ANALYSIS: A new year, but Microsoft remains the dominant CDR buyer

Quantum Commodity Intelligence - Microsoft once again dominated advanced purchases of CO2 removals (CDR) credits in the first quarter of 2025. The US-based tech giant accounted for 12 million of the almost 17 million advanced commitments for CDRs in the first three months of the year, according to analysis by Quantum of announced deals.

Deals totalling more than 16.7 million tonnes of CO2 equivalent (tCO2e) were unveiled in the period, with the exact total likely to be higher given that several agreements did not specify volumes.

In late January, Microsoft and US-based developer Chestnut Carbon signed an agreement for 7 million CDRs over 25 years from the latter's afforestation project in the southern US. Chestnut Carbon said the deal, which is for credits from the Gold Standard-registered Chestnut Sustainable Restoration Project, is in addition to an initial agreement signed between the companies at the end of 2023.

In December 2023, Chestnut and Microsoft signed a 15-year offtake agreement for an initial 326,000 CDR credits from the same project, rising to 2.7 million CDRs over the duration of the deal.

Earlier in the same month, Microsoft inked a deal with Brazil-based developer Re.green for 3.5 million CDR credits to be issued from afforestation, reforestation and revegetation (ARR) initiatives over 17,500 hectares in the South American country.

The agreement is also the second deal between the two companies, with the duo having struck an agreement last May for 3 million credits to be delivered over a 15-year time frame. The developer expects to issue its first credits in the first quarter of 2026, following auditing this year.

Microsoft added a further 1.5 million CDR credits to its purchasing pile in the period with an agreement with UK-based project developer Climate Impact Partners (CIP). CIP said the deal represented 50% of the planned output from the ARR project in Panna, Madhya Pradesh, where the company aims to plant up to 11.6 million mixed native trees over 20,000 hectares.

China

Another large nature-based purchasing deal was struck by China-based conglomerate Tencent for 3 million CDRs over a 14-year period from 2027 to 2040 from US-based climate finance firm Catona Climate Solutions.

The purchase will help support the tech giant's decarbonisation plan, which prioritises reducing emissions and adopting renewable energy, then addresses residual emissions with high-quality carbon removals.

However, the future of this deal may be in doubt as Catona filed for Chapter 11 bankruptcy protection on March 30.

Tencent launched its second climate technology initiative in December that will broaden its focus to international markets, and spend tens of millions of dollars in areas including CDR and energy storage.

The initiative, entitled Global CarbonX Programme 2.0, builds upon the tech giant's first phase, with the fresh round of funding also targeting carbon capture, utilisation and storage, and products such as chemicals that use captured carbon.

Other large pre-purchase agreements announced in Q1 of 2025, include Facebook parent company Meta's long-term deal with US-based forest investment management company EFM to purchase 676,000 nature-based CDR credits through 2035.

The partnership with EFM will facilitate the transition of 68,000 acres (27,518 hectares) of forestland on Washington state's Olympic Peninsula to "climate-smart management", helping remove over 1 million tCO2e over the next 10 years.

In February, US airline United's sustainable fuel investment vehicle  invested in US direct air capture (DAC) developer Heirloom, and secured the right to procure up to 500,000 tCO2e of removal credits.

Another tech company, Google, agreed to buy 200,000 tCO2e — 100,000 CDRs each from Indian-based Varaha and California-headquartered Charm. Google also inked a $1.5 million deal with  US firm Indigo Ag for an undisclosed volume of CDRs generated by regenerative agriculture practices.

Elsewhere, buyers' coalition Frontier signed a couple deals for 78,000 tCO2e with enhanced rock weathering specialist Eion, and for 47,000 tCO2e with Germany-based electrochemical DAC developer Phlair.