Microsoft announced a new carbon removal offtake agreement with energy provider Ørsted for the purchase of one million tonnes of carbon removal over ten years from Ørsted’s new bioenergy carbon capture and storage (BECCS) project in Denmark, Ørsted Kalundborg CO2 Hub.

The agreement adds to a prior commitment from Microsoft announced last year to buy 2.67 million tonnes of carbon removal from the Ørsted project, bringing the total purchase under contract to 3.67 million tonnes of CO2.

The Ørsted Kalundborg Hub project, will establish carbon capture at two of Ørsted’s Danish power stations, including the wood chip-fired Asnæs Power Station in Kalundborg on western Zealand and at the Avedøre Power Station’s straw-fired boiler in the Greater Copenhagen area. The two combined heat and power (CHP) plants are linked to the grid, the district heating system, and have their own harbours, enabling them to act as hubs for the handling and shipping of carbon and green fuels. They will not only serve as hubs for the capture and shipping of its own carbon but they will also for shipping carbon produced by other players. Carbon captured at the plants will be shipped for permanent storage at the Northern Lights storage reservoir in the Norwegian part of the North Sea.

Anticipated to come online by the beginning of 2026, the new project is expected to capture and store approximately 430,000 tonnes of CO2 every year.

Ørsted announced last year that it had been awarded a $1 billion, 20-year contract for the project by the Danish Energy Agency, alongside the initial commitment from Microsoft.

Ole Thomsen, Senior Vice President and Head of Ørsted’s Bioenergy business, said:

“This expanded collaboration with Microsoft is a testament to our shared vision for a sustainable future. By combining Ørsted’s expertise in bioenergy carbon capture and storage with Microsoft’s commitment to reducing its carbon footprint, we’re showcasing how strategic relations can accelerate the transition to a greener economy.”

Under the new agreement, Microsoft will offtake 1 million tonnes of BECCS carbon removal from the Avedøre Power Station, which converts locally sourced straw, an agricultural by-product, into electricity and district heating. According to Ørsted, by capturing biogenic carbon from biomass, which would have otherwise been emitted through the natural carbon cycle, the project creates negative emissions.

The announcement marks the latest in a series of large-scale carbon removal purchase deals for Microsoft, forming part of the company’s goal to become carbon negative by 2030, including agreements this month totaling more than 6 million tonnes for reforestation-focused carbon removal with re.green for BECCS-based carbon removal with Swedish energy company Stockholm Exergi.

Brian Marrs, Senior Director of Energy & Carbon Removals at Microsoft, said:

“We’re proud once again to announce a landmark offtake agreement with Ørsted, which is pioneering responsible carbon removal development in Denmark while also meeting the needs of a decarbonised energy system. The urgency around climate goals means translating great planning into rapid action – and Ørsted remains a valuable collaborator in bringing big ideas to life.”