A new agreement between Microsoft and Liferaft highlights the rapid growth of carbon removal markets. The deal covers 1 million carbon removal units or credits over 10 years, making it one of the latest long-term offtake agreements in the sector.
These agreements are important. They give developers guaranteed future demand while helping them raise capital, build projects, and scale operations. For buyers like Microsoft, they secure access to high-quality carbon removal credits in a tight market.
Phillip Goodman, Director, Carbon Removal at Microsoft, commented:
“At Microsoft, we’re pleased about the Liferaft project’s potential to pair high-quality, durable carbon removal with meaningful local benefits. Liferaft has strong plans for putting locally available biomass waste to productive use, generating local jobs, and supporting farmers and land managers. This demonstrates how carbon removal can strengthen agricultural communities, improve land outcomes, and deliver durable climate impact.”
The deal also reflects a broader shift. Companies are moving from short-term carbon offsets to long-term carbon removal contracts. These focus on physically removing carbon dioxide from the atmosphere and storing it for long periods.
Microsoft Expands Its Carbon Removal Playbook
Microsoft is the largest corporate buyer of carbon removal credits today. The company has rapidly scaled its purchases in recent years.
In 2025 alone, Microsoft signed agreements covering about 45 million tonnes of carbon removal. This was more than double its 2024 volume and a major jump from about 5 million tonnes in 2023.
- The company also dominates the broader market. In 2024, Microsoft accounted for about 63% of all durable carbon removal purchases, securing over 5.1 million tonnes.
Recent deals show how fast this is growing:
- 2.85 million tonnes of soil carbon removal credits with Indigo Ag over 12 years
- 2 million tonnes from afforestation projects in Africa
- 1.24 million biochar credits in one of the largest deals of its kind
- 3.6 million tonnes from a bioenergy carbon capture project in the U.S.
These numbers show a clear trend. Microsoft is using long-term contracts to build supply across multiple carbon removal pathways.
The company’s goal is ambitious. It aims to become carbon-negative by 2030 and to remove all its historical emissions by 2050. Carbon removal plays a key role in achieving this target.
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Why Biochar Is Dominating Early Carbon Markets
Liferaft is a U.S.-based carbon removal developer focused on biochar-based solutions. The company converts agricultural and forestry residues into stable biochar, which locks carbon in soil for hundreds of years.
Liferaft then sells these durable carbon removal credits to corporate buyers. Its approach combines carbon storage with soil health benefits, improving nutrient retention and reducing methane and nitrous oxide emissions from land.
The Microsoft offtake deal marks one of its largest long-term agreements, helping Liferaft scale operations and expand biochar deployment. It is important because it highlights the growing role of biochar carbon removal.
Biochar is produced by heating organic materials like agricultural waste in low-oxygen conditions. This process locks carbon into a stable solid form that can be stored in soil for hundreds to thousands of years.
It is considered one of the most practical carbon removal methods available today. Moreover, it is relatively low-cost compared to technologies like direct air capture. It can also scale faster because it uses existing biomass waste.
Biochar already plays a major role in the market. In 2024–2025, it accounted for about 86% of global carbon removal purchases and deliveries.
Demand is strong, but supply is limited. In 2024, biochar made up a large share of purchases, but actual issued credits remained below demand levels.
The long-term potential is also huge. Estimates suggest biochar could remove between 0.3 and 4.9 billion tonnes of CO₂ per year globally, with some studies pointing to around 3 billion tonnes annually using available biomass waste.
This makes biochar one of the most scalable carbon removal options available today.
How Offtake Deals Help Scale Carbon Removal
The Liferaft–Microsoft agreement follows a model that is becoming standard in carbon removal markets: long-term offtake contracts.
These deals serve several purposes:
- They provide price certainty for developers.
- They reduce investment risk for new projects.
- They help scale technologies that are still early-stage.
Microsoft has emphasized that early demand is critical. By committing to future purchases, companies help suppliers secure financing and expand capacity. This model is similar to how renewable energy markets grew. Long-term power purchase agreements helped scale solar and wind by guaranteeing revenue.
Now, the same model is being applied to carbon removal.
From Offsets to Permanent Carbon Removal
The carbon removal market is still small but growing fast. Demand is driven by corporate climate targets and stricter net-zero standards. Global purchases of carbon removal credits reached about 8 million tonnes in 2024, up nearly 78% from 2023.
By 2025, demand had already surged further, with tens of millions of tonnes under contract. Looking ahead, forecasts show strong growth:
- The market could reach $40 billion to $80 billion per year by 2030.
- By 2050, it could expand from $300 billion to $1.2 trillion annually.
However, supply remains a key constraint. Less than 1 million tonnes of durable carbon removal credits have been issued globally, far below demand.
This gap is pushing companies to secure long-term contracts early. It also supports higher prices for high-quality credits, especially those with long-term storage like biochar.
Carbon Removal Becomes Essential for Net Zero
Carbon removal is now seen as essential for climate goals. Reducing emissions alone is not enough. Some emissions are hard to eliminate, especially in sectors like agriculture, aviation, and heavy industry.
Carbon removal helps address these residual emissions. It removes CO₂ directly from the atmosphere and stores it in a durable way.
Experts note that carbon removal is what makes “net-zero” possible. Without it, many climate targets would be difficult to achieve at scale. This is why companies like Microsoft are investing heavily in the sector. They are building portfolios that include:
- Nature-based solutions like forests and soil,
- Engineered solutions like DAC and BECCS, and
- Hybrid approaches like biochar.
This diversified strategy reduces risk and supports multiple technologies at once.
A New Phase for Carbon Markets Emerges
The Liferaft agreement may seem small compared to Microsoft’s larger deals. But it reflects an important shift in the market.
First, it shows that demand is spreading across more suppliers. This helps build a broader and more competitive market.
Second, it highlights the growing role of biochar. As one of the most mature carbon removal methods, it is likely to remain a key part of early market growth.
Third, it reinforces the importance of long-term contracts. These agreements are becoming the main way to scale carbon removal globally.
With all these, the broader trend is clear. Carbon removal is moving from pilot projects to large-scale deployment. Companies are no longer testing the market. They are actively building it.
For now, Microsoft remains the dominant buyer. But its strategy is also creating space for others to follow. By securing supply early, the tech giant is helping to unlock a new phase of growth in climate technology.
The post Microsoft Inks Biggest-Ever U.S. Biochar Deal with Liferaft appeared first on Carbon Credits.
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
