Vancouver firm CO280 has struck what it claims is a “historic” 12-year deal with Microsoft to remove carbon dioxide (CO2) emissions from an American paper mill.
The company and its technology partner SLB Capturi plan to sell almost 3.7 million tonnes of CO2 removal to Microsoft. The project will be designed to capture biogenic (biological origin) emissions from boiler stacks by retrofitting them with capture equipment and storing the CO2 permanently in geological formations.
The CO280 strategy of adding carbon removal to existing paper mills is an efficient way to quickly scale carbon removal and bolster investment and jobs into timberland communities.
Brian Marrs, Microsoft
The initiative comes as Microsoft pursues ambitious emissions-reduction goals even as its own overall emissions have increased 29 percent over 2020 levels, mainly due to the energy-intensive data centres needed for AI applications—a problem plaguing companies across the tech sector.
The capture technology diverts emissions at the base of a mill’s boiler stacks, with a solvent absorbing and capturing the CO2, CO280 co-founder and CEO Jonathan Rhone told BetaKit in an interview. It’s purified, compressed, and sent through a pipeline to its final destination—in this case, saline aquifers made of porous rock saturated with saltwater.
Rhone noted the pulp and paper industry has “significant advantages” in terms of the cost of carbon capture, which is expected to be relatively inexpensive at less than $200 USD per tonne. Trees produce the heat and biomass that powers the mill, not fossil fuels or natural gas. In addition, the CO2 at the mills is 300 times more concentrated than in the air people typically breathe.
A CO280 spokesperson told BetaKit the company couldn’t disclose the monetary value of the agreement or the name of the mill, although it said the facility was located in a Gulf Coast state. The region is an “extremely attractive place” between the aquifers, tax credits, and large customers, Rhone added.
The company maintains that the agreement is one of the biggest engineered CO2 removal purchases “to date,” and that it could potentially scale to the larger pulp and paper mill industry. These facilities release 88 million tonnes of biogenic CO2 per year, according to the company. Both CO280 and Microsoft claim these retrofits are “securing” existing mill jobs while creating new ones.
“The CO280 strategy of adding carbon removal to existing paper mills is an efficient way to quickly scale carbon removal and bolster investment and jobs into timberland communities across the United States,” according to Brian Marrs, Microsoft’s Senior Director of Energy and Carbon Removal.
Microsoft aspires to be carbon negative (that is, eliminate more CO2 emissions than it produces) by 2030, and to remove its lifetime CO2 output by 2050. Its strategy includes carbon removal programs as well as emissions reduction efforts both in-house and in its supply chain. As outlined in its initial roadmap statement, it’s moving away from an industry practice of purchasing carbon offsets that merely avoid new emissions, as it believes carbon neutrality (net zero emissions) is “not enough” to minimize human-made climate change.
CO280 and SLB Capturi (formerly Aker Carbon Capture) signed a memorandum of understanding with Microsoft in April 2024 to help develop and scale CO2 removal in North America, including at pulp and paper mills. At the time, the companies aimed to streamline the deployment of carbon capture systems.
In December, CO280 signed a $48-million deal with carbon removal accelerator Frontier, an alliance between Alphabet (the parent company of Google), Meta (the owner of Facebook), McKinsey Sustainability, Canada’s payments giant Shopify, and Stripe. CO280 has a dozen projects at varying stages of development.
Rhone said CO280 had a “terrific relationship” with Microsoft, and that he expected both the memorandum and the new agreement to “encourage” other companies to get into the carbon removal market. These sorts of deals are “catalytic,” he said, adding that the technology is profitable for those mills that make the upgrade.
The CEO also saw the Microsoft agreement as the “first of many” removal projects. In addition to the Gulf Coast, he pointed to plans for capture systems in Alberta. The province is an “obvious” place to launch between its storage-ready geology and a well-developed permit process, Rhone explained, saying there were six mills of interest in Alberta.
The economic chaos resulting from US President Donald Trump’s tariffs haven’t created any problems for CO280, according to Rhone. He observed that his business has “not seen a pullback or a retreat” as a result. He believed that it even represented a “real opportunity” for Canada to lead in clean energy and carbon removal infrastructure, given its stability.
“That could be a real competitive advantage for Canada,” Rhone said.
Feature image courtesy of Constantin John on Unsplash. Body image courtesy of CO280.