Microsoft signs new carbon removal purchase agreement with UNDO

Microsoft has signed a new agreement with enhanced rock weathering firm UNDO to purchase 28,900 tonnes of carbon removal credits.

This marks the third commercial agreement between UNDO and Microsoft, after a 2023 contract for  5,000 tonnes of removals (Microsoft’s first investment in enhanced rock weathering), and a 2024 agreement for 15,000 tonnes.

In total, Microsoft has agreed to purchase nearly 49,000 tonnes of removals from UNDO, which will be issued through enhanced rock weathering – a method whereby rocks are ground up to accelerate the natural weathering and storage of CO2 within them. The resulting product can be used to reduce ocean acidification or to improve agricultural soil quality.

Phillip Goodman, Director, Carbon Removal Portfolio at Microsoft, commented: "Enhanced rock weathering is a promising pathway to gigatonne-scale carbon removal. UNDO's commitment to scientific rigour gives us confidence in both the durability of these credits and their role in helping Microsoft achieve its goal of being carbon negative by 2030."

Innovative debt financing

The deal was supported by an innovative debt financing structure by Inlandis, a Canadian climate fund managed by Fondaction Asset Management, which provided the capital needed to deliver on the carbon removal purchase.

"Innovative financing is the catalyst for unlocking gigatonne-scale carbon removal," added Jim Mann, Founder and CEO at UNDO. "The support of Inlandsis shows how financial backers can help transform carbon removal into a genuine asset class – one that is scalable, tradable, and investable. By combining financial innovation, strategic partnerships and bleeding-edge science, UNDO is accelerating deployment and delivering both climate and agricultural benefits in Ontario and beyond."

David Moffat, Managing Director at Inlandsis, said: "This collaboration marks several milestones for us – our first investment in an ERW project and the first Canadian investment for our second fund – and highlights our commitment to advancing carbon finance across Canada and beyond."

Enhanced rock weathering and the carbon removal market

Carbon removals are gaining popularity as an emerging climate solution, but most transactions focus on bioenergy with carbon capture and sequestration: Microsoft’s fast-growing removals portfolio is made up of 90% BECCS removals.

This is followed by biochar carbon removals, which made up around 9% of the market in the second quarter of 2025. Direct air capture and storage (DACS), enhanced weathering and other methodologies combined made up less than 1% of market volumes in Q2.