Microsoft, C2X Sign Long-Term Carbon Removal Deal

Renewable fuels producer C2X has signed a long-term agreement with Microsoft under which the technology company will purchase 3.6Mt of carbon removal units (CRUs) from a new low-carbon fuel and carbon capture project in Louisiana, reinforcing Microsoft’s strategy to scale durable carbon removals as part of its goal to become carbon negative by 2030.

The agreement centers on a planned bio-methanol and carbon capture facility developed by Beaver Lake Renewable Energy LLC, a C2X subsidiary. The project, located on the site of a former paper mill, is designed to convert locally and sustainably sourced forestry residues into bio-methanol while capturing and permanently storing biogenic CO₂ in secure geologic formations within the state.

Founded in 2022, C2X develops and operates low-carbon molecule production facilities aimed at supplying fuels and feedstocks to the shipping, aviation, chemical and industrial sectors. At full scale, the project is expected to produce more than 500,000t of bio-methanol per year and capture and store approximately 1Mt CO₂ annually through a bio-energy with carbon capture and storage (BECCS) process. 

Under the Microsoft contract, Beaver Lake will deliver CRUs representing CO₂ that has been removed from the atmosphere and permanently stored, with all associated lifecycle emissions, including biomass sourcing, plant operations and downstream transportation, accounted for and deducted to ensure net carbon removal.

The CRUs will be registered and issued on an ICROA-endorsed registry and verified by an independent third party. C2X said the project will follow sustainable biomass sourcing practices, including alignment with the principles outlined in the EU Renewable Energy Directive III.

“The Beaver Lake project combines the benefits of bio-methanol production for customers in hard-to-abate sectors with permanent carbon removals. We appreciate the leadership of Microsoft in the engineered carbon removal market and their collaboration to finalize this agreement. We look forward to working with other companies seeking to access biogenic carbon for sequestration as we deliver this project and scale up our portfolio globally,” said Brian Davis, CEO, C2X. 

Construction of the facility is expected to begin in the second half of 2026, with operations projected to start in 2029. The project represents an estimated US$2.5 billion investment. During construction, it is expected to create up to 1,150 jobs, with more than 600 direct and indirect positions anticipated once the plant is fully operational. The project is also intended to support Louisiana’s forestry sector by creating new demand for forestry residues following recent paper mill closures.

For Microsoft, the deal expands a growing portfolio of large-scale carbon removal purchases focused on engineered solutions with permanent storage. According to data from carbon dioxide removal platform CDR.fyi, Microsoft has committed to 34.5Mt of carbon dioxide removals globally, far exceeding the next-largest buyer group.

“The BLRE project provides a unique opportunity for large-scale carbon removal, while driving broader decarbonization initiatives through green methanol production. We value the technical and commercial expertise of the C2X team, which has demonstrated commitment to sustainable biomass sourcing, rigorous carbon accounting, and thoughtful engagement of the project’s surrounding community,” stated Phillip Goodman, Director of Carbon Removal Portfolio, Microsoft.