As the global decarbonisation needs aggravate and the climate crisis worsens, the demand for carbon credits are also on the rise. They are evolving from a once meme worthy concept to a niche tool. With mounting pressure on corporations to achieve net-zero targets, carbon credits are experiencing a surge in demand.

A case in point: Microsoft’s recent purchase of 1.5 million tonnes of carbon removal credits from India’s “largest” afforestation project.

For a company like Microsoft, which maintains one of the most advanced internal carbon accounting systems and has committed to being carbon negative by 2030, such a procurement decision would have been subject to intense scrutiny, both internal and external. The selection of this project implies a high confidence level in the integrity of the removals, the durability of sequestration, and the governance mechanisms in place for dMRV. Afforestation offers a more tangible and spatially explicit carbon sink. With improved remote sensing, MRV platforms, and standardised permanence discounting, afforestation credits when executed correctly are slowly becoming more defensible within corporate carbon strategies. The Indian project reportedly spans degraded land areas that have limited economic utility outside reforestation, addressing additionality concerns. Also, the selection of species, planting densities, and soil preparation techniques are expected to be aligned with regional ecological baselines, reducing the risk of monoculture-driven ecological distortion, hence promoting environmental impact. This also goes on to show that corporate offsetting weight being put on co-benefits related to biodiversity, water security, and socioeconomic upliftment. India's large pool of degraded land, combined with its established forestry expertise, is increasingly being recognized as a scalable reservoir for high-integrity carbon sinks.

This move could also influence credit pricing and perception -  High-integrity, removal-based credits from south Asia have historically suffered from underpricing due to buyer concerns about MRV reliability, land tenure complexity, and policy dynamics.

A purchase of this magnitude and status and ESG visibility sure recalibrates market trust and paves the way for similar future projects.