MUMBAI, 18 January 2025: Indian climate-tech company Varaha has entered into a long-term carbon dioxide removal (CDR) offtake agreement with Microsoft, marking a significant milestone for Asia’s emerging carbon markets and biochar-based climate solutions.
Under the agreement, Microsoft will purchase more than 100,000 tonnes of verified carbon dioxide removal credits over three years from Varaha’s biochar projects in India. To deliver this volume, Varaha will develop 18 industrial biomass gasification reactors with a projected operational life of 15 years. Over their full lifetime, these facilities are expected to remove more than two million tonnes of CO₂ from the atmosphere.
The project will source cotton stalk residue from smallholder farmers across Maharashtra’s cotton belt. Post-harvest, cotton stalks are typically burned in open fields, contributing significantly to seasonal air pollution. Varaha’s model diverts this waste biomass into controlled gasification units, converting it into biochar – a stable form of carbon that can remain sequestered in soils for centuries.
Industry observers note that this approach combines climate mitigation with strong rural co-benefits. By offering farmers a commercial alternative to residue burning, the initiative is expected to reduce particulate matter (PM2.5) emissions and improve regional air quality. Participating farmers are also encouraged to adopt regenerative practices such as residue mulching and soil application of biochar, which improves water retention, soil structure and crop productivity.
“The agreement demonstrates that high-integrity carbon removal can generate meaningful community impact,” said Madhur Jain, chief executive of Varaha. He added that the programme creates financial incentives for farmers to stop open-field burning while building climate resilience at the grassroots level.
The first reactor will be deployed alongside Varaha’s 52-acre cotton research farm in Maharashtra, where the company pilots sustainable farming techniques with local growers. Microsoft’s commitment is expected to fund the rollout of up to 18 reactors across major cotton-producing regions, allowing rapid scale-up of the programme.
From Microsoft’s perspective, the transaction strengthens its diversified carbon removal portfolio. Phil Goodman, programme director for carbon dioxide removal at Microsoft, said the partnership expands biochar-based CDR in Asia while delivering co-benefits such as improved soil health and shared economic value for farming communities.
Credits generated through the programme will adhere to strict measurement, reporting and verification standards, ensuring each tonne represents permanent carbon removal. Analysts view the deal as a benchmark transaction that could catalyse further institutional demand for high-integrity CDR projects across emerging markets.