Microsoft taps Alt Carbon as a symbol of India’s growing role in carbon removal

Microsoft has signed a three-year deal to buy around 37,000 tonnes of carbon credits from India’s startup Alt Carbon, marking the tech giant’s first deal in Asia.

Under the agreement, Alt Carbon will deliver 36,920 tons of carbon dioxide emission credits by 2029 from the Darjeeling Revival Project in eastern India. Microsoft also has the option to purchase additional volumes if the startup meets delivery and validation milestones.

The deal follows reports that Microsoft – the world’s largest purchaser of carbon credits – has temporarily suspended parts of its carbon emissions program. The company rejected those claims, saying it remains committed to its climate goals as it prepares its sustainability strategy.

The deal is a potential boon for Alt Carbon, a Bengaluru-based startup founded in 2023 that focuses on carbon sequestration projects, including advanced rock weathering. The process involves spreading crushed basalt and other silicate rocks on farms to speed up the natural chemical reactions that help store carbon dioxide. Alt Carbon sources obtain basalt from the Rajmahal Traps in eastern India and transport it to a farm in West Bengal, where the rock reacts with rainwater and atmospheric carbon dioxide to form stable bicarbonates.

Discussions with Microsoft began in early 2025 and culminated more than a year later after extensive scientific reviews, due diligence, and contract negotiations, Alt Carbon founder and President Sparsh Agarwal told TechCrunch. Microsoft also required additional monitoring, reporting, and verification (MRV) measures beyond the registration requirements, including expanded data sharing and carbon quantification processes, he said.

The deal comes as buyers are increasingly looking for proven carbon removal projects in a market where guaranteed supply remains scarce. Hundreds of startups have sprung up promising to remove carbon dioxide from the atmosphere. However, only a small proportion have brought guaranteed credits to commercial scale.

“The current problem is that there are many suppliers, but very few certified deliveries,” Agarwal said. “If companies can deliver, everyone wants to make sure they’re getting a piece of what’s being offered.”

Alt Carbon has issued nearly 10,000 credits for carbon removal through enhanced weathering of rocks to date, making it the largest issuance of such credits in the world, according to Agarwal. The startup is expected to issue another 15,000 credits by the end of the year.

Alt Carbon is running two carbon removal projects in North Bengal, including one dedicated to Japanese shipping giant Mitsui OSK Lines and a larger program for which Microsoft credits will be earned, Agarwal said. The initiative has expanded beyond tea estates into rice-growing areas and now works with more than 35,000 farmers on about 80,000 hectares.

Credits under the Microsoft agreement will be issued through Isometric, a carbon removal registry that developed an advanced rock-weathering methodology.

The agreement also reflects the growing role of emerging market suppliers in carbon sequestration. Developers from the Global South now account for 26% of carbon emissions, up from about 2% in 2022, Agarwal said. He added that international buyers were often skeptical of Indian carbon projects when Alt Carbon was launched two years ago, but rising emissions and stricter certification standards have helped boost confidence in the market.

The Alt Carbon deal is not Microsoft’s first decarbonization investment in India. In January, the company signed an agreement with another Indian startup, Varaha, to buy more than 100,000 tons of carbon dioxide credits produced from biochar over three years.

Microsoft joins the list of buyers of Alt Carbon credits that includes procurement agreements such as Frontier, whose members include Google, Stripe and Shopify, and NextGen, which is backed by companies including UBS, Swiss Re, and Boston Consulting Group, according to registration data.

Agarwal said Alt Carbon plans to expand its acreage nearly fivefold in the next four to five years from about 80,000 acres today, as demand for certified carbon credits grows.

Alt Carbon, which last year raised $12 million in a seed funding round led by tech investor Lachy Groom, has built its own MRV infrastructure, including labs in Bengaluru and Darjeeling that analyze soil and water samples and measure carbon removal. Agarwal said improving verification capabilities and reducing measurement costs will be critical to scaling up improved climate projects in India and beyond.