Microsoft’s Net-Zero Goals Propel It to Invest in Carbon Capture and Storage

"Our landmark long-term agreement with Ørsted for high-quality carbon removal supports Microsoft’s commitment to become carbon-negative by 2030, sends a strong demand signal to scale the market, and showcases the power of partnership and the technological innovation needed to help the world make the clean energy transition,” said Melanie Nakagawa, Chief Sustainability Officer at Microsoft.

According to the UN’s Intergovernmental Panel on Climate Change, capturing and storing biogenic carbon dioxide is critical. During 2025, the Asnæs and Avedøre combined heat and power plants will begin to capture and store biogenic carbon, and at the beginning of 2026, the two units will capture and store 430,000 metric tons of biogenic CO2 every year.

The 430,000 metric tons of biogenic carbon from the Asnæs and Avedøre combined heat and power stations will get shipped to the Northern Lights storage reservoir in the Norwegian North Sea. Ørsted has contracted with Northern Lights to develop a CO2 transport and storage infrastructure.

By capturing the biogenic carbon from biomass-fired combined heat and power plants and storing it underground, it is possible to reduce and remove CO2 from the atmosphere, as biogenic carbon from sustainable biomass is part of a natural biogenic carbon cycle, thereby creating negative emissions.

In March 2021, Ørsted, Aker Carbon Capture, and Microsoft agreed to collaborate on carbon capture and clean energy production via biomass-fired combined heat and power plants. Microsoft has decided to purchase 2.76 million tons of durable carbon removal over 11 years from capturing and storing biogenic carbon from the Asnæs Power Station, representing one of the world’s most significant carbon removal offtake agreements by volume.

“We’re incredibly pleased with the outcome of the tender process, and we look forward to establishing a carbon capture facility at two of our combined heat and power plants running on sustainable straw and wood chips,” Ørsted said in a release.

Will it reach scale?

The agreement between Ørsted and Microsoft potentially demonstrates the commercial value associated with carbon capture and removal. Given the nascent state of bioenergy-based carbon capture, Danish state subsidies and Microsoft’s contract were necessary to make this project viable.

“This partnership demonstrates how decarbonized solutions can mature and scale when off-takers, operators, technology providers, and policymakers collaborate closely,” says Ørsted. “By creating a commercial setup of negative emissions that provides transparency and lowers the cost, and time to market for carbon offsets, carbon capture, and storage can move from relying on subsidies to operating on market terms,” similar to developing other renewable energy solutions, such as solar PV and wind energy.

The carbon capture process will be heat-integrated with the combined heat and power plants, enabling district heating to be supplied in the Greater Copenhagen area. The process will create 35 megawatts of surplus heat.

As for Microsoft, it says it will be carbon negative by 2030, citing the urgency to keep global temperatures in check to avoid the worst aspect of climate change: rising tides, droughts, and extreme weather events. By 2050, Microsoft says it will remove from the environment all the carbon the company has emitted since 1975 -- through its operations and electricity purchases. To get there, the company has an internal carbon fee.

It is also launching an initiative to use Microsoft technology to help its suppliers and customers globally reduce their carbon footprints while creating a $1 billion climate innovation fund to accelerate the global development of carbon reduction, capture, and removal technologies.

The goal is to significantly drive down its emissions by 2025. How?

• By 2025, it will shift to 100% renewable energy supply. It will have power purchase agreements for green energy for 100% of carbon-emitting electricity consumed by all our data centers, buildings, and campuses.
• It will electrify its global campus operations vehicle fleet by 2030.
• It will pursue International Living Future Institute Zero Carbon certification and LEED Platinum certification for our Silicon Valley Campus and Puget Sound Campus Modernization projects.
• It implemented new procurement processes to enable and incentivize our suppliers to reduce their scope 1, 2, and 3 emissions. We will work with our suppliers to implement consistent and accurate reporting and pursue practical steps to make progress against scientifically based targets.

“By 2030, Microsoft will remove more carbon than it emits, setting us on a path to remove by 2050 all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975. We will achieve this through a portfolio of negative emission technologies potentially including afforestation and reforestation, soil carbon sequestration, bioenergy with carbon capture and storage, and direct air capture,” Microsoft said in a blog. 

While carbon capture and storage has worked in the lab, it is an expensive and elusive technology. The goal is widespread market acceptance, which requires lower barriers to entry and proven results. Microsoft’s involvement speaks volumes — a company determined to get to net zero that is willing to put its money where its mouth is.