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Microsoft pays to revive parts of Brazil's Amazon and Atlantic forests in exchange for carbon credits price tons of of hundreds of thousands of dollars, making it the most recent Big Tech player to bet on nature-based solutions to counter artificial intelligence-driven increases in greenhouse gases can offset emissions.
The $3.2 trillion US company told the Financial Times it had signed a deal to purchase 3.5 million loans over 25 years from Re.green, a Brazilian start-up that Buys up agricultural and livestock land. It restores the land by planting native tree species in projects funded by carbon credits and timber sales.
Neither company disclosed the worth of the deal, but recent market evaluation suggests it could possibly be price around $200 million. Microsoft's latest deal has made the corporate one among the world's largest buyers of nature-based carbon removal.
The deal comes as corporations similar to Microsoft, Google and Amazon are investing heavily in data centers to fulfill the massive demand stemming from the expansion of generative AI. But the expansion is resulting in a rise of their energy consumption and complicating their commitments to investors to curb emissions.
President Donald Trump's recent administration has downgraded mitigating climate change as a priority and as an alternative declared an “energy emergency” to spice up U.S. fossil fuel production, citing the challenges data centers face in meeting energy demands.
But U.S.-based tech corporations are still currently “the most important buyers” of carbon credits tied to nature restoration projects through agreements to purchase credits in future a long time, said Thiago Picolo, chief executive of Re.green. “They aren’t alone, but they’re on the forefront.”
Increasingly energy-intensive data centers still receive their electricity from networks that burn oil, coal and gas as fuel. This implies that tech corporations that wish to keep their green guarantees must depend on purchasing credits akin to one ton of greenhouse gases saved or reduced.
Tech corporations also buy renewable energy credits, which represent investments in wind or solar energy at home or abroad. Amazon, Google and Microsoft have also invested in nuclear energy.
Microsoft's carbon footprint was greater than 17 million tons of COâ‚‚ and other greenhouse gases in 2023, a 40 percent increase in comparison with around 12 million tons in 2020.
The company arrived at this figure after using investments and renewable energy credits to offset some emissions from its energy consumption. The company goals to turn into “carbon negative” by the top of the last decade by reducing its emissions and investing in carbon removal credits.
Microsoft has led technology corporations in recent times to deal with technologies that store COâ‚‚ underground for tons of or hundreds of years, signing a take care of U.S. oil producer Occidental last 12 months to purchase 500,000 such certificates.
These technologies are prone to store COâ‚‚ longer than trees, benefiting communities and ecosystems but leaving them vulnerable to fires and droughts, which is able to worsen as climate change increases. However, technology-based moves are dearer at tons of of dollars per ton, and the industry is growing slowly.
Large buyers of carbon removal credits have looked into nature-based credits, that are cheaper than technology-based carbon removal credits. Google, Meta, Microsoft and Salesforce announced last 12 months that they planned to purchase 20 million tons of it by the top of the last decade.
The global marketplace for emissions certificates has been affected by scandals, including over how every ton of COâ‚‚ ought to be verified.
Microsoft and Re.green struck an identical deal for 3 million credits last May. Microsoft also said last 12 months that it could buy 8 million credits from BTG Pactual Timberland Investment Group.
Climate technology startup Pachama, which helps map carbon projects, estimates that this kind of credit, issued in 2023, could cost as much as $82 per tonne. According to MSCI Carbon Markets, some conservation credits sold for $20 a ton last 12 months, with prices potentially set to rise in the approaching years.
An individual near a carbon registry said Microsoft was “within the lead” amongst buyers, paying greater than $50 a ton for high-value, nature-based waste in recent deals, significantly greater than others in the marketplace Market.
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