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Climeworks Lands Microsoft Carbon Offset Partnership

In 2022, industries are living under a new code of conduct that demands emissions be at the forefront of every conversation. From food producers to automotive manufacturers, each quarterly earnings report comes stocked with a thoroughly-written addendum on  current and future operations’ impact on emissions levels. As we move into this new era of corporate responsibility, companies are looking for increasingly creative ways to reduce pollutants with the same enthusiasm usually reserved for their bottom lines. 

Such pressure from nearly every industry eventually culminated in the creation of the carbon market, populated by the trading of carbon offsets that allowed businesses to outsource their environmentalism to several enterprising young faces in the fledgling carbon capture and storage (CCS) industry. One such face is Climeworks, an Icelandic startup specializing in extracting carbon from the air and storing it in its facilities. 

Large corporations looking to clean up their emissions diets will happily pay places like Climeworks top dollar in exchange for offsets, netting a business model that is as financially sustainable as it is environmentally sustainable. Now, a partnership with tech giant Microsoft sees Climeworks ascending to new heights. 

Photo Courtesy Climeworks

Announced this summer, Climeworks will enter into a 10-year partnership with Microsoft for carbon offsets. The Reykjavik-based company will capture and store 1,000 tons of carbon emissions for Microsoft each year for a total of 10,000 tons.

The collaboration allows Microsoft to continue working toward its widely-publicized commitment to go carbon-negative across all operations by 2030. Whether the Climeworks deal is the first of many is still unclear, but this is the first agreement of its kind for the Windows developer. 

Climeworks is used to being one of the firsts. In 2017, the company became the first to launch a publicly-known commercial CCS operation, putting it at the forefront of the global CCS movement in its earliest stage. Now, the company is pioneering high-level deals with some of the largest corporations on the planet, a move that will bring about massive benefits for both sides. 

At Microsoft, officials are optimistic about the agreement as the footing of a lasting environmental partnership. “Our experience in purchasing renewable energy shows that long-term agreements can provide an essential foundation for society’s race to scale new decarbonization technologies,” said Lucas Joppa, chief environmental officer for the company. “ The partnership can help kickstart the commercial and technical progress in a nascent but crucial industry to achieve IPCC targets.”

Photo Courtesy Climeworks

The Microsoft partnership looks to test the limits of Climeworks’ current capabilities, drawing roughly a quarter of all the stored annual emissions from its Orca facility. However, soon Orca will no longer be the sole operations center for the company — Climeworks is working on building a second, much larger Mammoth facility in Iceland. Mammoth boasts an expected emissions capacity of 36,000 tons of carbon each year, roughly nine times the amount handled by Orca. 

This new facility will represent a significant period of growth for the startup, allowing Climeworks to pave the way for future deals with carbon-interested companies worldwide, an umbrella that includes virtually every large corporation. “Climeworks is doing a very good job,” said Joppa. “Considering what they’re up against.”


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