Microsoft and climate solutions provider The Next 150 announced that they have signed a 6-year offtake agreement, with Microsoft purchasing 95,000 tons of carbon removal credits generated by a new biochar production facility in Mexico.

Biochar, or biological charcoal, is produced by heating biomass, such as forest residue, wood or crop waste, in the absence of oxygen, creating a stable form of carbon, which when buried in soil enables centuries-long carbon sequestration, in addition to leading to improved soil fertility.

Founded in 2022, Switzerland-based The Next 150 is a carbon removal venture developer and operator, aimed at investing and scaling climate solutions projects in emerging markets that generate positive environmental and financial outcomes.

The credits supplied to Microsoft under the new agreement will be produced by The Next 150’s General Biochar Systems (GBS) business unit’s first biochar plant in Guanajuato, Mexico. Inaugurated in May 2023, the project is designed to refine AgriWaste streams from crops like corn, wheat, and sorghum, and aims to supply up to 23,000 local farmers with biochar as a sustainable and regenerative soil amendment, providing benefits including improved crop yields, reduced reliance on chemical fertilizers, and decreased plant stress during prolonged drought. The Next 150 aims t have two more plants operational in Latin America by 2025.

Patrick Atanasije Pineda, Managing Partner at The Next 150, said:

“Securing multi-year commitments like the one with Microsoft allows The Next 150 to mobilize large-scale biochar projects across Latin America, by attracting institutional finance for project-level lending, backed by creditworthy offtakes.”

The agreement marks the latest in a series of carbon removal announcements by Microsoft, forming part of the company’s initiative to become carbon negative by 2030, and to remove all of its historical emissions by 2050, including another recent Latin America-based biochar deal with the Bolivia-based Exomad Green Concepción project. Microsoft’s growing portfolio of carbon removal agreements spans a range of technologies and solutions including nature-based reforestation and agroforestry projects, direct air capture (DAC) solutions, and ocean-based carbon removal.

Brian Marrs, Senior Director for Energy and Carbon Removal at Microsoft, said:

“Our 6-year purchase agreement and ongoing collaboration with The Next 150 is a step forward towards our ambition to realize our carbon negative by 2030 goal via a diversified portfolio of carbon removal.”