Microsoft has signed its third carbon removal deal with enhanced rock weathering (ERW) firm Undo, for 28,900 tons of carbon removal credits.

The deal was supported by a dedicated debt facility from Inlandsis, a Canadian climate fund managed by Fondaction Asset Management. The debt will provide the capital required for Undo to deliver on the purchase, with the removals expected to be delivered by 2036.

"Innovative financing is the catalyst for unlocking gigatonne-scale carbon removal," said Jim Mann, founder and CEO of Undo. "The support of Inlandsis shows how financial backers can help transform carbon removal into a genuine asset class - one that is scalable, tradable, and investable."

The agreement is Microsoft's third with Undo. The tech giant initially committed to buying 5,000 carbon credits from Undo in 2023, followed by a 15,000-ton commitment in 2024, while also committing to fund crucial scientific research.

"Enhanced rock weathering is a promising pathway to gigatonne-scale carbon removal. Undo's commitment to scientific rigor gives us confidence in both the durability of these credits and their role in helping Microsoft achieve its goal of being carbon negative by 2030," said Phillip Goodman, director, carbon removal portfolio at Microsoft.

The company removes carbon through ERW, which works by speeding up the natural process of rock weathering. To achieve this, companies such as Undo crush silicate rock, such as basalt or wollastonite, and spread it over agricultural land. When it rains, the water containing CO2 mineralizes with the silicate rock, forming a solid carbonate.

According to Undo, the latest agreement with Microsoft will support the spread of 90,000 tons of silicate rock across more than 30,000 acres of Canadian farmland. The delivery is planned in partnership with local farms to accommodate planting and harvesting schedules alongside local conditions.

The deal is the first Undo completed in partnership with Inlandsis. "This collaboration marks several milestones for us - our first investment in an ERW project and the first Canadian investment for our second fund – and highlights our commitment to advancing carbon finance across Canada and beyond," David Moffat, managing director at Inlandsis, said.

The purchase was underwritten by CFC, a specialist insurance provider that supports high-quality carbon market initiatives by mitigating risk and enabling transactions.

Microsoft has also backed several other ERW firms to support its carbon removal portfolio. These include a 12,000-ton deal with US firm Terradot, an 8,000-ton deal with Eion, and an 11,400-ton deal with Lithos Carbon.