In a world racing to curb climate change, Microsoft is doubling down on its promise to go carbon negative by 2030. On May 21, 2025, the tech giant sealed a multi-year deal with Climate Asset Management (CAM) to buy up to 700,000 nature-based carbon credits through 2035, sourced from a cutting-edge forestry project on Washington State’s Olympic Peninsula. Managed by Ecotrust Forest Management (EFM), this initiative isn’t just about offsetting emissions—it’s a bold step toward sustainable forestry that could redefine how corporations tackle climate goals. With AI’s energy demands pushing emissions up, can this deal help Microsoft stay on track while setting a new standard for green investment?

A Forest Transformed for the Future

The Olympic Peninsula, known for its lush rainforests and rugged coastline, is home to a 68,000-acre forest that’s getting a makeover. Previously managed for industrial logging, the land is now under CAM’s Natural Capital Fund I, with EFM steering it toward “climate-smart” forestry. This approach, known as Improved Forest Management (IFM), swaps short-term timber harvests for practices like longer tree rotation cycles, selective logging, and low-impact operations. The result? A forest that stores more carbon, supports biodiversity, and stays resilient against wildfires and pests.

The project is a powerhouse, expected to generate over 1 million tonnes of carbon removals in the next decade, per CAM. Microsoft’s deal, covering nearly all the project’s credits through 2035, locks in 700,000 credits—each representing one ton of CO2 removed from the atmosphere.

“This long-term offtake agreement significantly de-risks the carbon element of our project,” said James Bullen, CAM’s Head of Asset Management.

Read more: Patria’s $1 Billion Omnia Platform Bets Big on Green Data Centers in Latin America

It’s a win for investors too, blending carbon market revenue with timber sales and conservation easements.

Microsoft’s involvement goes beyond buying credits. Its Climate Innovation Fund has invested in EFM’s Fund IV, which aims to raise $300 million for similar projects nationwide, potentially securing 2.3 million more credits, per ESG News. This dual strategy—buying credits and funding forestry—shows Microsoft’s betting big on nature-based solutions.

Why This Matters

Microsoft’s emissions jumped 29% in 2023, driven by AI and cloud computing’s energy-hungry data centers, per CarbonCredits.com. With 80% of global high-durability carbon removal credits bought by Microsoft in 2024, totaling 5 million tons, the company is a heavyweight in the $2 billion carbon removal market, projected to hit $50 billion by 2030. This deal is part of a broader push, including 3.5 million credits from Brazil’s Re.green, 1.4 million from U.S. mined land reforestation, and an $800 million bioenergy carbon capture project.

The Washington project stands out for its local impact. The Olympic Peninsula’s forests, storing more carbon per acre than most ecosystems, are ideal for IFM, per EFM. Beyond carbon, the project boosts biodiversity, improves water and soil quality, and partners with tribal communities to restore salmon habitats.

“Such management approaches align with our impact objectives,” Bullen noted, highlighting community benefits like jobs and recreation.

Explore OneStop ESG Marketplace: Carbon offset services

Challenges in the Carbon Game

It’s not all green pastures. Carbon credits face scrutiny for their effectiveness. A 2023 study by the University of Cambridge found some forestry projects overstate carbon storage by up to 20% due to optimistic baselines or unaccounted risks like wildfires. The Olympic Peninsula, while lush, isn’t immune to droughts or pests, which could dent the project’s 1-million-tonne goal. Microsoft and EFM counter this with “dynamic baselines” and conservative harvest models to ensure credit integrity, per ESG News.

The carbon market itself is volatile. Prices for nature-based credits ranged from $5-$15 per ton in 2024, per S&P Global, and long-term deals like Microsoft’s risk locking in lower rates if prices spike. Competition is heating up too—Meta signed a 676,000-credit deal with EFM for the same forest, showing demand for high-quality projects. Scaling IFM across Fund IV’s $300 million goal will need more land, permits, and community buy-in, especially with tribes wary of past land mismanagement.

What’s Next?

Construction on the Olympic Peninsula is underway, with the first credits expected by 2026, per CAM. EFM’s FSC-certified model, backed by 20 years of sustainable forestry, gives the project credibility. Microsoft’s broader portfolio—spanning reforestation in India, soil credits in the U.S., and tech like bioenergy capture—shows it’s hedging bets across solutions.

For Washington, this could be a model for balancing economic and environmental goals. The state’s forests already support 40,000 jobs, per the Washington Forest Protection Association, and projects like this could add more while cutting emissions.

Microsoft’s deal with CAM and EFM isn’t just about numbers—it’s a signal that big tech can drive climate solutions close to home.

“We’re proud to contribute to climate-smart forestry in our own backyard,” said Brian Marrs, Microsoft’s Senior Director of Energy and Carbon Removal.

Whether this project scales to Fund IV’s ambitions or inspires other firms, it’s a step toward making forests not just carbon sinks, but engines of sustainable growth.

Explore ESG Solutions on our marketplace - OneStop ESG Marketplace.

Keep abreast of the top ESG Events on OneStop ESG Events.

OneStop ESG Educate: Your go-to source for top ESG courses and training programs tailored to your needs.