Technology giant Microsoft has finalized a substantial offtake agreement with the Indian environmental startup Varaha to procure more than 100,000 tons of biochar-based carbon removal credits over the next three years. This partnership focuses on the agricultural heartlands of India, specifically targeting the conversion of crop residues into stable biogenic carbon. By integrating smallholder farmers into the global carbon market, the initiative seeks to establish a high-integrity supply chain for durable carbon dioxide removal (CDR) while addressing the environmental externalities of traditional farming practices in South Asia.

The primary challenge addressed by this project is the pervasive practice of open-field burning of agricultural residues, such as cotton stalks, in regions like Maharashtra. This seasonal activity contributes significantly to regional air pollution and results in the immediate release of biogenic carbon back into the atmosphere. Furthermore, smallholder farmers often lack the capital and infrastructure required to adopt more sustainable waste-management technologies. Historically, the fragmented nature of small-scale farming has made it difficult to implement the rigorous monitoring, reporting, and verification (MRV) protocols necessary to attract institutional carbon buyers.

To resolve these barriers, Varaha has deployed a distributed network of gasificationGasification is a high-temperature, thermochemical process that converts carbon-based materials into a gaseous fuel called syngas and solid by-products. It takes place in an oxygen-deficient environment at temperatures typically above 750°C. Unlike combustion, which fully burns material to produce heat and carbon dioxide (CO2​), gasification More reactors that utilize various Original Equipment Manufacturer (OEM) technologies to process local biomassBiomass is a complex biological organic or non-organic solid product derived from living or recently living organism and available naturally. Various types of wastes such as animal manure, waste paper, sludge and many industrial wastes are also treated as biomass because like natural biomass these More. The solution incentivizes farmers to divert their crop residues to these facilities instead of burning them. These reactors operate under controlled, low-oxygen conditions to produce high-quality biocharBiochar is a carbon-rich material created from biomass decomposition in low-oxygen conditions. It has important applications in environmental remediation, soil improvement, agriculture, carbon sequestration, energy storage, and sustainable materials, promoting efficiency and reducing waste in various contexts while addressing climate change challenges. More, which is then returned to the soil as a regenerative amendment. This decentralized “ground game” approach ensures that the technology is accessible to rural communities while maintaining the scientific standards required for Microsoft’s diversified carbon removal portfolio.

The outcomes of this collaboration are multi-faceted, delivering both climate and socio-economic benefits. For Microsoft, the deal provides a reliable stream of high-integrity, durable carbon credits to meet its 2030 carbon-negative goal. For the participating farmers, the project generates additional income through payments for biomass and carbon sequestration, while the application of biochar improves soil fertility and moisture retention. Ultimately, the project demonstrates a scalable model for CDR in Asia, transforming a significant source of air pollution into a verified, long-term carbon sink.