Microsoft Acquires Carbon Loans From Chestnut Carbon In Efforts To Achieve Sustainability Goals

JAKARTA - Microsoft Corp has reached an agreement with the startup offset, Chestnut Carbon, to obtain credit related to the removal of carbon dioxide from the atmosphere. This was announced by the two companies on Wednesday, December 20, as part of the tech giant's efforts to achieve its sustainability goals.

Unlike other offset deals that generate credit by preserving trees, Chestnut grows new trees on land previously managed or used for other purposes, which provides greater environmental benefits.

"This, I believe, is the largest reforestation project ever registered in the United States," said Chestnut founder Ben Dell.

In this agreement, Microsoft will obtain a 15-year carbon removal credit from Chestnut for trees planted in the Mississippi Alluvial Valley. "The first credit will be handed over to Microsoft within three years, to give the tree planted to grow," Dell said.

The parties did not say how much Microsoft paid for the credit, which was equivalent to removing up to 2.7 million tonnes of carbon during the contract.

"We are excited to collaborate with Chestnut and their Sustainable Recovery Project for high-quality nature-based solutions located in the United States," said Brian Marrs, senior director of carbon energy & removal at Microsoft.

Microsoft sees the carbon removal program as a key part of its goal of achieving negative carbon by 2030, meaning that it will contribute to the net removal of greenhouse gases from the atmosphere. In 2022, Microsoft contracted more than 1.4 million tonnes of carbon removal metrics, according to their website.

This removal technique includes reforestation measures and technological solutions such as direct air extraction. Microsoft is Chestnut's first client, backed by private equity firm Kimmeridge Energy Management.

"The revenue generated by Chestnut will allow part of Kimmeridge's initial capital commitment of $200 million for the company to be directed back to purchasing new land for Chestnut," said Dell, who is also Kimmeridge's management partner.