Is carbon removal in trouble?

Last week, news outlets reported that Microsoft was pausing carbon removal purchases. It was something of a bombshell.

The thing is, Microsoft is the carbon removal market. The company has single-handedly purchased something like 80% of all contracted carbon removal. If you’re looking for someone to pay you to suck carbon dioxide out of the atmosphere, Microsoft is probably who you’re after.

The company has said that it is not permanently ending its carbon removal purchases (though it didn’t directly answer further questions about this apparent pause). But with this flurry of news, there’s a lot of fear in the industry—so, it’s worth talking about the state of carbon removal, and where Big Tech companies fit in.

Carbon removal aims to reliably pull carbon dioxide out of the atmosphere and permanently store it. There’s a wide range of technologies in this space, including direct air capture (DAC) plants, which usually use some kind of sorbent or solvent to pull carbon dioxide from the air. Another important method is bioenergy with carbon capture and storage (BECCS), in which biomass like trees or waste-derived biofuels are burned for energy, and scrubbing equipment captures the greenhouse gases.

There was a huge boom of interest in carbon removal technologies in the first half of this decade. One UN climate report in 2022 found that nations may need to remove up to 11 billion metric tons of carbon dioxide every year by 2050 to keep warming to 2 °C above preindustrial levels.

One nagging problem is that the economics here have always been tricky. There’s a major potential public good to pulling carbon pollution out of the atmosphere. The question is, Who will pay for it?

So far, the answer has been Microsoft. The company is by far the largest buyer of carbon removal contracts, and it’s the only purchaser that has made megatonne-scale purchases, says Robert Höglund, cofounder of CDR.fyi, ​​a public-benefit corporation that analyzes the carbon removal sector. “Microsoft has had a huge importance, especially for getting large-scale projects off the ground and showing there is demand for large deals,” Höglund said via email.

Microsoft has pledged to become carbon-negative by 2030 and to remove the equivalent of its historic emissions by 2050. Progress on actually cutting emissions has been tough to achieve though—in the company’s latest Environmental Sustainability Report, published in June 2025, it announced emissions had risen by 23.4% since 2020.

On April 10, Heatmap News reported that Microsoft staff had told suppliers and partners that it was pausing future purchases of carbon removal, though it wasn’t clear whether the company would increase support for existing projects, or when purchases might resume. Bloomberg reported a similar story the next day. In one instance, Microsoft employees said that the decision was related to financial considerations, one source told Bloomberg. 

In a statement in response to written questions, Microsoft said that it was not permanently closing its carbon removal program. “At times we may adjust the pace or volume of our carbon removal procurement as we continue to refine our approach toward sustainability goals. Any adjustments we make are part of our disciplined approach—not a change in ambition,” Microsoft Chief Sustainability Officer Melanie Nakagawa said in the statement.

Whatever, exactly, is happening behind the scenes, many in the industry are nervous, says Wil Burns, Co-Director of the Institute for Responsible Carbon Removal at American University. People viewed the company as the foundational supporter of carbon removal, he adds.

“This pause—whether it’s short term or whatever it is—the way it’s been rolled out is extremely irresponsible,” Burns says. The vast majority of firms looking to get carbon removal contracts are probably seeking Microsoft deals. So, while Microsoft has every right to change its plans, the company needs to be open with the industry now, he adds.

“I don’t think you can hold yourself out as the paragon of fostering carbon removal and then treat a nascent industry that disrespectfully,” Burns says.

Carbon removal companies were already in turmoil in the US, particularly because of recent policy shifts: Funding has been cut back, and recent changes at the Environmental Protection Agency were aimed at the government’s ability to target carbon pollution.

Now, if the largest corporate backer is shifting plans or taking a significant pause, things could get rocky.

Depending on the extent of this pause, the industry may need to survive on smaller purchases and hope for support from governments and philanthropy, Höglund says. But for carbon removal to truly scale, we need policymakers to create mandates so that emitters are responsible for either storing the carbon dioxide they produce or paying for it, Burns says.

“Maybe the upside of this is Microsoft has sent a wake-up call, that you just can’t rely on the kindness of strangers to make carbon removal scale.”

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