Microsoft Expands Carbon Removal Deal With Stockholm Exergi

Microsoft has expanded its carbon removal agreement with Swedish energy company Stockholm Exergi to over 5 million mt of carbon dioxide over 10 years, solidifying its position as the world’s largest corporate buyer of permanent carbon removals.

The agreement centers on Stockholm Exergi’s bio-energy with carbon capture and storage (BECCS) facility under development at the Värtan bio-cogeneration plant in Stockholm. Once operational in 2028, the plant will be capable of capturing and permanently storing up to 800,000Mt of CO₂ per year. The CO₂ captured from biomass-based energy production will be cooled, compressed, and transported to Norway for permanent storage in sedimentary bedrock beneath the North Sea, through the Northern Lights carbon transport and storage initiative led by Equinor ASA, Shell Plc, and TotalEnergies SE.

Stockholm Exergi described the new agreement with Microsoft, which increases the initial volume from 3.3 million mt to 5.08 million mt, as the largest carbon removal deal globally in terms of annual deliveries. The expanded offtake also makes Stockholm Exergi the largest BECCS supplier to date, according to carbon dioxide removals platform CDR.fyi.

“The extension of our existing agreement with Microsoft is a huge vote of confidence in our BECCS project and Stockholm Exergi’s ability to deliver sustainable permanent removals. It is also a strong validation that climate frontrunners on the voluntary carbon market continue to stay focused on mitigating climate change and contribute to getting the removals industry off the ground,” said Anders Egelrud, CEO, Stockholm Exergi. 

The facility’s estimated investment stands at US$1.4 billion. It will use forest, sawmill, and pulp and paper residues as feedstock, aiming to offset more CO₂ annually than all road traffic emissions in Stockholm.

“Stockholm Exergi is executing against a bold vision to deploy new carbon removal technologies towards climate action. We are pleased to announce this expanded offtake, which in turn reflects our progress to meeting ambitious 2030 Carbon Negative goals,” commented, Brian Marrs, Senior Director of Energy and Carbon Removal, Microsoft. 

With this agreement, Microsoft’s total carbon dioxide removal commitments now exceed 20.5 million mt, significantly ahead of other purchasers. In recent months, Microsoft has signed additional CDR deals with companies including biochar firm Carba, reforestation company Living Carbon, and CO280, which involves a 3.685 million mt contract aimed at the US pulp and paper sector.

The expansion underscores Microsoft’s strategic efforts to scale high-durability carbon removal technologies as part of its broader ambition to become carbon negative by 2030.