Microsoft supports tree planting as part of carbon reduction project in Panama

Microsoft supports tree planting as part of carbon reduction project in Panama
Microsoft supports tree planting as part of carbon reduction project in Panama

Microsoft Corp has reached an agreement to purchase 1.6 million carbon credits in what developers say is one of the largest fully funded greenhouse gas emissions elimination projects in Central America.

The 10,000-hectare project in Panama is funded in part by Microsoft, which is one of the largest credit-buying companies, and aims to remove 3.2 million tons of carbon from the atmosphere by planting more than 6 million trees in areas degraded by livestock farming.

Tech giants around the world are spending billions of dollars on projects that eliminate or avoid carbon emissions, as part of their efforts to meet their sustainability goals.

But voluntary carbon markets, which allow companies to buy credits to offset their emissions, have come under fire because many projects do not deliver the environmental or sequestration benefits they claim.

According to developer Ponterra, this project stands out because it focuses on restoring land degraded by cattle ranching by planting 6 million trees – so-called reforestation – rather than protection of existing forests against deforestation.

This means the project can sell carbon credits based on the additional tonnes of carbon removed from the atmosphere, rather than based on avoided emissions.

The project will also promote the restoration of biodiversity and bring more than $70 million to local communities in the form of rents, a share of carbon credit sales paid to landowners, salaries and donations to local NGOs.

The project comes as scientists and stakeholders debate whether allowing companies to buy offsets is good for the planet.

In the United States, cloud computing and AI are driving up emissions. Microsoft’s carbon emissions have increased 30% since 2020, mainly due to data center construction, the tech giant said in its 2024 sustainability report.

It has committed to achieving zero carbon emissions and zero waste by 2030, but will need to purchase carbon credits to do so, purchasing 5.015 million metric tons of carbon removals in 2023 to support this goal.

The project is being developed by Ponterra, with Rubicon Carbon and Carbon Streaming who, alongside Microsoft, provided the funding. The backers did not reveal the amount of the agreement, nor the price per ton paid by Microsoft. (Reporting by Virginia Furness; Writing by Elaine Hardcastle)

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