Dive Brief:
- Microsoft announced a 12-year deal with agricultural tech company Indigo Ag, which will help the tech giant remove 2.85 million metric tons of carbon dioxide from the atmosphere through soil-based carbon removals, according to a Thursday press release.
- Indigo Ag did not disclose the financial value of the deal, though the company’s senior director of policy, partnerships and impact, Meredith Reisfield, told ESG Dive that the agreement is, "by tonnage, the largest soil carbon deal that we're aware of in the market to date.”
- This is Microsoft and Indigo’s third deal together. Microsoft first purchased 40,000 soil-based carbon credits from Indigo in 2024 and followed up by purchasing 60,000 soil-based removal credits in 2025.
Dive Insight:
The deal is also one of the first soil carbon removal agreements that will have credits issued and approved with the Integrity Council for the Voluntary Carbon Market’s Core Carbon Principles label, according to Indigo Ag’s release.
Indigo Ag’s carbon removal program requires farmers looking to enroll to make a change to their practices, like cover cropping, rotating crops or reducing tillage or use of inputs, Reisfield said in an interview. The impacts of those changes are quantified through soil sampling and modeling by the farmers and verified by Climate Action Reserve, a third-party carbon credit platform, which then issues the credits. From initial practice change to credit issuance is typically a “two-ish” year timeline, Reisfield said.
The agricultural tech company, founded in 2013, has issued nearly 1 million metric tons of carbon dioxide equivalent carbon credits since 2018, according to the release.
Reisfield called the long-term nature of the Microsoft deal “exciting,” given the turnaround time from practice change and enrollment to credit issuance for farmers. She added that the length of the deal “gives farmers a lot of confidence in the trajectory of that kind of private sector funding to drive on the ground practice changes over time.”
Microsoft has a goal of becoming carbon negative by 2030, and Microsoft Director of Carbon Removal Phillip Goodman said the company was “pleased” by Indigo Ag’s regenerative agriculture approach and its ability to deliver “measurable results through verified credits and payments to growers, while advancing soil carbon science with advanced modeling and academic partnerships.”
Reisfield, citing a 2023 report from the Intergovernmental Panel on Climate Change, noted that regenerative agriculture has the ability to scale up and remove over 3.5 gigatons of CO2 equivalent annually. She said soil carbon as a carbon removal pathway “has really immense potential benefits beyond carbon in directing climate finance to rural communities” and delivering ecosystem and watershed benefits.
“We're trying to build back the capability of soils to sequester carbon in all of their great spongy capabilities, through the ability of plants to lock away carbon in their roots and in the microbial communities in the soil,” Reisfield said. “And that ability to scale something quickly is unique in the larger voluntary carbon market.”
The size of the deal shows that “carbon removals are moving from pilot purchases to industrial-scale procurement,” according to Charlie Sichel, a managing partner at global forestry and carbon sequestration project developer Forestry Linked Securities. Sichel said in emailed comments to ESG Dive that as carbon removals evolve in scale, they must also meet “a much higher bar on evidence.”
“The market is shifting from headline volumes to hard questions on measurement and long-term durability.” Sichel said. “Soil carbon can deliver real climate and resilience benefits, but it is also one of the more complex categories to quantify and maintain over time.”
Scrutiny on carbon removals “will only intensify as buyers scale,” and the deal also shows that “no single type of credit is a silver bullet,” according to Sichel.
