Microsoft signs massive carbon credit deal with reforestation startup Chestnut Carbon

Group 1: Microsoft and Carbon Credits - Microsoft is purchasing over 7 million tons of carbon credits from Chestnut Carbon in a 25-year deal to support reforestation efforts across 60,000 acres in Arkansas, Louisiana, and Texas [1] - The company reported a 29% increase in emissions since 2020, primarily due to the growth in AI and cloud computing, which poses a challenge to its 2030 carbon neutrality goal [2] - In 2023, Microsoft generated 17.1 million tons of greenhouse gas emissions before offsets [2] Group 2: Chestnut Carbon's Operations - Chestnut Carbon specializes in reforestation, facilitating tree planting, and monitoring the growth of new forests, with eight projects in the Southeast U.S. previously used as farms or pastures [3] - The company sold carbon credits for $34 per ton last year, which is significantly lower than the costs associated with direct air capture technologies, which range from $600 to $1,000 per ton [5] Group 3: Quality of Carbon Credits - Not all forest-related carbon credits are equal; credits from projects using non-native, fast-growing trees are considered lower quality and sell for less, while those supporting diverse, native plantings are priced at a premium due to their ecological resilience [4] - Chestnut Carbon has shifted from using Verra for certification to Gold Standard following a scandal that questioned the climate benefits of Verra's projects [6]