Microsoft has signed a carbon capture agreement which will see it purchase 95,000 tons of carbon dioxide removal credits from a biochar plant in Mexico.

It has agreed a six-year purchasing deal with The Next 150 and its General Biochar Systems (GBS) business unit, which runs the biochar plant near the city of Guanajuato.

Biochar Delivery
A biochar delivery from the Mexico plant – The Next 150

Biochar is produced by burning biomass in a zero-oxygen environment at a temperature of 250°C (482°F) or above. This thermal process, known as pyrolysis, enables the biochar to store large amounts of carbon. The resulting biochar can then be used as a soil enhancer, and it is thought the biochar retains the carbon for thousands of years.

“Our six-year purchase agreement and ongoing collaboration with The Next 150 is a step forward towards our ambition to realize our carbon negative by 2030 goal via a diversified portfolio of carbon removal,” said Brian Marrs, senior director for energy and carbon removal at Microsoft.

The Next 150 is a Swiss venture developer and operator with a focus on businesses that combat climate change. It was founded in late 2022 and opened the GBS facility in Mexico less than a year later.

Its biochar is used in state-run quarry rehabilitation efforts to restore degraded landscapes and enhance biodiversity. Ongoing work with local governments and civil society organizations aims to supply up to 23,000 local farmers with biochar as a sustainable and regenerative soil amendment, bringing additional co-benefits such as improved crop yields, reduced reliance on chemical fertilizers, and decreased plant stress during prolonged drought.

“Securing multi-year commitments like the one with Microsoft allows The Next 150 to mobilize large-scale biochar projects across Latin America, by attracting institutional finance for project-level lending, backed by creditworthy offtakes,” said Patrick Atanasije Pineda, managing partner at The Next 150.

It is the second biochar agreement Microsoft has signed in recent months. In December 2023, it agreed a deal with Exomad Green, the world's largest producer of biochar, for 32,000 tons of carbon dioxide removal credits to be delivered by June 2024 from its plant in Bolivia. It also signed a deal with Carbon Streaming to buy credits from its biochar site in Virginia.

Other carbon capture projects undertaken by the company include a 300,000-ton deal with Heirloom signed last year, which will remove carbon directly from the air onto sheets of calcium oxide. It has also done 10,000-ton deal with Climeworks, an electrical direct capture company, and paid for an undisclosed amount captured in Wyoming by Carbon Capture.