Microsoft is tapping Alt Carbon in a nod to India’s growing role in decarbonisation

Microsoft has signed a three-year agreement to purchase nearly 37,000 metric tons of carbon removal credits from Indian startup Alt Carbon, marking the technology giant’s first enhanced rock weathering deal in Asia.

Under the agreement, Alt Carbon will deliver 36,920 metric tons of CO2 removal credits by 2029 from the Darjeeling Revitalization Project in eastern India. Microsoft also has the option to purchase additional volumes if the startup meets the delivery and verification milestones.

The deal comes on the heels of reports that Microsoft – the world’s largest buyer of carbon removal credits – has temporarily halted parts of its carbon removal purchases programme. The company rejected the claims, saying it remains committed to its climate goals even as it improves its sustainability strategy.

The agreement is seen as a potential boon for Alt Carbon, a Bengaluru-based startup founded in 2023 that focuses on carbon removal projects, including improving rock weathering. This technique involves spreading crushed basalt and other silicate rocks on farmland to speed up natural chemical reactions that help store carbon dioxide. Alternative Carbon extracts basalt from the Raj Mahal traps in eastern India and spreads it across farmland in West Bengal, where the rocks react 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 review, due diligence and contract negotiations, Alt Carbon co-founder and president, Sparsh Agarwal, told TechCrunch. Microsoft has also requested additional monitoring, reporting and verification (MRV) measures beyond logging requirements, including expanded data exchange and carbon quantification protocols, he said.

The deal comes as buyers are increasingly looking for proven decarbonisation projects in a market where proven supplies remain scarce. Hundreds of startups have emerged that promise to remove carbon dioxide from the atmosphere. However, only a small fraction of verified credits have been offered on a commercial scale.

“The problem now is that there are a lot of suppliers, but very few verified deliveries,” Agarwal said. “When companies are able to deliver, everyone wants to make sure they get a piece of the offer.”

Alt Carbon has issued nearly 10,000 credits for carbon removal through enhanced rock weathering to date, making it the world’s largest issuance of such credits, according to Agarwal. The startup expects to release another 15,000 units by the end of the year.

Alt Carbon is running two decarbonization projects in North Bengal, including one dedicated to Japanese shipping giant Mitsui OSK Lines and a larger program through which it will earn Microsoft credits, Agarwal said. The startup has expanded beyond tea plantations into rice growing areas and now works with more than 35,000 farmers across nearly 80,000 acres.

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

The deal also reflects the growing role of emerging market suppliers in decarbonisation. Agarwal said developers from the Global South now account for about 26% of decarbonization credit issuances, up from about 2% in 2022. He added that international buyers were often skeptical of Indian carbon projects when Alt Carbon was launched more than two years ago, but increased issuance volumes and stricter verification standards have helped improve confidence in the market.

The Alt Carbon agreement is not Microsoft’s first decarbonisation investment in India. In January, the company signed an agreement with another Indian startup, Varaha, to purchase more than 100,000 tons of biochar CO2 removal credits over three years.

Microsoft joins a list of buyers of Alt Carbon credits that includes purchasing alliances such as Frontier, whose members include Google, Stripe, Shopify and NextGen, backed by companies including UBS, Swiss Re and Boston Consulting Group, according to filing data.

Alt Carbon plans to expand its deployment roughly five-fold over the next four to five years from about 80,000 acres today, as demand for verified carbon removal credits grows, Agarwal said.

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, which it uses to analyze soil and water samples and measure carbon removal. Improving verification capabilities and reducing measurement costs will be critical to scaling up improved rock weathering projects in India and abroad, Agarwal said.