Microsoft Expands Carbon Removal Efforts with Landmark India Afforestation Deal

Microsoft has secured 1.5 million tonnes of verified carbon removal credits from the Panna afforestation project in India, marking its largest carbon removal initiative in the Asia-Pacific region. Spanning 20,000 hectares in Madhya Pradesh, the project is expected to remove three million tonnes of CO₂ over 30 years while supporting biodiversity and local communities.

The agreement, developed in collaboration with Climate Impact Partners and Terra Natural Capital, reflects Microsoft’s deepening commitment to nature-based solutions as part of its broader climate strategy. Terra Natural Capital provides long-term funding for the initiative, while Climate Impact Partners ensures rigorous project development and verification under global carbon standards.

The Panna afforestation project will plant up to 11.6 million native trees on community and farmer-owned land, with 1.2 million trees already planted across 100 communities. Beyond carbon sequestration, the project offers multiple environmental and economic benefits, including revenue-sharing opportunities for farmers through carbon credit sales, climate-smart agricultural training, and enhanced water conservation infrastructure such as ponds and drip irrigation systems. The introduction of native tree species is also expected to restore biodiversity, encouraging the return of butterflies and birdlife to previously degraded lands.

Microsoft’s investment aligns with its long-term ambition to become carbon negative, reinforcing its belief in high-quality, nature-based solutions. Brian Marrs, Senior Director of Energy Markets at Microsoft, emphasized the importance of such projects, stating that Panna is a vital addition to the company’s growing portfolio of carbon removal initiatives, ensuring financial and environmental benefits for local communities while advancing global climate goals.

Financing remains a key hurdle in scaling carbon removal initiatives, and Terra Natural Capital’s role in funding Panna highlights the necessity of long-term capital investment. Erica Vertefeuille, Managing Director at Terra Natural Capital, underscored the impact of financial innovation in accelerating large-scale climate solutions, noting that collaboration between corporate buyers, project developers, and investment partners is crucial to achieving meaningful climate progress.

The Panna afforestation project meets stringent global verification standards, including Verra’s Afforestation, Reforestation, and Revegetation Methodology (VM0047), and adheres to the Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles. The project also holds an A rating from BeZero and is on track for verification under the Climate, Community, and Biodiversity Standard, ensuring its long-term environmental and social impact.