Microsoft, which normally leaves shopping for development supplies to its contractors, has signed a long-term contract to purchase low-carbon cement by startup Elegant Techniques. It can use a brand new type of environmental credit associated to that buy to assert emissions reductions associated to information heart development.
Beneath the deal, introduced Could 22, Microsoft will declare 622,500 metric tons of emissions reductions over a six-to-nine-year interval towards its Scope 3 footprint — which accounted for 96.5 p.c of the know-how firm’s complete footprint in its 2023 fiscal 12 months.
For perspective, Microsoft used 605,000 carbon credit that 12 months to make its carbon impartial declare. It has additionally bought credit for shut to twenty million tons of carbon elimination.
Microsoft plans to make use of Elegant’s cement in information facilities, infrastructure and places of work wherever geographically doable. Most cement is used inside a number of hundred miles of the place it’s produced.
Microsoft’s footprint rose 31 p.c between 2020 and 2024, largely due to information heart enlargement. Concrete and metal are carbon-intensive supplies that collectively contribute 13 p.c of worldwide carbon dioxide emissions. With a lot ado being made in regards to the enormous power urge for food of knowledge facilities that gas synthetic intelligence, Amazon, Google and Microsoft are all in search of methods to handle their construction-related emissions.
Elegant makes use of an electrochemical course of as an alternative of a combustion-driven kiln to fabricate a substitute for unusual portland cement. The corporate, spun out of analysis on the Massachusetts Institute of Know-how, has raised $200 million. That features funding from enterprise capital companies together with The Engine, Lowercarbon Capital and Vitality Influence Companions, together with an $87 million award by the Division of Vitality in 2024 — funding that thus far has not been affected by the Trump administration’s shifting priorities.
“We see an enormous alternative to each cultivate and modernize U.S. cement making,” mentioned Elegant CEO and Co-founder Leah Ellis. The U.S. imports greater than 20 p.c of its cement, and Elegant’s know-how might change that locus. Two factories within the Northeast have closed up to now 18 months due to outdated applied sciences.
Microsoft is the anchor buyer for Elegant’s first business facility being in-built Holyoke, Massachusetts, slated to start deliveries in 2028. One of many greatest development corporations within the Northeast, Suffolk, introduced a $3 million funding on Could 21 to purchase cement from the manufacturing unit.
“Elegant’s mission is at least essentially reshaping a cornerstone of the worldwide constructed surroundings panorama, and we’re proud to assist them by means of our capital, our community and our dedication to constructing a extra sustainable world,” mentioned Jit Kee Chin, government vp and chief know-how officer for Suffolk’s funding arm, Suffolk Applied sciences.
Credit for low-carbon cement and metal
Phrases of the Microsoft-Elegant deal weren’t disclosed, however the firm is positioning the contract as a means to offer early demand indicators for the startup’s first manufacturing unit, which can produce about 30,000 tons of cement yearly. “Microsoft is a market maker,” Ellis mentioned.
Elegant’s first business deliveries are slated for 2028; the startup hopes to assist a full-scale facility with a capability of 1 million tons probably by 2030, she mentioned.
Microsoft is utilizing a brand new class of environmental attribute certificates (EAC) for concrete and metal to justify its funding. The certificates are authorized mechanisms corporations use to calculate emissions reductions. One widespread kind is renewable power certificates, which many companies use to offset emissions from bought electrical energy.
Environmental attribute certificates are used to spur investments in applied sciences that decarbonize hard-to-abate sectors together with aviation, freight rail and maritime transport. The brand new ones that can be issued underneath the Microsoft-Elegant deal are based mostly on a technique Microsoft developed with carbon administration consulting agency Carbon Direct.
“Whereas we prioritize deploying bodily materials at any time when doable, this EAC method helps each patrons and sellers overcome geographic, provide chain, value and different obstacles that make it difficult to introduce new applied sciences,” mentioned Katie Ross, director of carbon discount technique and market improvement at Microsoft.
Aim: Scale availability of low-carbon cement
Microsoft’s purchases can be independently verified, though the small print of how that can occur haven’t but been decided, mentioned A.J. Simon, director of business decarbonization at Carbon Direct. The certificates can be managed by a ebook and declare system, just like what’s in place for sustainable aviation gas.
The methodology revealed as a information for different corporations recommends that certificates be vetted utilizing seven standards, equivalent to whether or not purchases will complement direct procurement of metal, cement and concrete.
“The intention is to set high-integrity requirements for commodity EACs that can enhance confidence on this mechanism,” Simon mentioned. “The thresholds for high quality within the report replicate Microsoft’s decarbonization; different corporations could resolve to weight the factors otherwise.”
The prepurchase commitments made doable by the EACs act as accelerants for startups, Ellis mentioned. Regardless of unsure macroeconomic circumstances, Elegant isn’t making massive changes, and it’s working carefully with three of the world’s largest cement producers — Holcim, Amrize and CRH — to deal with the long run. “This isn’t an trade that pivots rapidly,” Ellis mentioned.
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