Microsoft Bets Big on Carbon Capture in Louisiana

Microsoft has committed to the world’s largest permanent carbon removal project by partnering with AtmosClear in Louisiana. The $800 million initiative aims to sequester 6.75 million metric tons of CO₂ using BECCS technology and relies heavily on the U.S. 45Q tax credit—now threatened by potential policy rollbacks. The project is poised to boost local jobs and solidify Louisiana’s role in carbon capture innovation.

Microsoft has taken a significant step toward its 2030 carbon-negative pledge by signing what’s being called the largest permanent carbon removal agreement to date. The deal, announced on Tuesday, involves the removal of 6.75 million metric tons of carbon dioxide over 15 years through a bioenergy carbon capture and storage (BECCS) project in Louisiana, developed by AtmosClear, a subsidiary of Texas-based Fidelis.

This isn’t just a symbolic investment. The facility, which will be built at the Port of Greater Baton Rouge, will use biomass materials such as sugarcane bagasse and forest trimmings to generate power while capturing and permanently storing the associated carbon emissions underground. Microsoft’s decision comes at a time when the company’s environmental footprint is growing—its greenhouse gas emissions were 29.1% higher in 2023 than in 2020, largely due to the surging energy demands of artificial intelligence systems and cloud infrastructure. The company reported total emissions of 17.2 million tons last year.

The scale of the Louisiana project aligns with Microsoft’s broader climate strategy, which seeks not just to reduce emissions but to actively remove carbon from the atmosphere. “We’re committed to carbon removal at a meaningful scale,” said Brian Marrs, Microsoft’s Senior Director of Energy and Carbon. “This project doesn’t just capture carbon—it also supports jobs and innovation in local agricultural communities.”

But even as the project gets underway, its future is entangled in the politics of climate policy. The carbon sequestration component is expected to rely on the federal 45Q tax credit, which offers $85 per ton of CO₂ permanently stored underground. That incentive has played a pivotal role in encouraging private investment in carbon removal across the United States. However, with the Trump campaign signaling plans to roll back key climate-related spending and incentives enacted under President Joe Biden, the long-term stability of 45Q is now uncertain.

Neither Microsoft nor Fidelis confirmed whether the project would move forward without the tax credit. Still, Fidelis has indicated its intention to take full advantage of the incentive to fund the project. If realized as planned, the initiative could bring over $800 million in investment to the region, generate approximately 600 construction jobs, and support 75 permanent positions. It may also revive forestry management roles in the area—jobs that have been hit hard by recent mill closures.

The project's economic and environmental impact has made it a focal point for Louisiana officials, who are lobbying the U.S. Department of Energy and Congress to protect the 45Q tax credit. They’re also seeking federal funding for the state’s proposed Direct Air Capture hub in Calcasieu Parish, an ambitious effort to position Louisiana as a national leader in carbon management and climate technology.

Construction on the AtmosClear plant is scheduled to begin in 2026, with full commercial operations projected for 2029. As the climate crisis deepens and AI-fueled energy consumption rises, Microsoft’s Louisiana partnership could serve as both a benchmark and a battleground for the future of carbon removal in America. The outcome of this deal may well signal whether corporate climate goals can withstand the shifting winds of U.S. policy—or whether they're at the mercy of political tides.