Key Impact Points:
- Microsoft secures up to 3 million nature-based carbon removal credits through a new deal with forest manager EFM.
- The agreement includes an investment in EFM Fund IV, Microsoft’s first U.S. forestry investment via its Climate Innovation Fund.
- The initiative supports improved forest management and climate-smart forestry across 68,000 acres in Washington’s Olympic Peninsula.
Microsoft Invests in U.S. Forests to Meet Carbon Negative Goals
EFM, a U.S.-based forest investment and management firm, has signed a multi-year offtake agreement with Microsoft and secured an investment from Microsoft’s Climate Innovation Fund (CIF). The deal provides Microsoft with access to up to 3 million nature-based carbon removal credits, including 700,000 credits by 2035 from a newly acquired property in Washington State.
“Microsoft’s support marks a pivotal step in accelerating support for high-quality improved forest management projects,” said Bettina von Hagen, CEO of EFM. “Their leadership sets a strong precedent for the carbon market and reinforces the importance of natural forests as a scalable natural climate solution in the U.S.”
Climate Innovation Fund Backs EFM Fund IV
This marks CIF’s first-ever forestry investment in the United States, with capital committed to EFM Fund IV—targeting $300 million to scale climate-smart forestry nationwide. Microsoft’s investment ensures access to an additional 2.3 million high-quality carbon credits with measurable ecosystem and community co-benefits.
“Microsoft recognizes the important role of high-quality, nature-based solutions in meeting our Carbon Negative by 2030 goals,” said Brian Marrs, Senior Director of Energy & Carbon Removal at Microsoft. “We are proud to contribute to climate-smart forest management in Microsoft’s own backyard on the Olympic Peninsula.”
Scaling Climate-Smart Forestry
The first investment under EFM Fund IV—a 68,000-acre tract on the Olympic Peninsula—was formerly managed industrially for nearly 100 years. EFM is now transitioning it to FSC-certified, climate-smart forest practices, which include generating revenue through carbon credits, conservation easements, and sustainable timber harvesting.
The fund will prioritize forest properties in the Western U.S. while expanding into additional domestic markets where improved forest management can provide both environmental and financial returns.
Raising Standards for Forest Carbon Projects
The partnership aims to elevate the credibility and scalability of Improved Forest Management (IFM) carbon projects. IFM practices, such as extending tree rotation ages and promoting selective harvesting, are designed to maximize carbon storage, biodiversity, and watershed health.
Microsoft will share more about its IFM approach via its Microsoft Carbon Dioxide Removal (MSCDR) website.
EFM is integrating dynamic baselines and applying conservative harvesting assumptions to further increase the rigor and reliability of its IFM credits.
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