Last week, various news platforms indicated that Microsoft was halting its carbon removal purchases. It was somewhat of a shock.
The reality is, Microsoft constitutes the carbon removal market. The enterprise has independently acquired roughly 80% of all agreed-upon carbon removal. If you seek someone to finance the extraction of carbon dioxide from the atmosphere, Microsoft is likely your target.
The organization has stated that it is not indefinitely ceasing its carbon removal purchases (though it has not directly addressed further inquiries regarding this apparent suspension). However, amidst this wave of news, apprehension is prevalent within the industry—hence, it’s essential to discuss the current landscape of carbon removal, and the role of major tech firms within it.
Carbon removal seeks to effectively extract carbon dioxide from the atmosphere and confine it permanently. There exists a variety of technologies in this domain, such as direct air capture (DAC) facilities, which often utilize some form of sorbent or solvent to remove carbon dioxide from the air. Another significant technique is bioenergy with carbon capture and storage (BECCS), where biomass like trees or biodegradable fuels are combusted for energy, and filtration equipment captures the emitted greenhouse gases.
There was a significant surge of interest in carbon removal technologies during the initial half of this decade. A 2022 UN climate report indicated that nations might need to eliminate up to 11 billion metric tons of carbon dioxide annually by 2050 to restrict temperature increases to 2 °C above preindustrial figures.
A persistent challenge is that the economics involved have always been complicated. There’s a substantial potential public advantage to extracting carbon pollutants from the atmosphere. The question remains, Who will fund it?
Until now, the response has been Microsoft. The company is indisputably the most substantial purchaser of carbon removal agreements, and it stands as the only buyer that has made megatonne-scale transactions, according to Robert Höglund, cofounder of CDR.fyi, a public-benefit corporation that assesses the carbon removal industry. “Microsoft has played a crucial role, particularly in initiating large-scale projects and demonstrating there’s a demand for extensive contracts,” Höglund stated via email.
Microsoft has committed to becoming carbon-negative by 2030 and to eliminate the equivalent of its historical emissions by 2050. However, progress in reducing emissions has proven challenging—in the company’s most recent Environmental Sustainability Report, released in June 2025, it revealed that emissions had increased by 23.4% since 2020.
On April 10, Heatmap News reported that Microsoft personnel had informed suppliers and collaborators about pausing future carbon removal purchases, although it was unclear if the company would enhance support for ongoing projects, or when purchasing might recommence. Bloomberg reported similar information the following day. In one case, Microsoft staff indicated that the decision was affiliated with financial factors, one source relayed to Bloomberg.
In response to written inquiries, Microsoft mentioned that it is not permanently terminating its carbon removal program. “At times we might modify the pace or quantity of our carbon removal procurement as we continually enhance our approach to sustainability objectives. Any modifications we implement are part of our disciplined methodology—not a shift in ambition,” Microsoft Chief Sustainability Officer Melanie Nakagawa articulated in the statement.
Regardless of what is happening internally, many in the industry express unease, states Wil Burns, Co-Director of the Institute for Responsible Carbon Removal at American University. There’s a perception of the company as the fundamental supporter of carbon removal, he notes.
“This pause—whether short-term or whatever it is—the manner in which it has been communicated is exceedingly irresponsible,” Burns asserts. The vast majority of businesses seeking carbon removal agreements are likely targeting Microsoft deals. So, while Microsoft possesses the right to adjust its plans, the company must be transparent with the industry at this moment, he adds.
“I don’t believe one can position themselves as the model for promoting carbon removal and then treat an emerging industry with such disregard,” Burns remarks.
Carbon removal firms were already facing turmoil in the US, particularly due to recent shifts in policy: Funding has been narrowed, and new alterations at the Environmental Protection Agency aimed at diminishing the government’s capacity to target carbon emissions.
Now, if the largest corporate supporter is altering its plans or instituting a significant pause, the situation could become unstable.
Depending on how extensive this pause is, the industry may have to rely on smaller purchases and await assistance from governments and philanthropy, Höglund suggests. However, for carbon removal to genuinely scale, it is essential for policymakers to establish mandates making emitters accountable for either storing the carbon dioxide they generate or funding its removal, Burns emphasizes.
“Perhaps the silver lining of this situation is that Microsoft has issued a wake-up call, illustrating that reliance on external benevolence is insufficient to achieve the scaling of carbon removal.”
This article is from The Spark, MIT Technology Review’s weekly climate newsletter. To receive it in your inbox every Wednesday, sign up here.
