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Microsoft plans to buy carbon removal credits from the first commercial plant of a young startup created by SpaceX vets, the company tells Axios. 

Why it matters: The deal between Arbor and the tech behemoth provides a vote of confidence and a revenue stream for the newcomer. 

Zoom in: Arbor, founded in 2022, says it struck a deal to sell 25,000 tons of carbon removal credits to Microsoft, including 5,000 tons per year starting in 2027. 

The project, deploying Arbor's power systems paired with carbon capture, will potentially be built in Calcasieu Parish, Louisiana, and leverage the local carbon storage infrastructure in the region. 

While Arbor has tested its tech at the pilot scale in San Bernardino, California, the project will be its first built at a commercial scale. The company says it will eventually reach the size of removing 2 million tons per year by 2030.

In addition to removing carbon, Arbor's systems produce power. The commercial plant will initially generate 5 MW of clean electricity and 100 MW by 2030, says Arbor.  

How it works: Arbor has developed tech pioneered at SpaceX to build a "vegetarian rocket engine," as Arbor co-founder and CEO Brad Hartwig describes it. 

The power engine turns waste biomass, like from forestry or agriculture, into CO2, which the company then captures and sequesters. 

The process uses oxygen at high temperature and pressure, mimicking the conditions in reactors for rocket engines. 

Follow the money: The company's investors include Gigascale Capital, Voyager Ventures, Lowercarbon Capital, and Cantos Ventures. 

The big picture: Big tech companies, led by Microsoft, are making significant investments in carbon removal projects as their emissions from AI data centers rise. 

Post-combustion carbon capture and storage projects are also starting to slowly gain momentum thanks to incentives like the U.S. IRA and Canada's ITC. 

What's next: Arbor will need to switch into project developer mode and get its facility deployed and operating by 2027. 

Exclusive: SpaceX vets ink Microsoft carbon removal deal

Arbor is building its first commercial project in Louisiana.

An engine from startup Arbor that combusts waste biomass and produces CO2, which is then captured and stored

Startup Arbor's power engine combusts waste biomass and produces CO2, which can be captured and stored. Photo: Courtesy of Arbor

carbon capture

Microsoft plans to buy carbon removal credits from the first commercial plant of a young startup created by SpaceX vets, the company tells Axios. Why it matters: The deal between Arbor and the tech behemoth provides a vote of confidence and a revenue stream for the newcomer.

Exclusive: SpaceX vets ink Microsoft carbon removal deal

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