Microsoft and the Swedish energy company Stockholm Exergi have sealed a groundbreaking 10-year offtake agreement on May 6, 2024. Stockholm Exergi will supply Microsoft with over 3.3 million metric tons of carbon removal certificates from its planned Bio-Energy with Carbon Capture and Storage (BECCS) project at Värtan in Stockholm. This deal is touted as the world’s largest permanent removal agreement to date, marking a significant milestone in the fight against climate change.
Microsoft’s commitment to a decade-long partnership with Stockholm Exergi aligns with its ambitious target to achieve carbon negativity by 2030. The tech giant’s strategy focuses on prioritizing emissions reductions while simultaneously building a diverse portfolio of carbon removal projects utilizing various technologies and methods.
The collaboration includes a range of carbon removal solutions, categorized based on their durability. Low-durability solutions such as forestry projects, soil carbon projects, and mangrove blue carbon projects sequester carbon for less than 100 years. Medium-durability options like biochar projects and kelp-sinking projects lock away carbon for 100-1,000 years. Meanwhile, high-durability solutions such as BECCS projects, CO2 mineralization projects, direct air capture projects, and enhanced weathering projects sequester carbon for thousands of years.
Brian Marrs, Microsoft’s senior director of energy and carbon removal, emphasized the importance of leveraging existing biomass power plants as a crucial first step in building global carbon removal capacity. The company is investing $1 billion into a Climate Innovation Fund to accelerate Carbon Dioxide Removal (CDR) technologies and work towards achieving global carbon negativity.
Stockholm Exergi, a key player in Sweden’s energy sector, is embarking on an ambitious carbon capture project that aims to remove 800,000 metric tons of CO2 annually. The company plans to commence construction in 2025 and deliver carbon removal certificates to Microsoft starting in 2028, continuing for the next decade. Seeking complementary state aid and additional private carbon removal deals is crucial for the project’s financial viability.
Anders Egelrud, the CEO of Stockholm Exergi, hailed the agreement with Microsoft as a significant step forward for their BECCS project and the climate at large. He expressed optimism about inspiring other corporations with ambitious climate objectives and hinted at potential future deals with other pioneering companies.
Stockholm Exergi recently secured the environmental permit for its BECCS project in Stockholm, integrating carbon capture and storage into its existing biomass and heat power plant. The facility, known as the Stockholm Exergi KVV8 plant, is Europe’s largest biomass-based Combined Heat and Power plant, burning waste from the forestry industry and paper mills to generate heat and electricity.
The project’s key features include safeguarding biomass feedstock for sustainable forest management, ensuring stable carbon stocks, and avoiding Roundwood sourcing for long-lived wood products. The captured carbon dioxide will be liquefied, transported, and permanently stored underground in the Nordic region, adhering to stringent quality standards and monitoring protocols.
This agreement between Microsoft and Stockholm Exergi represents a significant milestone in climate change mitigation efforts. While reducing emissions remains a priority, permanent carbon removal is essential to limit global warming to 1.5°C or below 2°C. By setting ambitious voluntary climate goals, these companies aim to drive the growth of the carbon removal industry and inspire others to work towards net-zero targets in line with the Paris Agreement objectives.
