Microsoft supports a tree-planting carbon removal initiative in Panama

Microsoft is throwing its weight behind a carbon removal scheme in Panama, focusing on tree planting. This initiative signifies a notable step in the fight against climate change.

LONDON, May 22 (Reuters) - Microsoft Corp (MSFT.O) has entered into an agreement to purchase 1.6 million carbon removal credits from developers of what they claim is among Central America's largest fully financed nature-based carbon removal projects. 

Situated in Panama and covering 10,000 hectares, the project is partially funded by Microsoft, one of the leading corporate purchasers of such credits. Its goal is to extract 3.2 million tonnes of carbon from the air by planting over 6 million trees in regions previously damaged by cattle ranching.

Tech giants worldwide are investing substantial sums into initiatives aimed at either storing or preventing carbon emissions, aligning with their sustainability objectives. However, voluntary carbon markets, allowing companies to purchase credits for emission offsetting, face criticism over doubts regarding the actual environmental benefits of many projects. 

What distinguishes this initiative, according to developer Ponterra, is its emphasis on reforestation by planting 6 million trees to restore land degraded by cattle ranching, rather than merely safeguarding existing forests from deforestation.

As a result, the project can market carbon credits based on the additional carbon tons removed from the atmosphere, rather than just on emissions avoided. Additionally, it will advance biodiversity restoration and contribute over $70 million to local communities through lease payments, a portion of carbon credit sales allocated to landowners, employee salaries, and donations to local NGOs. 

This discussion arises amidst ongoing debates among scientists and stakeholders regarding the environmental benefits of permitting companies to purchase offsets.

In the United States, cloud-based computing and AI technologies are contributing to increased emissions. Microsoft acknowledges that its own carbon emissions have surged by 30% since 2020, primarily attributed to the construction of data centers, as revealed in its 2024 sustainability report. 

Despite this, the tech giant has pledged to achieve zero carbon emissions and waste by 2030, although it anticipates the need to purchase carbon credits to fulfill this commitment, having acquired 5.015 million metric tonnes of carbon removals in 2023 for this purpose.

Ponterra is spearheading the development of the project, in collaboration with Rubicon Carbon and Carbon Streaming, with financial support from Microsoft and the aforementioned partners. However, the backers have opted not to disclose the scale of the agreement or the price per ton paid by Microsoft.

Source: Reuters