Australia and the United States have launched a $3.5 billion critical minerals partnership, marking one of the largest bilateral efforts to secure materials essential for clean energy and electric vehicles (EVs).

The agreement focuses on strengthening supply chains for minerals such as lithium, cobalt, nickel, and rare earth elements. These materials are vital for batteries, solar panels, wind turbines, and other low-carbon technologies.

The deal comes as global demand for these minerals rises sharply. The International Energy Agency estimates that demand for critical minerals could quadruple by 2040 under net-zero scenarios. Lithium demand alone could grow more than 40 times by 2040, driven by EV adoption and battery storage.

Australia plays a central role in this supply chain. It currently produces about 55% of the world’s lithium, making it the largest global supplier. However, much of the processing still takes place overseas, creating supply risks for Western economies.

The new partnership aims to address this gap by boosting both extraction and domestic processing capacity.

Billions Back the Full Value Chain—from Mine to Market

The $3.5 billion investment will be deployed over seven years. The United States will give around $2.1 billion. This funding comes from the Defense Production Act and the Infrastructure Investment and Jobs Act. Australia will provide $1.4 billion through national financing programs.

The funding is designed to support the full value chain, from mining to refining to advanced research. The main areas of investment include:

• $1.8 billion for new mining projects and infrastructure upgrades
• $1.2 billion for processing and refining facilities
• $500 million for research, innovation, and sustainable extraction technologies

A key goal is to reduce reliance on external processing markets and build more resilient supply chains. This includes expanding refining capacity for lithium and rare earth elements, which are often processed outside producing countries.

The partnership is also expected to create economic benefits. Government estimates say about 15,000 direct jobs will be created. Additionally, around 30,000 indirect jobs will come from supply chains and related industries.

Breaking China’s Grip on Mineral Processing

The agreement reflects growing concern over the concentration of mineral processing in China. Currently, China dominates key parts of the global supply chain.

According to the International Energy Agency:

• China handles about 60% of global lithium processing
• It controls more than 80% of rare earth refining
• It also leads in battery component manufacturing

This dominance creates risks for supply security, pricing, and geopolitical stability. Disruptions in one region can affect global clean energy deployment.

By investing in alternative supply chains, Australia and the United States aim to diversify production and reduce these risks. The partnership could also encourage other countries to develop their own critical minerals strategies.

In addition, the deal may help stabilize prices for key materials. Volatility in lithium and nickel markets has impacted EV production costs. It has also delayed some renewable energy projects in recent years.

• MUST READ: The U.S. EV Supply Chain Race: Where Surge Battery Metals Fits in the National Critical Minerals Strategy

Supporting Climate Goals and the Energy Transition

The partnership has direct implications for global climate efforts. Critical minerals are essential for scaling clean energy technologies. Without a reliable supply, the pace of decarbonization could slow.

Battery storage is a key example. Energy storage systems help manage the variability of renewable energy sources like solar and wind. Expanding mineral supply will support the growth of these systems.

The IEA projects that global battery capacity must increase significantly to meet climate targets. Some estimates suggest energy storage capacity needs to grow more than sixfold by 2030 to stay on track for net-zero emissions.

The US-Australia alliance could help unlock this growth by ensuring stable access to raw materials. This, in turn, may reduce costs for batteries and renewable energy systems over time.

Both countries have also committed to improving environmental standards in mining. This includes reducing emissions, improving water management, and limiting land impacts. These measures are important because mining itself can be carbon-intensive.

Efforts to lower emissions in mineral extraction could also influence carbon accounting frameworks. As supply chains become more transparent, companies may need to track and report emissions linked to raw material sourcing.

ESG, Carbon Markets, and the New Mining Reality

The expansion of critical minerals supply chains is expected to influence carbon markets and ESG strategies.

As mining activity increases, so does the need to manage emissions. This could increase the need for carbon credits in the extractive sector. This is true for projects that cut or offset emissions from mining.

At the same time, improved supply chains for clean technologies may accelerate renewable energy deployment. This could support carbon reduction efforts across multiple sectors, including power generation and transportation.

The partnership may also lead to higher standards for responsible sourcing. Materials produced under strict environmental and social guidelines could command a premium in global markets.

This shift aligns with growing investor focus on ESG performance. Companies face growing pressure to show that their supply chains meet sustainability standards. This includes tracking emissions across Scope 1, 2, and 3 categories.

Over time, these trends could reshape how carbon credits are used. Companies may focus more on cutting emissions directly in their supply chains, rather than just using offsets.

Industry Scrambles to Secure the Next Wave of Supply

The announcement has received strong support from industry players. Major automakers and battery manufacturers are seeking secure and stable supplies of critical minerals. Companies like Tesla, Ford, and General Motors want to source materials from projects tied to the partnership.

Mining firms are also responding. Albemarle Corporation and Pilbara Minerals will likely gain from more investment and quicker project timelines.

Investor interest in the sector is rising as well. Global spending on energy transition minerals is growing rapidly, supported by both public and private capital.

The International Energy Agency reports that investment in critical minerals has increased sharply in recent years. This trend is expected to continue as countries compete to secure supply chains for clean energy technologies.

A Defining Shift in the Global Energy Economy

The $3.5 billion Australia–US critical minerals partnership represents a major step in reshaping global energy supply chains. It addresses a key bottleneck in the transition to a low-carbon economy: access to essential raw materials.

In the short term, the deal may help stabilize supply and reduce risks linked to market concentration. In the long term, it could accelerate the deployment of clean energy technologies and support global climate goals.

For carbon markets, the impact is indirect but important. More minerals can help speed up the use of renewables and energy storage. This, in turn, cuts emissions throughout the economy. At the same time, higher mining activity may drive demand for carbon credits and new emissions reduction strategies within the sector.

The success of the partnership will depend on execution. Expanding mining and processing capacity takes time, investment, and strong environmental oversight.

If these challenges are addressed, the alliance could serve as a model for future international cooperation on critical minerals. It also highlights how energy security, economic policy, and climate action are becoming increasingly connected.

Ultimately, as demand for clean energy continues to grow, securing sustainable and reliable mineral supply chains will remain a key priority for governments and industries worldwide.

• READ MORE: DOE and Amazon Partner to Secure Critical Minerals Through AI-Driven Recycling

The post US and Australia Boost Critical Minerals Support with $3.5B Alliance, Challenging China’s Grip appeared first on Carbon Credits.

JPMorgan Chase has signed two major carbon removal agreements this month. The first one involves a purchase of 60,000 metric tons of durable carbon dioxide removal (CDR) over ten years from climate startup Graphyte. The deal uses biomass-based technology that converts agricultural and timber waste into stable carbon blocks stored underground.

In parallel, JPMorgan has also secured 85,000 tons of forest-based carbon removal credits through improved forest management projects. These credits, marketed by Anew Climate, come from U.S. forest projects managed by Aurora Sustainable Lands.

They aim to extend harvest cycles, boost forest health, and enhance long-term carbon storage. The approach helps maintain higher carbon stocks in working forests while supporting biodiversity and sustainable timber production.

Taylor Wright, Head of Operational Sustainability at JPMorgan Chase, noted:

“We were excited to add credits from the Little Bear Forestry Project to our carbon removal portfolio. The dynamic baselining provides meaningful evidence that these credits meet a high threshold for quality, supporting our interests as both a buyer and as a steward of market integrity.”

Carbon Removal Still Small, But Growing Fast

The agreements are part of a broader push by the bank to expand its carbon removal portfolio. While the total volume is small compared to global emissions, the deals highlight a shift in corporate climate strategies.

Companies are now focusing more on durable carbon removal, not just emission reductions. JPMorgan’s mix of engineered and nature-based solutions also reflects a growing trend toward portfolio diversification in carbon removal sourcing.

Carbon removal remains a small but critical part of climate action. The United States emits about 5 billion tons of CO₂ per year, showing how limited current removal volumes still are.

However, long-term demand is expected to grow sharply. The Intergovernmental Panel on Climate Change estimates that by 2100, the world might need to remove 100 to 1,000 gigatons of CO₂. By mid-century, annual removal should reach about 10 gigatons per year.

Today’s market is far from that scale. Most carbon removal deals are measured in thousands or hundreds of thousands of tons. But these early contracts are seen as critical. They help build supply, reduce costs, and attract investment into new technologies.

JPMorgan’s latest deals fit this pattern. Together, the 60,000-ton biomass contract and 85,000-ton forest-based agreement provide long-term demand signals across different removal pathways. This helps scale both emerging engineered solutions and more established nature-based approaches.

Turning Waste Into Permanent Carbon Storage

Graphyte’s process, known as “carbon casting,” uses natural carbon capture through plants. Biomass absorbs CO₂ through photosynthesis. The material is then dried, compressed, and sealed to prevent decomposition. This allows the carbon to remain stored for long periods.

The company uses waste materials such as crop residues and timber byproducts. This reduces the need for new land use and lowers overall costs. The process also uses relatively low energy compared to other removal methods.

Projects linked to the JPMorgan deal include facilities in Arkansas and Arizona. These projects also provide added benefits. For example, using forest thinning residues can help reduce wildfire risk and support land restoration.

This reflects a broader trend in carbon markets. Buyers are increasingly looking for projects that deliver both carbon removal and environmental co-benefits. The bank’s forest-based deal reinforces this trend by supporting improved forest management practices that enhance carbon storage while maintaining productive landscapes.

JPMorgan’s $1 Trillion Net Zero Strategy and Climate Finance Push

JPMorgan’s carbon removal investments are part of a wider climate strategy. The bank has committed to facilitating $1 trillion in climate and sustainable development financing by 2030. It has already deployed about $309 billion between 2021 and 2024 toward this goal.

In addition to financing, the bank is building a diversified carbon removal portfolio. Since 2023, it has signed deals to cut hundreds of thousands of tons of CO₂. This includes a plan for up to 800,000 tons of carbon removal through long-term contracts.

The company aims to match its unabated operational emissions with durable carbon removal by 2030.

JPMorgan is also investing in a range of technologies. These include direct air capture, bio-oil sequestration, biomass storage, and forest-based removal. Its latest forest deal shows a continued commitment to high-quality, nature-based removals that meet stricter standards for durability and verification.

• SEE MORE: Banking in Carbon: JPMorgan Chase Invests $90M in Carbon Removal with CO280

This diversified approach helps reduce risk while supporting different pathways to scale. Compared to many financial institutions, JPMorgan remains an early mover. Most large buyers in carbon removal are still technology companies, particularly Microsoft.

Microsoft Pullback Shakes Market Confidence

However, Microsoft, the largest buyer of carbon removal credits, has reportedly paused new purchases.

The tech giant has played a dominant role in the market. It accounts for up to 90% of global carbon removal purchases and has contracted more than 45 million tons of CO₂ removal to date. In 2025 alone, the company signed agreements for 45 million tons, doubling its 2024 volume and far exceeding any other buyer.

However, reports suggest the company may be adjusting the pace of new deals. This shift does not mean the end of carbon removal demand, but it signals a transition.

The market can no longer rely on a single dominant buyer. In this context, JPMorgan’s continued activity—across both engineered and nature-based deals—shows how new buyers are stepping in to support market stability.

Market Trends: From Cheap Offsets to High-Durability Carbon Credits

The carbon market is evolving quickly. Traditional carbon credits often focus on avoiding emissions, such as protecting forests. However, there is growing demand for removal-based credits that physically take CO₂ out of the atmosphere.

Corporate net-zero goals drive this shift. Many companies now face limits on how much they can reduce emissions directly. Carbon removal is becoming necessary to address remaining emissions.

At the same time, supply remains limited. High-quality removal credits are scarce. This keeps carbon prices high, especially for engineered solutions.

Early buyers like JPMorgan are helping shape the market. Long-term contracts provide price signals and encourage project development. They also help define standards for quality and verification.

Another key trend is the focus on durability. Buyers prefer solutions that store carbon for decades or centuries, rather than short-term offsets.

Early-Stage Market, High-Stakes Growth

Despite growing momentum, carbon removal is still in its early stages. Current volumes are small compared to global needs. Policy support is also limited in many regions.

However, corporate demand is rising. Deals like JPMorgan’s show how private sector investment is driving the market forward.

The combination of long-term contracts, new technologies, and climate finance is expected to accelerate growth. Over time, this could help bring down costs and expand supply.

For now, the focus remains on building scale. Each new agreement adds to a growing pipeline of projects. These projects will play a key role in meeting long-term climate targets.

JPMorgan’s latest purchases may be modest in size. But together, they reflect a larger shift. Carbon removal is moving from early experimentation to a more structured and investable market, supported by a broader mix of buyers and solutions.

• READ MORE: JPMorgan, Microsoft Back $210 Million Carbon Loan in Landmark Climate Finance Deal

The post JPMorgan’s Carbon Bet Marks a Turning Point for the Removal Market appeared first on Carbon Credits.

Microsoft has temporarily halted all new carbon removal purchases as it reviews its broader climate strategy. The move affects direct air capture, biochar, and other engineered carbon removal solutions supported by its $1 billion Climate Innovation Fund, launched in 2020. It could delay hundreds of millions of dollars in planned investments across the carbon removal sector.

The pause was first reported by Heatmap News, in which a company spokesperson said that Microsoft is not indefinitely halting all of its purchases. Rather, she stated:

“We continually review and assess our carbon removal portfolio along with market conditions for the optimal balance on our path to carbon negative.”

Microsoft has been one of the largest corporate buyers of high-quality carbon removal credits. Its decision signals a shift in how major companies evaluate carbon offsets and removal technologies.

The review focuses on whether current solutions can deliver reliable, long-term emissions reductions at scale. It also reflects growing scrutiny of corporate net-zero claims from regulators, investors, and climate groups.

Impact on Carbon Removal Market Pricing

Microsoft’s pause is expected to have an immediate impact on the voluntary carbon market (VCM). The company has played a leading role in scaling demand for engineered carbon removal credits.

These credits are more expensive than traditional offsets. Microsoft has typically paid between $100 and $600 per metric ton of CO₂ removed, compared with $5 to $15 per ton for many nature-based or avoidance credits.

Industry estimates suggest that Microsoft’s pause could significantly reduce demand in the engineered carbon removal market. The tech giant has accounted for as much as 80% to 90% of global purchases of carbon removals, as data from CDR.fyi shows below.

Several suppliers are directly exposed. Companies such as Climeworks and Carbon Engineering have signed multi-year agreements with Microsoft worth a combined $200 million to $300 million. These deals helped fund the early deployment of direct air capture facilities.

The broader voluntary carbon market has already seen price pressure. According to the Ecosystem Marketplace, average prices for carbon credits vary widely depending on quality. Premium removal credits trade at a steep premium due to limited supply and higher verification standards.

Microsoft’s exit, even if temporary, may accelerate a correction in these high prices. It may also reduce near-term funding for early-stage carbon removal technologies.

Microsoft’s Net-Zero Targets Face a Reality Check

Microsoft has some of the most ambitious climate goals in the corporate sector. The company aims to become carbon negative by 2030 and remove all the carbon it has emitted since its founding by 2050.

To support this, the tech giant has committed significant capital to carbon removal. By 2025, it had invested more than $750 million in carbon removal projects and contracted roughly 45 million tonnes of removals.

The current review is examining whether these investments can scale fast enough to meet long-term targets. Key concerns include:

• The permanence of carbon storage, especially for geological projects
• The high cost of engineered removal compared to direct emissions cuts
• The limited capacity of current technologies to deliver millions of tons annually

Many removal methods are still in early stages. Direct air capture, for example, currently removes only a small fraction of global emissions. The International Energy Agency estimates that global carbon removal capacity remains well below what is needed to meet net-zero scenarios by mid-century.

Microsoft is also reviewing how carbon removal fits into its broader decarbonization strategy. This includes aligning removal purchases with renewable energy investments and operational emissions reductions

SEE MORE:

• Microsoft Inks Biggest-Ever U.S. Biochar Deal with Liferaft
• Microsoft Buys 60,000 Soil Carbon Credits from Indigo’s Largest Carbon Crop
• Microsoft Strikes 2 Record-Breaking Carbon Credit Deals

Broader Big Tech Climate Strategy Shifts

Microsoft’s move reflects a broader shift across the technology sector. Other major companies, including Amazon, Meta, and Google, have slowed their carbon removal purchases in recent quarters.

Instead, many are focusing more on reducing emissions directly. This includes expanding renewable energy use, improving energy efficiency, and redesigning supply chains.

This trend aligns with updated guidance from the Science Based Targets initiative (SBTi). The SBTi emphasizes that companies should prioritize emissions reductions across Scope 1, 2, and 3 before relying on carbon removal.

Under this framework, carbon removal is treated as a solution for residual emissions that cannot be eliminated. This approach reduces reliance on offsets and increases pressure on companies to decarbonize core operations.

At the same time, regulatory scrutiny is increasing. In the United States, the U.S. Securities and Exchange Commission has proposed new climate disclosure rules. These rules would require companies to provide more detailed reporting on emissions and climate-related risks.

This is pushing companies to strengthen verification standards for carbon credits and avoid reputational risks linked to low-quality offsets.

A Turning Point for Carbon Removal Investment Models

Microsoft’s decision may signal a broader shift in how companies support carbon removal technologies. Instead of buying credits directly, some firms are exploring new funding models.

These include advance market commitments, where companies guarantee future demand, and direct investments in technology development. These approaches can provide more stable funding while reducing reliance on spot market purchases.

The technology sector has been a major driver of carbon removal demand. Since 2022, it has accounted for about 40% of high-quality removal credit purchases. Between 2020 and 2025, major tech companies committed billions of dollars to carbon removal initiatives.

If large buyers step back, developers may face funding gaps in the short term. However, this could also push the industry to improve cost efficiency and scalability.

Current removal costs remain high. Direct air capture can exceed $500 per ton, though companies aim to reduce this below $100 per ton over time. Achieving this will require technological advances, economies of scale, and supportive policy frameworks.

What It Means for Carbon Markets and Climate Goals

Microsoft’s pause marks a key moment for the VCM. It highlights the growing demand for higher standards, better verification, and clearer climate impact.

In the short term, the decision may slow growth in the premium carbon removal segment. Prices could soften, and some projects may face delays or funding challenges.

However, the long-term impact could be positive. Stronger scrutiny may lead to more reliable and transparent carbon removal solutions. This would help build trust in the market and attract new investment.

For companies, the message is clear. Net-zero strategies must focus first on reducing emissions. Carbon removal remains important, but it must be credible, scalable, and cost-effective.

For the carbon removal sector, the challenge is to prove that its technologies can deliver on these expectations. If successful, it will play a critical role in global climate efforts.

The International Energy Agency and other bodies have made it clear that carbon removal will be essential to achieving net-zero emissions by 2050. The question is not whether it is needed, but how fast it can scale.

As the sector evolves, companies that can deliver verified, permanent, and affordable carbon removal solutions are likely to lead the next phase of expansion.

• READ MORE: Microsoft Signs 626,000-Tonne Carbon Removal Deal with Svante and Indigenous-Led North Star Project in Canada

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