Microsoft inked a deal with U.K.-based Climate Impact Partners to procure 1.5 million carbon removal credits from a 20,000-hectare afforestation project in India over the next 30 years, the companies announced.

Terra Natural Capital, an environmental commodities investment company, is financing the Panna Afforestation project, which is based in India's Madhya Pradesh State and anticipated to generate 3 million carbon removal credits, according to a news release Thursday.

"Panna forms an important part of our growing portfolio of carbon removal projects -- our first in India and largest in the APAC region," Microsoft senior director energy markets Brian Marrs said in a statement.

Climate Impact Partners, which announced the agreement, didn't detail financial specifics.

"Ultimately, the final pricing of ARR credits, including those from Panna, is influenced by commercial terms, co-benefit standards, and reporting requirements," Climate Impact Partners spokesperson Hannah Blackmore told OPIS.

A market source representing a Latin American ARR project recently priced forward sales starting at $45/metric ton, the source told OPIS. Other forward prices for projects in the global south have been heard as high as $80/mt recently.

Securing a long-term supply of quality credits "empowers companies like Microsoft to meet their ambitious climate targets, drive growth in the carbon removal market, and bring benefits to communities most impacted by climate change," Climate Impact Partners Chief Executive Sheri Hickok said in a statement.

Microsoft declined to comment. Terra Natural Capital didn't immediately respond to a request for comment.

The Panna project has already planted 1.2 million mixed native trees. The total upon completion will include up to 11.6 million on farmer-owned and community lands, according to Climate Impact Partners. The project's 20,000 hectares spans an area larger than the size of Washington, D.C.

Climate Impact Partners said co-benefits of the project will include farmers benefitting directly from a share of carbon credit sales, sustainable agriculture training programs, large-scale infrastructure that conserves water and improved biodiversity by focusing planting on native species.

Climate Impact Partners secured carbon removal credits in February for the LEGO Group from a reforestation project based in the Lower Mississippi Alluvial Valley in the Southeast U.S., OPIS reported last month.

The Panna ARR project uses Verra's latest Afforestation, Reforestation and Revegetation Methodology. As of Thursday, the project had requested registration with Verra, registry records showed. No projects using the methodology have been registered to date.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

-- Reporting by Zach Bright, zbright@opisnet.com; Editing by Henry Kronk, hkronk@opisnet.com

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March 06, 2025 17:53 ET (22:53 GMT)

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