Microsoft’s disastrous US$200 million carbon offset deal in Brazil
“CO₂ uptake by trees should not be used to offset fossil fuel emissions.”
Microsoft has signed a deal to buy 3.5 million carbon credits over 25 years from Re.green, a Brazilian start-up. Re.green buys up farms and cattle ranches and plants native tree species. The tree planting project with Microsoft will cover a total of 17,500 hectares.
The Financial Times estimates that the deal could be worth about US$200 million, based on “recent market analysis”.
It is the second agreement between Microsoft and Re.green. In May 2024, Microsoft agreed to buy 3 million carbon credits over a 15-year period from Re.green. The tree planting is planned to cover a total area of 15,500 hectares.
In a May 2024 statement, Brian Marrs, Microsoft’s Senior Director for Energy and Carbon Removal, said that,
“We value the science-led innovation and business execution that re.green brings to this agreement. High-quality, nature-based solutions are vital to addressing climate change and we are excited to pursue this offtake deal in Brazil with re.green. Projects like those undertaken by re.green are an important part of our carbon removal portfolio.”
Climate bullshit
This is just more of Microsoft’s climate bullshit. In 2020, Microsoft announced that by 2030 it would remove more carbon from the atmosphere than it emits.
But since 2020, Microsoft’s emissions have increased by 40%. In 2020, the company emitted 12.2 million tons of CO₂e. By 2023, that figure had increased to 17.2 million tons of CO₂e.
Microsoft works with the fossil fuel industry, including with Chevron, Shell, BP, Equinor, and ExxonMobil. The company is the leading cloud services provider to the oil and gas industry.
In January 2024, Holly Alpine resigned from her job at Microsoft. In her resignation letter she wrote that,
This work to maximize oil production with our technology is negating all of our good work, extending the age of fossil fuels, and enabling untold emissions.
Microsoft’s emissions are increasing even more rapidly, as a result of the company’s investment in data centres for A.I. and crypto.
And there’s the complicity of Microsoft and other Big Tech companies in Israel’s genocide in Gaza. The Guardian reports that leaked documents reveal that,
The Israeli military’s reliance on Microsoft’s cloud technology and artificial intelligence systems surged during the most intensive phase of its bombardment of Gaza.
None of this can be “offset” by planting trees.
Leakage and permanence
Joe Romm is a senior research fellow at the Penn Center for Science, Sustainability and the Media. In a comment on LinkedIn, he highlights two problems with planting trees as offsets: leakage; and permanence.
Re.green aims to buy up farms and cattle ranches to plant trees. Josias Araújo, a former cowboy who now works planting trees for Re.green, sums up the leakage problem very succinctly.
“We are killing pasture that a lot of farmers need,” he told the New York Times.
The problem is that Re.green buying up farms and cattle ranches and planting trees on them does nothing to reduce the demand for the products from those farms and cattle ranches.
Romm points out that, “Someone somewhere else can just cut down trees to do the farming and cattle raising the original folks were doing.”
Romm refers to a 2023 paper published in the journal One Earth titled, “Avoiding carbon leakage from nature-based offsets by design.” The authors analysed several studies and looked at a random sample of forest carbon projects from the main nature-based offset methodologies (Verra, Gold Standard, American Carbon Registry, and ART-TREES).
They write that,
Although leakage is “old news” and various anti-leakage measures have been considered, there is little evidence that current practices to address leakage actually work. In this perspective, we present evidence that leakage is vastly underestimated in practice and argue that current efforts to improve accounting methods are unlikely to deliver the accuracy required.
Romm points out that they find that “research estimates of market leakage from forest-based interventions . . . are typically above 70% . . . and can reach >100%”.
They ask, “why are leakage rates allowed by standards and applied by projects uniformly so much lower than those suggested by the research literature?”
They answer their own question as follows:
One explanation relates to technical complexity in market leakage accounting. Because accuracy is difficult and therefore costly, standards must negotiate a compromise between scientific rigor and financial viability. . . . However, the compromises that have been made in practice can seriously distort carbon accounting systems.
Expediency is another explanation for low leakage rates. The authors write that,
Leakage deductions can make or break the financial case for an offset project and are a key concern for project developers. Once rules are in place, project proponents are financially incentivized to apply the lowest possible discount factor, and there are minimal controls on strategic behavior. The evidential standard for selecting a discount factor is weak (typically subjective assessment of likely leakage location, expert opinion, and/or selective appeal to research literature), and the effectiveness of auditing is limited by a lack of external sources of information and potential conflicts of interest.
As Romm notes, “There’s no real solution to the leakage problem, other than not trying to call these offsets.”
Romm refers to two recent papers relating to permanence. The first, published in Nature, is titled, “Geological Net Zero and the need for disaggregated accounting for carbon sinks”.
The paper finds that “targets should acknowledge the need for Geological Net Zero, meaning one tonne of CO₂ permanently restored to the solid Earth for every tonne still generated from fossil sources”. The paper defines geological time scale storage as “multi-century to millennial”.
The second paper is published in Nature Communications Earth and Environment, and is titled, “Durability of carbon dioxide removal is critical for Paris climate goals.”
The authors find that, “storage duration substantially affects whether net zero emissions achieve the desired temperature outcomes”.
They write that,
Our findings suggest that a CO₂ storage period of less than 1000 years is insufficient for neutralizing remaining fossil CO₂ emissions under net zero emissions.
Obviously, there is absolutely no possible way of guaranteeing that land planted by Re.green will still have trees growing on it in 1,000 years’ time.
Romm concludes that “CO₂ uptake by trees should not be used to offset fossil fuel emissions.”
As a Brazilian, I feel like digging deeper into re.green, a superficial look at their website reveals strong ties to what we call “agribusiness”. I’m always too skeptical about offset “investments” in my country, they might just be a coat of green paint on top of layers upon layers of bureaucracy and false documentation…
Great report, thanks! What's missing is that "replanting" a forest merely replaces a previous element of Earth's natural carbon cycles, so how could that EVER be considered to generate indulgences for further emissions???