Microsoft (NASDAQ:MSFT) is under pressure to deliver on its ambitious climate pledge, and it’s now placing a massive bet on a startup that literally buries waste to fight carbon pollution. Carbon removal startup Vaulted Deep on July 17 announced a 12-year agreement with the tech giant to permanently eliminate 4.9 million metric tons of carbon dioxide from the atmosphere by 2038.
A runner-up in Elon Musk's Xprize Carbon Removal competition, Vaulted Deep uses human waste, animal manure, and paper sludge to create a carbon-rich slurry that is injected deep into underground rock formations using fracking technology in reverse, TechCrunch reports.
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Microsoft's Carbon Crisis: After Emitting 14.9M Tons Last Year, It's Now Turning to a Startup That Injects Waste Into Rocks
Vaulted Deep refers to its model as a "reverse oil company," turning waste that would otherwise head to landfills or incinerators into a long-term carbon sink, according to TechCrunch. So far, Vaulted Deep says it has removed over 18,000 metric tons of carbon dioxide and raised $32 million in Series A funding last November, led by Prelude Ventures.
According to TechCrunch, Microsoft's emissions have grown by nearly 25% since 2020, largely due to its rapid expansion of energy-intensive data centers.
In 2023, the company reported 14.9 million metric tons of greenhouse gas emissions, more than double what it aims to emit by 2030, the year it has committed to becoming carbon negative. To meet that goal, TechCrunch says that Microsoft has accelerated its investments in carbon removal technology.
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In addition to the Vaulted Deep partnership, Microsoft also signed a deal to remove 7 million metric tons of carbon dioxide with Chestnut Carbon, a reforestation startup restoring 60,000 acres in the Southeastern U.S., TechCrunch reports. Another agreement with carbon capture firm CO280 targets 3.7 million metric tons of carbon dioxide from paper mill operations across the Gulf Coast.
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According to a report by Zion Market Research, the global carbon dioxide removal market is projected to grow from $611 million in 2023 to $2.55 billion by 2032, expanding at a 15% compound annual growth rate during the forecast period. The report identifies several key players contributing to this growth, including Climeworks AG, Charm Industrial, and Heirloom Carbon, all of which are developing technologies such as direct air capture, bioenergy with carbon capture and storage, and enhanced weathering.
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According to Trellis, Frontier, a carbon removal coalition backed by companies like Stripe and Alphabet (NASDAQ:GOOG, GOOGL)), paid $58 million for a batch of Vaulted credits, which puts the per-ton price just above $380. That figure places Vaulted in the same pricing tier as other "durable" carbon removal methods, including direct air capture (over $500 per ton), biomass power with carbon capture ($350 per ton), and pulp and paper plant capture.
Industry experts expect these prices to drop as technologies scale, Trellis says. Vaulted Deep has signaled it aims to reduce its cost structure significantly over time, with a target of competing below $100 per ton, a benchmark set by Frontier for future investment viability.
According to TechCrunch, the Vaulted Deep deal is one of several carbon removal agreements Microsoft has signed as it works to meet its 2030 climate goal.
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