Microsoft's million-tonne CO2-removal purchase - lessons for net zero - Nature
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Setting the agenda in research
Comment
JULIA DUNLOP/CLIMEWORKS
Climeworks’ plant for direct air capture in Iceland removes carbon dioxide permanently from the atmosphere.
Microsoft’s million-tonne CO2-removal
purchase — lessons for net zero
Lucas Joppa, Amy Luers, Elizabeth Willmott, S. Julio Friedmann, Steven P. Hamburg & Rafael Broze
I
Strengthen markets, n January this year, Microsoft made a major of this, the company will count less than half as
announcement: it had paid for the removal being certified to officially compensate for its
measures and definitions for of 1.3 million tonnes of carbon dioxide from emissions. It is the largest corporate procure-
removing carbon dioxide the atmosphere. Among its purchases were ment of carbon removal so far.
projects to expand forests in Peru, Nicara- Microsoft did this as part of its 2020 com-
from the atmosphere to gua and the United States, as well as initiatives mitment to slash its greenhouse-gas emissions
fight climate change. to regenerate soil across US farms. Microsoft to ‘net zero’ — as one of more than 120 nations
will pay the Swiss firm Climeworks to operate and 1,500 companies to set such goals1. By
a machine in Iceland that pulls CO2 from the air 2030, the company will reduce its emissions
and injects it into the ground, where it miner- by half or more, and will have 100% of its elec-
alizes and turns to stone. The amount of CO2 tricity consumption matched by zero-carbon
to be removed is equivalent to about 11% of the energy purchases. It will electrify its vehicle
annual emissions from Microsoft’s value chain; fleet, stop using diesel for backup energy and
Nature | Vol 597 | 30 September 2021 | 629
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Comment
reduce emissions across its value chain. Emis- net-zero emissions by 2050 (which is an received, biosphere-based storage projects
sions that are harder to abate, including his- anticipated 2–10 gigatonnes of CO2 per year)2. cost only $16 per tonne of CO2 (tCO2), whereas
torical emissions, will be compensated for by Although Microsoft received 189 proposals geosphere-based storage costs, on average,
withdrawing carbon from the atmosphere. The offering 154 megatonnes of CO 2 (MtCO2) $141 per tCO 2 ($20–10,000 per tCO 2) —
firm is levying an internal carbon tax across all over the coming years, only 55 MtCO2 were similar to the costs in Microsoft’s proposals.
types of greenhouse-gas emission. It has set up available immediately, and a mere 2 MtCO2 Geosphere-based costs are higher, close to
a US$1-billion fund to invest in carbon reduction met Microsoft’s criteria for high-quality CO2 the $30–200 per tCO2 social cost of carbon
and removal technologies, and partnerships to removal. Stripe’s 47 carbon-removal proposals emissions3. However, many factors are not
provide social and environmental benefits. The amounted to 16 MtCO2, but only 0.024 MtCO2 priced in. Nature-based solutions face risks
aim is that, by 2030, the company will be carbon met the company’s requirement that carbon of reversal by fires, pests, storms and changes
negative. By 2050, it will have removed all of its remain sequestered for at least 1,000 years in land use. These risks can be reduced with
emissions since it was founded in 1975. (see ‘Carbon-market snapshot’). insurance and by accounting for carbon across
Here we summarize the lessons learnt from Second, the scarcity of proposals that met the larger areas4. But reliable tools for tracking
Microsoft’s carbon-removal efforts, along with companies’ criteria reflects a lack of standards carbon at scale are lacking. Co-benefits such
those from another early corporate procure- and clear definitions. Roughly one-fifth of pro- as water conservation, hazard protection and
ment — the $9-million purchases of carbon posals to Microsoft focused on avoiding new biodiversity are also unaccounted for.
removal in 2020 and 2021 by the US–Irish emissions, not on withdrawing CO2 from the
financial-infrastructure company Stripe. atmosphere; these were rejected. Others lacked Three priorities
Although these are just two companies’ efforts, the technical information needed to ensure The following three aspects of the world’s
they are the first significant open solicitations reliability. Indeed, there’s no standard way to carbon-removal efforts need urgent attention.
focused exclusively on carbon removal. We measure, report and verify carbon removed.
write as a team composed of Microsoft staff Such ambiguity is a barrier to investment. Meaning. The Intergovernmental Panel on
working on the company’s carbon-negative Third, systems for accounting for carbon Climate Change’s definition of net zero is sim-
programme and research scientists who ana- removal do not distinguish between short- ple enough at a global scale: when “anthropo-
lyse carbon reduction and removal strategies. and long-term forms of CO2 storage (see genic emissions of greenhouse gases to the
We highlight three ‘bugs’ in the current sys- ‘Some carbon-removal strategies’). This dis- atmosphere are balanced by anthropogenic
tem: inconsistent definitions of net zero, poor torts the market and discourages investments removals”. But it is too broad to tell individual
measurement and accounting of carbon, and in more-durable solutions. Nature-based stor- companies how they can reach net zero5.
an immature market in CO2 removal and off- age projects sequestering carbon for less than Businesses have lots of options. For exam-
sets. These challenges need to be overcome if 100 years accounted for most proposals that ple, offsetting emissions — by paying some-
the world is to reach net zero by mid-century. Microsoft received (in total, more than 95% one else not to emit as a way to compensate
of CO2 volume). It is cheaper and easier to for ongoing emissions — can slow the rate at
Three lessons establish trees and enrich soils than to deploy which CO2 builds up in the atmosphere, but
First, the supply of solutions capable of nascent technologies that capture carbon and it does not remove any. That’s why, in 2020,
removing and storing carbon viably is a tiny store it geologically. Microsoft pivoted to purchasing only carbon
proportion of that needed to reach global On average, in the pitches that Stripe removal. It also expanded the scope of its pro-
gramme to include its whole value chain and
SOME CARBON-REMOVAL STRATEGIES historical emissions, more than quadrupling
Nature-based methods for storing carbon dioxide are relatively cheap and currently available. the tonnage of carbon that the company needs
But carbon stored in terrestrial ecosystems is at risk of release by fires and pests, for example.
to compensate for.
Geological storage could be permanent, but today’s technologies are pricey and immature.
Companies need standards to gauge
Potential side effects Evidence base
whether their carbon commitments are con-
Positive Negative None Low confidence Medium confidence
sistent with global net zero. Efforts to develop
Biosphere Geosphere them include the international non-profit
Storage in plants and soils Storage in rocks and minerals
Science-based Targets Initiative, the Oxford
offsetting principles from researchers at the
University of Oxford, UK, and the cross-sector
business initiative Transform to Net Zero.
Managing forests Soil sequestration BECCS* Air capture
These emphasize reducing all greenhouse-gas
Impacts on: emissions as much as possible along the value
SOURCES: IPCC SIXTH ASSESSMENT REPORT (2021)/AUTHORS’ ANALYSIS
Water quality
chain; setting interim targets; purchasing car-
bon removal; and shifting towards long-term
Water quantity carbon storage. Such actions must be in addi-
tion to those designed to protect and enhance
Food supply stocks and sinks of carbon in the biosphere.
Many organizations assume there is no limit
Biodiversity to carbon-removal possibilities, but there
is. Nature-based removal is constrained by
Sequestration >3 GtCO2† 0.3–3 GtCO2 >3 GtCO2 >3 GtCO2
area and competing uses of land6. Engineer-
per year ing solutions can scale up, but are currently
scarce, expensive and resource intensive.
Measurement Fair Poor Fair Good
and verification Competition for supply will grow as more
companies act. The most effective measures
Impact ratings are from the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report, apart
from ‘Measurement and verification’, which are based on the authors’ judgement.
might become oversubscribed, making many
*BECCS, bioenergy with carbon capture and storage; †GtCO2, gigatonnes of CO2. net-zero commitments impossible to fulfil.
630 | Nature | Vol 597 | 30 September 2021
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.GETTY
Planting forests and improving their management are nature-based solutions that companies can use to remove and store carbon.
Without rapid growth in supply, the world training, habitat restoration and clean-energy and are of limited use in reducing emissions
might run out of high-quality options to com- grants. Similar efforts should be undertaken in practice. They do not factor in the impacts
pensate for remaining emissions, even after for carbon removal. of making different choices in the value chain
drastic reductions. Too little is being invested for greenhouse-gas emissions.
in durable technological approaches and Measurement. Corporations need more- Microsoft is making a start by requiring
geological storage systems. accurate, automated and consistent ways of suppliers to make annual disclosures of their
What can be done? Companies should start measuring and accounting for carbon. The greenhouse-gas emissions and to adopt plans
by reducing to zero those emissions they non-profit organization Greenhouse Gas to reduce emissions. However, suppliers face a
have most control over, such as from energy Protocol provides guidelines for assessing plethora of carbon-reporting requests.
use and land management. In the meantime, Digital tools are emerging that can auto-
they should invest in expanding the supply “Too little is being invested mate and increase the accuracy of emis-
and lowering the cost of the most effective sions measurement. Systems that combine
carbon-removal technologies, as Microsoft in durable technological remote-sensing images, sensors and machine
and Stripe are doing. Firms should consider approaches and geological learning are being developed — for example,
purchasing removal for emissions beyond their storage systems.” the European Space Agency’s Copernicus CO2
control that are hardest to abate, such as trans- monitoring mission and the methane-tracking
port of goods and materials by air and sea. satellite MethaneSAT, backed by the non-profit
Researchers need to define a global budget emissions from internal operations, such as Environmental Defense Fund in New York City.
for carbon removal, including evolving vehicle use and manufacturing, and from pur- Microsoft’s FarmBeats team is developing
scenarios for the supply of nature-based and chases of energy sourced off-site. Estimating low-cost, scalable methods for measuring soil
technology-based removal and storage. And emissions from supply and value chains is carbon in agricultural fields. Microsoft is also
they should assess the future demand for car- more difficult7. It requires calculations from collaborating with start-ups, such as NCX (for-
bon removal driven by net-zero commitments all suppliers and users of a company’s prod- merly SilviaTerra) in San Francisco, California,
of diverse organizations around the globe. ucts and services. Three-quarters of Micro- to process terabytes of satellite imagery to
Social equity is crucial. To reach net zero, soft’s emissions come from these, including count trees in the United States, estimate their
developing economies and under-served building materials, business travel, product potential for carbon sequestration and create
communities must benefit. For this reason, life cycles and the electricity that customers a marketplace for private landowners to reduce
Microsoft is partnering with Sol Systems, a consume when using Microsoft’s products. deforestation. For projects such as these to suc-
solar-energy finance and development firm The company has been using expenditure data ceed, rural broadband will be needed to collect
in Washington DC, to create a fund that links and industry-average emissions for reporting and transmit data from networks of Inter-
the purchase of renewable energy to career purposes. But these have large uncertainties net-connected devices — the Internet of Things.
Nature | Vol 597 | 30 September 2021 | 631
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.Comment
A growing number of enterprise-software release, or the social equity or environmental in the biosphere and the geosphere. Multiple
companies, including SAP in Walldorf, Ger- benefits of removal. At current prices, credits approaches have been proposed8,9. However,
many, Salesforce in San Francisco and Micro- for avoided emissions are the cheapest (as low these comparisons hinge on choices of a few
soft, are developing platforms for automating as $3 per tCO2). Nature-based carbon-removal parameters, such as economic rates. Factors
carbon accounting. For example, Microsoft’s costs more ($5–50 per tCO2), although it is such as competition for land use, limits to eco-
Cloud for Sustainability connects organizations much less expensive than geo-based removal. system-carrying capacity and social and envi-
to real-time sources of data to track carbon and Price and supply will shift over time. The cost ronmental impacts need to be accounted for.
show performance against net-zero goals. Such of nature-based removal is likely to increase as Microsoft is currently executing a strategy
platforms are still in their early stages, however. the requirement increases and supply declines, for its investments over the next decade, while
Automated systems will become more as available forests and soils become satu- setting conditions for the next three decades.
important as greenhouse-gas reporting and The company is prioritizing funding across
emissions reductions become mandatory — “Companies need better three pillars: reducing greenhouse-gas emis-
as the leaders of the G7 group of countries sions; removing carbon from the atmosphere
announced in June that they would implement.
economic incentives to and storing it in the biosphere; and removing
Investors and customers increasingly demand promote the most effective and storing it in the geosphere. It is implement-
that companies demonstrate progress against forms of CO2 removal.” ing internal targets, grants and other incen-
environmental, social and corporate-govern- tives to encourage innovations in emissions
ance goals. National governments are draft- reduction. Nature-based solutions will be a
ing regulations for corporate climate-related rated. Meanwhile, geo-based technologies will major portion of its carbon-removal strategy
disclosure. These rules could help to create develop and scale up, becoming more accessible in the near term. The company will include
common standards for carbon accounting and and cheaper. Companies making commitments more geo-based storage as this becomes more
climate-change data. to become net zero by 2050 have to make deci- widely available. To hasten that day, Microsoft,
sions now about operations in 30 years’ time, through its $1-billion Climate Innovation Fund,
Markets. Companies need better economic yet there is little economic modelling to project is investing in projects such as the Orca direct-
incentives to promote the most effective forms how CO2-removal markets might change. air-capture facility in Iceland developed by
of CO2 removal. Nature-based removal and Governments, researchers and compa- Climeworks. Anyone who can do more should
storage, and technology-enabled removal and nies need to develop a robust and effective do more. It is time to step up to develop the
geosphere-based storage are not equivalent carbon-removal market that can meet the science, technology and markets for success-
commodities and should not be valued as such. demand for global net zero. A key advance ful carbon removal.
Today’s pricing on a per-tonne basis encour- would be to set consistent standards for
ages companies to buy the lowest-quality measuring, verifying and accounting for
carbon offsets. It does not monetize the dura- carbon removal that internalize differences The authors
tion of carbon storage, the risk of premature in the quality and durability of carbon stored
Lucas Joppa is chief environmental officer,
CARBON-MARKET SNAPSHOT Amy Luers is global lead of sustainability
In 2020, Microsoft and financial-services firm Stripe received 189* and 47 proposals from companies, science and Elizabeth Willmott is director of
respectively, for locking away carbon dioxide. Of these, 95% used nature-based storage, which is less durable
than geosphere-based. Few options were available for permanent removal. Only about 2 million tonnes’
the Carbon Program at Microsoft Corporation,
worth was judged reliable enough to purchase, of the around 170 million tonnes offered. Redmond, Washington, USA. S. Julio
Biosphere-based storage Geosphere-based storage Friedmann is senior scientific adviser at Carbon
Forest Soil Ocean Other† Geophysical (direct air capture, Direct, New York City; and a senior research
(Triangles indicate avoided emissions.) bioenergy with carbon capture and scholar at the Center on Global Energy Policy,
storage, mineralization)‡
Columbia University, New York City, New York,
100,000,000
USA. Steven P. Hamburg is chief scientist at
the Environmental Defense Fund, New York
10,000,000 Converting waste
biomass into bio-oil City, New York, USA. Rafael Broze is manager
and injecting it of the Carbon Removal Program at Microsoft
Proposed volume of storage (tonnes of CO2)
1,000,000 underground attracted Corporation, Redmond, Washington, USA.
both companies.
e-mails: lujoppa@microsoft.com;
100,000 amyluers@microsoft.com
1. Black, R. et al. Taking Stock: A Global Assessment of Net
10,000 Zero Targets (Energy & Climate Intelligence Unit/Oxford
Net Zero, 2021).
2. Intergovernmental Panel on Climate Change. Global
1,000 Warming of 1.5°C (eds Masson-Delmotte, V. et al.) (World
Meteorological Organization, 2018).
3. Moore, F. C. & Diaz, D. B. Nature Clim. Change 5, 127–131
100 Forest protection that (2015).
SOURCES: CARBONPLAN/AUTHORS’ ANALYSIS
lacked management to 4. Schwartzman, S. et al. Environ. Res. Lett. 16, 091001 (2021).
enhance the carbon 5. Rogelj, J., Geden, O., Cowie, A. & Reisinger, A. Nature 591,
10 sink was rejected 365–368 (2021).
because it leads to 6. Nolan, C. J., Field, C. B. & Mach, K. J. Nature Rev. Earth
avoided emissions Environ. 2, 436–446 (2021).
1 without additional 7. Patchell, J. J. Cleaner Production 185, 941–958 (2018).
carbon removal. 8. Herzog, H., Caldeira, K. & Reilly, J. Clim. Change 59,
293–310 (2003).
0 9. Friedmann, S. J. et al. Net-Zero and Geospheric Return:
0 200 400 600 800 1,000 1,200 Actions Today for 2030 and Beyond (Columbia Univ./
Estimated years in storage Global CCS Institute, 2020).
*Data on 161 proposals compiled by CarbonPlan (https://carbonplan.org); these exclude 28 further proposals to Microsoft that lacked sufficient information.
†Biomass, wood products and biochar. ‡Many geosphere-based solutions were classified as >1,000 years duration, but are shown here as 1,000 years for simplicity. The authors declare no competing interests.
632 | Nature | Vol 597 | 30 September 2021
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