Under the agreement, Alt Carbon will deliver 36,920 metric tons of carbon dioxide removal credits by 2029 from its Darjeeling Revival Project in eastern India. Microsoft also has an option to purchase additional volumes if the startup meets delivery and verification milestones.

The deal follows reports that suggested Microsoft — the world’s largest buyer of carbon-removal credits — had paused parts of its carbon-removal procurement program. The company rejected those claims, saying it remained committed to its climate goals even as it refined its sustainability strategy.

The agreement is a potential boon for Alt Carbon, a Bengaluru-based startup founded in 2023 that is focused on carbon removal projects, including enhanced rock weathering. This technique involves spreading crushed basalt and other silicate rocks on farmland to speed up natural chemical reactions that help store carbon dioxide. Alt Carbon sources basalt from the Rajmahal Traps in eastern India and deploys it across farmland in West Bengal, where the rock reacts with rainwater and atmospheric carbon dioxide to form stable bicarbonates.

Discussions with Microsoft began in early 2025 and culminated more than a year later after extensive scientific review, due diligence, and contract negotiations, Alt Carbon co-founder and president Sparsh Agarwal told TechCrunch. Microsoft also required additional monitoring, reporting, and verification (MRV) measures beyond registry requirements, including expanded data-sharing and carbon quantification protocols, he said.

The deal comes as buyers increasingly look for proven carbon-removal projects in a market where verified supply remains scarce. Hundreds of startups have emerged promising to remove carbon dioxide from the atmosphere. However, only a small fraction have delivered verified credits at commercial scale.

“The problem that exists right now is that there are a lot of suppliers, but there are very few verified deliveries out there,” Agarwal said. “When companies are able to deliver, everyone wants to ensure that they get a part of the supply.”

Alt Carbon has issued nearly 10,000 carbon-removal credits through enhanced rock weathering to date, making it the world’s largest issuance of such credits, according to Agarwal. The startup expects to issue another 15,000 credits by the end of the year.

Alt Carbon operates two carbon-removal projects in North Bengal, including one dedicated to Japanese shipping giant Mitsui OSK Lines and a larger program from which Microsoft’s credits will be sourced, Agarwal said. The startup has expanded beyond tea estates into rice-growing areas and now works with more than 35,000 farmers across about 80,000 acres.

Credits under the Microsoft agreement will be issued through Isometric, a carbon-removal registry that developed an enhanced rock weathering methodology.

The deal also reflects the growing role of emerging-market suppliers in carbon removal. Developers from the Global South now account for about 26% of carbon-removal credit issuances, up from roughly 2% in 2022, Agarwal said. He added that international buyers were often skeptical of Indian carbon projects when Alt Carbon launched over two years ago, but growing issuance volumes and stricter verification standards have helped improve confidence in the market.

The Alt Carbon agreement is not Microsoft’s first carbon-removal investment in India. In January, the company signed an agreement with another Indian startup, Varaha, to purchase more than 100,000 tonnes of carbon dioxide removal credits generated through biochar over three years.

Microsoft joins a roster of buyers of Alt Carbon’s credits that includes procurement coalitions such as Frontier, whose members include Google, Stripe, and Shopify, and NextGen, backed by companies including UBS, Swiss Re, and Boston Consulting Group, according to registry data.

Agarwal said Alt Carbon plans to expand its deployment footprint roughly fivefold over the next four to five years from about 80,000 acres today, as demand for verified carbon-removal credits grows.

Alt Carbon, which last year raised $12 million in a seed funding round led by tech investor Lachy Groom, has built its own MRV infrastructure, including laboratories in Bengaluru and Darjeeling, that it uses to analyze soil and water samples and quantify carbon removal. Agarwal said improving verification capabilities and lowering measurement costs will be critical to scaling enhanced rock weathering projects in India and beyond.