Microsoft and Danish energy company Ørsted have announced a significant agreement to purchase 2.76 million tonnes of carbon removal, representing one of the largest-ever carbon removal deals in terms of volume. Ørsted will be responsible for capturing and storing biogenic carbon emissions, which result from burning biomass, produced at its Asnæs Power Station in Denmark over 11 years.
The Asnæs Power Station, powered by wood chips, is part of Ørsted’s “Kalundborg Hub” carbon capture and storage (CCS) project, which also includes the Avedøre Power Station’s straw-fired boiler in the Greater Copenhagen area. Ørsted recently secured a 20-year contract from the Danish Energy Agency (DEA) for the CCS project, with plans to commence capturing and storing biogenic carbon emissions from the plants in 2025. The project aims to capture and store around 430,000 tonnes of CO2 annually from the beginning of 2026.
This new agreement is another step in Microsoft’s ongoing efforts to become carbon negative by 2030 and eliminate all its historical emissions by 2050. Microsoft has recently made similar carbon removal deals, such as partnering with climate tech company CarbonCapture and startup Climeworks for Direct Air Capture (DAC) agreements. Additionally, Microsoft entered into its first ocean-based carbon dioxide removal agreement with ocean health company Running Tide in March. Ørsted previously collaborated with Microsoft and carbon capture technology provider Aker Carbon Capture in 2021 to explore the potential of developing carbon capture at biomass-fired heat and power plants. Aker will supply its “Just Catch” units for the new project, acting as the carbon capture provider.
Ørsted stated that the agreement with Microsoft will directly support the new project, as they work towards their carbon capture and storage goals.
Melanie Nakagawa, Chief Sustainability Officer at Microsoft, said:
“Our landmark long-term agreement with Ørsted for high-quality carbon removal supports Microsoft’s commitment to become carbon-negative by 2030, sends a strong demand signal to scale the market, and showcases the power of partnership and the technological innovation needed to help the world make the clean energy transition.”
