2 minute read | September.14.2023
Microsoft entered into a long-term purchase agreement with direct air capture technology provider Heirloom to purchase carbon removal credits for the removal of up to 315,000 metric tons of carbon dioxide over 10 years. The removal will offset the equivalent of the annual emissions of around 70,000 gasoline-powered cars, making this one of the largest carbon dioxide removal deals to date.
Orrick advised Microsoft on the agreement.
Heirloom builds low-cost direct air capture technology that will permanently remove CO2 at a billion-ton scale. The company uses limestone, one of the world’s most abundant and inexpensive minerals, to capture CO2 from the atmosphere and permanently and safely store it underground or in long-lasting materials such as concrete.
The agreement between Microsoft and Heirloom represents one of the first bankable carbon dioxide removal agreements, establishing a vital funding mechanism, similar to long term power purchase agreements, that will enable large scale carbon removal projects to be built by Heirloom. The innovative deal will accelerate the scale-up of carbon removal and drive down the cost of the breakthrough technology.
The transaction supports Microsoft’s goal to be carbon-negative by 2030 and its objective of removing by 2050 the equivalent of all the carbon the company has emitted since it was founded.
“Microsoft’s agreement with Heirloom is another important step in helping build the market for high-quality carbon removal and supports our path to become carbon negative by 2030,” Brian Marrs, Microsoft’s Senior Director of Energy and Carbon, said in the Heirloom press release.
Teresa Hill and Lana Le Hir led the Orrick team advising Microsoft. The team also included Daniel Lee, Mae Ji and Austin Himes.