Microsoft, Heirloom Sign Agreement for CO2 Removal

Microsoft is purchasing up to 315,000 metric tons of CO₂ removal over a multi-year period from Heirloom, a direct air capture (DAC) company, which follows Heirloom’s DAC Hub selection by the DOE for up to $600 million in matching funding.

“Microsoft’s agreement with Heirloom is another important step in helping build the market for carbon removal and supports our path to become carbon negative by 2030,” said Brian Marrs, Senior Director of Energy and Carbon at Microsoft. “As an investor in and customer of Heirloom, we believe that Heirloom’s technical approach and plan are designed for rapid iteration to help drive down the cost of large-scale DAC at the urgent pace needed to meet the goals of the Paris Agreement.”

The deal between Microsoft and Heirloom opens up a funding mechanism for Heirloom to finance future DAC facilities.

“Microsoft has been an incredible supporter of Heirloom, helping us scale one of the world’s most cost-effective DAC solutions,” said Shashank Samala, CEO of Heirloom. “Bankable agreements of this magnitude enable Heirloom to raise project finance for our rapid scale-up, fueling exponential growth like what we’ve seen in the renewable energy industry.”

This agreement provides additional predictable and durable cash flows needed to enable the project financing of upcoming Heirloom DAC facilities. Project financing involves the funding of capital-intensive projects with the future cash flows generated by those projects.

This contract unites domestic buyers and sellers to advance net-zero commitments under the First Movers Coalition, an initiative launched by the Biden Administration in which private companies use their purchasing power to create early markets for clean technologies that enable both reductions and removals. The CO₂ removal credits purchased as part of this agreement will be generated at Heirloom’s next two commercial deployments in the United States.

“It is incredibly encouraging to see agreements of this magnitude because corporate buyers, like Microsoft, can unlock a significantly lower cost of capital for DAC companies that are seeking to finance infrastructure projects, such as future carbon dioxide removal facilities.” said Robert Keepers, Managing Director, J.P. Morgan Green Economy Banking.