In the face of growing environmental concerns and increasing regulatory pressures to achieve net-zero, companies are actively seeking ways to reduce their carbon footprints and demonstrate their commitment to sustainability.

One significant method that businesses are adopting is the purchase of carbon credits through the Voluntary Carbon Market (VCM). Through VCM, the buyers of carbon credits offset their emissions by funding projects that either remove or prevent greenhouse gases from entering the atmosphere.

A 2023 report from Ecosystem Marketplace revealed that companies that invest in carbon credits are more effectively addressing their climate footprints compared to those that don't. According to a Carbon Brief analysis, two-thirds of the largest companies aiming for net-zero emissions use carbon offsets to help them reach their climate goals.‍

That is why major corporations like Microsoft, Shell, Stripe, Disney, and Apple heavily invest in carbon reduction credits. Their efforts not only help to meet emission reduction targets, but also enhance corporate social responsibility profiles, and appeal to environmentally conscious consumers.

‍The Size and Importance of the Voluntary Carbon Market

The Voluntary Carbon Market (VCM) plays a crucial role in global efforts to reduce carbon emissions and combat climate change. Unlike compliance markets, which operate under legally binding national or international laws and regulations, the VCM allows companies, organizations, and individuals to voluntarily purchase carbon credits to fund projects that reduce or remove greenhouse gases from the atmosphere.

The VCM market supports carbon credit projects  like reforestation, renewable energy, and carbon capture, which collectively support the goal to achieve the global warming threshold of 1.5 degrees Celsius. The VCM is rapidly growing, with projections estimating its value to reach $50 billion by 2030. The market's growth underscores its potential to significantly impact global emission reduction efforts and achieve climate goals.

Who are the Buyers of Carbon Credits

A diverse range of entities across different sectors buy carbon credits. These buyers include corporations, governments, non-governmental organizations (NGOs), and individuals.

In this article, we will focus on five leading global companies that purchase carbon credits, discussing their offsetting strategy and focus in detail.

1. Microsoft: Leading the Tech Sector in Carbon Neutrality

Tech giant Microsoft has committed to becoming carbon negative by 2030, meaning they aim to remove more carbon from the environment than they emit. By 2050, the company strives to remove all the carbon it has emitted either directly or through electricity consumption since it was founded in 1975. To achieve this goal, Microsoft invests in a variety of carbon credit projects that focus on both technological innovations and nature-based solutions.

Purchase Strategy: Microsoft is investing in a diverse portfolio of carbon credits, focusing on both removal and avoidance credits. For financial year 2022 alone, the company has invested in 1.5 million carbon credits. Removal credits fund projects that actively remove CO2 from the atmosphere, while avoidance credits support projects that prevent emissions from occurring in the first place.

Project Types and Locations:

Technology-Based Projects:

• ^‍Biochar Projects
  • The Next 150: Microsoft entered into a six-year agreement with The Next 150 to purchase 95,000 tons of biochar carbon removal credits. This biochar is produced in Guanajuato, Mexico, and involves converting biomass into stable carbon, which is then used to enhance soil health and agricultural productivity.
• ‍Direct Air Capture (DAC)
  • CarbonCapture's Project Bison: Microsoft has agreed to purchase carbon removal credits from CarbonCapture, which operates a DAC plant in Wyoming. This facility aims to capture 10,000 metric tons of CO2 annually, with plans to scale up significantly over the next decade​.‍
  • Climeworks: Microsoft has also partnered with Climeworks to remove 10,000 metric tons of CO2 using DAC technology.

Nature-Based Projects:

• ‍Reforestation and Afforestation
  • Chestnut Carbon: Microsoft signed a 15-year deal with Chestnut Carbon to remove 2.7 million metric tons of CO2 through afforestation projects in the Mississippi Alluvial Valley. This project involves reforesting land previously used for agriculture, enhancing biodiversity and carbon sequestration capacity​.‍
  • TIG: Microsoft has committed to purchasing up to 8 million carbon removal credits from BTG Pactual Timberland Investment Group (TIG). These projects are located in Latin America, focusing on restoring deforested areas and creating sustainable commercial tree farms​.
  • Microsoft has invested in various forest conservation projects aimed at preventing deforestation and preserving existing forests. These projects not only store carbon but also protect biodiversity and support local communities. One example is its collaboration with Pachama to support forest conservation in critically important tropical and boreal forests.‍
• Soil Carbon Sequestration:
  • Indigo Ag: Microsoft has purchased 40,000 agricultural soil carbon credits from Indigo Ag. These credits are generated by implementing sustainable farming practices that enhance soil carbon storage and improve soil health​.‍
  • Grassroots Carbon: Microsoft invested in carbon removal credits from Grassroots Carbon, which focuses on regeneratively managed grasslands. These projects support practices that improve soil health and enhance carbon storage​​.

‍Renewable Energy Projects:‍

• Microsoft has purchased avoidance credits from renewable energy projects, including wind and solar farms, which displace fossil fuel energy production and reduce overall carbon emissions. One example is its partnership with Ørsted, a global renewable energy company specializing in offshore wind, onshore wind, and bioenergy. In 2024, Microsoft agreed to purchase an additional 1 million tons of carbon removal over 10 years from the Avedøre Power Station, adding to their existing commitment of 2.67 million metric of CO2 from the Asnæs Power Station.

2. Shell: Transitioning an Oil Giant to Sustainable Energy

Oil companies are facing mounting pressure to transition to sustainable energy practices due to increasing regulatory demands, shareholder expectations, and societal calls for action against climate change. That’s why they are among the biggest buyers of carbon credits globally.

British multinational oil and gas company Shell has committed to becoming a net-zero emissions energy business by 2050, in alignment with societal goals to limit global warming to 1.5 degrees Celsius. This involves reducing the carbon intensity of the energy products they sell by 15-20% by 2030 and by 100% by 2050.

‍Purchase Strategy: Shell's approach to carbon credits involves both removal and avoidance credits. Shell's portfolio is diverse and encompasses a range of measures including investment in renewable energy, carbon capture and storage (CCS), and nature-based solutions.‍

Project Types and Locations:

Technology-Based Projects:

• ‍Carbon Capture and Storage (CCS)
  • Quest CCS Project: Located in Alberta, Canada, this project captures and stores around one million tons of CO2 annually from the Scotford Upgrader.‍
  • Northern Lights Project: In collaboration with Equinor and TotalEnergies, Shell is part of this project aimed at developing a full-scale CCS facility in Norway. The Northern Lights project plans to capture and store up to 1.5 million tons of CO2 annually in its first phase, with significant expansion potential .

Nature-Based Projects:

• ‍Reforestation and Afforestation
  • Katingan Mentaya Project: Shell has invested in various reforestation projects across the globe, including initiatives in Peru, Indonesia, and Spain. These projects aim to restore degraded lands, enhance biodiversity, and sequester significant amounts of carbon. For example, in Indonesia, Shell supports the Katingan Mentaya Project, which protects and restores peatland forests, a critical habitat for biodiversity and a major carbon sink.

3. Stripe: Catalyzing Innovation in Carbon Removal

Financial services company Stripe is also among the big buyers of carbon credits. The company has committed to advancing carbon removal technologies through its Stripe Climate initiative. As of December 2021, Stripe has increased its carbon removal commitments to $15 million, supporting a wide range of innovative technologies aimed at permanently removing CO2 from the atmosphere.‍

Purchase Strategy: Stripe focuses exclusively on removal credits, investing in projects that offer scalable and permanent carbon sequestration solutions.

Their approach is unique in that it enables any business to automatically direct a portion of its revenue processed through Stripe toward these carbon removal technologies. This has attracted more than 15,000 companies from over 40 countries, generating a critical demand signal for new and emerging carbon removal solutions.

Stripe's project selection is based on stringent criteria to ensure the effectiveness and sustainability of their investments.‍

Project Types and Locations:

Technology-Based Projects:

• ‍Direct Air Capture (DAC)
  • Sustaera: Stripe supports U.S. company Sustaera’s direct air capture system, which uses renewable energy and ceramic monolith air contactors to capture CO2 directly from the air for permanent underground storage. This technology is designed for rapid manufacturing and scalability.‍
• ‍Mineralization
  • 44.01: This Oman-based company turns CO2 into rock through a process called mineralization. Using clean energy, 44.01 injects CO2 underground, accelerating its reaction with peridotite, an abundant rock, to achieve permanent CO2 storage
• ‍Ocean-Based Carbon Removal
  • Ebb Carbon: Stripe funds California-based Ebb Carbon, which uses a proprietary electrochemical system to remove acid from the ocean, enhancing its natural ability to draw down atmospheric CO2 and store it as oceanic bicarbonate.‍
• Enhanced Weathering
  • Eion: This U.S company accelerates mineral weathering by mixing silicate rocks into soil. The product, applied by farmers and ranchers, increases soil carbon, which eventually makes its way to the ocean, storing it permanently as bicarbonate.

4. Disney: Leading the Charge in Natural Climate Solutions

Mass media and entertainment conglomerate Disney aims to reduce absolute emissions from its direct operations (Scope 1 & 2) by 46.2% by 2030, measured against a 2019 baseline. They also plan to achieve net-zero emissions for their direct operations by the end of the decade, balancing remaining emissions with carbon removal efforts.

The company’s carbon credits investments focus on nature-based solutions. Since 2009, Disney has committed nearly $100 million to over 30 projects that bring additional benefits like conserving wildlife habitats, creating jobs, protecting water resources, and mitigating flood and soil erosion impacts.‍

Purchase Strategies: Disney prioritizes high-quality, certified nature-based solutions that are scientifically validated and result in verified emissions reductions. According to their website, Disney supports projects that are scalable and designed to have a lasting positive impact. Their investments also bolster local economies by creating jobs such as park rangers, surveyors, trainers, and seasonal workers.‍

Project Types and Locations:

Nature-Based Projects:

• ‍Reforestation and Afforestation:
  • Cuyamaca Rancho State Park: Following the devastating Cedar Fire in 2003, Disney is helping the efforts to restore the Cuyamaca Rancho State Park in California. The project aims to support wildlife, safeguard water resources, and provide a space for people to enjoy nature
  • ‍Family Forest Carbon Program: In collaboration with the American Forest Foundation and The Nature Conservancy, this program engages rural family forest owners in Maryland, Pennsylvania, and West Virginia. It focuses on improving forest management practices to increase carbon sequestration and storage. The long-term goal is to involve 20% of U.S. family-owned forests in climate-friendly practices.

Household Solutions:

• Proyecto Mirador: Disney supports the Proyecto Mirador initiative, which constructs fuel-efficient, wood-burning stoves in rural areas of Honduras and Guatemala. These stoves reduce household smoke, conserve trees, shorten cooking times, and generate small business and job opportunities. Since 2009, Proyecto Mirador has prevented over 2 million metric tons of greenhouse gases from entering the atmosphere.

5. Apple: Pioneering Carbon Removal Through the Restore Fund

Multinational technology company for consumer electronics Apple is committed to achieving carbon neutrality across its entire supply chain by 2030. Central to this goal is Apple's investment in innovative carbon removal strategies through its Restore Fund.

Launched in 2021 with an initial $200 million commitment from Apple, the Restore Fund aims to scale nature-based carbon removal solutions and protect critical ecosystems.‍

Purchase Strategy: In 2023, Apple doubled its investment in the Restore Fund to a total of $400 million. This expansion reflects Apple's dedication to advancing carbon removal technologies that offset its remaining emissions. The Fund supports sustainable forest management but also invests in agricultural practices that promote nature-forward solutions and generate high-quality carbon credits.

Utilizing advanced remote sensing technologies like Upstream Tech’s Lens platform and Maxar’s satellite imagery, Apple aims to ensure rigorous monitoring and verification of its carbon removal projects.‍

Project Types and Locations:

Nature-Based Projects:

• Apple collaborates with Climate Asset Management to manage a diversified portfolio aimed at removing 1 million metric tons of CO2 annually. Projects include sustainable forestry management and the restoration of natural ecosystems, such as certified forests and preserved grasslands and wetlands.

Drivers of Demand for the Buyers of Carbon Credits

Companies buy carbon credits for three main reasons: to comply with regulations and emission reduction targets, to maximize their impact and enhance financial results, and to improve their branding and reputation among eco-conscious consumers and investors. 

Compliance with Carbon Regulations and Emission Reduction Targets

Many companies purchase carbon credits to comply with stringent carbon regulations and meet their emission reduction targets. As governments worldwide implement more rigorous climate policies, businesses are compelled to take proactive steps to mitigate their carbon footprints, making the VCM a vital tool in their compliance strategies.

Opportunity to Maximize Impact and Enhance Financial Results

Beyond regulatory compliance, the VCM enables companies to significantly contribute to climate change mitigation while also benefiting financially. By investing in carbon credits, companies can support innovative projects that reduce greenhouse gas emissions, such as reforestation, renewable energy, and energy efficiency initiatives. These projects often yield co-benefits, such as improved community health and biodiversity conservation, which can translate into positive business outcomes. Additionally, carbon credits can be a more cost-effective solution compared to other emission reduction measures, allowing companies to achieve their sustainability goals without incurring excessive costs. 

Enhancing Branding and Reputation

Investing in carbon credits is also a strategic move for companies looking to enhance their branding and reputation. By actively participating in the voluntary carbon market (VCM), businesses can showcase their commitment to environmental sustainability. This commitment resonates well with eco-conscious consumers and investors who are increasingly favoring companies with strong environmental credentials. A robust environmental strategy, underscored by purchasing carbon credits, can differentiate a company from its competitors, foster customer loyalty, and attract investment from those prioritizing sustainability.

Final Thoughts

The Voluntary Carbon Market is a dynamic and essential component of global climate action, enabling companies to offset their residual emissions and contribute to combating climate change. Leading corporations such as Microsoft, Shell, Stripe, Disney, and Apple are investing heavily in carbon credits, driven by regulatory compliance, emission reduction targets, and the desire to enhance their sustainability credentials.

As demand for carbon credits continues to outpace supply, it is crucial for companies to act now and secure their credits in the VCM. By investing in carbon credits, businesses can mitigate their environmental impact and position themselves as leaders in the transition to a sustainable, low-carbon future. The outlook for the Voluntary Carbon Market is attractive, with substantial demand growth is projected for the near future. This is driven by companies’ recognitions to tackle climate change, and understanding of using carbon credits as a tool to offset their residual, unavoidable emissions to get to net-zero.