Microsoft Signs Carbon Removal Deal with Varaha to Deploy 18 Biochar Reactors in India

Varaha, a carbon-removal developer working with smallholder farmers across Asia, has signed a large offtake agreement with Microsoft to deploy industrial biochar gasification across India. The pact will finance up to 18 gasification reactors that are expected to operate for 15 years and collectively sequester more than 2 million tonnes of CO₂ over the project lifetime, the companies said.

The initiative converts cotton stalks, typically treated as waste and often burned in fields across Maharashtra’s cotton belt, into biochar via biomass gasification. The biochar stores biogenic carbon stably for centuries and can be applied back to soils. Varaha plans to source feedstock from thousands of smallholder farms and use the first reactor alongside its 52-acre cotton research farm in Maharashtra to validate production and soil application at scale.

Local Benefits & Pollution Reduction

Beyond climate impact, Varaha says the project will tackle seasonal air pollution by reducing open-field burning of crop residue, cutting particulate matter (PM2.5) emissions that harm local air quality.

Farmers participating in the programme will receive payments for supplying biomass and for adopting residue-management practices and regenerative techniques such as mulching and biochar soil application. Varaha frames these income streams and soil-health gains as central co-benefits that lift rural livelihoods while improving long-term agricultural productivity.

Microsoft said the credits from the Varaha project will meet rigorous measurement, reporting and verification standards, reflecting durable removal rather than short-term offsets. Varaha emphasised that biochar offers a permanent form of carbon storage on geological timescales, positioning the project as a scalable CDR pathway for Asia.

Voices from Deal

Varaha CEO Madhur Jain said the agreement shows that “high-integrity carbon removal can drive transformative co-benefits for communities and ecosystems,” stressing the programme’s dual focus on emissions reduction and farmer incentives. Phil Goodman, programme director for CDR at Microsoft, described the offtake as a way to diversify Microsoft’s removal portfolio with a design that is “scalable and durable” while promoting cleaner air and shared economic opportunity for farmers.

With funding secured through Microsoft’s commitment, Varaha intends to rapidly scale reactors across India’s cotton belt while continuing field trials on its research farm. The first reactor will serve as a demonstration site to refine operations and quantify agronomic and air-quality benefits before broader roll-out.