Varaha signs offtake agreement with Microsoft to remove over 100,000 tonnes of carbon dioxide

Under the agreement, the tech giant will help fund a portion of the commitments required to set up 18 reactors across India’s cotton belt to scale the biochar project. Each reactor costs about Rs 9.2 crore to set up. 

The agreement aims for the removal of over 100,000 tonnes of carbon dioxide over three years. While financial terms of the deal were not disclosed, Co-founder and CEO at Varaha, Madhur Jain clarified to YourStory that “Microsoft is buying a little over 100,000 credits so the deal value needs to be looked at from the price point at which Microsoft is buying these credits.”

According to Jain, these reactors are expected to operate for 15 years, contributing to a total projected removal volume of over 2 million tonnes of carbon dioxide. 

Varaha’s biochar project sources cotton stalks from smallholder farms in Maharashtra for feedstock for biochar production. These stalks, which would have otherwise been subjected to open-field burning, are heated using a process called pyrolysis in low oxygen in Varaha’s biomass gasification facilities. This creates a stable charcoal-like material called biochar that can lock away carbon for centuries, preventing its release as carbon dioxide into the atmosphere. Biochar can also be used to improve soil health. 

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“This offtake agreement broadens the diversity of Microsoft’s carbon removal portfolio with Varaha’s biochar project design that is both scalable and durable. It represents a step forward in scaling biochar CDR growth in Asia and advancing co-benefits for farmers—improved soils, cleaner air, and shared economic opportunity,” said Phil Goodman, Program Director, CDR at Microsoft, in a statement.

Varaha has onboarded about 40,000 farmers across Gujarat, Rajasthan and Maharashtra for its biochar project and has seven reactors in place.

Biochar is not the only carbon removal project Varaha is implementing. It has set up enhanced rock weathering (ERW) projects, afforestation, and regenerative farming projects across the country.

The company is aiming to make its first delivery of carbon credits to Microsoft by the end of 2026 to early 2027, Jain noted. According to carbon credit data insights platform CDR.fyi, Microsoft is one of the largest purchasers of carbon credits in the world.

Varaha’s partnership with Microsoft comes almost a year after it had signed a similar agreement with Google under which the technology company agreed to purchase 100,000 tonnes of biochar credits from the company. 

These agreements come at a time when major technology firms are struggling to manage their carbon emissions amidst rising demand for artificial intelligence and setting up of data centres.