Microsoft (MSFT stock) has signed a long-term carbon removal agreement that highlights both the scale and direction of the emerging carbon market. The company will purchase 626,000 tonnes of durable carbon dioxide removal (CDR) credits over 15 years from the North Star project in Saskatchewan, Canada.
This project is being developed by Svante Technologies Inc. in partnership with the Meadow Lake Tribal Council (MLTC), through their joint venture North Star Carbon Solutions LP.
The facility will use bioenergy with carbon capture and storage (BECCS) to remove CO₂ from the atmosphere and store it permanently underground. Notably, the project will be co-located at the existing MLTC Bioenergy Centre and powered by waste biomass from a nearby Indigenous-owned sawmill.
This makes it one of the first fully integrated, Indigenous-led BECCS projects in Canada and a landmark deal in Microsoft’s growing carbon removal portfolio.
Indigenous-Led Carbon Project Sets New Benchmark in Canada
The North Star project stands out not just for its technology, but also for its ownership model. It is expected to be Canada’s first major Indigenous-owned, high-quality carbon removal project. The Meadow Lake Tribal Council, which represents several First Nations communities, plays a central role in both ownership and development.
This structure ensures that economic benefits stay within the local community. During construction, the project is expected to create around 50 jobs. Once operational, it will support a smaller but steady workforce while also boosting demand for nearby businesses. As a result, the project delivers both climate and economic value.
Equally important, the facility will rely on an existing industrial ecosystem. The MLTC Bioenergy Centre already generates renewable energy using wood waste.
That waste comes from the NorSask Forest Products sawmill, which is owned by MLTC and supplied through sustainably managed forests. This close integration reduces costs, improves efficiency, and strengthens the project’s environmental credibility.
Phillip Goodman, Director of Carbon Removal Portfolio, Microsoft, said:
“We’re pleased to work with North Star Carbon Solutions and Meadow Lake Tribal Council to help advance high-quality, durable carbon dioxide removal. To meet our climate goals, we need to help scale solutions that deliver durable storage and are backed by rigorous monitoring and verification. This agreement supports an Indigenous-led collaboration that enables the infrastructure needed to bring durable carbon removal online in Canada, thus creating a pathway for additional projects over time.”
How the North Star BECCS System Works
The North Star facility uses BECCS, a technology widely seen as critical for achieving net-zero emissions. It combines renewable energy production with carbon capture to deliver negative emissions.
- In this system, trees first absorb CO₂ from the atmosphere as they grow. When these trees are processed for wood products, leftover biomass is used as fuel to generate energy.
- Normally, this process would release carbon back into the air. However, in this case, the CO₂ is captured before it can escape.
- The captured carbon is then compressed, transported, and injected deep underground into a secure geological formation.
This ensures long-term storage, often lasting hundreds or even thousands of years. Continuous monitoring systems track the stored carbon to ensure safety and permanence.
Here’s a representation of the BECCS process:
A Fully Integrated “Source-to-Sink” Model
From the process explained above, it’s clear that one of the most important features of the North Star project is its fully integrated design. It connects every step of the carbon removal process, from biomass supply to permanent storage.
This end-to-end system improves efficiency and reduces uncertainty. It also strengthens the credibility of the carbon credits produced.
Significantly, Svante will fund the project through its early stages, supporting development until a final investment decision is made. Commercial operations are expected to begin in early 2029.
Reliable Carbon Removal, Verified and Transparent
At full capacity, the facility is expected to capture up to 90,000 tonnes of CO₂ annually. Over the 15-year contract period, this will translate into the delivery of 626,000 tonnes of verified carbon removal credits to Microsoft.
All credits will follow strict monitoring, reporting, and verification (MRV) standards, ensuring transparency and quality.
Microsoft Scales Up Carbon Removal Strategy
This agreement is part of Microsoft’s broader push to scale carbon removal. The company has rapidly increased its purchases over the past few years, signaling a shift from small pilot projects to large, long-term commitments.
In 2023, Microsoft contracted roughly 5 million tonnes of carbon removal. By 2024, that number rose to 22 million metric tons. In 2025, the target surged further to around 45 million tonnes, as announced by the company. This sharp increase shows how quickly the company is building a diversified carbon removal portfolio.
Importantly, Microsoft does not rely on a single technology. Instead, it spreads its investments across multiple pathways, including BECCS, direct air capture, and mineralization. This approach reduces risk while supporting the development of different solutions.
Recent agreements reflect this strategy. These include multi-million-tonne deals with BECCS facilities in the United States and Europe. Together, they position Microsoft as one of the most influential buyers in the global carbon removal market.
Rising Emissions Make Carbon Removal Essential
Despite its climate commitments, Microsoft faces a growing emissions challenge. The company’s total emissions have increased by more than 30% compared to 2020 levels. This rise is largely driven by the rapid expansion of data centers, cloud services, and AI infrastructure.
These operations require vast amounts of energy and materials, making it difficult to cut emissions quickly. As a result, carbon removal has become a key part of Microsoft’s strategy.
However, the company is clear about its priorities. It focuses first on reducing emissions through efficiency and clean energy. Carbon removal is used only for emissions that cannot be eliminated.
This approach supports Microsoft’s ambitious net-zero goals. The company aims to become carbon negative by 2030 and aims to run on 100% renewable electricity and eliminate all historical emissions by 2050.
BECCS Market Gains Momentum
The North Star deal also reflects growing interest in BECCS technology. While still at an early stage, the global BECCS market is expanding rapidly. Analysts expect it to grow at a CAGR of around 19.27% from 2024 to 2030 as governments and companies seek reliable carbon removal solutions.
BECCS is particularly valuable because it can deliver durable removals. Unlike some nature-based solutions, which may face risks like fires or land-use changes, BECCS stores carbon permanently underground. This makes it attractive for companies looking for high-quality credits.
According to the International Energy Agency, BECCS could play a major role in climate mitigation. It may contribute up to 15% of the emissions reductions needed by 2100 to limit global warming to 2°C.
At the same time, challenges remain. Concerns about biomass sourcing, land use, and storage safety continue to shape the debate. Even so, projects like North Star aim to address these issues through sustainable sourcing and rigorous monitoring.
North Star Marks a New Era in Carbon Markets
In conclusion, the Microsoft–North Star agreement highlights how quickly the carbon removal market is evolving. Large buyers are now committing to long-term deals that help bring new projects to life.
At the same time, the project sets a new benchmark for inclusive climate action. Indigenous ownership ensures that local communities benefit directly from the energy transition.
As demand for durable carbon removal continues to grow, more projects like North Star are likely to emerge. These developments will play a critical role in helping companies meet climate targets while building a scalable, high-integrity carbon market.
In that sense, this deal is more than just a contract. It is a clear signal that carbon removal is moving from concept to reality—and becoming a core part of global climate strategy.