Microsoft’s ambitious climate strategy took a decisive step forward this week with the extension of its carbon removal agreement with Stockholm Exergi, a Swedish utility pushing the frontiers of bio-energy with carbon capture and storage (BECCS) technology. This multi-year deal, billed as the largest of its kind to date, commits Microsoft to purchasing 500,000 tonnes of permanent carbon removal annually for a decade—on top of last year's original 3.33 million tonne contract. Yet, as the partnership grows, so too do the questions around the effectiveness, sustainability, and ethics of carbon offsets as both corporations and nations face pressure to deliver genuine climate progress.
The expanded agreement between the two companies now covers a total of 5.08 million tonnes of permanent carbon removal over ten years, according to company statements and coverage by The Register and industry analysts. Both deals center around Exergi’s planned BECCS facility, under construction in Stockholm near the Värtan strait, expected to be operational as the first deliveries of carbon removal certificates to Microsoft begin in 2028.
BECCS technology is designed to remove carbon dioxide from the atmosphere by burning biomass—such as wood, agricultural residue, or food waste—capturing the resulting CO₂, and securely storing it underground, typically in geological formations. Supporters herald BECCS as “carbon negative,” claiming it can extract more CO₂ from the atmosphere than it emits, making it a key tool in achieving net-zero or even net-negative emissions goals. However, these claims remain deeply contested, and the magnitude of Microsoft’s purchase has intensified scrutiny from environmentalists and climate scientists alike.
This partnership’s scale places it at the forefront of the voluntary carbon removal market. Microsoft, as a purchaser, aims to use the resulting carbon credits to offset its own operational and supply chain emissions, part of a wider commitment to become “carbon-negative” by 2030—a goal first publicized in 2020. In line with Swedish policy, these removals will also contribute to Sweden’s national climate targets, illustrating the growing interplay between corporate net-zero pledges and state-level climate accounting.
Proponents, such as the International Energy Agency (IEA), have described BECCS as the only carbon removal technique that also provides dispatchable energy, framing it as a rare win-win for decarbonization. Well-implemented BECCS, in theory, can deliver “negative emissions”—subtracting more carbon from the atmosphere than the system lifecycle emits.
However, multiple scientific assessments, including recent reports from the IPCC and independent climate watchdogs, raise pointed questions:
Construction of the carbon capture unit at Exergi’s Stockholm facility is underway, supported by an environmental permit received last year. The first certificates for carbon removal credits are planned for delivery to Microsoft in 2028, spanning a ten-year period.
Notably, the agreement stipulates that feedstock must not be diverted from wood destined for products like construction timber or furniture—materials that inherently store carbon for decades and may offer larger climate benefits than burning for energy. This nuance addresses a major criticism leveled at some biomass power operators and underscores a scrutiny of sourcing that must be evidenced through independent MRV.
Yet, measured against direct emissions reductions, carbon offsets remain deeply divisive in climate circles. Experts, including those at Carbon Market Watch and environmental think tanks like IEEFA, caution that such deals risk enabling business-as-usual pollution—corporations buy credits to balance their books and maintain status quo operations, rather than investing in genuine operational changes such as renewable energy, energy efficiency, and supply chain decarbonization.
Recent reports even suggest that Microsoft’s own carbon emissions have increased by nearly 30 percent since 2020, the same year it pledged to reach carbon negativity by 2030. While offsetting plays a recognized part in net-zero paths, critics argue it should be reserved for the hardest-to-abate sectors and accompanied by deep, absolute cuts in the company’s own emissions footprint.
Additionally, there are mounting questions about the double-counting of carbon benefits. Credits bought by corporations are often claimed simultaneously for corporate and national emissions targets if permitted by local regulatory frameworks, potentially inflating reported climate progress on paper without reflecting real-world reductions.
The IEA’s most recent tracking report on BECCS highlights multiple breakthroughs and setbacks. The energy arm describes BECCS as a “necessary but insufficient” piece of the climate puzzle, pointing to a yawning gap between promised removals and actual, operational capture and storage projects. They underscore bottlenecks including:
In the Nordic region, Sweden’s climate policy is among the most advanced, integrating negative emissions into both planning and reporting. Yet, environmental NGOs caution even highly regulated systems may not always prevent perverse incentives, such as prioritizing biomass for BECCS over traditional forest preservation.
Verification is critical. Industry observers and climate policymakers will scrutinize the delivery of carbon removal credits, the transparency of MRV systems, and the real-world sourcing of biomass over the coming decade. The project’s implementation will likely serve as a benchmark for similar global initiatives.
Above all, the challenge for Microsoft—and the sector at large—is to combine engineered removals with deep, absolute emissions cuts, demonstrating that climate leadership is about transformation, not just accounting. As climate deadlines loom, the world is watching not just for bold deals, but for authentic, sustainable results.
Microsoft and Stockholm Exergi: Scaling Up Carbon Removal
The expanded agreement between the two companies now covers a total of 5.08 million tonnes of permanent carbon removal over ten years, according to company statements and coverage by The Register and industry analysts. Both deals center around Exergi’s planned BECCS facility, under construction in Stockholm near the Värtan strait, expected to be operational as the first deliveries of carbon removal certificates to Microsoft begin in 2028.BECCS technology is designed to remove carbon dioxide from the atmosphere by burning biomass—such as wood, agricultural residue, or food waste—capturing the resulting CO₂, and securely storing it underground, typically in geological formations. Supporters herald BECCS as “carbon negative,” claiming it can extract more CO₂ from the atmosphere than it emits, making it a key tool in achieving net-zero or even net-negative emissions goals. However, these claims remain deeply contested, and the magnitude of Microsoft’s purchase has intensified scrutiny from environmentalists and climate scientists alike.
This partnership’s scale places it at the forefront of the voluntary carbon removal market. Microsoft, as a purchaser, aims to use the resulting carbon credits to offset its own operational and supply chain emissions, part of a wider commitment to become “carbon-negative” by 2030—a goal first publicized in 2020. In line with Swedish policy, these removals will also contribute to Sweden’s national climate targets, illustrating the growing interplay between corporate net-zero pledges and state-level climate accounting.
How BECCS Works—and Why It’s Controversial
The technical promise of BECCS lies in its ability to couple renewable energy production with carbon sequestration. BECCS facilities combust biomass, generating energy for local grids or industry. The CO₂ byproduct is captured at the source, compressed, and transported for permanent storage underground—a process known as geological sequestration.Proponents, such as the International Energy Agency (IEA), have described BECCS as the only carbon removal technique that also provides dispatchable energy, framing it as a rare win-win for decarbonization. Well-implemented BECCS, in theory, can deliver “negative emissions”—subtracting more carbon from the atmosphere than the system lifecycle emits.
However, multiple scientific assessments, including recent reports from the IPCC and independent climate watchdogs, raise pointed questions:
- Sustainability of Biomass Feedstock: Is the biomass actually from renewable sources, or does it involve cutting down forests that would otherwise sequester more carbon naturally?
- Lifecycle Emissions: How much carbon is released during planting, harvesting, transport, and processing of biomass?
- Permanence: Will underground CO₂ storage truly remain secure over the long term?
- Scalability: Can BECCS operate at the global scale required for meaningful climate mitigation, given limited sustainable biomass resources?
Microsoft’s Climate Claims: A Closer Look
Microsoft’s public statements highlight a rigorous approach to carbon procurement. Under the new agreement, Stockholm Exergi must meet “strict quality requirements,” including:- Sustainable biomass sourcing, developed collaboratively with Microsoft to avoid sourcing material that would otherwise be used for long-lived wood products.
- Thorough quantification of net removals, requiring robust lifecycle analysis to ensure the process is genuinely carbon negative.
- Comprehensive monitoring, reporting, and verification (MRV), ensuring transparency and accountability in both the capture and storage process.
Construction of the carbon capture unit at Exergi’s Stockholm facility is underway, supported by an environmental permit received last year. The first certificates for carbon removal credits are planned for delivery to Microsoft in 2028, spanning a ten-year period.
Notably, the agreement stipulates that feedstock must not be diverted from wood destined for products like construction timber or furniture—materials that inherently store carbon for decades and may offer larger climate benefits than burning for energy. This nuance addresses a major criticism leveled at some biomass power operators and underscores a scrutiny of sourcing that must be evidenced through independent MRV.
Carbon Offsets or Climate Cover? The Broader Debate
Microsoft is not alone in pursuing offsets on a massive scale. The company recently expanded a deal with Brazilian partner Re.green to plant millions of trees over 16,000 hectares, potentially earning 3.5 million tons of carbon removal credits over 25 years. Another recently publicized agreement saw Microsoft buy 500,000 metric tons of carbon dioxide removal credits over six years from Occidental Petroleum, anchored in direct air capture (DAC) technology.Yet, measured against direct emissions reductions, carbon offsets remain deeply divisive in climate circles. Experts, including those at Carbon Market Watch and environmental think tanks like IEEFA, caution that such deals risk enabling business-as-usual pollution—corporations buy credits to balance their books and maintain status quo operations, rather than investing in genuine operational changes such as renewable energy, energy efficiency, and supply chain decarbonization.
Recent reports even suggest that Microsoft’s own carbon emissions have increased by nearly 30 percent since 2020, the same year it pledged to reach carbon negativity by 2030. While offsetting plays a recognized part in net-zero paths, critics argue it should be reserved for the hardest-to-abate sectors and accompanied by deep, absolute cuts in the company’s own emissions footprint.
Additionally, there are mounting questions about the double-counting of carbon benefits. Credits bought by corporations are often claimed simultaneously for corporate and national emissions targets if permitted by local regulatory frameworks, potentially inflating reported climate progress on paper without reflecting real-world reductions.
The Science and Policy Context
The United Nations Intergovernmental Panel on Climate Change (IPCC) notes that some carbon removal, including BECCS, is “unavoidable” to achieve net-negative emissions later this century—primarily to compensate for overshoot scenarios or residual emissions from hard-to-abate sectors like cement, steel, and aviation. However, the panel repeatedly emphasizes that these are not substitutes for rapid, deep decarbonization in all sectors.The IEA’s most recent tracking report on BECCS highlights multiple breakthroughs and setbacks. The energy arm describes BECCS as a “necessary but insufficient” piece of the climate puzzle, pointing to a yawning gap between promised removals and actual, operational capture and storage projects. They underscore bottlenecks including:
- Incomplete or fragmented policy frameworks to incentivize deployment
- Insufficient certainty for investors and technology providers
- Ongoing issues around biomass sustainability certification
- A general lag in CO₂ transport and storage infrastructure
In the Nordic region, Sweden’s climate policy is among the most advanced, integrating negative emissions into both planning and reporting. Yet, environmental NGOs caution even highly regulated systems may not always prevent perverse incentives, such as prioritizing biomass for BECCS over traditional forest preservation.
Addressing the Key Risks
Like much of the carbon offset space, Microsoft and Exergi’s plan contains both exciting potential and material risk. Key strengths include:- Scale: A single buyer deal of this magnitude helps create market certainty for emerging carbon removal technologies, an essential condition for driving innovation and cost reductions.
- Rigorous standards: The published commitment to sustainable feedstock sourcing, robust lifecycle analysis, and third-party-verified MRV offers a template for future carbon procurement contracts.
- Integration with national policy: Tying removals to Sweden’s national climate targets ensures that the carbon reductions are recognized under domestic and international frameworks.
- Offsetting as distraction: Major environmental groups warn that such deals risk providing cover for businesses to continue emitting, prioritizing offsets over genuine transformation in energy sourcing, product design, or logistical efficiency.
- Biomass sustainability concerns: The gap between sustainably sourced biomass and demand for BECCS will be challenging to close as multiple buyers enter the market. Careful auditing and transparent public reporting are non-negotiable.
- Infrastructure limitations: Large-scale BECCS is fundamentally capped by availability of storage space and safe CO₂ transport capacity; delays in infrastructure buildout could undercut the promised climate benefits.
- Uncertain permanence: Geological storage science is well established, but questions remain about the possibility of future leakage, particularly in politically or geologically unstable regions.
Looking Ahead: What Comes Next?
The expansion of Microsoft’s carbon removal deal with Stockholm Exergi positions the tech giant as a bellwether in the rapidly maturing field of engineered carbon removals. The contractual structure—with strict sustainability and MRV criteria, and a decade-long commitment—sets a new standard for voluntary carbon markets. Yet, the broader debate remains pointed: can large-scale offsets deliver climate justice, or will they simply become a tool for greenwashing?Verification is critical. Industry observers and climate policymakers will scrutinize the delivery of carbon removal credits, the transparency of MRV systems, and the real-world sourcing of biomass over the coming decade. The project’s implementation will likely serve as a benchmark for similar global initiatives.
Above all, the challenge for Microsoft—and the sector at large—is to combine engineered removals with deep, absolute emissions cuts, demonstrating that climate leadership is about transformation, not just accounting. As climate deadlines loom, the world is watching not just for bold deals, but for authentic, sustainable results.
