Dive Brief:
- Microsoft will buy 40,000 carbon credits from agricultural tech provider Indigo Ag, the two companies announced Thursday. Indigo Ag said the transaction represents the largest number of credits it has ever delivered to a buyer.
- The carbon credits are soil-based and produced through carbon farming, which leans on sustainable practices to hold carbon in the soil. The credits are then verified and issued according to guidelines from the Soil Enrichment Protocol of the Climate Action Reserve — a trusted offset registry for global carbon markets — according to Indigo Ag.
- Microsoft said it chose the sustainable agriculture company’s carbon program to incorporate soil-based carbon removals into its decarbonization strategy and help accelerate progress toward reaching its climate goals, which include a target to become carbon negative by 2030.
Dive Insight:
The credits rely on sustainable practices farmers have adopted or will adopt to both enrich the soil with more carbon and reduce greenhouse gas emissions. To achieve this two-pronged goal, farmers can add cover crops, reduce tillage and rotate crops which, ultimately, retains carbon in the soil.
Further, farmers are able to develop an additional revenue stream through the production and selling of such soil-based carbon credits — which Indigo facilitates — according to the company. The sustainable agriculture solutions company said farmers are paid at least 75% of the average credit price following a transaction. Indigo’s carbon program has issued almost 300,000 offset credits so far.
Microsoft’s carbon credits will be pulled from Indigo’s third carbon crop, generated from farms across 28 states in the United States.
The companies said in the June 20 release that the agreement “underscores demand for robust, science-backed agriculture soil-based credits and the valuable role they can play in climate action, as well as reflects the increasing maturity of the voluntary carbon market.”
Indigo Ag CEO Dean Banks said the deal marked a “major milestone” for the company’s carbon program and promoted the use of such nature-based carbon solutions.
This deal joins a flurry of recent initiatives Microsoft has undertaken to mitigate its carbon footprint. Earlier this month, the software solutions provider inked an agreement with Anew Climate to purchase over 970,000 carbon removal credits, which are to be generated through forest management and afforestation projects across the U.S.
Prior to this, Microsoft signed a landmark carbon removal contract with Stockholm Exergi, a 6-year offtake agreement with Catona Climate and a renewable energy credits purchase agreement with Recurrent Energy this year alone.