Microsoft signs three-year deal to buy nearly 37,000 metric tons of carbon credits from Indian startup Alt Carbonmarking the tech giant’s first enhanced rock weathering deal in Asia.
Under the agreement, Alt Carbon will deliver 36,920 metric tons of carbon credits by 2029 from its Darjeeling Revival Project in eastern India. Microsoft also has the option to purchase additional volumes if the startup meets delivery and verification milestones.
The deal follows reports that is suggested Microsoft – the world’s largest purchaser of carbon credits – had suspended parts of its carbon procurement program. The company rejected these allegationssaying it remained committed to its climate goals even as it refined its sustainability strategy.
The deal is a potential boon for Alt Carbon, a Bengaluru-based startup founded in 2023 that focuses on carbon removal projects, including improved rock erosion. 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 is sourced from basalt from the Rajmahal Traps in eastern India and grown on agricultural land in West Bengal, where the rock reacts with rainwater and atmospheric carbon dioxide to form stable bicarbonate.
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 is also requiring additional monitoring, reporting and verification (MRV) measures beyond the 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 on a commercial scale.
“The problem 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 make sure they’re getting part of the deal.”
Alt Carbon has issued nearly 10,000 carbon credits through enhanced rock erosion 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 is running two carbon removal projects in North Bengal, including one dedicated to Japanese shipping giant Mitsui OSK Lines and a larger project from which Microsoft’s credits will come, Agarwal said. The startup has expanded beyond tea estates into rice-growing areas and now works with more than 35,000 farmers on about 80,000 acres.
Credits under the Microsoft deal will be issued through Isometric, a carbon removal registry that developed an improved rock weathering methodology.
The deal also reflects the growing role of emerging market suppliers in decarbonising. Developers from the Global South now account for about 26 percent of carbon credit issuance, up from about 2 percent in 2022, Agarwal said. He added that international buyers were often skeptical of coal projects in India when Alt Carbon was launched two years ago, but increasing issuance volumes and stricter verification standards have helped improve confidence in the market.
The Alt Carbon deal is not Microsoft’s first decarbonisation investment in India. In January, the company signed an agreement with another Indian startup, Varaha, to buy more than 100,000 tons of carbon dioxide credits produced through biochar over three years.
Microsoft joins a list of buyers of Alt Carbon credits that includes procurement coalitions such as; Borderwhose members include Google, Stripe and Shopify and NextGenbacked by firms such as UBS, Swiss Re and Boston Consulting Group, according to registry data.
Agarwal said Alt Carbon plans to expand its development footprint about fivefold over the next four to five years from about 80,000 acres today as demand for verified carbon removal credits increases.
Alt Carbon, which last year raised $12 million in a round of seed funding led by tech investor Lachy Groom, has built its own MRV infrastructure, including labs in Bengaluru and Darjeeling, which it uses to analyze soil and water samples and quantify carbon removal. Agarwal said improving verification capabilities and reducing measurement costs will be critical to scaling up improved rock erosion projects in India and beyond.
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