TL;DR
Microsoft agreed to purchase more than 100,000 tonnes of carbon dioxide removal credits from Indian startup Varaha over the next three years, through 2029. The project converts cotton residue into biochar, aims to cut open-field burning and improve soils, and will scale across Maharashtra with tens of thousands of smallholder farmers involved.
What happened
Microsoft signed an offtake agreement with Varaha to buy in excess of 100,000 tonnes of carbon dioxide removal credits across the next three years, through 2029, expanding its portfolio of carbon removal methods as its cloud and AI operations grow. Varaha’s project web converts cotton stalks—typically burned after harvest—into biochar, a stable form of carbon that can be returned to soil to store carbon long term and help reduce seasonal air pollution. The initial phase focuses on Maharashtra and will engage roughly 40,000–45,000 smallholder farmers. Varaha plans 18 industrial reactors with 15-year operating lives, which the companies estimate could remove over 2 million tonnes of CO2 across the project lifetime. The startup has been scaling rapidly: in 2025 it processed about 240,000 tonnes of biomass, produced roughly 55,000–56,000 tonnes of biochar and generated around 115,000 credits, and it aims to grow throughput further in 2026.
Why it matters
- Adds another durable removal source to corporate portfolios as tech firms expand energy-intensive AI and cloud services.
- Uses agricultural waste to address both carbon sequestration and seasonal air pollution from open-field burning.
- Demonstrates demand-side support can help scale domestic removal projects in agricultural markets like India.
- Highlights the need for robust digital monitoring, reporting and verification systems to deliver credits at scale.
Key facts
- Microsoft will buy more than 100,000 tonnes of carbon dioxide removal credits from Varaha over the next three years, through 2029.
- Project converts cotton crop waste into biochar and initially focuses on the western Indian state of Maharashtra.
- The agreement will involve about 40,000–45,000 smallholder farmers in the initial phase.
- Varaha plans to build 18 industrial reactors with 15-year operating lives, projecting over 2 million tonnes of CO2 removed across the reactors’ lifetimes.
- In 2025 Varaha processed roughly 240,000 tonnes of biomass, produced about 55,000–56,000 tonnes of biochar and generated around 115,000 credits.
- Varaha reported plans to increase throughput in 2026 to roughly 500,000 tonnes of biomass and nearly 250,000 tonnes of carbon sequestered.
- Varaha runs 20 projects across India, Nepal and Bangladesh, works with about 150,000 farmers, and said its portfolio could potentially sequester around 1 billion tonnes of CO2 over project lifetimes.
- Microsoft reported total greenhouse gas emissions of 15.5 million metric tonnes CO2e in fiscal 2024 and had contracted about 22 million metric tonnes of carbon removals in FY2024 as part of its carbon-negative strategy.
- Google previously agreed to buy 100,000 tonnes of carbon removal credits from Varaha in January 2025.
- Varaha has raised about $50 million since 2022, with a $30.5 million investment from Mirova announced in November to expand regenerative farming work.
What to watch next
- Progress on Varaha’s rollout of 18 industrial reactors and whether they meet the planned timelines and operating targets — not confirmed in the source.
- Whether Varaha achieves its stated 2026 throughput target of roughly 500,000 tonnes of biomass and close to 250,000 tonnes of carbon sequestered.
- Microsoft’s public reporting on its carbon performance for 2025; the company had not reported 2025 progress at the time of the announcement.
Quick glossary
- Biochar: A charcoal-like substance produced by heating biomass in a low-oxygen process; when added to soil it can store carbon and influence soil properties.
- Carbon dioxide removal (CDR): Methods that remove CO2 from the atmosphere and store it long term, distinct from emissions reductions.
- Durable carbon removal: Carbon removal approaches that sequester CO2 in stable forms or reservoirs for long periods, reducing the risk of re-release.
- Monitoring, reporting and verification (MRV): Processes and systems used to track, document and validate greenhouse gas removals or reductions for claims and credits.
Reader FAQ
How many credits did Microsoft agree to buy?
Microsoft agreed to purchase more than 100,000 tonnes of carbon dioxide removal credits over the next three years, through 2029.
What feedstock does the project use?
The project converts cotton crop waste—typically burned after harvest—into biochar.
How many farmers are involved in the initial phase?
The initial phase is expected to involve about 40,000–45,000 smallholder farmers in Maharashtra.
Has Microsoft reported its 2025 emissions or carbon progress?
Not confirmed in the source.
How large is Varaha’s existing operation?
In 2025 Varaha processed about 240,000 tonnes of biomass, produced roughly 55,000–56,000 tonnes of biochar and generated around 115,000 credits; it works with about 150,000 farmers across 20 projects in South Asia.
Microsoft has signed a deal with Indian startup Varaha to buy more than 100,000 tons of carbon dioxide removal credits over the next three years, through 2029, expanding its portfolio…
Sources
- Microsoft taps India’s Varaha for durable carbon removal offtake
- Microsoft tops Google for 'world's largest biochar carbon …
- The Top 5 Biochar Carbon Removal Projects: A Buyer's Guide
- Microsoft Signs Largest-Ever Biochar Carbon Removal …
Related posts
- Dylan Araps: Why the Open-Source Developer Says ‘I Have Taken Up Farming’
- Raspberry Pi’s AI HAT+ 2 Adds 8GB RAM and Hailo 10H for Local LLMs
- nao Labs Seeks Founding Engineer to Build Open-Source Analytics Agent