3.3 million tonnes of CO2 will be removed

Microsoft (MSFT) and Stockholm Exergi joined forces in early May in an agreement to target the removal of carbon dioxide (CO2) emissions from the atmosphere. The 10-year agreement between the companies, billed as the largest of its kind in the world, could help permanently remove 3.3 million tonnes of carbon dioxide as part of the Bioenergy with Carbon Capture and Storage (BECCS) project. As part of this effort, Microsoft will receive corresponding carbon credits from 2028. Stockholm-based Exergi, which produces biomass energy from forestry and paper residues, will capture CO2 from flue gas and store it in a liquefied version at the bottom of the North Sea, where it will be mineralized over time, according to ESGtoday. The process will take place at its newest BECCS facility in Stockholm's Värtane area, which will be integrated with an existing power plant, and the project has already received environmental permits, according to a company press release. Construction is expected to begin as early as next year after the power producer receives an investment decision for the project, which the agreement with the tech giant is expected to contribute significantly to. In addition, Stockholm Exergi intends to obtain financial support from government entities or other private companies.

A step towards carbon negativity

Microsoft's goal is to become not carbon neutral, but outright carbon negative by 2030, and this collaboration will not only help it achieve this goal, but also reflects the company's strategy of prioritising emissions reduction and ensuring quality carbon removal. Brian Marrs, Microsoft's Director of Energy and Carbon Removal, stresses the importance of sustainable biomass sourcing and efficient carbon capture processes. Stockholm Exergi's press release also states that the companies' agreement ensures high quality standards, including a number of criteria within sustainability, removal and monitoring that they have jointly developed. In addition, the companies hope to inspire other companies to do the same, as Stockholm Exergi sells certificates to other companies to help them achieve their emissions targets.

Millions of tonnes of CO2

As part of the fight against climate change, the US giant has already entered into several partnerships aimed at removing carbon dioxide, for which it receives carbon credits, confirming a multi-faceted strategy in pursuit of its emissions target. By partnering with companies such as Neustark in Switzerland, which captures CO2 and stores it in mineral waste, Microsoft earns carbon credits equivalent to 27,600 tonnes of CO2 over six years. Meanwhile, projects such as Catona Climate's agroforestry business in Kenya and Brazilian startup Mombak's reforestation efforts in the Brazilian Amazon further contribute to the company's portfolio of carbon credits, which together represent millions of tons of CO2 removed. A partnership with Carbonfuture, a company that captures CO2 from biochar production and stores it in the soil to improve soil fertility, works on a similar principle to Stockholm-based Exergi. This adds 32,000 tonnes of CO2 removed in the form of credits for Microsoft.  In addition, the partnership with Running Tide underscores Microsoft's commitment to accelerate CO2 removal through natural ocean uptake, demonstrating a comprehensive strategy to meet ambitious emissions targets. In addition to these companies, Microsoft has secured partnerships with Climate Robotics, Land O'Lakes and Heirloom.

At all-time highs

Artificial intelligence and technology are not the only reasons that make Microsoft so attractive to investors. Its commitment to protecting nature and reducing the impacts of climate change also adds value to the company, not only ethically but also financially. According to Companiesmarketcap.com, it still tops the list of companies with the largest market capitalisation of more than US$3 trillion. As of May 7, 2024, the stock was worth $413.* Since the beginning of last year, the stock has been on an upward trend despite short-term declines, reaching an all-time high of $428 in March of this year. At the end of April, the company released results for the third quarter of fiscal 2024 that exceeded expectations and confirmed its leadership position.

Microsoft stock performance over the last 5 years (Source: Trading Economics) *

Olivia Lacenová, chief analyst at Wonderinterest Trading Ltd.

[*] Past performance is no guarantee of future results