Tech giant Microsoft has struck a landmark agreement with Occidental Petroleum subsidiary 1PointFive, addressing the escalating carbon footprint associated with artificial intelligence.
Under the deal, Microsoft will purchase 500,000 metric tons of carbon dioxide removal (CDR) credits over six years, marking the largest single purchase of such credits facilitated by direct air capture technology.
Direct air capture (DAC), which extracts CO2 directly from the atmosphere, is gaining traction among tech firms striving to achieve ambitious net-zero emission targets.
Michael Avery, president of 1PointFive, emphasized DAC’s suitability for reducing residual emissions and advancing climate objectives amid rising energy demands in the tech industry.
This move follows Amazon’s similar agreement with 1PointFive last year, involving the purchase of 250,000 metric tons of carbon removal over a decade. Both companies’ CDR credits will be generated by Stratos, 1PointFive’s inaugural industrial-scale DAC facility currently being built in Texas.
Brian Marrs, Senior Director for Carbon Removal and Energy at Microsoft, highlighted DAC’s role in supporting Microsoft’s broader aim to achieve carbon negativity by 2030.
These agreements enable Microsoft and Amazon to offset their emissions by compensating 1PointFive for removing carbon from the atmosphere and securely storing it underground.
Before DAC, carbon capture predominantly involved extracting CO2 from industrial sources and either storing it underground or repurposing it for products like synthetic fuels or chemicals.
While the UN Intergovernmental Panel on Climate Change (IPCC) views carbon capture technology as essential for limiting global warming, critics caution against viewing it as a substitute for more politically challenging emission reduction measures.
The urgency behind these agreements is underscored by the escalating emissions linked to the substantial computing power required to operate AI systems.
Recently, Google reported an increase in its greenhouse gas emissions for 2023, attributed to powering data centers that support AI operations.
Similarly, Microsoft’s latest sustainability report revealed a 29 percent rise in greenhouse gas emissions last year compared to 2020.
Industry experts note that companies like Microsoft, Amazon, Airbus, and Lego are willing to pay significant sums—upwards of $1,000 per tonne of CO2 captured and stored as carbon credits—to offset their emissions.