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Microsoft will buy over 100,000 tons of durable carbon removal credits from Varaha, using cotton waste to make biochar in India’s cotton belt.
Microsoft has agreed to purchase more than 100,000 tons of carbon‑removal credits from Indian climate‑tech startup Varaha over the next three years, marking the tech giant’s first large‑scale biochar deal in Asia [1]. The partnership will convert cotton crop residues—normally burned after harvest—into biochar, a stable form of carbon that can be stored in soil while also cutting air‑pollution from open‑field burning [1][2].
Key takeaways
Varaha’s business model centers on turning cotton stalks—often burned after harvest—into biochar via industrial reactors. The company will build up to 18 reactors across India’s cotton‑growing regions, each operating for 15 years and collectively targeting more than 2 million t of CO₂ removal over their lifetime [1][2]. The first unit will be located beside Varaha’s 52‑acre research farm in Maharashtra, where the startup already works with farmers to test biochar application under real‑world conditions [1]. By the end of 2025 the firm had processed about 240,000 t of biomass, yielding roughly 55,000 t of biochar and creating 115,000 carbon credits, a sharp rise from the 15,000‑18,000 credits generated a year earlier [1]. Varaha expects to double its 2025 throughput in 2026, handling around half a million tons of biomass and sequestering close to 250,000 t of carbon [1].
The agreement required Varaha to develop bespoke digital monitoring, reporting, and verification systems to satisfy Microsoft’s stringent carbon‑procurement standards. This effort was complicated by the need to coordinate with tens of thousands of smallholder farmers, a scale far larger than typical biochar projects in the United States or Europe [1]. More than 30 % of Varaha’s team has agricultural experience, which the co‑founder and CEO Madhur Jain says helped design ground‑level systems that can track feedstock, reactor performance, and credit issuance [1].
The deal highlights Microsoft’s strategy to diversify its carbon‑removal portfolio as its AI and cloud services drive up emissions. While the 100,000‑ton credit purchase is modest compared with Microsoft’s FY 2024 carbon‑removal contracts of about 22 million t, it signals a shift toward durable, high‑integrity removal pathways in emerging markets [1]. For India, the project offers multiple co‑benefits: reducing seasonal particulate pollution from crop‑residue burning, providing income to thousands of smallholder farmers, and improving soil health through biochar application [2]. As biochar gains traction as a cost‑effective, long‑lasting removal method, Varaha’s scaling plan could position India as a key supplier of high‑quality credits, influencing both corporate procurement strategies and regional climate‑policy discussions.
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AI-assisted synthesis by the TrendWatcher Editorial Desk · sourced from 2 outlets · Jun 12, 2026 · How we report
It is a carbon removal technique that involves spreading crushed silicate rocks, such as basalt, on farmland to accelerate natural chemical reactions that store atmospheric carbon dioxide as stable bicarbonates.
India offers large-scale agricultural economies and significant volumes of biomass, providing opportunities for durable carbon removal projects that help Microsoft work toward its carbon-negative goal.
Biochar is a charcoal-like material produced from agricultural waste that stores carbon for long periods when added to soil, while also potentially improving soil health.
Startups must navigate complex logistics involving thousands of smallholder farmers and meet rigorous, often bespoke, monitoring and verification standards to prove their carbon removal claims.