Microsoft has signed a deal with Indian startup Varaha to buy more than 100,000 tons of carbon dioxide removal credits over the next three years, through 2029, expanding its portfolio of carbon removal projects as the tech giant scales up AI and cloud operations.
The project will turn cotton crop waste, which is often burned after harvest, into biochar — a charcoal-like material that can be added to soil, storing carbon for long periods while also helping reduce air pollution from open-field burning. It will initially focus on the western Indian state of Maharashtra and involve around 40,000–45,000 smallholder farmers.
The agreement comes as large corporations, including Microsoft, ramp up spending on carbon removal — projects designed to physically remove carbon dioxide from the air. The Redmond-based software maker is working toward its goal of becoming carbon-negative by 2030. However, Microsoft’s total greenhouse gas emissions rose 23.4% in fiscal year 2024 from a 2020 baseline, primarily driven by value-chain emissions linked to its growing cloud and AI business. Microsoft has not yet reported on its carbon progress for 2025.
With the rapid expansion of AI operations, energy use and emissions are rising, pushing companies to look beyond the U.S. for carbon removal projects that can take carbon dioxide out of the atmosphere. India has increasingly emerged as an attractive market for such projects because of its large volumes of agricultural waste and the scale of its farming economy.
Varaha will develop 18 industrial reactors that will operate for 15 years, with a total projected removal volume exceeding 2 million tons of carbon dioxide over the project’s lifetime, the companies said in a statement on Thursday.
One of the biggest gaps in carbon removal markets is not just installing equipment to produce biochar, but running projects reliably and navigating a stringent process to issue credits. Varaha’s ability to deliver credits at scale helped it emerge as the world’s second-largest player in durable carbon deliveries and drew Microsoft’s attention, co-founder and CEO Madhur Jain said in an interview.
A Farmer spreading Biochar in their farm to enhance soil quality Image Credits:Varaha
Microsoft’s requirements for digital monitoring, reporting, and verification meant Varaha had to build bespoke systems in-house, Jain told TechCrunch, adding that working with tens of thousands of smallholder farmers in India makes tracking and logistics far more complex than biochar projects in the U.S. or Europe that rely on biomass concentrated at a single industrial site.
Techcrunch event Join the Disrupt 2026 Waitlist Add yourself to the Disrupt 2026 waitlist to be first in line when Early Bird tickets drop. Past Disrupts have brought Google Cloud, Netflix, Microsoft, Box, Phia, a16z, ElevenLabs, Wayve, Hugging Face, Elad Gil, and Vinod Khosla to the stages — part of 250+ industry leaders driving 200+ sessions built to fuel your growth and sharpen your edge. Plus, meet the hundreds of startups innovating across every sector. Join the Disrupt 2026 Waitlist Add yourself to the Disrupt 2026 waitlist to be first in line when Early Bird tickets drop. Past Disrupts have brought Google Cloud, Netflix, Microsoft, Box, Phia, a16z, ElevenLabs, Wayve, Hugging Face, Elad Gil, and Vinod Khosla to the stages — part of 250+ industry leaders driving 200+ sessions built to fuel your growth and sharpen your edge. Plus, meet the hundreds of startups innovating across every sector. San Francisco | WAITLIST NOW
“More than 30% of our team has worked in agriculture,” Jain said, adding that the experience has helped Varaha design systems that work on the ground with farmers.
... continue reading