¶ Intro / Opening
Latitude Media covering the new. The energy transition.
¶ Microsoft's Ambitious Carbon Removal Pledge
In January of 2020, Microsoft announced a major goal. By 2030, it wouldn't just be carbon neutral, it would be carbon negative.
Big point Microsoft will be carbon negative by twenty thirty. And what that means obviously is is that these guys are putting the hammer to everybody, suppliers, themselves, whatever's necessary to basically revert. what's going on for hundreds of years. I think this is real. This is not greenwashed.
And by 2050, Microsoft aims to remove from the atmosphere all the carbon the company has emitted since its founding in 1975.
🎵 Music
That is actually what drew me to Microsoft. I was at the energy space and was really excited by the leadership role that Microsoft was willing to play.
That's Phil Goodman, director of the carbon removal portfolio at Microsoft. He joined the company in 2022 to help scale up procurement of carbon removal products. And he quickly found that meeting the 2030 goal would mean hitting the ground running.
When I joined, I came in with a little bit of myopia thinking Oh, we've got plenty of time till 2030 for our goals. There's lots of time to get to the remove the rest portion of our 2030 carbon negative target. And what I quickly learned was if you add up project development timelines and the depth of applications that we're getting. 2030 is going to be here before we know it.
Part of the issue was that in 2020, high-quality carbon removal was simply hard to find. Microsoft's demand was larger than the market for carbon removal could meet.
We knew at that time that the market was only in the couple millions of tons annually, and Microsoft schools were several times greater than that. And so for there to be a vibrant market where Microsoft is only buying a share of it, the carbon Rouval market needed to grow exponentially.
🎵 Music
At the time, a lot of the available market for carbon removal was limited to contracts for short-term purchases, say for just a year of carbon removal. So Microsoft opened a request for proposals to try to find good candidates for carbon removal partners.
Any company in the world can go on our website, up submit an application, fill out a bunch of questions to help us understand do they fit as a good candidate for our carbon removal program with a criteria that would make us feel confident that this was going to be high integrity, high quality.
And
The applications were were sort of mediocre.
Things started to change when Microsoft made a deal with Orsted to purchase two point seven million tons of carbon removal over an eleven year period from a bioenergy carbon capture and storage plant.
Once we were able to structure that deal and we announced that transaction in the start of 2023, it became this huge signal. All of a sudden there was a shift. in the quality of applications and the depth of applications that we saw. And our 2030 goals went from, ooh, I don't know if we're going to make it there to wow, look at the the wide number of innovation, look at the responsiveness that suppliers have had to our prep past feedback.
So other suppliers were encouraged by the opportunity to follow in Orsa's footsteps. And since then we've been on a contracting tier, finding other suppliers and then structuring agreements to make those happen.
¶ Adapting Offtake Agreements Amidst AI Growth
I'm Lara Pierpoint, and this is The Green Blueprint, a show about the architects of the clean energy economy. Global climate goals, gigatons of carbon dioxide removal, or CDR, will be needed in the second half of the century. But the markets for CDR today are just getting off the ground. This week, I'm talking with Phil Goodman, director of Microsoft's Carbon Removal Portfolio.
We talk about what it takes to structure off-take agreements for CDR and how Microsoft is helping foster emerging CDR markets.
🎵 Music
All of the scenarios modeled by the IPCC that keep climate change to two degrees or lower by the end of the century agree. In addition to decarbonizing, we're going to need CDR.
To get to one and a half degrees Celsius, two degrees Celsius, you need gigatons of CDR. And so Microsoft at the time saw that. CDR was an unaddressed area. Like there's an essential component. No one's really doing this. And so Microsoft saw an opportunity to go first and lead and create the foundations of a market. And that's a completely unaddressed area.
Before joining Microsoft, Phil had a background in renewable project finance, and he later worked in commercialization for clean energy products, including software for wind, solar, and batteries as VP of operations and strategy at Fluence Digital.
the sort of common element and the thing that I really got excited by at that time was how do you contract really hard things that make a big impact on the environment, things that hadn't really been done before. So when I saw Microsoft was, you know, focused on carbon negative and and building out a CDR team, I saw the early stages of offtake agreements happening and saw the opportunity to adapt.
power purchase agreements to the carbon removal space, which got me really excited to contract really innovative things and put contractual language around new concepts that were essential to net zero.
Microsoft's agreement with Orstead represented a turning point with off take agreements in the whole CDR space. I wanted to get into the nuts and bolts of how Off-Take agreements in CDR actually function. But first I wanted to know how Off-Take agreements have evolved since that very first contract with Orsted.
🎵 Music
So this is really cool that you all were on the front lines of essentially changing and sort of creating a new a new style of off-take agreements that's much more meaningful within the CDR market space. And so you've really seen that take off since then, is that right?
Absolutely. I mean, I think there's a a playbook that we can follow. And the same time, there are elements of the playbook that are quite different based on the type of car removal that you're working in. So a bioenergy and carbon capture and storage off dig agreement has a lot of common elements with what a long term off agreement looks like for reforestation credit. Um, but they're also looking at different investment periods. So a reforestation project may have a much longer
naturally would want a longer term because if you look at tree growth cycles, you'd have carbon credit generation over a long period of time. Whereas in infrastructure style back project again kind of needs a fixed, you know, 10 to 15 year period. And you can you have there's a fixed shape to it. You know, they need reliable offtake over that period of time. Trees grow at different rates depending what they do. First is
pretty slowly and then it goes fast and then slowly again. And that shapes how you think about contracting and um core commercial terms and financing and uh durability as well. You know, how long is that carbon gonna remain sequestered?
Okay. So we've moved into a world where now we've got longer CDR off take agreements. But the other thing, of course, that's changed since you joined Microsoft is this little known thing called artificial intelligence has become much more real than it was before. So
Can you say a little bit about how that's affected your work? And I'm curious to hear this in two ways. I think one, one is, you know, with the growth of AI, we're going to see a lot more data centers built. We're going to see a lot more energy demand as a result of this.
So how does this affect how you see Microsoft's emissions going forward and the work that you're gonna need to do to abate or offset those, particularly between now and 2030? And then also sort of separately, but I guess relatedly, how does this affect? your and Microsoft's willingness to sign new off-take agreements to do even say more innovative things in the CDR space? Is there more work that you're going to be doing to invest?
to procure the sort of CDR stuff as a result of the demand that you're seeing and the and the growth of AI.
Yeah, AI doesn't change our sustainability goal. We're still buying CDR in pursuit of our carbon negative goal. And the AI hasn't really changed that target for us. It just increased the importance of a net zero world still needs to be possible. in it despite the the AI growth.
And
We're encouraging to sort of keep keep pursuing off to the agreements from from that lens. Come on.
I'm curious to understand whether this particular style of demand growth gives you a little bit more room for innovation. Because specifically, one of the things I obser I've observed, especially, you know, from back in the day being a at a utility, is that If you've got big demand growth and that means that you're gonna be doing a lot of building, there's a lot of
of promise on the sort of revenue side of the equation for a business, it makes it easier for you to do more innovative things. There's kind of more headroom, there's more need, frankly, too, for doing some things that might be a little bit outside the box. Is that something that you're seeing right now, or are you generally still sticking to kind of the most proven CDR technologies you can find?
Yeah, I think our city are procurement strategy breaks down in sort of two general buckets. They're the pathways that we think can deliver scale by twenty thirty. And in that case, I think it's more the example that you give that you need to focus on the proven tech because scale can only be achieved so quickly.
And, you know, hockey stick can only be so so steep. Uh we're also focused on innovation in the CDR market and focused on advancing the broader CDR market so that it could be a vibrant part of net zero economy and a vibrant part that that other companies And maybe governments in the future can buy from. And uh it can definitely play a role in, you know, what does the next generation of direct air capture look like? What does the next generation of uh marine CDR look like? Those are pathways that
aren't gonna be so big on our twenty thirty timescale, but really important in twenty thirty five by twenty forty. So there's certainly opportunity to play there. I guess the other thing that comes to mind here is our carbon free energy procurement. that is tailored to where we're gonna have uh energy or have have data centers around the world, you know, they're thinking and that that team sits right next to us and they're thinking increasingly creatively on how you structure contracts.
so that you can match your scope to emissions in the markets where where those emissions are happening.
And
We're certainly talking with them on an ongoing basis of ways that we can collaborate further and introduce innovation across our contracting approaches.
¶ Contractual Details and Quality Assurance
That's a great segue because now I want to dig into some of the details around how you think about these contracting approaches. And so you've already alluded a little bit to some of the elements that you think about when it comes to a contract, but I'm curious if you can talk about kind of the specific elements and how you structure it.
And really what I'm getting at is that, you know, when you think about kind of a typical off-take agreement for carbon dioxide removal credits, there's the really basic piece of it, which is, you know, how many tons of carbon dioxide removal and when. But then there are these other elements too that you've already brought up around, well, how permanent is it and how much certainty is there or isn't there around your ability to measure what this carbon dioxide removal looks like?
So how do you think about all of those pieces and how do you ultimately structure the contracts you sign?
Yeah. So the the backbone of our off take agreements is built on a power purchase agreement. So I think you called out a lot of the right elements that are common to folks who've who've seen lots of power purchase agreements. But there's a huge difference between electricity and carb removal. Electricity is generated and then it goes away in a flash. Right. So your the service is provided and it's and it's over.
In the carbon removal sense, durability, how long that carbon remains sequestered from the atmosphere is the whole challenge because if you have the credit and then that that tree gets cut down or burnt. or the geologic the carbon that was put in some sort of geologic storage formation at mile underground, that well gets uncapped and gets released to the atmosphere, that is sort of undermines exactly what you've just purchased. So
We're highly engaged in different thoughts of durability protections and reversal management, sort of how we look at it in a contracting sense. I mean, every credit that we buy has to be. Issued and uh and verified by a third party carbon registry. So those are some methodology out there that will
assert that okay for this type of carbon removal, these are the types of of calculations we need to do. This is how we approach a life cycle analysis to see, okay, what what is happening with carbon in the users are there, is there any carbon that's utilize fossil emissions that we need to account for when we issue that that carbon carbon credit.
And
Yeah, those we're looking to sort of gold plate those methodologies in the early days of the carbon uh in the carbon market ecosystem. So if we have a forestry project that may follow A Vera 47 protocol. We're looking at what are the other elements of the project that we need to feel good about so that.
Um, we we feel confident about the reputational element of the credit and that it is truly high quality. And so we will add in additional protections as we go about that process to shore that up. I think a better example here is in the bioenergy with carbon capture space, you care a lot about the biomass sourcing. So where did the trees or wood chips or straw come from that go into the plants?
That gets converted in energy and creates a carbon waste stream that then gets captured and stored underground. Where are those wood products coming from? Is that truly waste? So one thing that we focused on quite a bit is ensuring we have a broad set of biomass sourcing principles that we worked on with Carbon Direct and is available on our on our website. that identify, okay, we need to make sure that those sources of of wood products are truly waste, have come from forests that have
increasing or stable forest stocks. There's no deforestation happening. So there aren't any perverse incentives. And you're actually not doing harm in the process. Uh and that
Um, you're not cutting down some old growth forest that has some ecological benefit to the area. So we have those protections. We add that on top of our You know, the the general measurement process within our our contracts and the registry processes to ensure that we have covered every, every angle that the carbon credit at the end of the day is a net benefit for the world.
And can you say a bit more about because I think that this extra layer of sort of protections to make sure you're getting what you want to get is really interesting and probably very critical. So what does that look like? Is it really just sort of the company attesting that like we're this is truly a waste stream that we're using? Or is it something where you verify suppliers and go visit sites and things like that? Like what is that ultimately, what form does that take, these protections?
Yeah. So taking a step back, every contract that we sign typically has a twelve month process, could be more, could be a little bit less, where we've done our own due diligence, pulled in scientific experts. And then ultimately based on that that expertise and the site visit, have a sense of what are the things we care about over and above what the current registry methodologies do. And so then we will that structure.
our contracts based on that project context and based on understanding, okay, this is we have these specific concerns in this area of the world or in this for the what the project is doing, what we're seeing on the ground. And so we'll write that in as requirements in our contract.
They can take a few different forms. It can be part of the progress reporting that the supplier provides. There's always an audit right that we can come in if things sort of seem wrong and we can we can go back in once a year or so and make sure they're following the terms of the contract. In an ideal world. We build this into the registry ecosystem so that the third party verifier is checking the box.
But at this stage of the carbon market, as methodologies are quickly developing, we're looking to bolster those standards through attestations, through progress reporting. Sometimes we'll ask for evidence, sometimes we'll ask for officer certificates that that an officer of the company has pledged that this has happened in this way.
Um, so that we feel good that the company is sort of following through on on what they said they're going to do. Um, but the reporting really, you know, varies based on the nature of the production we're looking for.
We'll dig into the supply side of CDR, what it looks like to find quality projects, and we'll walk through some examples of Microsoft CDR partners after the break.
¶ Engaging with CDR Suppliers and Project Vetting
Well, so let's talk about that. Let's talk about the supply side and what it looks like when you're actually engaging with a partner. So you mentioned that you have a website and that people can kind of fill out a form and say, here's my project. So is that That typically how the engagement starts? Or do you also go out and kind of directly try to recruit projects? Tell us more about kind of how the engagement goes.
All the above. Beggars can't be choosers. So uh fair enough. They are open RFP process on our website. So if you just Type in and search for Microsoft Carbon Removal Program, you'll get there. Scroll down, it says click here to apply. That provides us an opportunity to evaluate projects on equal terms. In the early days of the program, we established our principles for high-quality carbon removal. So things like additionality, you know, making sure that our corporate purchase.
Is essential to the project existing measurability, monitoring, reporting, and verification. So you feel good about the quantification methods of the credits. um community fairness so that we're doing right by the communities that are affected by these projects. You know, that that's part of like good permitting and good project development. And so we've got all those those questions geared to those
good those criteria and the application gives us a chance to evaluate every project on its merits. Cause it's really important to us that we are fair across the board and give every chance every project an equal chance to succeed. But we're out there talking to folks constantly. And I think by the nature of the number of announcements there are Microsoft buying various forms of car removal.
lots of suppliers are no, okay, Microsoft's a way to to come approach us is a buyer out there and we'll evaluate their project. So we've get we get requests to chat, we get um inbounds through our sales organization, companies that Microsoft is trying to sell to, but they also may have some carbon credit opportunities. So we're looking at all those all the opportunities, but ultimately direct companies to apply to our application.
And then uh we can evaluate them on even terms and and run them through our procurement process so we can uh check the boxes against our our criteria at the end of the day
And so when you say no to a project, what are the most common reasons that you're saying no?
The most common way we say no to project is because it's too early. You know, they haven't yet thought through all the elements that are in the application. So we don't yet know. They may not have a site selected. So you don't know what the impacted communities are going to be. They may not have fully identify what a lifecycle analysis looks like for the project. Where are the system boundaries?
And so where are they going to get their their carbon, uh, the the sort of source material, the inputs, and how are they gonna sort of turn it into a carbon credit? Um, you know, companies can be at various stages. They don't have to have an LCA before they apply. They don't have to have sourcing contracts, but um, some of those pieces need to be filled in so we have a good sense of where where they're going to be.
Afterwards. Sounds good.
And conversely, are there a couple of things that are sort of baseline, unless you have this, don't bother applying. It sounds like maybe site selection is one of those things. Are there other sort of bright line things you're looking for?
think you have to have a good sense of their unit economic model. So you have to know, okay, what are my revenues going to look like? How many credits do I want to sell into the market? What are my other revenue streams? And what are my key cost items? And how can I then be sure, and and your buyers as well be sure that there is additionality from the carbon credit purchase? So thinking through a unit economic model to uh understand what your returns are going to be and have those inputs.
sort of firmed up a little bit. You know, if you don't have a picture of what your sourcing is going to look like, you if you don't have a picture of what your land cost is going to look like, it's probably pretty hard to submit to our our application. The carbon equivalent is the carbon accounting math. So you've got to have a view of you know, how many credits are you going to be able to produce, which working backwards.
requires you to have a sense of, you know, how much carbon are you going to sequester? Are there any process emissions in the in the course of generating that credit that you're going to need to deduct? And what's your plan to get those those verified? So it sort of comes down to numbers, I'd say is the is the starting point. You know, what's your financial model look like, what's your carbon accounting model look like? And having those sketched out is essential. You could have open questions.
And we can work with any supplier on those open questions in the process, but we've got to know where they're going and have some a good sense of um of of quantities and timing.
¶ Financing and Tailored CDR Agreements
Okay. And then that leads to then my next question. So when we talk to infrastructure investors and really a lot of growth equity funds too, the refrain that we often hear is Yes, we are delighted to invest in projects. We just need to see proven unit economics in the form of full-scale commercial facility. That's been up and running for at least X number of months so that we're very clear exactly what the unit economics are going to be on this thing you now want to build.
So of course you sign an off-take agreement, you're ready to work with these partners, you like the unit economics, you believe in sort of the modeling that they've done that will get them to these numbers. But then at the end of the day, they still have to finance this facility and build it. So, how does that tend to work? Are you all ever actually supporting the sort of direct investment in these projects? Are you helping them find investors?
Do you find that they're almost always using venture capital and sort of financing on their own balance sheets if they're a little bit earlier? What are the sorts of things that you're seeing on the actual sort of project investment side?
We typically work with three types of supplies. You've got the established typically energy companies that are looking to diversify their revenue streams, add a new revenue stream from some sort of low carbon business. You've got companies that are traditional carbon market players that have done a lot in the carbon avoidance world and are trying to move into to carbon removal.
And then you've got startups, you know, pure play ideas, thinly capitalized. And so I think the financing model varies based on each of those. In the first case, there is some sort of corporate finance. agenda. They may end up thinking about project finance, but they're they're going through, you know, corporate balance sheets and Like they would any other new capital project.
In the second category, they'll probably engage a little bit more in project finance, sort of depending on the strength of their of their balance sheet. And uh our off takes sort of critical component of that so that you've got a high credit worthy off taker on the other side and they can though go raise capital against that. And then the third case of the sort of startup model.
You know, anything's on the table. There's some venture approaches and uh and project-based approaches, but we vary our contracting in two big ways. So if the project's ready for scale, we will work through a long-term off ticket agreement that's modeled off of PPA. If the project is not ready for scale yet, that may be a factor of the supplier not being ready yet. They're still working through an idea, the text pretty nascent. Um, they haven't figured out their scaling plan.
Or that can be sort of on on our side, so the the carbon market side of the quantification methods just aren't there yet. So this has been true for enhanced rock weathering for us two date. It's something we're we're working through right now of like is Do we feel good enough about the quantification methods of carbon removal through enhanced rock weathering such that we can sign a long-term optic agreement that any measurement uncertainty can be managed in the course of an optic agreement?
So if the project's not ready for scale, we'll sign a shorter form agreement. The intent is for that to be a really light touch contract for them. You know, we'll buy some credits for them for a one, two, three year period.
get some proof points, get help them um bridge to you know, they'll have some early revenue for for their pilot scale projects and then Within 12 to 18 months, hopefully, we can then turn around and sign a much larger agreement as we can see what is the scale opportunity here. And so we hope that by matching those different off take structures, you know, we don't have to do as much due diligence on the the smaller purchase agreements. Those are one, two, three years in in nature.
uh that that can help them get going so they can get to that commercial scale facility and proven financing and and raise the full capital stock.
¶ Diverse Partnerships and Portfolio Strategy
Let's talk a little bit about chestnut carbon. Tell us a bit about what makes chestnut carbon a good partner and tell us some more about kind of the nature of your agreement with them.
Yeah. So, you know, Tesla was founded within a private equity firm focused on oil and gas. And they've evolved quite a bit into a forestry operation that's quite sophisticated. Their plans are to plant I think it's 35 million trees across the five different states in the southeast of the US. Um, we signed a deal to purchase.
believe eight million tons of carbon removal from them over a period of time. And they know finance very well. So they were able to pull in JP Morgan as a as a key financier. Um and and show, you know, what does the bankability look like for an off-take agreement? So bankability being that investors are willing to in to come into a project. Knowing that the revenue purchased from from Microsoft is secure, that we are going to stay in and buy the carbon that actually gets generated from it.
You know, Cheston has helped navigate those any of those challenges and ensure that that the project finance picture can sort of come together for a mass scale reforestation project, which is not so common. You know, typically those agreements exist for heavy infrastructure. So to do it on thirty five million trees across the US is a is a big, big milestone.
Tell us more what are your other favorite deals that you've done and how are they structured?
Yeah, BTG is a really exciting one. You know, this is the world's largest carbon removal deal out there. Uh they're uh Planning to purchase I think more than eight million tons. They're planning to plant a hundred million trees and they're converting degraded cattle pasture in the Brazilian Serrado, which is the second largest biome in Brazil after the Amazon.
So they're planting trees in in this place that's been deforested and uh with with a mix of native species and eucalyptus plantations. And and while they're doing that, they're restoring native ecosystems. Um, and so the eucalyptus is used as as sustainable timber production on land that does not have good alternate uses. The native tree planting is sort of restoring those ecosystems. You know, they're
We we're in a paygo relationship with them where we'll buy the credits as they sell them to us. And they're they've raised you know, well over half of their billion dollar fund. And on the timber side, they're working with best in class Effic standards. So that gives us a lot of credibility in where they're going and that the quality of the project is at the top.
You've mentioned at various points, both engineered, you know, carbon dioxide removal as well as nature-based solutions. Do you all kind of have a preference for one over the other? Or do you think about the sort of differentiated advantages and disadvantages and kind of you do all of the above opportunistically?
Yeah, we have an all the above strategy to cur to carbon removal, but It requires us having a balanced portfolio. So the the target is we we segment the CDR market based on durability. So for us, low durability carbon removal is you expect that carbon to be sequestered for 100 years or less. There's medium durability, 100 to 1000 years, and then high durability, which is millennia plus.
And so for 2030, for us to meet our goals and for us to build a high quality carbon removal market, we've been targeting for about half of the portfolio to be low durability and half to be medium and high.
There are
different approaches to the carbon removal market. Our view is that the climate crisis is happening now and that there are not only carbon benefits, but also ecological benefits that can happen from nature-based solutions, typically low durability. uh uh in the typically low durability category that can buy us important time against you know as we work toward a net zero world. So we're looking at that 50-50 split and then buying projects.
within within those and we think about portfolio diversification across that. So we don't want to be too deep in any one technology or too deep with any one supply or any one project.
¶ Market Pathways and Future Growth
So in the low durability, there are certain pathways that we think are more likely for scale by 2030. Those are primarily afforestation, reforestation, and restoration, uh, improved forest management and soil carbon. Like each of those has
good quantification methods that can make us and projects that can scale by 2030. Medium durability is mostly biochar. And then in the high durability space, Bioenergy with carbon capture and storage has been to the most we have the highest confidence in that and the widest range of suppliers that can deliver meaningful volumes on the twenty thirty timescale.
But there's also direct air capture and enhanced rock weathering that may be able to get to that sort of same level of confidence. And we're still working through those opportunities today.
So what do you think the future holds for these potentially 500 plus CDR companies out there? Do you think they'll they'll all be around, you know, sort of eventually, or do you think that we're going to see a winnowing of companies that are operating in this space?
I sincerely hope they'll all be around, but I think history shows that there will there will certainly be a win o wing. What we're focused on is ensuring that high quality carbon removal has funding today and has off take today. And so we see about 250 applications per year and mostly from this probably from two hundred plus suppliers. And we're seriously considering over a hundred projects right now in our pipeline. Not all of those will make it through. I I would guess fewer than half do.
Uh but a lot of the other half we we will The half that will reject, or more than half that will reject, will provide feedback on, okay, this is what it takes for you to improve. This is what we need to see for you to come back. So for many companies, that will be enough guidance for them to work on some things, work on a pilot. uh advance in LCA, make some key hires, help them shore up their application.
For for others, they won't have enough time to do that. And then, you know, we'll see, I think with any emerging Emerging marketplace that the suppliers will sort of re-gravitate to what are the tech pathways that that are going to going to work out. So I don't have a crystal ball of uh of the types of car removal that we buy today, you know, which of those will actually be still there in 2040, but I couldn't tell you right now that which ones are not going to make it.
And so our approach is let's keep all those up options on the table. Let's try to maximize the total addressable market for carbon removal and give suppliers every chance they can to succeed. And then, you know, they'll calibrate and and run to the more promising pathway.
Do you think that the corporate market for carbon dioxide removal credits will be enough to create a really strong ecosystem of carbon dioxide removal to get us to net zero by twenty fifty? Or do you think there will come a moment? And if so, how soon when governments need to step in and start procuring CDR at scale?
There will definitely be a moment for government demand. I think when you look at the IBCC numbers for five plus gigatons, five to ten gigatons of carbon removal, you need public procurement to play an essential role of that. I think we're encouraged by some of the things that are happening in the European Union. Like there's some discussions of having public uh public procurement of carbon removal uh as part of their I think twenty forty target.
And so corporate demand is a bridge to that to that world. And I think we've seen a lot of parallels in the wind and solar world where a lot of the renewables procurements are driven by renewables procurement standards in the US state. And so uh granted it's utilities who are doing that, but on behalf of state targets. So in order for carbon removal to be vibrant in the 2040, 2050 timeline, we'll definitely need public demand to to be a core element of it.
¶ Future Vision and Investment Ideas
Okay, I have one final question for you. If I could give your team, Phil,$100 million tomorrow to do something creative or to augment what you're already doing, what would you do with it?
I've got two ideas. One idea is frankly, a fund to help startup supplier companies in the CDR space that is independently managed because we want to have an arm's length relationship for Microsoft to help them understand what is necessary to develop high quality carbon removal projects. and give them maybe allocate small pockets of funding and perhaps resourcing and your expertise kind of like an incubator.
to get them moving and and you know perhaps different from other incubators out there, make sure that that incubator has enough sort of buyer input and registry input to know like, you know, what is what it's gonna look like. My other idea is how do you shore up the verification space, perhaps with more uh artificial intelligence? Because We need to move faster that to verify the carbon removal that happens from millions of trees.
Or even in the biochart space where you have modular units, but overall you're gonna want to verify in a larger scale. So to throw um some sort of Focus on uh shoring up methodologies in a way that you can feel good. A third party is coming out and stamping carbon credits. And saying that that means a metric ton of carbon was removed from the atmosphere. That will make everyone a lot more excited and perhaps uh less gun shy to buy carbon removal.
I love that you said that. Well, thank you so much, Philip. Really appreciate all the insights that you've given, especially around how to do off-take agreements. Thank you for being here.
It was a pleasure to speak with you.
🎵 Music
Phil Goodman is the director of the Carbon Removal Portfolio at Microsoft. The green blueprint is produced by Latitude Media in partnership with Trellis Climate. The show is hosted by me, Lara Pierpoint. This episode was produced by Alexandria Hare and Ann Bailey. Anne Bailey is our senior editor. Sean Marquand is our technical director. Stephen Lacey is our executive editor.
If you'd like to suggest topics or guests for the show, send an email to thegreenblueprint at latitudemedia.com. You can listen to the Green Blueprint at latitudemedia.com or subscribe wherever you get podcasts. And if you have fellow clean energy or climate tech Travelers who would benefit from insights in this show, send them a link.
Thank you.
This is the Green Blueprint, a show about the architects of the clean energy economy.
🎵 Music