Microsoft seals carbon capture deal with Occidental

On Tuesday, tech giant Microsoft signed a landmark carbon capture agreement with 1PointFive, a subsidiary of Occidental Petroleum, as major technology companies address the increasing carbon footprint associated with artificial intelligence.

Under this deal, Microsoft will purchase 500,000 metric tons of carbon dioxide removal (CDR) credits over six years. This agreement represents the largest single purchase of CDR credits using direct air capture (DAC) technology to date. DAC, which extracts CO2 directly from the atmosphere, is gaining popularity among tech firms aiming to achieve ambitious net-zero emission targets.

“Energy demand across the technology industry is increasing, and we believe direct air capture is uniquely suited to remove residual emissions and further climate goals,” said Michael Avery, president of 1PointFive.

DAC is one of several methods being explored to combat climate change, although it has faced criticism for potentially being seen as an unproven alternative to more challenging political measures.

This agreement follows a similar deal between Amazon and 1PointFive last year, involving the purchase of 250,000 metric tons of carbon removal over a decade. Both Microsoft and Amazon’s CDR credits will be generated by Stratos, 1PointFive’s first industrial-scale DAC facility currently under construction in Texas. These deals allow Microsoft and Amazon to offset their emissions by paying 1PointFive to remove carbon from the atmosphere and store it underground.

Previously, carbon capture processes typically involved extracting CO2 from industrial sources and either storing it underground or repurposing it for products like synthetic fuels or chemicals. While the UN Intergovernmental Panel on Climate Change (IPCC) considers carbon capture technology essential for limiting global warming, critics worry it may be viewed as an easy solution, potentially discouraging necessary emission reductions.

The urgency of these deals is underscored by the rising emissions from the heavy computing power needed for generative AI. Google recently reported an increase in its greenhouse gas emissions for 2023, attributed to powering data centers that support AI operations. Similarly, Microsoft’s latest sustainability report showed a 29 percent increase in greenhouse gas emissions last year compared to 2020.

Experts note that companies like Microsoft, Amazon, Airbus, and Lego are willing to pay upwards of $1,000 per ton of CO2 captured and stored as carbon credits to offset their emissions.

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