Microsoft (NASDAQ:MSFT) has entered into a significant 25-year agreement with Chestnut Carbon, a nature-based carbon removal startup, to purchase over 7 million tons of carbon removal credits. These credits will be generated from forest restoration projects in the Southern United States, covering approximately 60,000 acres and involving the planting of more than 35 million native trees. This deal represents a substantial investment in conservation forestry and aligns with Microsoft’s broader carbon-negative strategy by 2030.
What does the project entail?
The agreement will focus on afforestation, reforestation, and revegetation (ARR) activities in Arkansas, Texas, and Louisiana. Chestnut Carbon emphasizes the durability of its carbon sequestration efforts and the additionality of its projects, which depend on carbon market incentives for land restoration. Beyond carbon removal, the projects aim to enhance native wildlife habitats, improve air and water quality, and foster local economic growth by involving community stakeholders and local foresters.
How does this fit into Microsoft’s broader commitments?
The deal builds on Microsoft’s previous collaborations with Chestnut Carbon, including a December 2024 agreement for 3 million tons of carbon credits, and expands its diverse carbon removal initiatives. Microsoft’s portfolio includes large-scale reforestation projects, such as a recent 3.5 million-ton agreement with Brazil-based re.green, as well as ventures in ocean-based carbon removal, biochar, and direct air capture technologies. These initiatives collectively support the company’s ambitious goal to become carbon negative by 2030.
Earlier reports reveal that Microsoft consistently explores various carbon removal methods to balance scalability and environmental impact. For example, its investments in biochar and direct air capture reflect a combination of innovative and nature-based strategies. Compared to its past projects, the latest agreement with Chestnut marks a broader commitment to U.S.-based forest restoration, suggesting a regional diversification in its portfolio.
Chestnut Carbon, launched in 2022 by Kimmeridge, specializes in restoring marginal farmlands into biodiverse forests. The company plans to expand its portfolio to 500,000 acres by 2030, estimating the removal of 100 million tons of CO2 over 50 years. Ben Dell, CEO of Chestnut, commented:
“We’re confident in our belief that nature-based afforestation solutions are the most attractive, scalable, and cost-effective means for removing carbon from the atmosphere today.”
Microsoft echoed this sentiment, with Brian Marrs, Senior Director of Energy & Carbon Removal, stating:
“This agreement with Chestnut Carbon is another positive step towards Microsoft’s goal to become carbon negative by 2030.”
This development underscores the growing collaboration between corporations and environmental startups to address climate challenges. By investing in long-term forestry projects, Microsoft is setting an example of how private capital can support large-scale environmental restoration while meeting corporate climate commitments.
Long-term agreements like these highlight the critical role of partnerships in scaling nature-based solutions. For readers, understanding the mechanisms behind carbon credits—such as durability, additionality, and co-benefits—can provide insights into how these initiatives contribute to both business goals and environmental sustainability. This deal also indicates a broader trend of corporations diversifying their carbon removal portfolios to combine immediate impact with future scalability.
