In a deal that could be worth $200 million, Microsoft announced that it is purchasing 315,000 metric tons of carbon removal over a multi-year period from climate tech startup Heirloom Carbon. It’s one of the biggest deals of its kind, reports The Wall Street Journal (paywalled). GeekWire reports: San Francisco-based Heirloom is harnessing a geologic approach to catching and holding carbon dioxide. Limestone naturally binds to carbon, but Heirloom’s technology dramatically speeds up the process, cutting it from years to days. The startup operates the only U.S. facility permanently capturing carbon. Even more important than the volume of carbon to be removed is the deal’s ability to unlock additional funding and investments to grow Heirloom’s business and the sector more broadly.
Microsoft previously invested in Heirloom through its $1 billion Climate Innovation Fund. The new deal represents a financially empowering “bankable agreement,” said Heirloom CEO Shashank Samala. “Bankable agreements of this magnitude enable Heirloom to raise project finance for our rapid scale-up, fueling exponential growth like what we’ve seen in the renewable energy industry,” Samala said in a statement. The guaranteed cash flow can facilitate financing needed to build Heirloom’s next two commercial sites. The deal is also “an example of the impact of the Biden administration’s 2021 infrastructure bill,” notes the report. “[T]he purchase was tied to Heirloom being selected by the U.S. Department of Energy as one of the nation’s direct air capture (DAC) hubs. It will receive $600 million of matching funding thanks to the designation.”
