Microsoft Strikes Landmark U.S. Soil Carbon Credit Agreement With Indigo

Key Moments

Record-Setting Commitment to Soil Carbon Removal

LONDON, Jan 15 (Reuters) — Microsoft has signed a 12-year agreement with Indigo Carbon to purchase 2.85 million soil carbon credits in the United States. The deal supports Microsoft’s goal of becoming carbon negative by 2030. It also comes as emissions rise due to expanding artificial intelligence and data center operations.

Microsoft, now the world’s largest buyer of carbon removal credits, did not disclose the deal’s price. However, a person familiar with the agreement said the cost falls within Indigo Carbon’s usual range of $60 to $80 per ton. As a result, the total value is estimated at $171 million to $228 million.

Regenerative Agriculture at the Core of the Credits

The soil carbon credits come from regenerative farming projects across the United States. These practices include reduced tillage, cover cropping, and managed livestock grazing. Together, they help soil store more carbon. In addition, they improve water retention and soil health.

Meanwhile, demand for soil-based carbon credits continues to rise. Market data firm Sylvera reported growing interest last year. For example, Microsoft previously bought 2.6 million credits from Agoro Carbon, which was the largest deal at the time.

Indigo’s Position in the Carbon Markets

“This deal highlights the role of soil carbon removal in corporate climate plans,” said Meredith Reisfield, Indigo’s senior director for policy, partnerships, and impact. She added that it strengthens Indigo’s position as a provider of high-integrity carbon credits.

Indigo’s model also supports farmers directly. According to Reisfield, growers receive 75% of the average weighted credit price for each issuance or crop year. As a result, farmers gain a clear financial incentive to adopt regenerative practices.

Microsoft echoed that view. “We are excited by Indigo’s approach to regenerative agriculture,” said Phillip Goodman, Microsoft’s Director of Carbon Removal. He noted that the credits deliver verified results and direct payments to growers.

How the Credits Fit Into Corporate Climate Strategies

Microsoft aims to remove more carbon from the atmosphere than it emits across its operations. To achieve this, the company relies on carbon removal projects alongside emission reductions. The soil carbon credit purchase forms part of that broader strategy.

In the voluntary carbon market, one credit represents one ton of carbon dioxide removed from the atmosphere. Companies buy these credits to offset emissions linked to their business activities.

Indigo supports projects from start to finish. Specifically, it works with farmers to design programs, verify results, and sell credits to buyers such as Microsoft.

Debate Over the Role and Reliability of Removal Credits

Many scientists see carbon removal as a useful tool for slowing climate change. In particular, it helps address emissions from sectors that still depend on fossil fuels.

However, critics raise concerns about measurement accuracy and long-term durability. They also warn that removal projects could distract from the urgent need to cut emissions directly.

Deal Overview