provider Indigo Ag ove12 years, generated through the promotion of regenerative agriculture practices by U.S. farmers.
Founded in 2013, Indigo Ag provides nature-based and digital technologies aimed at helping farmers improve profitability and environmental sustainability. The company launched its carbon program in 2019, helping farmers adopt regenerative agriculture practices including cover crops, diversified crop rotation, reduced tillage and improved nitrogen timing, that enrich soil while sequestering carbon dioxide. Under the program, farmers add the new practices with agronomic support from Indigo, while the company also calculates the carbon credits through the use of soil samples and on-farm data, validates the findings with a verifier, with results submitted to a carbon registry, for issuance of the credits, which can be sold to corporate buyers.
Meredith Reisfield, Senior Director of Policy, Partnerships and Impact at Indigo, said:
“Microsoft’s purchase highlights the transformative power of regenerative agriculture to support watersheds, support farming communities, and advance global net-zero goals. Indigo is a proud catalyst of today’s soil carbon market, with our long-standing history of farmer collaboration and proven impact, already saving 64 billion gallons of water and issuing nearly one million tonnes of CO2e carbon removal credits since 2018.”
The deal marks Microsoft’s third transaction with Indigo Ag, scaling up significantly from the prior 40,000 tonne and 60,000 tonne agreements over the past two years.
Phillip Goodman, Director of Carbon Removal at Microsoft, said:
“Microsoft is pleased by Indigo’s approach to regenerative agriculture that delivers measurable results through verified credits and payments to growers, while advancing soil carbon science with advanced modeling and academic partnerships. Indigo is strengthening the carbon market through their commitment to enhancing project quality, championing the improvement of third-party standards, and producing high-integrity carbon removal credits.”
Microsoft also announced a new agreement for more than 100,000 tonnes of carbon removal generated from a biochar project in India by carbon project developer Varaha.
Founded in 2022, carbon project developer Varaha specializes in nature-based solutions, with a focus on working with smallholder farmers to help remove carbon from the atmosphere at a planetary scale, with a mission to sequester 1 billion tonnes of CO2e on smallholder lands. The company currently operates 20 carbon projects across South Asia, focused on approaches including regenerative agriculture, agroforestry, biochar, and enhanced rock weathering.
Varaha’s project sources cotton stalks from smallholder farms in Maharashtra, India for use as the feedstock for biochar production through Varaha’s biomass gasification facilities. The project provides an alternative for the cotton stalks, which are normally treated as waste biomass and often disposed through open-field burning. Varaha is planning to develop 18 industrial gasification reactors that will operate for 15 years, with a total projected removal volume exceeding 2 million tonnes of CO2.
In addition to sequestering carbon, Varaha noted other key benefits from the project, including mitigating the widespread burning of cotton crop residue and avoiding the emission of pollutants that contribute to poor air quality, helping farmers participating in the program to adopt regenerative practices like crop residue mulching and biochar application to soils, improving soil health, water retention, and long-term agricultural productivity, and direct enhancements to the livelihoods of thousands of smallholder farmers through payments for contributing agricultural biomass and for implementing crop residue incorporation practices.
Varaha CEO Madhur Jain said:
“This agreement demonstrates that high-integrity carbon removal can drive transformative co-benefits for communities and ecosystems. We’re not just removing carbon—we’re creating economic incentives for farmers to mitigate open burning of crop residues.”
Microsoft’s Goodman added:
“This offtake agreement broadens the diversity of Microsoft’s carbon removal portfolio with Varaha’s biochar project design that is both scalable and durable. It represents a step forward in scaling biochar CDR growth in Asia and advancing co-benefits for farmers—improved soils, cleaner air, and shared economic opportunity.”
According to carbon dioxide removals (CDRs) platform CDR.fyi, Microsoft has purchased more than 34.6 million tonnes of carbon removal to date, , placing the company well ahead of the Frontier buyers group in second place for CDR purchases at 1.9 million tons.
Mark founded ESG Today following a 20 year career in investment management and research. Prior to founding ESG Today, Mark worked at Delaney Capital Management (DCM) in Toronto, Canada, most recently as the firm’s head of U.S. equities. While at DCM, Mark was part of the firm’s ESG team, responsible for evaluating and tracking the sustainability factors impacting portfolio companies, and assessing the suitability of companies for portfolio inclusion. Mark also spent several years in the sell-side research industry, covering the technology and services sectors. Mark holds an MBA from Columbia University in New York, a BBA from the Schulich School of Business at York University in Toronto, and is a CFA charterholder.
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