Varaha Signs Carbon Removal Agreement with Microsoft
15th January 2026
Varaha, a leading developer of carbon dioxide removal (CDR) projects with smallholder farmers across Asia, has announced a major offtake agreement with Microsoft for biochar carbon removal in India
Varaha will develop 18 industrial gasification reactors that will operate for 15 years, with a total projected removal volume exceeding 2 million tonnes of CO2 over the project's lifetime
The project sources cotton stalks from smallholder farms in Maharashtra, India for use as the feedstock for biochar production. After harvest, these stalks are treated as waste biomass, and open-field burning is a common practice across the region's cotton belt. This project provides an alternative use for the stalks, converting them into biochar through Varaha's biomass gasification facilities and sequestering biogenic carbon for centuries
Varaha's biochar project also delivers measurable benefits for farmers and communities:
- Improvement in Air Quality: The project mitigates the widespread burning of cotton crop residue, significantly reducing PM 2.5 pollutants that contribute to poor air quality. By providing an economically viable alternative to field burning, the initiative tackles a major source of seasonal air pollution
- Promotion of Regenerative Agriculture: Farmers participating in the program adopt regenerative practices like crop residue mulching and biochar application to soils, improving soil health, water retention, and long-term agricultural productivity
- Lifting Farmer Livelihoods: The program directly enhances the livelihoods of thousands of smallholder farmers, who receive payment both for contributing agricultural biomass and for implementing crop residue incorporation practices
The project's first reactor will operate alongside Varaha's 52-acre cotton research farm in Maharashtra, where Varaha works directly with farmers to test sustainable practices, including soil application of biochar, under real-world conditions. With up to 18 total reactors funded across India's cotton belt through Microsoft's commitment, the focus remains clear: scaling quickly while putting farmers first.
Setting New Standards for Asian Carbon Markets: The agreement signals growing recognition of the region's potential for high-quality carbon removal projects. Biochar offers permanent carbon storage on geological timescales while supporting agricultural systems, making it one of the most promising pathways for durable carbon dioxide removal
The credits generated through the Varaha program meet rigorous standards for measurement, reporting, and verification, ensuring that each tonne represents genuine, permanent carbon removal