Arbor, a California-based company that uses solutions based in part on rocket engine technology to remove CO2 from the atmosphere, announced a purchase agreement with Microsoft, providing the tech giant with 25,000 tons of carbon dioxide removal, starting in 2027.

Arbor said that its carbon removal system – based on its bioenergy carbon capture & storage (“BECCS”) platform – can not only remove the carbon, but also generate 5MW of clean electricity—enough to power roughly 4,000 US homes year-round. The system uses readily available organic waste as a fuel source, and is modular, so it can be easily deployed in a variety of settings.

The system is similar to that used to propel rockets leaving the atmosphere. Arbor was founded by veterans of SpaceX, who have been leveraging recent advancements in oxy-combustion and supercritical turbomachinery – many of which they pioneered while developing rocket engines over the last decade – and applying them to electricity generation. The carbon removal will be delivered via a new protocol for Biogenic Carbon Capture and Sequestration (BCCS) issued by carbon removal registry Isometric, with Microsoft receiving carbon credits for the removal.

Arbor’s initial facility will be able to sequester and permanently store 75,000 tons of carbon per year–the equivalent of taking 16,000 cars off the road–while generating 5 MW of clean electricity. Once fully scaled in 2030, Arbor will be able to generate 100 MW of electricity while removing almost two-million tons of carbon each year. By scaling to these volumes, the company said, it would enable the delivery of CO2 removal at a price well below $100 per ton, allowing for generation of baseload power at rates competitive to fossil fuels.

Brad Hartwig, CEO of Arbor, said:

“This contract with Microsoft serves as a significant endorsement from one of the most influential and trusted leaders in the industry. Microsoft’s commitment to draw down their historical emissions by 2050 perfectly aligns with our mission to bring the planet back into balance with carbon-negative electricity and permanent carbon removal. This agreement underlines the promise of our technology and is another critical step in getting this project off the ground.”

The announcement adds to Microsoft’s growing portfolio of carbon removal purchases, forming part of the tech giant’s initiative to become carbon negative by 2030, which span an increasing range of solutions and technologies including, direct air capture (DAC), ocean-based carbon removal, and biochar-based projects, and include several large-scale nature-based carbon removal agreements, as well as large-scale BECCS-based deals with Ørsted and Stockholm Exergi.

Brian Marrs, Senior Director for Carbon Removal and Energy at Microsoft, said:

“The technical promise and modularity of Arbor’s system makes it a very compelling climate solution. Arbor has established a clear, actionable blueprint for simultaneously removing CO2 while producing clean electricity. We look forward to collaborating with the Arbor team on our path to carbon-negativity.”